Marketing Ethics White Paper SMPS Foundation

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Marketing Ethics White Paper SMPS Foundation

  1. 1. White Paper Marketing Ethics: The Truth, the Whole Truth, and Nothing But the Truth… or NOT Taree Bollinger, CPSM and Pamela Heeke, CPSM July 2009 The content in this White Paper applies primarily to the following SMPS Domains of Practice: Domain 3: Client and Business Development Domain 4: Qualifications/Proposals Domain 6: Marketing and Business Performance Copyright © 2009 Society for Marketing Professional Services Foundation The information in this document is the intellectual property of the Society for Marketing Professional Services Foundation. Reproduction of portions of this document for personal use is permitted, provided that proper attribution is made to the SMPS Foundation. Reproduction of any portion of this document for any other purpose, including but not limited to any commercial purpose, is strictly prohibited. Contact: Society for Marketing Professional Services Foundation (800) 292-7677 E-mail: info@smps.org www.smpsfoundation.org
  2. 2. Table of Contents Executive Summary ............................................................................................... i Introduction ...........................................................................................................1 What Are Ethics and Ethical Behavior ...................................................................2 Ethical Decision Making .............................................................................3 Common Ethical Dilemmas Marketers Face .........................................................4 Stretching the Truth ....................................................................................4 Everybody’s Doing It ...................................................................................6 They Made Me Do It ...................................................................................7 Gifting Your Way to Success ......................................................................8 Truth or Consequences .........................................................................................9 Loss of Reputation......................................................................................9 Below the Bottom Line ..............................................................................10 The Prospect of Unemployment ...............................................................10 Righting Client Relationships ....................................................................11 The Ultimate Sacrifice ..............................................................................11 It May be Ethical, But is it Legal? ........................................................................12 From Stretching the Truth to Fraud ..........................................................13 From Gift Giving to Bribery .......................................................................14 From Conflict of Interest to Collusion ........................................................15 Instituting an Ethical Culture ................................................................................17 Mandating Ethical Behavior ......................................................................17 Corporate Codes of Ethics – Written or Implied?......................................18 Conclusion – Doing the Right Thing ....................................................................19 Endnotes .............................................................................................................20 Bibliography of Works Cited ................................................................................22 Acknowledgements .............................................................................................25 Authors’ Biographies ...........................................................................................25 Appendix (Sample Ethics Codes) ............................................................................ © 2009 Society for Marketing Professional Services Foundation
  3. 3. Executive Summary Raw egotism, greed, and the quest for more money, power, and success are all drivers of unethical behavior; but research shows that pressure from upper management to meet unrealistic expectations may be the leading factor. How many marketers out there haven’t felt similar pressure? As the history of corruption in corporate America continues to repeat itself like the movie “Groundhog Day,” it is now more important than ever for professional service firms to start talking about ethics and taking the necessary steps to put an end to “a VERY long day” when it comes to unethical marketing practices. The white paper, “Marketing Ethics: The Truth, The Whole Truth, and Nothing But the Truth… or Not,” opens with a brief introduction and explanation of ethics and ethical behavior and provides some suggestions on ethical decision making before launching into four major discussion points: 1) Common Ethical Dilemmas Marketers Face, 2) Truth or Consequences, 3) It May Be Ethical, But Is It Legal?, and 4) Instituting an Ethical Culture. The authors’ conclusions are based on extensive secondary research, as well as interviews with selected professionals who offered varying perspectives and insights, which are woven throughout the paper. They include: • The Trainer: Ford Harding, CMC, noted marketing consultant, educator, and author, who told them: “As the years have gone by, I’ve become more and more convinced that stretching the truth is by and large not productive, not helpful, and not necessary.” • The Attorney: Matt Williams, JD, general manager of a national insurance company, pro tem district court judge, and law school trial instructor, who told them: “Ultimately, professionals are going to hold themselves to the highest standards, and they’re going to work very hard to avoid even the appearance of impropriety.” • The A/E/C Executive: Craig Galati, AIA, president of Lucchesi Galati, a Las Vegas-based architectural and planning firm, who told them: “I think it’s the marketer’s job to make sure that whatever gets put into peoples’ resumes is as factual as they can determine.” © 2009 Society for Marketing Professional Services Foundation —i
  4. 4. • The Marketer: Brian Dyer, former marketer for Arthur Andersen who left as a result of the Enron scandal, who told them: “Marketing is about selling solutions to people, not creating new problems.” Some of the authors’ findings and observations may surprise you. Others won’t. For instance, did you know that… • There are simple tests you can use to help you make better ethical decisions on the fly? They include: The Stink Test, The Spouse Test, and The Newspaper Test. • Ethics laws regulating gifts to public officials in some states are so stringent that even accepting a cup of coffee or participating in a raffle at a trade show may be prohibited? • The Federal Acquisition Regulations (FAR) stipulate that all contractors awarded federal contracts exceeding $5 million with a performance period of 120 days or more must have a written code of business ethics and conduct in place within 30 days of the award? • The Project on Government Oversight maintains a Federal Contractor Misconduct Database on its website, www.pogo.org? • It may be the process rather than the end product that provides the real value when it comes to developing corporate codes of ethics? While we all know people who scoff at the idea of “marketing ethics” and label it an oxymoron, in researching and writing this paper, the authors came face-to-face with their own ethical dilemmas and boundaries. Their research has led them to agree with Jon Huntsman who said, “You do not act ethically to succeed, you do so because it the right thing to do.” © 2009 Society for Marketing Professional Services Foundation — ii
