Business Ethics 02


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Courseware from the course on Business Ethics that I taught at St. Joseph\'s College of Business Administration in 2009

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Business Ethics 02

  1. 1. Business  Ethics   Tathagat  Varma   Session  2/12:  23-­‐Jul-­‐09  
  2. 2. History  •  Probably  as  old  as  trade  itself  !  •  The  Code  of  Hammurabi  (1700s  B.C.),  prescribing   prices  and  tariffs  and  laying  down  both  rules  of   commerce  and  harsh  penalMes  for  noncompliance,   evidences  some  of  civilizaMons  earlier  aQempts  to   establish  the  moral  contours  of  commercial  acMvity.    •  Aristotles  Poli&cs  (300s  B.C.)  addresses  explicitly   commercial  relaMons  in  its  discussion  of  household   management.    •  Judeo-­‐ChrisMan  morality,  as  expressed  in,  e.g.,  the   Talmud  (200  A.D.)  and  the  Ten  Commandments   (Exodus  20:2-­‐17;  Deuteronomy  5:6-­‐21),  includes  moral   rules  applicable  to  commercial  conduct.  
  3. 3. Today  •  As  a  discrete,  self-­‐conscious  academic  discipline,   business  ethics  is  roughly  four  decades  old.    •  Raymond  Baumharts  (1961,  1963,  1968)   groundbreaking  studies  in  the  1960s  are  generally   understood  to  be  early  contribuMons  to  business   ethics.    •  Richard  DeGeorge  (2005)  dates  academic   business  ethics  to  the  1970s,  idenMfying   Baumhart  as  a  forerunner  to  a  self-­‐conscious   academic  business  ethics.    •  Prominent  contemporary  business  ethicist   Norman  Bowie  dates  the  fields  first  academic   conference  to  1974  (DeGeorge  2005).  
  4. 4. 1960s  •  Ethical  Climate   –  Social  unrest.  AnM-­‐war  senMment.  Employees  have  an  adversarial  relaMonship   with  management.  Values  shi`  away  from  loyalty  to  an  employer  to  loyalty  to   ideals.  Old  values  are  cast  aside.  •  Major  Ethical  Dilemmas   –  Environmental  issues   –  Increased  employee-­‐employer  tension   –  Civil  rights  issues  dominate   –  Honesty   –  The  work  ethic  changes   –  Drug  use  escalates  •  Business  Ethics  Developments   –  Companies  begin  establishing  codes  of  conduct  and  values  statements   –  Birth  of  social  responsibility  movement   –  CorporaMons  address  ethics  issues  through  legal  or  personnel  departments  
  5. 5. 1970s  •  Ethical  Culture   –  Defense  contractors  and  other  major  industries  riddled  by   scandal.  The  economy  suffers  through  recession.   Unemployment  escalates.  There  are  heightened  environmental   concerns.  The  public  pushes  to  make  businesses  accountable  for   ethical  shortcomings.  •  Major  Ethical  Dilemmas   –  Employee  militancy  (employee  versus  management  mentality)   –  Human  rights  issues  surface  (forced  labor,  sub-­‐standard  wages,   unsafe  pracMces)   –  Some  firms  choose  to  cover  rather  than  correct  dilemmas  •  Business  Ethics  Developments   –  ERC  founded  (1977)   –  Compliance  with  laws  high-­‐lighted   –  Federal  Corrupt  PracMces  Act  passed  in  1977   –  Values  movement  begins  to  move  ethics  from  compliance   orientaMon  to  being  "values  centered"  
  6. 6. 1980s  •  Ethical  Culture   –  The  social  contract  between  employers  and  employees  is  redefined.   Defense  contractors  are  required  to  conform  to  stringent  rules.   CorporaMons  downsize  and  employees  ahtudes  about  loyalty  to  the   employer  are  eroded.  Health  care  ethics  emphasized.  •  Major  Ethical  Dilemmas   –  Bribes  and  illegal  contracMng  pracMces   –  Influence  peddling   –  DecepMve  adverMsing   –  Financial  fraud  (savings  and  loan  scandal)   –  Transparency  issues  arise  •  Business  Ethics  Developments   –  ERC  develops  the  U.S.  Code  of  Ethics  for  Government  Service  (1980)   –  ERC  forms  first  business  ethics  office  at  General  Dynamics  (1985)   –  Defense  Industry  IniMaMve  established  (1986)   –  Some  companies  create  ombudsman  posiMons  in  addiMon  to  ethics   officer  roles   –  False  Claims  Act  (government  contracMng)  
