A recent study conducted by Thomas Zeni, M. Buckley, Michael Mumford and Jennifer Griffith examined the ethical component of decisions made by 65 high-profile executives as recorded in their biographies. The research effort broke down ethical decision making into three key phases:
Concerned that your corporate ethics policies aren't being followed? Read: Why Your Workplace Ethics Program Is Failing
According to the team's findings, the most critical stage, from an ethics perspective, during this decision-making process is the second step -- the gathering of information. Various biases can intrude during this stage to undermine ethical considerations, leading to less ethical outcomes.
Decision makers may unintentionally (or intentionally) limit the framing conditions for business discussions or restrict the types of information being considered to unduly influence the process towards a specific outcome. This bias can also come into play when certain information is valued or trusted more highly based solely on the message it conveys rather than its source.
One example would be evaluating potential sales incentive programs only on their ability to net higher revenues, avoiding or ignoring any discussions regarding process abuse, customer mistreatment, or potential ethical ramifications. Wells Fargo made this mistake, and it cost them $185 million.
They instituted an incentive program that was a huge success and generated millions of new accounts. Unfortunately, 1.5 million of these were created fraudulently by poorly-monitored employees looking to game the system.
To combat this bias, incorporate ethics discussions into your regular business meetings. Before launching a new project or initiative, consider the various moral implications and potential ethical pitfalls this program may have. And encourage staff to evaluate these issues from more than one perspective. Have them evaluate how customers, vendors, and business partners would react to these decisions.
Similarly, always evaluate the source of considered information. Is it coming from a group with a vested interest?
Another concern is the tendency of personal biases and agendas to creep into ethical decision-making processes. These private motivations are often rooted in personal experience and emotion, supplanting analytical frameworks for information and established corporate practices.
These influences can even be entirely unconscious.
Discourage these personal biases with clearly established company ethics standards. Draft corporate conduct guidelines that clearly outline what is and is not appropriate behavior for employees. Include real-world examples and scenarios that can demonstrate the ethical values held by your organization.
Employ tools to help employees and key decision makers uncover their own unconscious biases. Ethics training can also provide your staff with strategies to identify and react to ethical quagmires effectively and responsibly.
With proper education and training, your staff can proactively account for personal biases during decision-making processes. Similarly, other employees will be able to recognize inappropriate behavior and help either the errant worker or the organization to take adequate action.
In many cases, corporate decisions are iterative, building on previous policies and directives. And that tendency can lead to the kind of ethics death spiral that makes national headlines.
Research suggests that people are more likely to rationalize and engage in unethical behavior if the opportunities for corruption are presented gradually. So a small ethical oversight here or there can quickly snowball into rampant misconduct. Even more troubling, the study found that this trend is also present among those charged with ethical oversight.
To counteract this creeping threat, build an ethical culture within your organization. And according to the Organisation for Economic Co-operation and Development (OCED), the participation of executive leadership and management is crucial to this effort.
Incorporate these leaders into your company-wide ethics program, having them lead discussions and openly participate in training. By making it clear that ethical behavior is important from the top down, your employees will be less likely to cross lines or enter moral gray areas.
In addition, bring up ethical considerations during hiring processes and employee reviews. Make proper behavior a core requirement for every role in the company, and you can quickly change your corporate culture.
While taking measures to improve how information is considered and handled during ethical discussions is critical, it is not a cure-all. Business ethics requires constant diligence and consideration. But by taking these measures, your organization can help responsible business practices become a habit for your employees.
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