  5. 5. Introduction “We can learn a good deal about the nature of business by comparing it with poker. Poker has its own special ethics … Cunning, deception and concealment of one’s strength and intentions, not kindness and openheartedness, are vital in poker … No one thinks any the worse of poker on that account, and no one should think any worse of the game of business because its standards of right and wrong differ from the prevailing traditions of morality in our society.” 1 — Albert Carr Over forty years have passed since Carr’s classic article “Is Business Bluffing Ethical?” was published by the Harvard Business Review, and what have we learned? It is widely recognized that some of the most disastrous business strategies in history can be attributed to corporate executives who got so caught up in winning the game of business that they lost all sight of the impact their actions might have on others. Nevertheless, the pattern of corporate corruption continues to repeat itself on a national scale like the movie “Groundhog Day.” Marketers are certainly not exempt from the long list of unethical professionals who grace the nightly news on televisions across America. We all know people who scoff at the idea of “marketing ethics” and label it an oxymoron. With personal and business reputations on the line, it is now more important than ever for professional service firm marketers to talk about ethics and take action to put an end to “a VERY long day” when it comes to unethical practices. Seth Godin drove this point home in his book All Marketers are Liars, “Until marketers start to take responsibility for the stories we tell and the promises we make, consumers will get 2 increasingly skeptical and suspicious—and all marketers will lose.” This paper addresses these concerns and other consequences of unethical behavior. It provides suggestions for surmounting common ethical dilemmas professional services marketers face and touches upon methods for creating an ethical culture within a firm. In preparing this paper, the authors performed extensive secondary research as well as interviewed four professionals who each offer a different perspective on the topic: • The Trainer: Ford Harding, CMC, noted marketing consultant, educator, and author • The Attorney: Matt Williams, JD, general manager of a national insurance company, pro tem district court judge, and law school trial instructor © 2009 Society for Marketing Professional Services Foundation —1
  6. 6. • The A/E/C Executive: Craig Galati, AIA, president of Lucchesi-Galati, a Las Vegas- based architectural and planning firm • The Marketer: Brian Dyer, a former Arthur Andersen employee who lost his job as a direct result of the Enron scandal Our findings support the supposition that when the chips are down in business, doing whatever it takes to win (including bluffing) can lead to a devastating losing streak that doesn’t stop with money. Its widespread effects range from the loss of trust and reputation to the loss of freedom and even life. As Robert Solomon emphasizes in his book A Better Way to Think about Business, “There is too much at stake for too many people to think of business as merely a 3 game.” What are Ethics and Ethical Behavior? “A principle is a principle and in no case can it be watered down because of our incapacity to live it in practice. We have to strive to achieve it, and the striving should be conscious, deliberate, and hard.” — Mahatma Gandhi Key principles associated with ethical behavior include honesty, integrity, loyalty, respect, transparency, and consistency. The majority of us grew up being taught at least some of these values, but how many of the firms that we work for go beyond incorporating them into their mission/values statements, and why do some marketers and companies inevitably fail to live up to them? According to Brad Johnson and Charles Ridley, authors of The Elements of Ethics for Professionals, “No one stands above the potential of deception, evasion, and out and out lying. When money, power, success, or prestige is on the line, even highly regarded professionals have been found to cut corners, falsify data, plagiarize, and dupe the public, clients and their 4 5 own families…” Do you recognize the names: Nixon, Milken, and Madoff? Other influencers likely to convince professionals to cross the line into unethical territories were cited in a global survey on business ethics commissioned by the American Management Association (AMA). Conducted by the Human Resource Institute (HRI), the study found that “pressure from management or the Board to meet unrealistic business objectives and deadlines” was the leading factor most likely to cause unethical corporate behavior. The “desire © 2009 Society for Marketing Professional Services Foundation —2
  7. 7. to further one’s career and to protect one’s livelihood” were ranked second and third, respectively, as leading factors. Ethical Decision Making Figure 1: How to Measure Ethical Behavior Realizing there is probably not a Ford Harding (The Trainer): professional services marketer out there The Stink Test: “If it stinks don’t do it. If it feels wrong, don’t do it.” who hasn’t felt similar pressures, we asked our sources for advice on how to The Spouse Test: “How would you feel if your spouse found out about it?” make better ethical decisions. They Matt Williams (The Attorney): offered their guidance and even provided some tests to help you answer that “There’s the appearance of impropriety, there’s ethics and morality, and then there’s the law and corporate question for yourself. (See Figure 1: How compliance. Those standards may be different, but ultimately professionals are going to hold themselves to Measure Ethical Behavior.) In addition to the highest standards, and they’re going to to these tests, Ford Harding offers six work very hard to avoid even the appearance of impropriety. When they’re uncertain about it, they’re other measures in his book Creating going to seek guidance from their corporate compliance or their legal staff.” Rainmakers, including the authors’ favorite: “Is the finesse even necessary?” Craig Galati (The A/E/C Executive): 6 “I think that honesty is first and foremost. Then, [I ask] is it legal? Are all the issues balanced and do Another reliable barometer for judging you have all the information you need to make a what is ethical, and what is not, is peer decision? Are you hiding something or is someone hiding something from you? Do you feel right doing review. Peer review can improve the it? A mentor of mine once said, “If it was in the paper tomorrow and your mom was reading it, how would quality of your work, help with your you feel?” professional development, and reduce the Brian Dyer (The Marketer): risk of behaving inappropriately. (Unless, “The Golden Rule: Do unto others as you would have of course, you are hanging out with shady them do unto you. Take intellectual property for characters.) Make it a habit to discuss example…on one of the projects we were doing, another platform came up for re-purposing the ethics with your peers via such avenues information, but the information really belonged to the CEOs we were working with. It necessitated going as SMPS roundtables and networking back to them and getting their permission to use it on opportunities, as well as LinkedIn and another platform, because it wasn’t what they had originally agreed to or aligned with their perception of other social networks. what we were going to do with the material. Wouldn’t you want to know how your name is going to be used?” © 2009 Society for Marketing Professional Services Foundation —3
  8. 8. Common Ethical Dilemmas Marketers Face “A half truth is a whole lie.” — Yiddish Proverb Poem Tests for ethics help us measure whether a behavior is unethical, but they are of little help in resolving ethical dilemmas. Some common dilemmas and ways to deal with them are discussed below. Stretching the Truth “Most executives from time to time are almost compelled... to practice some form of deception when negotiating… By conscious misstatements, concealment of pertinent facts, or exaggeration… they seek to persuade others to agree with them… If the individual executive refuses to bluff from time to time… if he feels compelled to tell the truth, the whole truth, and nothing but the truth, he is ignoring Figure 2: Stretching the Truth is Not opportunities permitted under the rules Recommended and is at a heavy disadvantage in his Galati’s Advice: “I think that for some reason our business dealings,” wrote Carr in 1968. 7 profession has tolerated that [stretching the truth] in marketers, but if you talk to the ones that are really successful, they didn’t get successful by pulling those These behaviors are often passed along kinds of stunts. The people I’ve learned from have always kind of preached to just tell the truth. If you to those entering the field as “finessing” or have a project that has a problem, you’re better off “putting a spin on it.” But those who do so just not putting it in than you are trying to hide or talk around the issues.” are only lying to themselves. They need to call their own bluff before their clients do it Dyer’s Advice: “Don’t. Don’t do it. You just better have the numbers. You need the numbers to support for them. Our sources agreed. (See anything that you are doing. Marketers decide what the face of the company is going to look like. They Figure 2: Stretching the Truth Is Not set the sales pitches along with the sales team. They Recommended.) decide the language to be used. And decide what the triggers are going to be by highlighting the benefits. They’re creating the skin.” Johnson and Ridley advocate choosing integrity over finesse: “Integrity demands Harding’s Advice: “As the years have gone by, I’ve become more and more convinced that stretching the clarity in the presentation of one’s truth is by and large not productive, not helpful, and credentials, achievements, and not necessary.” experience. Ethical professionals refuse to inflate or misrepresent the nature or efficacy of their services. Whether motivated by egotism, inadequacy, or greed, inaccurate presentation of 8 credentials or services always constitutes a fundamental ethical breach.” © 2009 Society for Marketing Professional Services Foundation —4