  7. 7. 1990s  •  Global  expansion  brings  new  ethical  challenges.  There  are  major  concerns   about  child  labor,  facilitaMon  payments  (bribes),  and  environmental  issues.   The  emergence  of  the  Internet  challenges  cultural  borders.  What  was   forbidden  becomes  common.  •  Major  Ethical  Dilemmas   –  Unsafe  work  pracMces  in  third  world  countries   –  Increased  corporate  liability  for  personal  damage  (cigareQe  companies,  Dow   Chemical,  etc.)   –  Financial  mismanagement  and  fraud.  •  Business  Ethics  Developments   –  Federal  Sentencing  Guidelines  for  OrganizaMons  (1991)   –  Class  acMon  lawsuits   –  Global  Sullivan  Principles  (1999)   –  In  re  Caremark  (Delaware  Chancery  Court  ruling  re  Board  responsibility  for   ethics)   –  IGs  requiring  voluntary  disclosure   –  ERC  establishes  internaMonal  business  ethics  centers   –  Royal  Dutch  Shell  InternaMonal  begins  issuing  annual  reports  on  their  ethical   performance  
  8. 8. 2000s  •  Unprecedented  economic  growth  is  followed  by  financial  failures.  Ethics  issues   destroy  some  high  profile  firms.  Personal  data  is  collected  and  sold  openly.  Hackers   and  data  thieves  plague  businesses  and  government  agencies.  Acts  of  terror  and   aggression  occur  internaMonally.  •  Major  Ethical  Dilemmas   –  Cyber  crime   –  Privacy  issues  (data  mining)   –  Financial  mismanagement.   –  InternaMonal  corrupMon.   –  Loss  of  privacy  -­‐  employees  versus  employers   –  Intellectual  property  the`   –  The  role  of  business  in  promoMng  sustainable  development  •  Business  Ethics  Developments   –  Business  regulaMons  mandate  stronger  ethical  safeguards  (Federal  Sentencing  Guidelines  for   OrganizaMons;  Sarbanes-­‐Oxley  Act  of  2002)   –  AnMcorrupMon  efforts  grow.   –  Stronger  emphasis  on  Corporate  Social  Responsibility  and  Integrity  Management   –  OECD  ConvenMon  on  Bribery  (1997-­‐2000)   –  UN  ConvenMon  Against  CorrupMon  (2003);  UN  Global  Compact  adopts  10th  principle  against   corrupMon  (2004)   –  Revised  Federal  Sentencing  Guidelines  for  OrganizaMons  (2004)   –  Increased  emphasis  on  evaluaMng  ethics  program  effecMveness  
  9. 9. What  is  Decision-­‐making  ?  •  Decision  making  can  be  regarded  as  an  outcome   of  mental  processes  (cogniMve  process)  leading  to   the  selecMon  of  a  course  of  acMon  among  several   alternaMves.  Every  decision  making  process   produces  a  final  choice.[1]  The  output  can  be  an   acMon  or  an  opinion  of  choice.  •  Key  influences:   –  Law  of  the  Land,  Company  Policies:  SMck  to  the  rules   at  all  cost  Vs.  break  all  rules   –  Environmental  Factors,  the  ground  situaMon,   criMcality,  urgency,  importance,  etc.   –  Data  available:  Certain,  Complete,  Consistent,  Timely,   etc.   –  Affected  by  personal  factors,  biases  
  10. 10. Personal  Factors  affect  Decision   Making  •  Intellectual  Ability:  The  mental  ability  of  two  individuals  will  not  be  the   same.  People  differ  in  their  capacity  to  perceive,  understand  and  analyze   any  given  problem.  Such  a  difference  is  reflected  in  their  decisions.  •  Experience:    A  manager  with  considerable  experience  may  not  encounter   problems  while  evolving  decisions  even  on  crucial  maQers.  This  is   obviously  because  he  would  have  already  come  across  such  situaMons  in   his  career.  A  manager  who  lacks  experience,  on  the  other  hand,  may   fumble.  •  Sen@ments  and  Values:  Every  manager  has  his  own  values,   beliefs  and  senMments.  Some  managers  may  be  pragmaMc  in  their   approach  and  may  evolve  a  pracMcal  decision  each  Mme.  On  the  other   hand,  there  are  sMll  some  others  who  may  like  to  play  safe  and  go  by   convenMon  or  custom.  •  Courage:  Undoubtedly,  The  manager  needs  courage  to  evolve  and   implement  certain  decisions  on  sensiMve  issues.  •  Level  of  Mo@va@on,  Self-­‐Confidence,  etc:  A  manager  with  a  high  level  of   moMvaMon  and  self-­‐confidence  may  not  be  afraid  of  the  reacMon  to  his   decisions.  He  will  not  bother  even  if  his  decision  does  not  get  the  approval   of  everyone.  He  is  sure  of  the  success  of  his  decision.  
