Tags: Decision-making, Ethical Values
Read our latest guest blog by By Kirk O. Hanson, Coauthor of Rotten: Why Corporate Misconduct Continues And What To Do About It.
I have taught more than 5000 MBA and executive students in 41 years teaching at the Stanford Business School and at Santa Clara University. As a standard assignment, I have required most of my students to write and analyze a case study on an ethical dilemma they have personally faced at work. I have now read approximately 4000 of these cases.
The most common ethical dilemmas reflect attempts by others – bosses, coworkers, subordinates – to involve the younger worker in some type of misconduct. Other cases describe temptations to get ahead by hiding a mistake, exaggerating a success, or taking credit for another’s work.
Let me share the 5 most important things I learned from my students about early career ethics:
- Every early-career employee faces pressures and temptations to misbehave. The stories are too common to conclude otherwise. Some of these pressures are generic – hide a mistake, fudge a number or signature on a standard report, claim you have done something you have not, share some information you shouldn’t, tolerate racist language by a coworker or boss. Other dilemmas are very specific to the particular job and role the new employee has taken – how the privacy of HR data is to be protected, what adjustments to financial statements are permitted and not permitted, what information must be shared with your boss, or a customer or joint venture partner.
- Some supervisors and managers, sometimes even top executives, take advantage of the new employee to do the “dirty work.” When an action is questionable, some senior managers prefer to have a “newbie” fill out the boss’s expense report, fudge a number, or skip the test -- so they can blame it on the subordinate if caught. Drug dealers long ago adopted this practice, preferring to have underaged messengers deliver product to customers for them.
- The career cost of getting implicated in misconduct and scandals can be significant. Wells Fargo reported it fired more than 5000 sales employees in recent years who gave in to pressures to create fake customer accounts so they could meet unyielding sales goals established by their bosses. One Silicon Valley financial reporting scandal led to the firing of more than 75 finance staff, many of them young accountants for “not objecting” when their bosses manipulated the accounts. Some students report candidly that they had to leave their first employer “under a cloud.”
- Company cultures and values differ; some companies are more dangerous for new employees. Corporate cultures differ, and in some, employees are forced to walk so close to the unethical line that they inevitably behave unethically. Other companies are consciously value-oriented and have created systems and first-level supervision concerned about protecting all employees from engaging in misconduct. New employees have to know the culture --of both the company they are going to work for, but also of the specific boss and workgroup.
- You can protect yourself from being drawn into misconduct as a new employee. The key steps in protecting yourself are knowing what is a good culture and a bad culture, choosing to work for a company with a good culture, understanding the ethical norms and expectations of your good company, knowing the unavoidable ethical choices and pressures in your particular job and role in the company, having good strategies for raising ethical questions when necessary.
In the balance of this blog post, I will identify some practical suggestions on how a recent graduate or a job-changer can protect their own integrity. I am grateful to my students for so many of these insights.
Know the Ethical Culture of Your Company and Your Workgroup
Knowing the culture of a company takes some work before you accept a job. Most companies have reputations that have some basis in truth. But you can do online research about scandals and misconduct of your prospective employer. If you find a pattern of misconduct or serious concerns about the integrity of its leaders, you may want to look elsewhere. Similarly, you need to know something about the specific workgroup you will join and the specific manager you will report to. Ask to talk to some employees who have joined the group in the last year or two. Find someone who has left the group and talk to them. Research the background and reputation of the specific supervisor.
Choose a Good Company and a Good Boss
When you decide the company-- or a nonprofit or government agency -- you will go to work for, don’t lean too heavily on which organization pays the highest salary or promises the very fastest advancement. Some organizations talk big but don’t deliver. Some organizations are so aggressive that the only staff that advance quickly are those who are willing to cut ethical corners and do the “dirty work.” Pick a company with a good reputation, where your own research tells you that employees like yourself enjoy working, where you and your values are going to be respected.
Know the Unavoidable Ethical Choices in Your Specific Job
There are a set of generic dilemmas every new employee faces – some outlined in #1 above. Also, know that there are many grey areas in business decisions; you need the guidance of coworkers and bosses to make those choices ethically and responsibly. Study your specific job and the likely ethical dilemmas you will face in that position. Come to your first day of work with a set of questions about what to do in as many situations as you can anticipate. Ask your boss and coworkers what grey areas exist in your specific job. If your job is in sales, ask what you can tell the prospective customer, what information you must keep confidential, what promises you can make – and which you are prohibited from making. If you are in product development, get guidance about what ideas are considered intellectual property, what trade secrets of your firm – and your competitors – you must protect.
Strengthen Your Own Character
In the end, acting ethically and avoiding getting drawn into misconduct depends on your own strength of character, your own willingness to take a stand for what you know is right. It takes courage to raise a question about the ethics of a proposed action when you are unsure. One of my colleagues, Mary Gentile of University of Virginia, has developed a set of lessons and tactics under the rubric of “Giving Voice to Values” which employees can use to raise ethical questions or objections. She wants to “lower the cost” of acting ethically. But, in most business careers, there will still come times when you must simply refuse to go along, even leave the company to avoid implicating yourself in misconduct. One way of strengthening your ability to do this is to have enough cash in an emergency fund to sustain yourself if you have to quit or risk being fired by refusing to do something unethical.
And Some Lessons for Companies
My students’ stories also have many critical lessons for companies, of course. Companies must stand for something more than making money; they must have some social purpose and a set of values that support integrity. They must have good first-level supervisors and manager, dedicated to the company’s values and to training new employees in the ethical norms of the business and how those norms apply to tasks of the specific workgroup. Companies must create a culture that values raising and clarifying ethical questions – and reporting deviations from ethical behaviour, even among managers and executives.
The IBE is pleased to receive blogs from external contributors. These are published as a contribution to the debate and do not necessarily represent the position of the IBE.
Kirk O. Hanson
Kirk O. Hanson stepped down recently as Executive Director of Santa Clara University’s Markkula Center for Applied Ethics, one of the leading global centers for the study of applied ethics, where he held the John Courtney Murray, S.J. University Professorship in Social Ethics for 17 years. Previously Kirk taught business ethics at the Stanford Business School for 23 years and is recognized as one of the founders of the academic field of business ethics. He has been an emeritus faculty member at Stanford since 2001.
Hanson writes and has published widely on managing the ethical and public behavior of corporations and their leaders. His current research interests include the design of corporate ethics programs and the responsibilities of boards for the ethical culture of organizations. Hanson has consulted with more than 125 corporations, nonprofit organizations, health care entitles, and government bodies on the design of ethics programs and the resolution of ethical dilemmas.
Hanson was the founding president of The Business Enterprise Trust, a national organization created by leaders in business, labor, media, and academia to honor exemplary behavior in business. He was the Honorary Chair of the first business ethics center in China and the first Chair of the Santa Clara County Political Ethics Commission in Silicon Valley. He currently serves on several foundation and non-profit boards, has been honored by the Aspen Institute’s Center for Business Education and the American Leadership Foundation Silicon Valley, and has received honorary doctorates from Santa Clara University and the University of Portland for his work on business responsibility.