  9. 9. Don’t be fooled thinking you won’t be caught, or if you are, the client won’t really care. Galati said he has been in more than one proposal debrief where the client exposed what they believed was unethical behavior in their competitors’ proposals without giving the name of the firm. In one instance, the client told him the competitors used one of his firm’s projects in their proposal without giving credit. The client recognized it as a Lucchesi Galati project and told him they wouldn’t work with that firm because of it. Another tactic he said competitors often use is showing a photo or master plan of a big campus site that they didn’t do instead of zeroing in on the one building within the plan that they actually worked on. If your firm seriously lacks the experience and skills to perform the work in the first place, why are you pursuing it? The more ethical choice would be to refer the client/work to a firm that has the necessary competency. In doing so, you build a relationship and bond with that other firm. It most likely will return the favor at a later date. However, even ethical professionals may be tempted to operate outside their established competence for many reasons: financial stress, impatience to get ahead, and something we’ve all run across—“raw egotism.” If you find yourself facing this dilemma, consider Johnson and Ridley’s advice: “If you would be uncomfortable with colleagues knowing that you are offering a particular service or engaging in a specific professional practice, you could be bordering on 9 incompetence.” That being said, there is nothing unethical about asking for work that you may be “less than qualified” to perform as long as you are up front about it. Consider the following example shared by an SMPS member: The State of Washington issued an RFP for a License Plate Renewal Study. One of the requirements was for the proposing firm to have performed a number of these studies in the past. No firms responded. The state reissued the RFP, but did not remove the stipulation. With a little research, the firm’s marketer determined that only a handful of states had ever sponsored such studies and estimated that the probability of another firm in Washington having performed one was practically nil. The marketer suggested that her firm respond, but do so honestly. The firm submitted a proposal clearly stating that it had never performed a license renewal study. The proposal detailed the firm’s competence and capabilities to perform each of the individual tasks outlined in the scope, and connected the dots for the selection committee. The marketer © 2009 Society for Marketing Professional Services Foundation —5
  10. 10. did not attempt to mislead. The firm merely illustrated how the sum of the parts could equal the total even though it had never performed “the total.” The firm landed the job! Everybody’s Doing It! Everybody’s doing it. All you mothers and fathers of teenagers reading this go ahead and say it: “So if everybody jumped off a cliff—would you jump too?” The “everybody’s doing it” excuse neither makes something ethical nor protects you from the consequences. Williams suggests looking at the housing and financial crises of 2008-2009 as evidence of this. He told us that if you talked to people in the appraisal industry during the subprime mortgage crisis, many would tell you: “If we had not written the appraisals the way we were told to write them, we wouldn’t have gotten the business (because everybody else was doing it).” That behavior not only had disastrous impacts on many of those appraisers and on the companies that were pressuring that kind of behavior, but it has had disastrous impacts on our economy. The same behavior can be found in the professional services industry, where some firms try to use the “everybody’s doing it” excuse to justify low balling and bait and switch tactics. In low balling, a firm submits a bid to perform a project at a price below what it knows is necessary. The game plan is to win the job so the firm can get to the negotiating table. Once there, the firm claims certain tasks were not included in the proposal and it raises its price. On occasion, a firm will wait until it is halfway through the project and ask for the remaining money via change orders. Bait and switch is similar in that once a firm wins a job, it will switch out the key professionals listed in the proposal with less qualified (and lower salaried) staff members. As in everything, there may be exceptions. Harding believes if you are up front with the client about changing out personnel, and the client agrees, then it’s not a bait and switch. He stated that the key is whether you knowingly include yourself in the proposal because you know the client loves you, but fully intend on having someone else do the work. In other words is it your intent to mislead? Still, if everybody is doing it, and it helps the firm win a major project, isn’t it worth the risk? Consider what Williams told a traffic offender who was trying to get out of a speeding ticket. The offender reasoned that since he was driving in a group of six cars and he was the only one pulled over, it wasn’t fair for him to pay the ticket. Williams responded: “Well, you admit that you © 2009 Society for Marketing Professional Services Foundation —6
  11. 11. were violating the law. The fact that you were the one who got picked up I understand is frustrating. But they’re just as guilty of violating the law as you are. Just because they got away doesn’t mean you do…The nature of the law is when you behave in a certain way, you have to deal with the consequences.” So, how do firms who refuse to engage in low balling and bait and switch compete with those who are? Methods include putting a guarantee in your proposal to stand behind your quote as a counter to low balling or citing the number of times you have come in on time and budget on previous work. If your contracted backlog, coupled with the number of proposals you are pursuing, makes it difficult to guarantee the availability of certain employees, state that. Let the prospective client know that you will be selecting a qualified staff member with the skills and experience that best matches the client’s final scope of work and who has the availability for the duration of the project. They Made Me Do It! Is unethical behavior excusable when your job is on the line? Several marketers claim they are forced by their bosses or employers to act unethically. If you find yourself facing this dilemma, be honest. Start by resisting the urge to lay blame for unethical behavior at the feet of the CEO of your firm. Crossing ethical boundaries is your choice. We recognize that you may have thought you were climbing aboard the Love Boat when you joined your firm, and it wasn’t until you had set sail that you discovered you had mistakenly boarded Jack Sparrow’s Black Pearl. Walking the gang plank can be a daunting exit strategy, but it is your choice whether you resist or acquiesce. Abuse of power comes in many forms. It can be overt and direct, as in “Do this or you’ll lose your job.” Or, a colleague can insinuate that “If you know what’s good for you, you’ll help me cover this up.” At first glance, it may appear as if the ethical choice would be to resist involvement in either situation. However, loyalty and obedience are also characteristics of ethical individuals. Therein lies the rub. We recommend that when you find yourself caught between acting upon your boss’s unethical request or your loyalty to your firm, consider what might happen if you were to acquiesce. If you have a boss who insists you do something unethical to keep your job, how secure is your job in the first place? If your boss is willing to lie to the client or cheat the firm, is it much of a stretch to © 2009 Society for Marketing Professional Services Foundation —7