  11. 11. Values  •  The  core  beliefs  we  hold  regarding  what  is   right  and  fair  in  terms  of  our  acMons  and  our   interacMons  with  others.  Another  way  to   characterize  values  is  that  they  are  what  an   individual  believes  to  be  of  worth  and   importance  to  their  life  (valuable).    (From   "What  is  the  Difference  Between  Ethics,   Morals  and  Values?",  Frank  Navran,  / ask_e4.html)        
  12. 12. Morals  •  Values  that  we  aQribute  to  a  system  of  beliefs   that  help  the  individual  define  right  versus   wrong,  good  versus  bad.  These  typically  get   their  authority  from  something  outside  the   individual  -­‐-­‐  a  higher  being  or  higher  authority   (e.g.  government,  society).  Moral  concepts,   judgments  and  pracMces  may  vary  from  one   society  to  another.  (From  "What  is  the   Difference  Between  Ethics,  Morals  and   Values?",  Frank  Navran,  /ask_e4.html)  
  13. 13. Ethics  •  The  decisions,  choices,  and  acMons  (behaviors)  we  make  that  reflect  and   enact  our  values..    •  The  study  of  what  we  understand  to  be  good  and  right  behavior  and  how   people  make  those  judgments.  (From  "What  is  the  Difference  Between   Ethics,  Morals  and  Values?",  Frank  Navran,  /ask_e4.html)    •  A  set  of  standards  of  conduct  that  guide  decisions  and  acMons  based  on   duMes  derived  from  core  values.  (From  "The  Ethics  of  Non-­‐profit   Management,"  Stephen  D.  PoQs,  /resources/speech_detail.cfm?ID=821  )    •  There  are  many  definiMons  as  to  what  ethics  encompasses:     –  The  discipline  dealing  with  what  is  good  and  bad  and  with  moral  duty  and   obligaMon;     –  Decisions,  choices,  and  acMons  we  make  that  reflect  and  enact  our  values;     –  A  set  of  moral  principles  or  values;     –  A  theory  or  system  of  moral  values;  and/or     –  A  guiding  philosophy.   (From  "CreaMng  a  Workable  Company  Code  of  Conduct,"  2003,  Ethics   Resource  Center)    
  14. 14. What  Ethics  is  NOT  •  Ethics  is  not  the  same  as  feelings.  Feelings  provide  important  informaMon  for  our   ethical  choices.  Some  people  have  highly  developed  habits  that  make  them  feel   bad  when  they  do  something  wrong,  but  many  people  feel  good  even  though  they   are  doing  something  wrong.  And  o`en  our  feelings  will  tell  us  it  is  uncomfortable   to  do  the  right  thing  if  it  is  hard.    •  Ethics  is  not  religion.  Many  people  are  not  religious,  but  ethics  applies  to   everyone.  Most  religions  do  advocate  high  ethical  standards  but  someMmes  do  not   address  all  the  types  of  problems  we  face.  •  Ethics  is  not  following  the  law.  A  good  system  of  law  does  incorporate  many   ethical  standards,  but  law  can  deviate  from  what  is  ethical.  Law  can  become   ethically  corrupt,  as  some  totalitarian  regimes  have  made  it.  Law  can  be  a  funcMon   of  power  alone  and  designed  to  serve  the  interests  of  narrow  groups.  Law  may   have  a  difficult  Mme  designing  or  enforcing  standards  in  some  important  areas,  and   may  be  slow  to  address  new  problems.  •  Ethics  is  not  following  culturally  accepted  norms.  Some  cultures  are  quite  ethical,   but  others  become  corrupt  -­‐or  blind  to  certain  ethical  concerns  (as  the  United   States  was  to  slavery  before  the  Civil  War).  "When  in  Rome,  do  as  the  Romans  do"   is  not  a  saMsfactory  ethical  standard.    •  Ethics  is  not  science.  Social  and  natural  science  can  provide  important  data  to  help   us  make  beQer  ethical  choices.  But  science  alone  does  not  tell  us  what  we  ought  to   do.  Science  may  provide  an  explanaMon  for  what  humans  are  like.  But  ethics   provides  reasons  for  how  humans  ought  to  act.  And  just  because  something  is   scienMfically  or  technologically  possible,  it  may  not  be  ethical  to  do  it.  
