Pages:9 (2693 words)
Beliefs, Practices, Challenges
Persons in positions of leadership inevitably encounter major ethical dilemmas and in fact make ethical decisions on a daily basis. Interviews with senior executives can reveal the complexities of ethical decision making at the executive level, as personal morals frequently disconnect from the ethical culture governing the organization or the industry’s regulatory climate (Bailey & Shantz, 2018). Bandwagon fallacies—the sense that because something is normative it is ethical—predominate in the workplace. An interview with C. Linden (name altered to protect the individual’s privacy) shows how personal ethical beliefs clash with the prevailing norms and values in the field. Employee diversity adds to the complications involved in executive ethical decision-making, according to Linden. The predominant ethical challenges usually relate to balancing two equally compelling ethical objectives, or weighing the pros and cons of a decision when there are no clear black-and-white resolutions. No genuine dilemma has a straightforward answer; it is not as if C-suite leaders are faced with simple choices like whether to steal, accept a bribe, or commit some crime. The most common ethical challenges are those that require discipline and self-restraint, but also courage and humility.
The subject of this interview holds ethical beliefs that align with universal principles, while veering more towards the philosophy of character ethics. As Crossan, Mazutis & Seijts (2013) point out, character ethics or virtue ethics can prove to be a more sensible model or framework for guiding the decisions made by leaders. Unlike deontological or utilitarian ethical frameworks, virtue and character ethics demand self-reflection, the willingness to change, and the ability to act based on intrinsic motivation to do the right thing. At the same time, Linden agrees that a formal ethical code remains essential in any organization. Research substantiates the subject’s belief in a formal ethical code that outlines behavioral guidelines and the ramifications of transgressions. For example, Schwartz (2013) found that formal elements such as “code of ethics, ethics training, an ethics hotline, and an ethics officer” prove far more effective than nebulous means of approaching dilemmas and decisions (p. 39). Leadership always remains critical for the entire corporate culture, inculcating the values and norms of the organization through C-suite behavioral characteristics. Linden believes, as Hatcher (2018) does, that “an organization is only as ethical as its leaders,” (p. 98). One of Linden’s biggest challenges has been to speak out against immoral acts, even when they are committed by colleagues he would have referred to as friends. The courage to speak out involves delicate and tactful approaches to communication and emotional intelligence, Linden notes, pointing out that the first step should always be direct confrontation with the individual and then if necessary alerting senior leadership.
Linden believes that human resources should remain more actively involved in promoting the ethical culture of the company through more robust hiring and training practices. At the risk of overreliance on personality assessments, a human resources department can use tools and techniques to seek out the character traits most suitable to the organization’s outlook. Similarly, through employee development and training, the human resources department participates in the process of engagement and motivation that minimizes conflict. Three years ago, Linden’s company invested in software systems for employee training and also in public speakers designed to improve the moral character and outlook of employees. Intrinsic motivation comes from engaging employees and creating the type of organizational culture that discourages ethical infractions. Whereas Linden used to benefit financially from the benefit of stock-based compensation, a shift away from such ethically problematic policies has helped his organization to overcome some of its most serious problems. Stock-based compensation has traditionally been used as a source of extrinsic motivation for executives, but research shows how this practice leads to “smooth earnings,” and the artificial elevation of the company’s stock price, as well as broader societal problems like “lower shareholder returns, bubbles and crashes and huge corporate scandals,” (Martin, 2011, p. 43). In light of the ethical and even legal problems associated with providing C-suite personnel with stock in the firm, his company made the difficult choice to pull back and totally shift its approach towards compensation, reward, and retention of top talent.
The interview with Linden therefore believes in the importance of personal responsibility and accountability. Leadership should be comprised of people with solid values, firm ethical judgment, and strength of character that remains unwavering in the face of difficult choices. Loyalty is to values and the mission of the firm, not to cronies in the company, as Linden put it. While not all ethical dilemmas can be resolved easily, through a process of open dialogue and interchange with opposing points of view, leaders can come up with creative solutions that promote the goals and values of the organization. Finally, ethical behavior never needs to conflict directly with profitability. As Hatcher (2018) points out too, values have value in the C-suite. MacDougall, Bagdasarov & Buckley (2018) refer to the concept of the “triple bottom line,” which many senior executives like Linden have come to adopt in their daily work…
…ethics plus the cultivation of good moral character in employees makes for a sensible approach to ethical dilemmas in the workplace. A code of ethics and even the law are insufficient to guide employee behavior. As Linden does, I also believe in the need to be intrinsically motivated. We cannot expect people to be angels, but we can demonstrate through good leadership that ethical behavior benefits the self, others, and promotes the triple bottom line.
Leaders in the C-suite become role models for the company. Linden did not go into specifics regarding corporate social and environmental responsibility as they are practiced in his organization, but shows how sometimes extrinsic reward eventually leads to intrinsic motivation down the road. One example is the company’s environmental policies and practices. The company has changed its environmental policies several times in response to client requests and also to market forces. At first, the C-suite took some steps to reduce waste out of the need to retain customers and remain competitive. One competitor had billed itself as the green alternative in the industry and threatened to undermine Linden’s firm. To respond, the company released a line of products that appealed to the “green” ethos. After a year, Linden and his colleagues realized that they actually had a better attitude and emotional outlook towards their work knowing that they were acting in accordance with overarching ethical principles. This was a good example of how extrinsic factors are sometimes necessary to stimulate the more important intrinsic changes that lead to normative ethical behavior.
Speaking with leaders like Linden also showcase the diversity of opinions and approaches to business ethics. Not all leaders will believe that character ethics can be integrated into a large company. Many leaders believe that market forces and the legal climate are the only real thing guiding ethical decisions. Others may believe that religious values are needed to create a stable ethical climate in a company. Linden straddles the extremes of consequentialism and deontology, showing that hard lined stances are just as problematic in the world of business as moral relativism. Through this interview, I also learned the importance of humor—an unexpected takeaway. Linden kept reminding me that people make mistakes and that when a leader with the potential to make errors with major ramifications does make a mistake, it is important to recognize it immediately, correct it, but also have the courage to laugh. Working with a team, and continually collaborating with others can also prevent the types of errors that do lead to seriously…
Bailey, C. & Shantz, A. (2018). Creating an ethically strong organization. MIT Sloan Management Review. http://ilp.mit.edu/media/news_articles/smr/2018/60101.pdf
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MacDougall, A.E., Bagdarasov, Z. & Buckley, M.R. (2008). Applying a primary risk management model to the C-suite. In Sims, R.R. & Quatro, S.A. (Eds.) Executive Ethics. Second Edition. Charlotte: IAP, pp. 211-234.
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Schwartz, M.S. (2013). Developing and sustaining an ethical corporate culture: The core elements. Business Horizons 56(1): 39-50.
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