  12. 12. conclude that he might just as easily make you walk the gang plank when he gets caught? Isn’t it better to get off the ship with your reputation intact, than try to re-market yourself with a skull and cross bones on your resume? Dyer reminds us that “In any company, there are checks and balances. If you are being required to do something unethical, you need to keep a diary and cover with email. I personally feel you need to find out ways to make sure that your voice has been heard.” One tactic that Dyer has used is to talk to somebody trustworthy in the company off the record. Resistance may cost you your job, but failure to resist may cost you your physical and moral well being. One solution is to anticipate the coercion before it becomes an ethical dilemma. When you get a new boss, become someone else’s new boss, or pursue a new client relationship, discuss your ethical boundaries and make your expectations clear from the get-go. Anticipation readies you mentally, prevents you from being caught off guard, and gives you the courage to withstand coercion. If you do choose to debark, before you set sail on a new ship, investigate your target firm’s ethics and value system to determine if it is aligned with yours. Does it have a code of ethics? If not, does it have a published mission/value statement? What is its reputation in the industry? Gifting Your Way to Success Is giving gifts to clients ethical? Gift giving is a common means for professional services firms to maintain client relationships, and to say, “thank you for your business.” However, a gift you might see as a gesture of goodwill can look to someone else as a reward for mutual favors. Beyond what is spelled out in federal and state regulations for public sector officials, Galati offers a simple measure for marketers, as ‘givers,’ to use to determine the true intent of a gift: “Taking somebody to golf doesn’t seem to me to be out of line, because what you’re really doing is just getting time with that person to enjoy a conversation and build a relationship. What I have a problem with is when they’re just perks without any connection to the relationship. For example, buying someone a set of golf clubs instead of taking them golfing, or sending someone on a trip but not going with them.” The distinction is that you’re not furthering the relationship; you’re trying to gain favor. To avoid any misunderstandings, marketers should determine what the industry’s professional standards © 2009 Society for Marketing Professional Services Foundation —8
  13. 13. are in terms of value and other considerations before giving a gift. This helps avoid putting clients in a position where they feel they must reciprocate for a large gift or putting them on the spot by offering something that they can’t legally accept. Diane Swanson warns that giving clients gifts can open a can of worms. She suggests that instead of gifting, use “cause branding.” Given the economic climate, Swanson said that a donation to a food bank or other charity stretched thin by economic woes might be more appropriate and meaningful than a gift that will just sit on a desk or hang on the wall. She points out that this is especially true if the charity relates to the client’s type of business such as giving to a breast cancer charity in the name of a client whose customer base is women. 10 Truth or Consequences “Teach your children well.” — Crosby, Stills, Nash & Young, 1970 The consequences of telling the truth and otherwise abiding by ethical standards can be formidable—loss of job, loss of promotional opportunities, loss of client relationships, and loss of collegiality. But the consequences of acting unethically can be much worse. They range from loss of reputation to loss of personal freedom, as in jail time. The worst case scenario is loss of life. According to Dyer, “Marketing is about selling solutions to people, not creating new problems… When it comes to a question of ethics, are you really creating more problems by saying if we fly under the radar this is a solution? That’s where you run into trouble.” Loss of Reputation A marketer’s reputation can be tarnished in three ways: 1) by his/her own unethical behavior, 2) by working for a firm with an unethical reputation, or 3) by his/her firm’s association with a firm that is perceived to tolerate unethical behavior. Those who worked for Arthur Andersen during the Enron scandal can attest to the truth of the latter case. Many former clients convicted Andersen based on the strength of rumors and fear of what might happen to them, rather than actual misdeeds. In point of fact Arthur Andersen was acting as an external auditor to review materials that were actually prepared by Enron’s internal auditors. Sometimes just being accused of unethical behavior can ruin relationships and make it difficult to reestablish credibility. One SMPS firm marketer told us that her firm frequently teams with © 2009 Society for Marketing Professional Services Foundation —9
  14. 14. large engineering firms as a subconsultant on a non-exclusive basis. But on one particular proposal her firm agreed to go exclusive with Firm A. Both Firm A and Firm B were shortlisted. During the interview process, Firm A learned that Firm B had included the marketer’s firm in its proposal and accused the marketer of breaching their exclusive agreement. This was blatantly untrue, but when Team B won, Team A was livid. Even though the marketer’s firm had little impact on the reason Team B was selected, Team A insisted that the marketer’s firm abide by the exclusive agreement and not perform the work. Below the Bottom Line If reputation is not an issue for you then consider the financial impact. Jon M. Huntsman, chairman and founder of Huntsman Corporation, relates a story in his book Winners Never Cheat that illustrates this point. After negotiating a deal to purchase Sweetheart Plastics late into the night for $800 million, Sweetheart’s chief negotiator raised the ante at midnight by $100 million. Huntsman refused to be pressured and walked away from the deal. Sweetheart’s next highest offer was only $660 million. “Greed cost Sweetheart Plastics $140 million and a lawsuit 11 from Sweetheart’s bondholders for unethical behavior.” Another form of financial loss is the loss of repeat business when the behavior is found out. Competitive pursuits are much more costly than follow-on or sole-source work. While the unethical behavior may win you the job, it won’t secure the client relationship. Finally, unethical behavior may also cause a decline in productivity. When we act unethically our behavior is in discord with our morals. That leads to stress. Employees who are stressed all the time are not productive, nor are they clearheaded enough to make sound decisions. Thus, by allowing unethical behavior to continue unchecked, you may be placing your firm at financial risk. The Prospect of Unemployment As a marketer at your firm, you may not end up in jail or even be fined for complicit involvement in an unethical act, but you could lose your job. How? If your company folds as a result of being convicted either in the eyes of the law, or by the industry your firm serves, where does that leave you? Dyer found out firsthand when Arthur Andersen experienced a global shutdown as the result of the Enron scandal. This is even more astounding when you consider that at the time, according to Dyer “What Enron was doing wasn’t really illegal. (Congress passed the © 2009 Society for Marketing Professional Services Foundation — 10