  15. 15. Why  IdenMfying  Ethical  Standards  is   Hard  ?  •  There  are  two  fundamental  problems  in   idenMfying  the  ethical  standards  we  are  to  follow:   –  On  what  do  we  base  our  ethical  standards?   –  How  do  those  standards  get  applied  to  specific   situaMons  we  face?  •  If  our  ethics  are  not  based  on  feelings,  religion,   law,  accepted  social  pracMce,  or  science,  what  are   they  based  on?  Many  philosophers  and  ethicists   have  helped  us  answer  this  criMcal  quesMon.  They   have  suggested  at  least  five  different  sources  of   ethical  standards  we  should  use.  
  16. 16. Five  Sources  of  Ethical  Standards  •  The  UMlitarian  Approach  •  The  Rights  Approach  •  The  Fairness  or  JusMce  Approach  •  The  Common  Good  Approach  •  The  Virtue  Approach  
  17. 17. The  UMlitarian  Approach  •  Some  ethicists  emphasize  that  the  ethical  acMon   is  the  one  that  provides  the  most  good  or  does   the  least  harm,  or,  to  put  it  another  way,   produces  the  greatest  balance  of  good  over   harm.  The  ethical  corporate  acMon,  then,  is  the   one  that  produces  the  greatest  good  and  does   the  least  harm  for  all  who  are  affected-­‐ customers,  employees,  shareholders,  the   community,  and  the  environment.  Ethical  warfare   balances  the  good  achieved  in  ending  terrorism   with  the  harm  done  to  all  parMes  through  death,   injuries,  and  destrucMon.  The  uMlitarian  approach   deals  with  consequences;  it  tries  both  to  increase   the  good  done  and  to  reduce  the  harm  done.  
  18. 18. The  Rights  Approach  •  Other  philosophers  and  ethicists  suggest  that  the   ethical  acMon  is  the  one  that  best  protects  and  respects   the  moral  rights  of  those  affected.  This  approach  starts   from  the  belief  that  humans  have  a  dignity  based  on   their  human  nature  per  se  or  on  their  ability  to  choose   freely  what  they  do  with  their  lives.  On  the  basis  of   such  dignity,  they  have  a  right  to  be  treated  as  ends   and  not  merely  as  means  to  other  ends.  The  list  of   moral  rights  -­‐including  the  rights  to  make  ones  own   choices  about  what  kind  of  life  to  lead,  to  be  told  the   truth,  not  to  be  injured,  to  a  degree  of  privacy,  and  so   on-­‐is  widely  debated;  some  now  argue  that  non-­‐ humans  have  rights,  too.  Also,  it  is  o`en  said  that   rights  imply  duMes-­‐in  parMcular,  the  duty  to  respect   others  rights.  
