For those of you who haven’t seen Game of Thrones, it’s a great show, and you should watch it as a reward for finishing FRP.
Now imagine that you are a character in the series stuck in an epic power struggle filled with wars, assassinations, dark magic and treason. Do you execute a fellow commander who killed innocent children in the name of revenge, knowing that his troops will then abandon you in the moment when you really need them to end the war? Do you kill a comrade hoping that his death will allow you to infiltrate the enemy and turn the tide of the battle? These are outlandish circumstances that we will probably never find ourselves in. But often in business and in life, we will face hard decisions where our own moral integrity is called into question, and we will have to choose not between black and white, but various shades of grey.
Business ethics have gained attention over the years, mostly due to corporate scandals embodied by Enron, WorldCom and the financial crisis in 2008. They have led to the creation of new legislation, such as Sarbanes-Oxley and Dodd-Frank. However, as Professor Mark Schwartz, who teaches Responsibility in Global Management, explains, most of the reaction has been legalistic and on paper. Companies talked the talk and re-examined their ethics programs, but they typically reverted to their usual practices after some time. Very few conducted real soul-searching and implemented changes that were sustainable. Not surprisingly, unethical behavior is particularly a concern in service industries where compensation is tied to sales.
So are some people naturally more susceptible to unethical behavior, or do bad environments contaminate good apples? This nature versus nurture question has been examined by over 1,000 empirical studies, and the results are mixed. Professor Schwartz subscribes to the 20-60-20 rule, which posits that 20% of the population always acts ethically, 20% never does and the remaining 60% sways with the situation. “This 60% is where organizational factors become critical, including peer pressure, leadership, reward systems and opportunity.” In addition, there are other stakeholders who can help ensure that the firms behave appropriately. Increasingly, consumers are more conscientious and often favor products from companies whose missions they approve of – whether it is supporting fair-trade coffee or boycotting businesses with questionable labor practices. Employees can choose to not work for an unethical firm, and shareholders can choose to only invest in principled businesses. Along with NGOs and governments, they can help police corporate behavior.
Deeply entangled with business ethics is the concept of power. For many, power exudes a negative connotation and is often seen as a source of evil. Professor Samir Nurmohamed, who teaches Power and Politics in Organizations, emphasizes that power can be used for good and serve as a correcting mechanism when meritocracy fails. But we all know that power has the potential to corrupt, so how does one prevent him/herself from being blinded by power? As suggested by Professor Nurmohamed, it is important to take a step back from the decisions being made and put yourself in other people’s positions, not only cognitively but also emotionally. Don’t assume that others want the same as you, and reflect upon the consequences of your decisions and how they affect others – who is made worst off, and can you live with what happens to them?
Professor Nurmohamed described three key takeaways for students. First, short-term gains often come at the expense of long-term goals, so while it’s easy to exercise decisions during the moment, one needs to understand what the long-term consequences will be. Second, don’t assume that everyone hungers for power. Often times, being submissive grants an escape route so that people don’t have to make tough decisions and doing nothing can be equally guilty. “It takes courage to sometimes be in a position of power and make the decision for others.” Finally, there exists a fine line between influence and persuasion on the one hand and manipulation on the other. As you move up in the world, you need to find where this line lies relative to your own moral standards and make sure you are comfortable with it.
As much as we would like to, no one can be perfectly ethical. We are emotional human beings, and we will make mistakes that can harm others. The question, as posed by Professor Schwartz, then becomes: How do you respond? How do you learn from the mistake to prevent it from happening again?