  15. 15. 12 Sarbanes-Oxley Act in 2002 in response to the accounting scandals.) The questions on everyone’s mind were rather: Was it ethical? Was it moral? Everybody was up in arms because they lost so much money on their pensions. The numbers hurt people. So Arthur Andersen was indicted on shredding. It was about obstructing justice; it wasn’t about numbers manipulation.” Move ahead five years. The unemployment lines have lengthened with the addition of former bankers, lenders, appraisers and others associated with the subprime mortgage debacle. It is doubtful that even the whistle blowers envisioned the result of unethical choices being made by or forced upon so many in the banking and real estate industries. Righting Client Relationships It is true that some clients expect marketers to include “a little spin” in their proposals. Doing so may not dissuade them from selecting your firm. Depending on how much spin is used or how often, you may still win the job, but lose the client’s trust. Dyer shared with us a story that the office managing partner at Arthur Andersen told to all new employees. The partner compared business relationships to a piece of paper. If you crumple the paper into a ball, it destroys your ability to write on it. If you unfold it, you can write on it again, but there will always be the markings and lines from the crumpling. Once you are caught lying, you introduce an element of distrust and suspicion into your relationship. Like the paper, your relationship will never be as smooth again. The wrinkles will always be there. The Ultimate Sacrifice Are you prepared to give your life or take another’s life for the sake of the corporation’s bottom line? Consider the peanut butter product recall in early 2009. Nine deaths have been attributed to the peanut butter products that were contaminated with salmonella, and it appears the company was aware of this possibility when it shipped the products. Granted, this example may be a bit extreme, but inherent in unethical behavior is the fact that it gets easier the more you do it. If it happens often enough, it will no longer be “breaking news” and the line between ethical and unethical we have drawn may disappear all together. A review of ENR.com bears this out. The incidences of ethical misconduct have exploded to the point that Engineering News-Record magazine devotes a section of its online magazine, ENR.com, to “Ethics & Corruption” under BIZ MGMT. A recent review of headlines includes: © 2009 Society for Marketing Professional Services Foundation — 11
  16. 16. “Rigger Faces Manslaughter Charges in Deadly NYC Tower Crane Collapse” and “Chinese Official Receives Death Sentence for Corruption on Construction Job.” It May Be Ethical, But is it Legal? “When I was sworn in here, I swore to tell the truth and the whole truth, not the partial truth.” — Kenneth Lay, Enron Corp. founder The ultimate consequences of unethical behavior are potentially legal ones. We have all heard rationalizations such as: “It’s not illegal, so who cares? What are they going to do, sue me?” Most people would agree that a person can behave unethically without breaking the law. On the other hand, just because something is considered acceptable behavior by a group of people, that doesn’t make it legal either. As stated earlier, some marketers go so far as to tout common marketing practices such as inflating a resume in a proposal, getting inside information on a selection process, or buying a potential client a round of golf in hopes of earning some extra points over the competition as best practices. With these types of activities being proselytized throughout the industry, how many marketers even stop to consider whether or not they are legal? While it would be an oversight to write a paper on marketing ethics and not touch on the law, the authors of this paper are not lawyers. If you are questioning the legality of your firm’s marketing practices, you should consult an attorney. That said, we asked Judge Williams for his thoughts. Williams told us: “There’s a lot of case law that relates to when things are illegal and when things are not. The reality is that much of it is very fact specific and very context specific. Sometimes it can be very subtle in terms of when a line is crossed and when it’s not. For example as an attorney representing a client, I can say, ‘It is my opinion that X is the truth.’ But I have to be careful when I say, ‘X is the truth,’ especially if I know that X is not the truth. Those are fairly clear boundaries…” So, how do professional services marketers minimize their firms’ risk of breaking the law? If the firm is fortunate enough to have an attorney on staff, consulting with that person is an obvious answer. However, oftentimes deadline-driven marketing activities simply do not allow for the time or budget to get your firm’s attorney or outside counsel involved. So marketers need to proceed with caution to avoid stepping across the boundary from unethical to illegal. © 2009 Society for Marketing Professional Services Foundation — 12
  17. 17. From Stretching the Truth to Fraud Marketing proposals are frequently incorporated into the professional services contract. With that knowledge, there are some pretty clear laws that could come into play in terms of stretching the truth. For example, to practice architecture and engineering (and several other professional services) in the United States, an individual is required to be licensed in the state in which the professional services are to be delivered. Therefore, it could be considered unlawful to claim on a resume (or to imply) that a team member is a licensed architect or engineer when she isn’t. 13 The same would apply to falsely claiming a firm is licensed to practice in a particular state. It is conceivable that these examples, as well as falsely filling out personnel inventory forms or affirmative action documents, claiming ADA compliance, or “adjusting” hourly pay rates to meet billing ratios, might fall under the legal connotation of perpetrating a fraud—an intentional deception for personal gain. If the fraud is serious enough, and you are caught, the punishment could range from an immediate stop order on the project and loss of the contract, to the inability to bid on future work for that client for a specified number of years. Other consequences include cancellation of your license or registration to practice or conviction of a felony depending on the seriousness and the state. All states maintain general criminal statutes designed to punish fraud. For example, Arizona has a fraudulent scheme and artifice statute that spells out that anyone who “knowingly obtains any benefit by means of false or fraudulent pretenses, representations, promises, or material omissions" is guilty of a felony (Ariz. Rev. Stat. Ann. § 13-2310(A)). What role, then, does the marketer play in policing this type of behavior? For example, if a project manager asks a marketing coordinator to inflate his resume, is it the marketer’s responsibility to challenge that behavior? Galati believes marketers do have a responsibility to question and challenge these types of issues to the best of their ability. “I think that it’s the marketer’s job to make sure that whatever gets put into peoples’ resumes is as factual as they can determine.” He admits, however, that there are limits on the amount of background research a marketer can do. “The gray areas are the tougher ones… if you recognize that something’s not right or you don’t remember it that way, it’s important to get another opinion on it,” said Galati. © 2009 Society for Marketing Professional Services Foundation — 13
  18. 18. Harding seems to agree, to an extent. When asked what a marketing coordinator should do if asked to include old project descriptions in a proposal when the RFP asks for projects in the past five years, he said, “I think everybody has to make their own decision there… It’s hard to judge what someone else does in that kind of circumstance… I would be concerned that if it’s for a government client, it might cause you legal problems… I think my bias would be to push back.” Figure 3: Oregon Law Places New Restrictions on Exhibitors From Gift Giving to Bribery Subject: OMFOA Sponsorship/Exhibitor Guidelines Even when giving gifts is ethical, as Importance: High discussed earlier, it is not always legal. Thank you for your continued support to our organization. As you are aware, with the passage of Most states have laws prohibiting the Senate Bill 10, which went into effect January 1, 2008, the rules that govern what public officials can giving and receiving of gifts if it influences receive and interested parties can give have an official action, but there is a wide significantly changed. disparity in the details of such laws. (A To ensure that OMFOA adheres to the new rules, we are asking that any raffle item that you are intending quick internet search can provide links to to “give away” be donated to OMFOA. OMFOA will resources for laws relative to the states in then give away the items with names drawn from the Exhibitor cards. Conference attendees will be given which marketers work.) Certain state laws an Exhibitor card and will have to get signatures are so stringent that even accepting a cup from the Exhibitors in order to be eligible for any drawings. Please limit the cost of any item to be of coffee or participating in a raffle at a given away to $50. Please do not have any corporate tradeshow may be prohibited. logos on the items to be given away. Also, please be aware that items that you give from a vendor booth and receptions and dinners are At the Oregon Municipal Finance Officer all subject to the new