  19. 19. The  Fairness  or  JusMce  Approach  •  Aristotle  and  other  Greek  philosophers  have   contributed  the  idea  that  all  equals  should  be   treated  equally.  Today  we  use  this  idea  to  say  that   ethical  acMons  treat  all  human  beings  equally-­‐or  if   unequally,  then  fairly  based  on  some  standard   that  is  defensible.  We  pay  people  more  based  on   their  harder  work  or  the  greater  amount  that   they  contribute  to  an  organizaMon,  and  say  that  is   fair.  But  there  is  a  debate  over  CEO  salaries  that   are  hundreds  of  Mmes  larger  than  the  pay  of   others;  many  ask  whether  the  huge  disparity  is   based  on  a  defensible  standard  or  whether  it  is   the  result  of  an  imbalance  of  power  and  hence  is   unfair.  
  20. 20. The  Common  Good  Approach  •  The  Greek  philosophers  have  also  contributed  the   noMon  that  life  in  community  is  a  good  in  itself   and  our  acMons  should  contribute  to  that  life.   This  approach  suggests  that  the  interlocking   relaMonships  of  society  are  the  basis  of  ethical   reasoning  and  that  respect  and  compassion  for  all   others-­‐especially  the  vulnerable-­‐are   requirements  of  such  reasoning.  This  approach   also  calls  aQenMon  to  the  common  condiMons   that  are  important  to  the  welfare  of  everyone.   This  may  be  a  system  of  laws,  effecMve  police  and   fire  departments,  health  care,  a  public   educaMonal  system,  or  even  public  recreaMonal   areas.  
  21. 21. The  Virtue  Approach  •  A  very  ancient  approach  to  ethics  is  that  ethical   acMons  ought  to  be  consistent  with  certain  ideal   virtues  that  provide  for  the  full  development  of   our  humanity.  These  virtues  are  disposiMons  and   habits  that  enable  us  to  act  according  to  the   highest  potenMal  of  our  character  and  on  behalf   of  values  like  truth  and  beauty.  Honesty,  courage,   compassion,  generosity,  tolerance,  love,  fidelity,   integrity,  fairness,  self-­‐control,  and  prudence  are   all  examples  of  virtues.  Virtue  ethics  asks  of  any   acMon,  "What  kind  of  person  will  I  become  if  I  do   this?"  or  "Is  this  acMon  consistent  with  my  acMng   at  my  best?"  
  22. 22. A  Framework  for  Ethical  Decision   Making  •  Recognize  an  Ethical  Issue  •  Get  the  Facts  •  Evaluate  AlternaMve  AcMons  •  Make  a  Decision  and  Test  it  •  Act  and  Reflect  on  the  Outcome  
  23. 23. Recognize  an  Ethical  Issue  •  Could  this  decision  or  situaMon  be  damaging   to  someone  or  to  some  group?  Does  this   decision  involve  a  choice  between  a  good  and   bad  alternaMve,  or  perhaps  between  two   "goods"  or  between  two  "bads"?    •  Is  this  issue  about  more  than  what  is  legal  or   what  is  most  efficient?  If  so,  how?  
  24. 24. Get  the  Facts  •  What  are  the  relevant  facts  of  the  case?  What   facts  are  not  known?  Can  I  learn  more  about   the  situaMon?  Do  I  know  enough  to  make  a   decision?  •  What  individuals  and  groups  have  an   important  stake  in  the  outcome?  Are  some   concerns  more  important?  Why?  •  What  are  the  opMons  for  acMng?  Have  all  the   relevant  persons  and  groups  been  consulted?   Have  I  idenMfied  creaMve  opMons?  
  25. 25. Evaluate  Alternate  AcMons  •  Evaluate  the  opMons  by  asking  the  following   quesMons:   –  Which  opMon  will  produce  the  most  good  and  do  the   least  harm?  (The  UMlitarian  Approach)   –  Which  opMon  best  respects  the  rights  of  all  who  have   a  stake?  (The  Rights  Approach)   –  Which  opMon  treats  people  equally  or   proporMonately?  (The  JusMce  Approach)   –  Which  opMon  best  serves  the  community     as  a  whole,  not  just  some  members?     (The  Common  Good  Approach)   –  Which  opMon  leads  me  to  act  as  the  sort  of  person  I   want  to  be?  (The  Virtue  Approach)  
  26. 26. Make  a  Decision  and  Test  it  •  Considering  all  these  approaches,  which   opMon  best  addresses  the  situaMon?    •  If  I  told  someone  I  respect-­‐or  told  a  television   audience-­‐which  opMon  I  have  chosen,  what   would  they  say?    
