Management
Communication About
Ethics
The Difficulties of Managing for
Ethics
Compliance
with Laws
SWEET
SPOT
Compliance and Ethics Program
Ethical
Behavior
Moral Muteness
• The fact that managers rarely talk about
ethics directly. Managers talk instead
about:
– a. organizational interests
– b. practicality
– c. economic good sense
In reality, many of their decisions
are actually guided by
• a. morally defined standards codified in
law
• b. professional conventions
• c. social mores
And they defend moral activities
such as:
• a. service to customers
• b. effective cooperation among personnel
• c. use of resources for company’s benefit
Go it Alone:
• Managers struggle with ethical issues, but
don’t talk to one another about it much:
• “Morality is a live topic for individual
managers but it is close to a non-topic
among groups of managers.”
Communication& Follow-Through
are Essential
• While normative expectations are
explicitly given through legal rulings,
regulatory agencies decrees,
professional codes, organizational
policies and social mores, if these are
not communicated well, and acted upon,
the message will not get out.
What is communicated?
Ethics Materials:
Mission
Values
Code of conduct/ethics
Policies
Decision methods
Your culture
Ethics program:
Who is the Ethics Officer? How to
make contact?
Senior Management
Commitment to Ethics:
Why organizational ethics matters?
Methods of Communication
Evaluate current ethics communication lines
– Formal and informal
– downward, upward, and two way
Clear, consistent, credible messages across
communication lines
More about Methods of
Communication
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Hiring Announcements
Website
Email
Brochures
Meetings – Formal & Informal
Orientation sessions
Newsletters
Manuals
Code Handbooks w/certifications
Badges and Wallet Cards
Key Fobs
Causes of Moral Muteness:
• 1. Threat to Harmony: moral talk often
requires some challenge and confrontation
Causes of Moral Muteness:
• 2. Threat to efficiency:
•
a. if done with ideological exhortations it
•
i. does not facilitate problem solving
•
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ii. doesn’t usually clarify issues
iii. seems self-serving
Causes of Moral Muteness:
• Threat to Efficiency (cont’d):
• b. moral talk adds an extra burden to
business decisions—seen as distraction
• c. Adds additional rules and regulations,
may hinder quick decisions
Causes of Moral Muteness:
3. Threat to image of Power and Effectiveness
• a. moral ideals highlight imperfections in
current practices
• b. managers don’t want to expose their own
moral illiteracy
• c. lower managers are expected to solve
their own problems
Consequences of Moral
Muteness
• 1. Moral Amnesia: forget that ethics is part of
business
•
Ex: Milton Friedman acts as though business
should be concerned only with profit, not social
responsibility, yet he alludes to 8 important
ethical issues: no fraud, no deceit, fair
competition, respect law, respect contracts,
recognize employee and investor rights,
maximize consumer satisfaction and freedom
Consequences of Moral
Muteness
• 2. Narrowed conception of morality:
Discuss business only in terms of strategy
and common sense, and avoid discussing
the ethical reasons for the decision.
Ethics is construed to be only for the
severely immoral—rules to punish
breakers.
Consequences of Moral
Muteness
• 3. Moral Stress: managers who don’t
discuss the ethical issues will have more
stress that they internalize
Consequences of Moral
Muteness
• 4. Neglect of Abuses: Many moral issues
are simply not organizationally recognized
and addressed. “Many moral abuses are
ignored, many moral ideals are not
pursued, and many moral dilemmas
remain unresolved.”
Consequences of Moral
Muteness
• 5. Decreased authority of moral standards:
The less we talk about it, the less those
standards will seem real.
Not Just Cheerleading
• Charismatic Leadership and forceful
commands bring about short term change,
but long term changes require shared
values which provide a common
vocabulary for identifying and resolving
problems.
How to make Changes
• Must provide an opportunity for open
discussion without any danger of
retribution or corporate punishment.
Making Changes
•
2. Important to help all involved realize
that they hold similar long-run objectives
and value common principles
– Help make shared commitments seem
basic/core
– Less likely to become contentious if unity is
emphasized
– Legitimate dissent will be more cordial and
controlled if ground-rules are set up first.
Making Change Happen
3. Role of Senior Managers:
– Must demand that these ethical
conversations take place
– Need to build these into fabric of
organizational life
– Interventions require patience
Management Creates a Culture
Management is All About Ethics
• “Typically, unethical business practice involves
the tacit, if not explicit, cooperation of others and
reflects the values, attitudes, beliefs, language,
and behavioral patterns that define an
organization’s operating culture. Ethics, then, is
as much an organizational as a personal issue.
Managers who fail to provide proper leadership
and to institute systems that facilitate ethical
conduct share responsibility with those who
conceive, execute, and knowingly benefit from
corporate misdeeds.”
Gallup Research Based Findings
During nearly forty years of research and
tens of thousands of interviews, Gallup
has determined the
Seven Demands of Leadership.
These are behaviors of individuals who
are perceived as leaders within their
organizations, communities and
nations.
WHAT GREAT LEADERS DO MOST
- the most commonly expressed demands
Gallup Organization
VISIONING
7
D
E
M
A
N
D
S
MENTORING
BUILD A CONSTITUENCY
CHALLENGING EXPERIENCES
MAKING SENSE OF EXPERIENCES
STABILIZING VALUES
KNOWING SELF
Values
Gallup Organization
“The true test of character is
how we behave when we don’t
know what to do.”
John Holt
Communication
Our Values
We have an obligation to communicate. Here, we take the time to talk with one another
and to listen. We believe that information is meant to move and that information moves
people.
Respect
We treat others as we would like to be treated ourselves. We do not tolerate abusive or
disrespectful treatment.
Integrity
We work with customers and prospects openly, honestly, and sincerely. When we say
we will do something, we will do it. When we cannot or will not do something, then we
won’t do it.
Excellence
We are satisfied with nothing less than the very best in everything we do. We will
continue to raise the bar for everyone. The great fun here will be for all of us to
discover just how good we can really be.
Tone at the Top
Gallup Organization
The challenge at the top is to lead
in accordance with the true values
of the organization.
If your organization does not have
an entrenched value system,
don’t claim that you do. Just
writing it down doesn’t make it so.
Enforcement
• Reality: Codes and rules without
enforcement and adherence are useless.
• Question: How do we ensure compliance
with legal rules and corporate policies?
Types of Enforcement
The best policy is to prevent wrongdoing
1. Getting Compliance (preventative)
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Training and Education (‘I didn’t know’)
Review: Audit for compliance and quality
Incentives: compensation and recognition
Model: Leadership talks, and walks the talk
2. Punishment (responsive)
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Clear Sanctions in place
Ethics Committee (method in place)
Someone with oversight responsibility
Summary
• Avoid Moral Muteness through
Communication
• Good leadership will help create a strong
corporate culture of ethics/compliance
• Talking the talk and walking the walk both
are essential
Final Thoughts
• Often, doing the right thing is clear, even if
its not easy
• We tend to cut corners for short-term
apparently inconsequential issues, but this
can come back to haunt us
• Having Ethical Habits takes practice, and
some thoughtfulness.