rules. Association’s annual conference in 2008, With regards to sponsorship of events at OMFOA organizers asked exhibitors not to have Conferences you will continue to be recognized as a sponsor at various times during the conference but individual raffles at their booths. As a your sponsorship will not be tied to any result of newly enacted state legislation, particular food, beverage, or entertainment. For example, your company name will be displayed exhibitors and sponsors were only at the luncheon if you have provided a certain level allowed to contribute gifts to the OMFOA of sponsorship to OMFOA but there will be no implication that you paid for lunch. The Board of sponsored raffle game that did not display Directors will be discussing upcoming sponsorship opportunities for future conferences and we are corporate logos and that were valued at confident that we will be able to provide different less than $50. (See Figure 3, Oregon Law sponsorship opportunities that will meet everyone’s goal. Places New Restrictions on Exhibitors, for the full text of the email that explains other We very much appreciate your continued support to our organization. We just want to make sure that we restrictions as well.) Marketers should be follow the new ethics rules. © 2009 Society for Marketing Professional Services Foundation — 14
  19. 19. aware of these types of restrictions in their state and at tradeshows they plan to attend. In his article, Corporate Gifts to Public Officials, Brian Maas cautions that according to some federal criminal laws, even when a gift falls within the legal limits, it can still be deemed a bribe or illegal gratuity. “The federal courts have ruled that no quid pro quo is required to violate the gratuities laws. If a gift is made ‘for or because of any official act’ —whether in the past or the future—then the official who receives the benefit (and in many cases the entity making the gift) 14 could be subject to criminal prosecution.” In other words, you can get in as much trouble for offering a gift as a client can for accepting one. One reason for these restrictions is an effort by the government to keep a lid on bribery and kickbacks. But what distinguishes a gift from a bribe? “When you start talking about things that are gifts—trips, plane tickets, trinkets, meals—it becomes more complex and more subtle,” said Williams. “But, you have to return to your core principles. If the gift is being offered to influence decision making, then certainly the question should be asked, is it not only in compliance with the standard moralities of ethics, but is it also in compliance with the corporate or government gifting laws or policies, and is it something that is, in fact, going to influence someone improperly? If the answers to those questions are yes—that it either violates those or is meant to improperly influence—then your answer is clear.” The indictment of former Illinois Governor Rod Blagojevich is one example where a public servant was charged with using his position for personal gain to the detriment of his constituents. He was indicted on federal corruption charges and solicitation of bribery for conspiring to sell Barack Obama's vacated United States Senate seat to the highest bidder, among other counts of racketeering and fraud From Conflict of Interest to Collusion The mere existence of a conflict of interest is neither unethical nor illegal. In general, any time an individual or corporation is in a position to use its authority in some way for personal gain, it could be considered a conflict of interest. Every time a dual relationship exists, the possibility of a conflict of interest may also exist. As an example, our firm’s vice president sits on the Board of Commissioners for a local water district. This could be construed as a conflict of interest if we were to propose on work for that district. But it would only become a conflict, if he was also on the selection committee or in a position to influence those making the ultimate decision. When a © 2009 Society for Marketing Professional Services Foundation — 15
  20. 20. conflict of interest exists, the simplest solution is for those involved to disclose the fact and recuse themselves. As with gift giving, Congress and many state legislatures have enacted statutes that define conflicts of interest and specify sanctions for violations. At the very least, professionals, such as engineers, architects, and medical providers, who are involved in a conflict of interest can be subject to disciplinary proceedings before the appropriate committees of their respective licensing bodies. There are many federal government contracting cases posted on the Project on Government Oversight (POGO) website that illustrate what happens when this boundary is crossed. One example is the Harris Corporation case. In 1995, Harris Corporation agreed to forgo as much as $1.6 million in federal payments to settle allegations that the company improperly obtained information to win a communications system contract from the Federal Emergency Management Agency (FEMA). The federal government alleged that in 1983 Harris employees got information 15 from a FEMA employee relating to the agency's criteria for evaluating bids. Marketers may ask ‘Why is this illegal’? Isn’t it just an example of wiring a job? Yes and no. Failure to disclose a conflict of interest raises the question as to whether a firm won the job based on “insider information” or because it was the best choice to perform the work. Using a personal relationship to win a contract may be viewed as a savvy marketing strategy by some, but it is clear that the federal government doesn’t agree. And at the extreme, failure to disclose the relationship may be construed as collusion. Collusion is defined as a secret agreement between two or more parties for fraudulent, illegal, or deceitful purposes. Another case, which in the authors’ opinion might be construed as collusion, is the United States of America v. Darleen A. Druyun, the Air Force’s former chief acquisition official. The POGO posting states that Druyun was sentenced to nine months in federal prison for her part in a conspiracy to assist Boeing in a tanker lease contract in violation of 18 U.S.C. § 208, which deals with personal financial conflicts of interest. She was also fined $5,000 and ordered to perform 150 hours of community service. Subsequently, Boeing entered into a global settlement with the Department of Justice for $615 million to resolve this and other pending investigations. 16 © 2009 Society for Marketing Professional Services Foundation — 16
  21. 21. Instituting an Ethical Culture “Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws.” — Plato At the core of every successful company is a culture of ethical behavior. Whether the firm’s values are formalized and published as a set of written statements or whether they are simply understood as the rules by which all employees operate, they provide a cohesive bond. Ethical firms can be trusted, and ethical employees trust one another. Solomon puts it this way: “A culture carries right at its heart a sense of mutual belonging and the sense that one’s own interests lie, not contingently but necessarily, with the group. The more we dehumanize the corporation and focus on financial rather than cultural interests, the more inefficient we will be.” 17 Mandating Ethical Behavior Yet both corporations and Congress alike persist in trying to get us to act ethically by legislating or mandating that we do so. In 2002, Congress considered the corporate world today so challenged when it comes to ethics that it enacted the Sarbanes-Oxley Act in an attempt to regain credibility for the marketplace that was destroyed by the Enron scandal and others like it. In 2007, the Department of Justice created the National Procurement Fraud and Task Force aimed at rooting out fraud, waste, and abuse in contracting for federally funded projects. The same year, the Federal Acquisition Regulation (FAR) revised long mandated ethical behavior standards for federal contractors (FAR Part 9 (9.104-1(d)). According to Bell, Rosenberg & Hughes “News in Brief,” October 2008, a section was added to the FAR which stipulates that all contractors awarded federal contracts exceeding $5 million with a performance period of 120 days or more, must have a written code of business ethics and conduct in place within 30 days of the award. Despite this legislation, the subprime mortgage fiasco and subsequent financial fallout one year later (2008) support our hypothesis that legislating ethics isn’t going to curb unethical behaviors. © 2009 Society for Marketing Professional Services Foundation — 17