  27. 27. Act  and  Reflect  on  the  Outcome  •  How  can  my  decision  be  implemented  with   the  greatest  care  and  aQenMon  to  the   concerns  of  all  stakeholders?  •  How  did  my  decision  turn  out  and  what  have  I   learned  from  this  specific  situaMon?  
  28. 28. What  do  you  do  when  you  see…?  •  Your  boss/colleagues/team  members  indulging  in   –  ViolaMon  of  company  policies   –  Illegal  behavior   –  Unethical  pracMces   –  Workplace  harassment  •  Do  you   –  Report  immediately   –  Raise  hell   –  Tip-­‐off  law  agencies   –  Call  the  press  •  You  have  to  make  some  kind  of  decision!  
  29. 29. We  Don’t  Need  Another  Hero  !  •  Published  in  HBR  in  Sep  2001,  this  arMcle  is  by  Joseph   L.  Badaracco,  John  Shad  Professor  of  Business  Ethics  •  Key  ideas:   –  The  gold  standard  of  honorable  leadership:  the  charismaMc   hero  astride  a  white  horse,  baQling  wrongdoing,   spearheading  large-­‐scale,  ethical  missions.  MarMn  Luther   King,  Jr.,  for  example.   –  But  should  this  standard  apply  in  corpora&ons?  In  most   firms,  the  opposite  leadership  style  is  far  more  potent.  It’s   not  the  heroic  types  but  the  quiet  leaders  who  achieve   extraordinary  results.  They  work  inconspicuously,  deep   within  their  organizaMons—paMently  picking,  and  fighMng,   their  baQles.   –  Quiet  leaders  don’t  make  headlines.  But  through  their   modest,  measured  efforts  far  from  the  limelight,  they   make  their  organizaMons  much  beQer  places.  And,  they   don’t  rack  up  casualMes.  
  30. 30. Essence  of  ‘Quiet  Leadership’  •  …the  most  effecMve  moral  leaders  in  the  corporate   world  o`en  sever  the  connecMon  between  morality   and  public  heroism.  These  men  and  women  aren’t   high-­‐profile  champions  of  right  over  wrong  and  don’t   want  to  be.  They  don’t  spearhead  large-­‐scale  ethical   crusades.  They  move  paMently,  carefully,  and   incrementally.  They  right—or  prevent—moral  wrongs   in  the  workplace  inconspicuously  and  usually  without   casualMes.  I  have  come  to  call  these  people  quiet   leaders  because  their  modesty  and  restraint  are  in   large  measure  responsible  for  their  extraordinary   achievements.  And  since  many  big  problems  can  only   be  resolved  by  a  long  series  of  small  efforts,  quiet   leadership,  despite  its  seemingly  slow  pace,  o`en  turns   out  to  be  the  quickest  way  to  make  the  corporaMon— and  the  world—a  beQer  place.    
  31. 31. From  the  arMcle…  •  In  this  arMcle,  I  explore  the  findings  of  my  four-­‐year  effort   to  understand  how  quiet  leaders  see  themselves,  think   about  ethical  problems,  and  make  effecMve  decisions.   Although  all  names  have  been  changed,  the  anecdotes   below  are  based  on  more  than  150  case  studies  that  I   gathered  from  several  sources,  including  direct  observaMon,   parMcipaMon  in  situaMons  as  an  adviser,  and  papers  and   accounts  by  many  of  my  older  MBA  students  who  came   from  corporate  posiMons  with  serious  management   responsibiliMes.  The  stories  have  convinced  me  that  while   certain  ethical  challenges  require  direct,  public  ac@on,   quiet  leadership  is  the  best  way  to  do  the  right  thing  in   many  cases.  That’s  because  quiet  leadership  is  prac@cal,   effec@ve,  and  sustainable.  Quiet  leaders  prefer  to  pick   their  baSles  and  fight  them  carefully  rather  than  go  down   in  a  blaze  of  glory  for  a  single,  drama@c  effort.    
