Our world is reeling from three major blows in the past couple years. First, the dot com meltdown: this was rough, but it was a story of excess and error on the part of a new high tech sector of the business world, not the whole. Then the September 11 attack: this was an unspeakable horror, but the enemy was from outside. Third, the corporate ethics meltdown manifested in Enron, Andersen, WorldCom, Global Crossing, etc. — a betrayal with still-unfolding, negative consequences that will be felt for years to come. What is perhaps most ominous about this third crisis is that it has occurred from within, among reputable leaders of respected businesses, among friends of our highest political leaders, among the nice folks sitting over there in the church and the synagogue.
It will not be enough to jail a few offenders and pass a few new regulations making certain accounting or compensation practices illegal. Both of those things may need to happen, but they are not a sufficient response to our business ethics challenge. Corporations must take serious, well-conceived steps to rebuild their own ethical health. To successfully build an ethical, excellent business enterprise, serious attention must be given to five inter-related foci.
It is easy, but mistaken, to assume that everyone is eager to work in an ethical manner. To build an ethical enterprise, everyone, from the Board of Directors through executive management to employees at all levels, must understand and embrace the strongest possible, most thoughtful and convincing rationale for taking ethics very seriously. Why should we — why must we — cares about a sound ethics? What are the costs of ethical neglect? What are the benefits of sound ethics? Until this motivational challenge is addressed, little improvement can be expected.
If the motivational challenge is met, the next move is to focus on the mission — the core purposes and overarching goals of the company. Why do we exist? Where are we going? Why focus so intensely on core mission if improved ethics is our goal? Because it is the mission that best leverages ethical behavior. An inspiring and shared mission can mobilize people toward ethics and excellence. Each company must identify and articulate its own distinctive core mission and, to most successfully inspire and mobilize people, it must somehow tap into our basic human needs and purposes. Without clear linkage to such a mission, ethics codes become little more than abstract, arbitrary, boring legalisms. Ethical values and principles must be understood as integral aspects of all strategies and plans to achieve the company mission.
Corporate or organizational culture refers to what the company “is” (not so much what it “does” in this or that circumstance). Culture is about context and capability. What are the characteristic traits, habits, and customs that define the organization? What is the style and atmosphere of the company? What are its virtues and vices, its characteristic potentialities, skills, and inclinations? Without a healthy “value-embedded-culture,” ethical decisions and practices are imperiled. Just as a physically-weak, out-of-shape sports team cannot successfully carry out even the most brilliantly conceived set of plays, so an ethically-weak company culture cannot live up to its stated principles and its code of ethics. Each company must identify and articulate the cultural values and traits that are essential to carrying out its particular mission.
When a company has addressed its motivation, mission, and culture, it is time to ask what the company actually “does”? What are the basic practices of the company? What are the primary activities, behaviors, and processes undertaken as the company pursues its mission? Here is where companies need action-guiding rules and principles — often stated in the form of a code of ethics. Without robust, reliable “principle-guided-practices,” companies are liable to fail in their quest for excellence and wind up dealing with far more crises than necessary. When principles have a nice “fit” with basic business practices and activities, when they are clearly rooted in the company mission and culture, ethics is not experienced as an abstract, negative restraint but rather as a “set of plays helping us get into the end zone.”
Even in the best of circumstances, hard cases and crises in business are going to arise. An exclusive emphasis on crisis-resolution, “damage-control” ethics is a mistake because it allows negative challenges and crises to set the ethics agenda and fails to move upstream to deal with the sources of these challenges. Nevertheless, ethical dilemmas and quandaries are inescapable and ethically-healthy companies must put in place a ready, effective trouble-shooting and crisis-resolution method.
David W. Gill was co-founder of IBTE and author of Benchmark Ethics, a regular article in the first 32 issues of Ethix. After eight years of writing, speaking, teaching, and consulting in the Bay Area of California, he joined the faculty of Gordon-Conwell Theological Center (South Hampton, Mass.) in 2010, where he is also Director of the Mockler Center for Faith and Ethics in the Workplace.