  22. 22. Corporate Codes of Ethics – Written or Implied? A written code of ethics, whether by federal mandate or corporate choice, will not necessarily make a difference. According to Huntsman: “Core values, reinforced by regular consultations with one’s internal compass, are more critical to a company than defined regulations. If determining whether behavior is ethical automatically requires searching the official rulebook, it is an indication that we are vulnerable to missing danger signs. If we must check to see if our 18 activity is wrong, it probably is.” Without a collective understanding of the firm’s value system, an underlying culture of ethical behavior cannot exist even when a written code is published. In fact, those bent on unethical conduct will quickly surmise how to use “The Code” to justify unethical behaviors not specifically spelled out. Similarly, if a code is published simply because of a corporate board’s insistence that the firm do so to impress clients or in response to the latest fad, it will not change employee behavior or create an ethical culture. Instead, it is the process or act of developing a code of ethics, rather than the end product that may be what enables a firm to recognize and root out unethical behaviors as well as those employees who practice such behaviors. This process usually takes several months and comes with its fair share of squabbling. But amazingly, Solomon, who has facilitated a number of such studies, has found that in the end, they all come out pretty much the same. • A prominent dedication to the customers; • A cooperative conception of the community; • An affirmation of respect for the individuals; • An emphasis on teamwork; • Some reference to innovation, initiative, or entrepreneurship; and • Insistence on integrity (of course). 19 Other values hotly debated in ethics codes, according to Solomon, include a return to stockholders and whether it should be reasonable, maximum, or fair and being the best versus humbly “striving for excellence.” The sample ethics codes included in the appendix to this paper include these criteria and more. With or without a formal code, at the very heart of every successful firm’s culture are the employees who have the courage to follow the moral compass in the face of marketplace © 2009 Society for Marketing Professional Services Foundation — 18
  23. 23. pressures. According to Huntsman, “Regardless of who is holding the compass, or how they are holding it, or what time of day it happens to be, north is always north and south is always south. 20 Following one’s moral compass is not for the faint of heart or the cold of feet.” Conclusion – Doing the Right Thing America’s ideas of business ethics continue to be rocked by scandals from the savings and loan crises to the Enron/WorldCom fiascos to the AIG bailout. And Wall Street continues to run amok. Does ethical behavior really make a difference in an unethical nation? We think so. We close with a tale of two companies: Arthur Andersen and Huntsman Chemical. Arthur Andersen’s success was in a large part due to its incredible code of ethics instilled in all employees by its founder and namesake. In 2001, Arthur Andersen boasted 350 local offices in 84 countries and employed 85,000 people. Under the leadership of its namesake and his immediate successors, Arthur Andersen enjoyed a reputation for honesty and trustworthiness within the accounting profession. But the 89-year-old company’s demise, as chronicled by Barbara Toffler in her book “Final Accounting,” was largely due to straying from those very same ethical standards as well as by being tainted by the “company” the firm kept (Enron). Jon Huntsman was also the namesake of his company, Huntsman Chemical. He grew its annual revenue to more than $12 billion by consistently making ethical choices. Before going public in 2000, Huntsman Chemical was one of the largest privately held chemical companies and one of America’s biggest family-owned and operated businesses. He did it honestly and, unlike Arthur Andersen (the company, not its namesake), Huntsman stayed the course. Just one of the examples of putting ethics before profits that Huntsman shares in his book Winner’s Never Cheat is his story of a joint venture with Mitsubishi in Thailand known as HMT. With $30 million invested in HMT, Huntsman met with the country’s minister of finance who showed him 19 new Cadillacs explaining that they were “gifts” from foreign companies. Huntsman responded that he did not engage in that sort of thing. Shortly thereafter, he received a call from the Mitsubishi executive, who was responsible for Thailand operations, asking for Huntsman Chemical’s share of HMT’s various government official kick backs, amounting to an annual obligation of $250,000. © 2009 Society for Marketing Professional Services Foundation — 19
  24. 24. “Without my knowledge Mitsubishi had been paying these ‘fees’ on our behalf. We sold our interest in HMT to Mitsubishi for a loss of $3 million,” writes Huntsman. “But it was a blessing in disguise when several years later the entire industry tanked due to the Asian economic crises. Ethical decisions can be cumbersome and unprofitable in the near term, but after our refusal to pay ‘fees’ in Thailand became known, we never had a problem over bribes again in that part of 21 the world.” The authors doff their hats to Huntsman, who believes, as we do: “You do not act ethically to succeed, you do so because it the right thing to do.” Endnotes 1 Carr, Albert Z., Harvard Business Review, “Is Business Bluffing Ethical,” January-February 1968. 2 Godin, Seth, All Marketers Are Liars: The Power of Telling Authentic Stories in a Low-Trust World (New York: Portfolio, A member Penguin Group, 2005), p. 101. 3 Solomon, Robert C., A Better Way to Think About Business: How Personal Integrity Leads to Corporate Success (New York: Oxford University Press, 1999) p. 21. 4 Johnson, W. Brad and Ridley, Charles R., The Elements of Ethics for Professionals (New York: Palgrave MacMillan: a division of St. Martin’s Press, 2008), p.11. 5 Nixon: The Watergate scandal was a political scandal during the presidency of Richard Nixon that ultimately led to his resignation on August 9, 1974. The scandal began with the arrest of five men for breaking and entering into the Democratic National Committee headquarters at the Watergate Office complex in Washington, D.C. The press reported that the immense scope of crimes and abuses included campaign fraud, political espionage and sabotage, illegal break-ins, improper tax audits, illegal wiretapping on a massive scale, and a secret slush fund laundered in Mexico to pay those who conducted these operations. Tape recordings revealed that Nixon had obstructed justice and attempted to cover up the break-in. Milken: Michael Robert Milken is a prominent American financier and philanthropist who almost singlehandedly created the market for high-yield bonds (also called junk bonds) during the 1970s and 1980s. After he was sent to prison on finance-related charges, his detractors cited him as the epitome of Wall Street greed during the 1980s, and nicknamed him the Junk Bond King. Ironically, admirers, like George Gilder in his book, Telecosm, note that "Milken was a key source of the organizational changes that have impelled economic growth over the last twenty years. Most striking was the productivity surge in capital, as Milken … and others took the vast sums trapped in old-line businesses and put them back into the markets." Madoff: Bernard Lawrence "Bernie" Madoff is an American businessman and former non-executive chairman of the NASDAQ stock exchange who was convicted of operating a Ponzi scheme that has been called the largest investor fraud ever committed by a single person. (http://en.wikipedia.org/wiki/Madoff - cite_note-MadoffAllocution-1) On March 12, 2009, Madoff pled guilty to an 11-count criminal complaint and admitted to defrauding thousands of investors. Federal prosecutors estimated client losses, which included fabricated gains, of almost $65 billion. Source: Wikipedia 6 Harding, Ford, Creating Rainmakers, (Avon Massachusetts: Adams Media Corporation, 1998) p. 174. © 2009 Society for Marketing Professional Services Foundation — 20