  32. 32. 4  PracMces  of  Quiet  Leadership  •  My  research  suggests  that  quiet  moral  leaders  follow   four  basic  rules  in  meeMng  ethical  challenges  and   making  decisions.  Although  not  always  used  together,   the  rules  consMtute  an  indispensable  tool  kit  that  can   help  quiet  leaders  work  out  the  dilemmas  they  face.   Some  tac@cs  may  seem  a  liSle  too  clever  or  even   ethically  dubious.  Certainly,  few  people  would  want   to  work  at  jobs  where  such  moves  cons@tute  business   as  usual.  Nevertheless,  these  guidelines  oVen  prove   cri@cal  when  leaders  have  real  responsibili@es  to   meet.     –  Put  things  off  un@l  tomorrow   –  Pick  your  baSles   –  Bend  the  rules   –  Find  a  compromise  
  33. 33. Put  things  off  unMl  tomorrow  •  Put  things  off  un@l  tomorrow.  When  an  ethical   dilemma  escalates,  buy  Mme—it  can  spell  the   difference  between  success  and  failure.  •  Example:  Under  intense  financial  pressure,  new   regional  bank  president  Kyle  Williams  inherited   four  chronic  underperformers  whom  his   superiors  wanted  to  fire  immediately.  Fearing   legal  repercussions,  he  stalled  for  Mme.  He  sought   legal  personnel  advice  and  raised  strategic   quesMons—gaining  weeks  to  resolve  all  the   issues.  The  payoff?  Three  of  the  problem   employees  le`  for  incontroverMble  reasons;  one   became  a  first-­‐rate  loan  officer.  
  34. 34. Pick  your  baQles  •  Pick  your  baSles.  Quiet  leaders  protect  their  poliMcal   capital—their  reputaMon  for  accomplishing  things  and   their  networks  of  people  who  appreciate  and  reward   their  efforts.  Before  taking  a  stand,  they  calculate  the   risks  and  returns  to  that  capital.  •  Example:  PR  manager  Michele  Petryni  fumed  when  a   partner  in  her  law  firm  excluded  her  from  a  meeMng   because  of  her  gender.  But  rather  than  making  trouble,   she  used  pointed  humor.“I’ve  never  been  told  I  couldn’t   play  ball  because  I  didn’t  have  the  right  equipment!”   she  joked  with  a  colleague.  He  told  the  senior  partner   what  happened—generaMng  an  apology  from  the  firm.   Petryni  raised  awareness  of  the  problem—and   protected  her  poliMcal  capital.  
  35. 35. Bend  the  rules  •  Bend  the  rules.  Following  rules  slavishly  can  be  a   moral  cop-­‐out.  Face  it:  We’ve  all  told  a  “white  lie”   to  protect  a  friend’s  feelings.  Quiet  leaders  find   effecMve  ways  to  maneuver  within  the  rules’   boundaries.  •  Example:  Consultant  Jonathan  Balint’s  brother-­‐in-­‐ law  worked  at  Jonathan’s  client  company  and  was   debaMng  whether  to  stay  there.  Jonathan  knew   the  client  was  planning  a  major  layoff.  Instead  of   betraying  the  client’s  confidenMality  by  alerMng   his  brother-­‐in-­‐law,  he  offered  hints  (“No  one  is   indispensable”).  The  brother-­‐in-­‐law  caught  on— and  Jonathan  protected  his  own  reputaMon  and   career.  
  36. 36. Find  a  compromise  •  Find  a  compromise.  An  unwillingness  to   compromise  may  be  morally  principled—but  it’s   unrealisMc  in  most  situaMons.  Quiet  leaders  cra`   responsible,  workable  compromises.  •  Example:  Sales  rep  Roger  Darco  couldn’t  sell  a   longMme  customer  a  server  it  needed;  his   company  reserved  them  for  “premier”  clients.   Rather  than  disappoint  his  customer  or  fake   documents  to  sell  the  server,  Roger  arranged  for   his  customer  to  serve  as  a  test  site—and  get  the   computer  earlier.  He  pleased  his  customer  and   his  company.  
  37. 37. Reading  List  •  The  Ethical  Mind  –  conversaMon  with  Howard   Gardner  •  The  Ethical  ResponsibiliMes  of  Professionals  –   Howard  Gardner  •  Business  Excellence  through  Value  Systems  –   Sharu  Rangnekar