ROLE OF TRAINING IN PROMOTING ETHICAL BEHAVIOR IN ORGANIZATIONS Promoting ethical conduct requires an organizational structure that is “ethically balanced.”i Ethics training that is not supported and reinforced by organizational processes and corporate culture will likely do more harm than good. Once you set behavior expectations around ethics, you must be ready to reinforce and reward ethical behavior as well as monitor and disincentivize unethical behavior, which requires you to begin with the corporate culture and its supporting organizational processes. The Cloak Of Culture A corporate culture can be defined as "the moral, social, and behavioral norms of an organization based on the beliefs, attitudes, and priorities of its members." This definition reflects the two-part process of building ethical behavior norms into a culture: What do we believe is right (outcome)? How does it look when we are right (process/behavior)? To set standards for behavior, companies often develop a code of ethics, i.e., a clear, simple set of beliefs and values top management and the board of directors prioritize as most critical to meeting the company’s mission or purpose. Once armed with this guidance, the members of top management can turn those beliefs and values into concrete behavior expectations. The behavior expectations should reflect these three key characteristics of ethical companies: high tolerance for risk, high value on teamwork and collaboration, and a focus on means as well as outcomes. High Tolerance for Risk. To shape ethical behavior, the corporate culture must support employees taking risks and innovating as well as tolerate a reasonable level of mistakes. Not all Promoting Ethical Behavior Page 2 risks pay off and not all innovations work, but you want employees to learn from what doesn’t work and keep trying to find what does, and feel supported and safe doing so. Employees who feel comfortable taking risks and are not afraid to stand out from the crowd and express a different opinion will be more likely to speak out against and report ethical misbehavior and take initiative in acting ethically. High Value on Teamwork and Collaboration. In ethical cultures, employees are discouraged from engaging in unbridled competition and rewarded for their collaboration and teamwork skills. Making it clear that the organization expects employees to think of the impact of their behavior on peers and customers limits the incentives for maintaining a competitive, win-lose focus, or acting on individual best interest at the expense of others’ vulnerabilities A focus on teamwork and collaboration as corporate values emphasizes the importance of creating win-win outcomes. Focus on Means as Well as Outcomes. Probably the most important characteristic of an ethical corporate culture is a focus on how goals are achieved as well as what goals are achieved. As we watched Lay and Skilling, the leaders of Enron, on the witness stand, we heard them say over and over again that they had the best interest of the shareholder’s in mind at all times, that everything they did was in pursuit of an honorable goal. What ethical companies have in common is an understanding that the ends do not automatically justify the means, that the values espoused by the company apply every step of the way, not just at the finish line. Employees pay close attention to what managers care about. When company leaders reward top salespeople with no regard to how those sales were achieved or focus on the bottom line exclusively with no regard to how that target is reached, they are incentivizing unethical behavior. Conversely, when company leaders punish top salespeople who have used tactics inconsistent with company Promoting Ethical Behavior Page 3 values, and set expectations of behavior that overshadow profit targets, they are incentivizing ethical behavior. Organizational Processes Because all but a few employees with strong internal codes of ethics will act unethically if there are organizational incentives and pressures to do so, organizational processes are critical to promoting ethical behavior. To provide the required structure and support to an ethical culture, organizational processes and procedures must be evaluated to add incentives for ethical behavior and add disincentives for unethical behavior. The first processes to examine are typically under the auspices of HR: Personnel recruitment and selection processes Performance-evaluation systems Compensation systems Reporting, evaluating, and monitoring mechanisms Decision-making practices and protocols Training Personnel recruitment and selection processes. As discussed earlier, selection is one of the tools for initiating and maintaining culture. The process used for recruitment must identify ways to attract employees who will be a good fit with the company’s ethically focused culture and provide the required diversity of skills and perspectives. HR must also develop guidelines for evaluating the values and character of potential hires as well as their experience in demonstrating ethical behaviors in addition to the traditional screening for technical and interpersonal skills. (end of excerpt) Promoting Ethical Behavior Page 4 i Harvey, J. (2000). Reinforcing ethical decision making through organizational structure. Journal of Business Ethics, 28(1), p. 43. 2. Robbins, S. (2005). Organizational Behavior (11th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.