  25. 25. 7 Carr, “Is Business Bluffing Ethical?” p. 3. 8 Johnson and Ridley, The Elements of Ethics for Professionals, p. 13. 9 Johnson and Ridley, The Elements of Ethics for Professionals, pp. 89-90. 10 Kansas State University, News, U.S. Newswire, Washington, November 26, 2008, K-State Business Ethics Expert Discusses How to Give Holiday Gifts Ethically, Fairly at the Office. http://www.reuters.com/article/pressRelease/idUS156126+26-Nov-2008+PRN20081126 11 Huntsman, Jon, Winners Never Cheat, p. 116-117. 12 The Sarbanes-Oxley Act of 2002 (Pub.L. 107-204, 116 Stat. 745, enacted July 30, 2002), also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called Sarbanes-Oxley, Sarbox or SOX, is a United States federal law enacted in response to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems, and WorldCom. These scandals, which cost investors billions of dollars when the share prices of the affected companies collapsed, shook public confidence in the nation's securities markets. Named after sponsors Senator Paul Sarbanes (D-MD) and Representative Michael G. Oxley (R- OH), the Act was approved by the House by a vote of 334-90 and by the Senate 99-0. Source: Wikipedia 13 Federal Sentencing Guidelines Manual, Chapter 2 - Part B - Basic Economic Offenses, Section 1: Theft, Embezzlement, Receipt of Stolen Property, Property Destruction, and Offenses Involving Fraud or Deceit. Source: http://www.ussc.gov/guidelin.htm 14 Maas, Brian W., “Corporate Gifts to Public Officials,” Copyright 1998 Pillsbury Winthrop Shaw Pittman LLP. Source: Findlaw for Legal Professionals, http://library.findlaw.com/1998/Jul/1/128655.html 15 Project on Government Oversight (POGO) Federal Contractor Misconduct Database, Source: http://www.contractormisconduct.org 16 Ibid Project on Government Oversight. 17 Solomon, A Better Way to Think About Business: How Personal Integrity Leads to Corporate Success, p. 50. 18 Huntsman, Winners Never Cheat, pp. 96-98. 19 Solomon, A Better Way to Think About Business, p. 53. 20 Huntsman, Winners Never Cheat, p. 18. 21 Huntsman, Winners Never Cheat, p. 36. © 2009 Society for Marketing Professional Services Foundation — 21
  26. 26. Bibliography of Works Cited BOOKS The Elements of Ethics for Professionals by W. Brad Johnson and Charles R. Ridley; Palgrave MacMillan, 2008, New York, 210 pages. This book is patterned after Strunk and White’s classic reference tool The Elements of Style. The authors have condensed a wealth of published material on professional ethics and reorganized it as an easy-to-use reference tool. According to the book jacket, it contains seventy-five of the most important and pithy truths about ethics for professionals in all fields, such as integrity, loyalty, justice, respect, and delivering one’s best in the business environment. Each chapter starts with a story followed by discussion and ends with a synopsis of the key components. A Better Way to Think About Business: How Personal Integrity Leads to Corporate Success by Robert C. Solomon; Oxford University Press, 1999. Robert Solomon’s goal is to provide a one-of-a-kind business manual to show you how to be ethical without sacrificing profit. He believes that most executives do want to take the ethical high road, but fail when they try to reconcile their ethics with their bottom lines. Solomon ascribes to the Aristotelian approach to ethics—a corporation is embedded in the community and that corporate values are meaningless unless they are transformed into action. In fact, according to Solomon, deficient values actually destroy businesses. The book also debunks the pervasive myths that encourage unethical business practices. An interesting feature of the book is Solomon’s catalog of business virtues which may prove to be of value for firms in the process of developing code of ethics. Winners Never Cheat: Everyday Values We Learned as Children (But May Have Forgotten) by Jon M. Huntsman; Wharton School of Publishing, 2005. Don’t believe that it is possible to run your business ethically and make a profit? Read Jon Huntsman’s book. Huntsman doesn’t just explain the theory of professional ethics, he shows you how to put it into practice. This is a true story of how Huntsman applied his ethical beliefs to his business decisions on a daily basis. © 2009 Society for Marketing Professional Services Foundation — 22
  27. 27. All Marketers Are Liars: The Power of Telling Authentic Stories in a Low-Trust World by Seth Godin; New York: Portfolio, A member Penguin Group, 2005. According to Seth Godin, all marketers tell stories, and if they do it right, people believe them. In fact, Seth ascribes to the belief that people buy the story, not the products: “We believe that $225 Pumas will make our feet feel better—and look—cooler than $20 no- names... and believing it makes it true.” The main focus of this book is on how to develop a marketing pitch for consumer products. But in “Chapter 8: Important Aside: Fibs and Frauds” Godin touches upon “stretching the truth dilemmas.” He writes that “fibs are true” and frauds are inauthentic. We disagree. Just because you can get someone to buy your storyline does not make it the truth. Final Accounting: Ambition, Greed, and the Fall of Arthur Andersen by Barbara Ley Toffler; Broadway Books, New York, 2003. In her tell-all tale of the downfall of Arthur Andersen, Inc., Barbara Toffler takes readers on a journey from the firm’s beginnings to its ultimate demise. She carefully lays out how straying from the ethical behaviors drilled into what were referred to in the early days as “Andersen Androids” led to the eventual demise of the firm. According to Toffler, while we contributed the downfall to the Enron scandal, the real culprit was the change in the culture that led up to the scandal. Other books reviewed for this paper: You Want Me To Do What? When, Where and How to Draw the Line at Work, Nan DeMars, (A Fireside Book: Simon and Schuster, 1998, New York). Lying Moral Choice in Public and Private Life, Sissela Bok, (Vintage Books: Random House, Inc., 1999, New York). Creating Rainmakers: The Manager’s Guide to Training Professionals to Attract New Clients, Ford Harding, (Adams Media Corporation, 1998, Avon, Massachusetts). © 2009 Society for Marketing Professional Services Foundation — 23
  28. 28. The ABCs of Building a Business Team that Wins, Blair Singer, (Warner Business Books, 2004, New York). My First Book of Business Ethics, Alan Axelrod, (An Executive Board Book, Quirk Books, Philadelphia, 2004). ARTICLES The following articles, though published years ago, are classics. They are must reads for anyone exploring the subject of professional ethics practice. Laura Nash, Harvard Business Review, “Ethics Without the Sermon,” November-December 1981. Albert Carr, Harvard Business Review, “Is Business Bluffing Ethical,” 1964. © 2009 Society for Marketing Professional Services Foundation — 24
  29. 29. Acknowledgements We gratefully acknowledge and share credit with our primary sources: Matt Williams, JD; Craig Galati, AIA; Ford Harding, CMC; and Brian Dyer for taking the time to be interviewed and to review the draft of this white paper. Their stories from the trenches lend not only credibility but flavor to the final product. We also thank the SMPS Foundation and our coaches, Jane Caffey, CPSM, and Nancy Usrey, FSMPS/CPSM for providing us with the opportunity to share our findings with the SMPS community and beyond. Authors’ Biographies Taree Bollinger, CPSM and Pamela Heeke, CPSM currently work in the professional services industry as marketers. They are employed by FCS GROUP, which serves a niche market within the A/E/C industry. As director of administration and marketing and finance officer, Taree oversees and directs the firm’s business practices which include marketing, financial operations, accounting, human resources, systems administration, and facilities management activities. Pam is the firm’s marketing manager. Pam has been a professional services marketer since 1996, holding positions with architecture, engineering, construction, and financial and management consulting firms. She has been an active member of SMPS since 1997, chairing various committees and serving on the board of both the Indiana and Seattle chapters. She is a past president of the Seattle chapter and currently serves on the SMPS National Striving for Excellence Task Force. Taree has been a professional services marketer for 14 years. She is an active member of SMPS, where she has served on the Seattle chapter’s Regional Conference Committee and chaired the 2007 Salary Review Committee. She is the author of the 2008 SMPS Foundation white paper “A Seat at the Boardroom Table.” She is also a member of the Society of Human Resource Management (SHRM). Both authors received their CPSM certifications in 2005 and have a long history of publishing articles and books. Contact them: Taree Bollinger, CPSM — tareeb@fcsgroup.com; Pamela Heeke, CPSM — pamh@fcsgroup.com © 2009 Society for Marketing Professional Services Foundation — 25

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