Thursday, June 01, 2006

ethics global study 2005

Mention corporate names such as, Enron, Worldcom, Adelphia, and Tyco and immediately it brings to mind the increases in unethical business behavior. The growing disgust and the resulting miasma has become a global Pandora's Box. What exactly are the reasons behind the rise in corporate unethical behavior, and what, if anything, is being done to clean up their behavior? As one of the authors of The Ethical Enterprise, A Global study of Business Ethics, I would like to share the findings with you.

According to the study, the number 1 answer from the 1,100 respondents to the question, Factors Most Likely to Cause People to Compromise Ethical Standards was Pressure to meet unrealistic business objectives/deadlines. Considering that marketplace competition was cited as a major business driver of ethics today and the respondents believe, according to the American Management Association/Human Resource Institute 2005 study, to remain a major driver 10 years into the future in addition to the desire to further one’s career and protect one’s livelihood, what can companies do now to protect themselves from future scandals?

Answers to these questions, and more, are addressed throughout the study. Areas where organizations can draw the line of first defense are found in their ability to make transparent current business cultures, Leadership support and modeling ethical behavior, training programs (through a Train-the-Trainer Certification Program where individual accountability and a responsibility is tied to promotional opportunities, bonuses/incentives, retention, future assignments and departments which includes new-hires straight up to the C-Levels and into the Board of Director), the development of an Ombudsman Program with 24/7 anonymous hotline, an enforceable Code of Conduct and ethic audits addressing technology, Corporate Social Responsibility Program are just to name a few.

This report:
>Discusses what’s driving business ethics today
>Describes today’s state-of-the-art business ethics practices
>Forecasts what will drive business ethics over the next 10 years
>Discusses what the best-in-class practices may look like in the year 2015
>Provides a summary of the Business Ethics Survey 2005 results.

I believe, as one of the authors of, The Ethical Enterprise,: A Global study of Business Ethics 2005, the information, insights, and enlightenment you will provide to your readers will be of immense and timely value. In troubled times, people look for truth and answers. Let’s give them what they seek!

Please feel free to contact me for a copy of the survey, or any questions you may have.

Thank-you for your time.

Respectfully,

Rick Keller,

Executive-In-Residence,
The Human Resource Institute
President, The Healthy Business Doctor: Proactive Business, Leadership & Coaching Solutions

Contact information:
(352) 288-9002
hbizdr@yahoo.com

2 Comments:

Blogger Stuart Wood said...

Sounds interesting Rick - would love to have a read.

The historically and widely accepted primary purpose of business is to increase its wealth thus achieving a profit and increasing shareholder value. But how does this narrow view best serve humanity?

What this unitary ‘profits are everything’ approach does not however conceive is the wider implications of the firm operating within society, of which it is inextricably linked, and the affect that it may, directly and indirectly, have on the people and various other constituents, that make up that society.

Milton Friedman, the Noble Prize winning economist, vigorously protested against the notion of corporations taking on any wider social responsibilities. Moral responsibility, according to Friedman, is exclusive to human beings and therefore not the concern or duty of the firm. Furthermore, management should act solely in the interests of the firm’s shareholders and certainly not become involved in social issues, which he contended were the sole responsibility of government. However, if moral responsibility is exclusive to human beings, and not to the firm, then is Friedman suggesting that employees of such firms need to leave some of their humanity, and certainly their morality, at home?

How then, can the consumers engage and trust these inanimate, morally vacant firms, and would the consumer want to engage with this type or organisation if it knew about it’s ‘character’ or lack of character - surely not. Furthermore, would other constituents, in contact with the firm such as suppliers and employees, and local communities enter into a relationship with such an organisation if they too were aware of this lack of humanity within the firm? Maybe customers, potential and existing, would think differently if they knew the morally indefensible lengths that some companies will go to in order to achieve a profit.

Lee Iacocca is a prime example of a manager that went too far. He is a widely known as a morally vacant, single-minded, profits driven manager who went to extremes to achieve profits. Iacocca was the manager in charge of the infamous Ford Pinto over twenty years ago when it was going head-to-head in competition against the VW Beetle. There was a problem with the Pinto’s fuel tank that had a propensity to explode under impact. The executives at Ford, led by Iacocca, were fully aware that the Pinto was dangerous under certain conditions and they carried out a review of what was required to make the car safe. The findings would have certainly saved the lives of Ford’s customers.

However, the cost of improving the quality of the Ford Pinto fuel tank was $5 per vehicle and it was deemed too expensive for the cars to be recalled. The company actually carried out a cost-benefit-analysis of recalling the Pinto against the predicted number of deaths per annum that may be attributed to the weakness in the Pinto’s fuel tank and thus the amount of damages the company would have to pay out to the families of the deceased Ford customers. It was cheaper to payout to the families of the deceased than to improve the safety of the fuel tank and thus the improvements were shelved. See Ford Memo.

Hundreds of people lost their lives because of this singleminded pursuit of profit at any cost...so much for customer service!

Surely this case should have served as warning to all unitary focused, profits are everything, whatever it takes, morally vacant businesses and also motivate government to legislate. However, this has not proved to be the case with many different ethically vacant incidences over the past twenty years involving companies such as McDonalds, Enron, WorldCom, Shell, Nike and others.

There are however a few shining lights out there that have developed their businesses by steadily increasing sales and market share, without selling their souls, or behaving in an illegal or morally indefensible manner. Cafédirect, Ecover, The Body Shop, Ben and Jerry’s Ice Cream, Charles Schwab, The People Tree are testament to this fact. Recently, even big business has caught on to the idea that these “high value” ethical brands may have the potential to develop a more meaningful and human relationship with the customer. So much so that The Body Shop (L’Oreal) and Ben and Jerry’s (Unilever) have been bought out by multinationals.

Note that the primary goal of each of these "high values" companies was not to enrich shareholders; it was in fact to enrich and benefit the actual suppliers, customers, employees, shareholders and the wider society thus developing real long-term relationships that benefit all.

Businesses and their managers should be responsible to their shareholders but they should never lose sight of their responsibilities to their employees, suppliers, customers, the communities and environments in which they operate and society in general. Enlightened shareholder value, which is striking a balance between the competing interests of the different stakeholders in order to benefit the shareholders in the long run is the policy advocated here. It makes perfect business sense. The Iacocca, purely profit driven focus on shareholder value, above the lives of his own customers, is utterly reprehensible.

Good business; embracing values, ethics and fairness, as Cafédirect, Ecover, People Tree and others have illustrated, can make perfect “high value” business sense. This is an entirely more fair, intelligent and human way of doing business for all involved.

4:45 PM  
Blogger RICH said...

HI,

My contact number has changed:

352/ 454-6816

Thanks,

Rick Keller, President
Healthy Business Doctor
hbizdr@yahoo.com

5:39 AM  

Post a Comment

Business Ethics Forum

Powered by Blogger