Commentary - September 2002

Business Ethics –

A New Oxymoron?

by Lyle Brennan

Everywhere you look these days, there seems to be another scandal involving corrupt business practices. The current cycle started with Enron, moved on to Arthur Andersen’s role in the Enron affair, and then spun off into evidence of other companies cooking the books to inflate their stock prices, and executives and their friends benefiting from insider trading. Who knows where it will end? The average citizen, and especially the small investor, doesn’t know whom to trust anymore. The whole situation has given business people a black eye.

Besides the overall economic effect these scandals have had on the stock market and on consumer confidence, thousands of individuals have had their lives ruined by the actions of a few people who chose to misuse their power for their own benefit. Think of all the Enron employees whose life savings were tied up in company stock. Not only are they out of work, but they have no retirement or savings to fall back on. And they are not alone. People all over the country have lost jobs or seen the value of their 401(k)s evaporate overnight.

A recent survey by the American Management Association (AMA) revealed some disturbing statistics. The AMA surveyed its members in April and May 2002 and reported that 86 percent of the 175 executives responding said their companies had written statements of values, which were included in employee handbooks, company brochures, etc. But how well were these high-minded statements actually put into practice? Here are some excerpts from the survey that should give us all some food for thought:

Q. To what extent is each of these values practiced in your organization?

Q Do you agree with the statement, "My organization believes in doing the ethical thing, regardless of the cost"?

Yes – 70%                     Not sure – 21%                   No – 9%

Q. Do you agree with the statement, "My organization always will do what is legal, but not always what may be perceived as ethical"?

Yes – 36%                     Not sure – 21%                   No – 32%

Keep in mind that the people answering the survey are executives talking about the companies where they work. Granted that a few of them may have an ax to grind, but it still upsets me that 5 percent admit their companies are not at all ethical. How did this situation get so out of control, or as a bumper sticker I once saw put it, "Where am I going, and why am I in this handbasket?"

I don’t think the high-ranking executives, CPA’s and stockbrokers who committed these misdeeds are that different from the rest of us. They all had parents who tried to raise them right. They went to school and probably to some kind of church. But, let me ask you this: How have morals in general changed during the last 25 or 30 years? The answer can be condensed into two words: situational ethics. It used to be that all American children were taught the Ten Commandments, and they were displayed in public places as a reminder of the basic rules that governed our society. We believed in clear cut right and wrong, absolute morality. People knew it was wrong to steal and to lie, and they expected to be punished if they broke these rules.

The current generation has been taught that everything can be seen in shades of gray, that people can decide for themselves what is right or wrong, and that it is old-fashioned and even repressive to talk about moral absolutes. Now we are reaping the fruits of this doctrine. There is no right or wrong - only legal or illegal - and even that doesn’t matter if you’re smart enough not to get caught. And if I am free to decide what is moral for me, why not decide on a morality that fills my pockets at someone else’s expense?

It’s not too late to take a long, hard look at the cause of these recent events and to make some efforts to correct the situation. First of all, we need to shed the gray and bring back the black and white - we need to honor and obey the Ten Commandments and our God who created them. We need to start monitoring and analyzing our own behavior as individuals. Are you cheating on your taxes? Cheating on your spouse? Taking home office supplies? Taking cash under the table? It’s not too late to make a new start and begin to put your personal actions in line with what you know to be right. If you are in a position of responsibility at your firm, pull out the company manual and review what it says about your firm’s ethical responsibility. Make sure everyone who works for you knows that company management is committed to those principles, and then walk the walk. Don’t be afraid to be the one who brings up the question, "Is this the right thing to do?" It may cost you some money in the short run, but the long-term benefits – not just for you, but for all of us – will be priceless.

Lyle Brennan Publisher
COMMENTS? email: lyle@nbj.com