Preventing Unethical Behaviours

June 25th, 2015 by Gary Bates

Mark Carney in his Mansion House speech on 10 June talked about "ethical drift" and how "unethical behaviour went unchecked, proliferated and eventually became the norm" in the City banks. And it’s not only the banks. Bribery and corruption at FIFA, phone hacking at News International and Mirror Group newspapers, MP’s expenses, Jimmy Saville at the BBC, Mid Staffs Hospital – there seems to be a never ending stream of stories about unethical behaviour in major organisations. No doubt there are more to come.

How can organisations prevent it? How do you create a ‘New Normal’?

First let’s look at what drives people to behave unethically. One can get into deep discussion about the different philosophical positions on ethical dilemmas (teleological vs deontological) but motives in the real business world are often much more straightforward:

Personal gain/greed - this is often the key driver, FIFA being the obvious example. One might also put Saville in this category; whilst his was not financial gain, he was certainly fulfilling his own personal desires.

Organisational gain/greed - whilst this is more complex the motivation is the same. Companies want to make more profit or gain advantage over competitors and create conditions where unethical practices are encouraged and rewarded. If you’re told to ‘get the story at any cost’ or ‘make that target, do whatever it takes’, then can you blame people if they do just that? And when you then incentivise people with huge bonuses for making the target, you create the perfect storm of both personal and organisational drivers.

Of course there are instances where organisations claimed they were trying to do the right thing - 'operating more efficiently’, ‘creating shareholder value’, ‘reducing costs for customers’, ‘bringing stories to the public’s attention’ etc - and that employees then abused the operating model for personal gain. We’ve seen numerous cases, especially in the banks and newspaper hacking cases, where individual employees have been prosecuted whilst leaders claimed to be unaware of what was happening in their own organisations. However, whether they were unaware or simply turning a blind eye, they have demonstrated a gross dereliction of duty (see Bazerman and Tenbrusel, Ethical Breakdowns for more on the different ways that organisations create, knowingly or unknowingly, the conditions for unethical behaviour).

But whether the driver is personal or organisational gain (or both), unethical practices begin with one or two individuals who decide to push the boundaries. That will always happen in organisations that employ humans. You can’t entirely eradicate the ‘rotten apple’ who will go beyond the line in pursuit of personal gain or ambition. The real question is what happens next? How do others react when the rotten apple emerges? It’s the nature of organisations that people cannot operate alone. Others will become aware of what's happening.

Despite the simplistic portrayal of ‘evil’ bankers, ‘seedy’ journalists and ‘greedy’ MPs, the organisations named above were not full of rotten apples – quite the opposite. These are people like you and me who come to work to do a good job. They have families and friends, do good deeds in their personal lives and, no doubt if you asked them, would claim to have strong moral values. Yet at work they ignore, condone and at worst collude in unethical decisions and practices.

This is the "drift" that Carney was referring to. Gradually, perhaps almost unnoticeably, unethical practice becomes the norm.

So what can organisations do about it? I would suggest there are three key factors:
  1. Legislation and Governance - The tighter legislation for the City announced by Mark Carney is to be welcomed. It may deter unethical behaviour to some extent and make people think twice if there are more serious repercussions. But we all know that ‘rules are there to be broken’. History shows that people will always find 'ways around', ingenious loopholes – and that in itself can become an industry (tax avoidance springs to mind). Increasing legislation and rules will only ever be a very small part of the answer. 

  2. Leadership and Role Modelling - There is clearly a hefty responsibility on leaders to role model good ethical practices and decisions, be open to challenge and to create processes that reward ethical behaviour alongside profits/targets. Leaders and organisations also have a duty to send a clear message that whistleblowing is valued, welcomed and will be taken seriously (without repercussions for the whistleblower). The Francis Report into the NHS demonstrates the sort of measures that all organisations need to put in place. But again, whilst this is important, it will not in itself prevent unethical behaviour from spreading.

  3. Get people talking about Ethics - For me this is the key. The best way to mitigate against individual unethical behaviours or decisions is to use the wisdom of the crowd - use everyone’s eyes and ears to examine decisions and everyday situations through an ethical lens. Create a culture of conversation about ethics in the organisation. 
For this to happen you need people to:

Engage emotionally. Some would say that emotions shouldn’t come into play in business, but I would argue the opposite. Emotions and feelings are essential if we are to consider the ethical impact of decisions.

Recognise ethical dilemmas. To have some experience and to practise talking about them - to have a language for the conversation.

Be comfortable to challenge (including upwards) when they think something is wrong (and the whistleblowing measures outlined above need to be in place for that).

In my experience of working with organisations, the best way to achieve this emotional engagement and to enable people to experience and practise talking about ethics is by using drama. It’s common across all cultures that people engage with stories. The more you can bring the issues to life and make them feel real (in a safe environment), the more effective the engagement. When carefully crafted and designed, scenarios that feel real to the people in the organisation can create powerful debate and honest, open discussion about potentially tricky issues. This experience makes it more likely that they will talk about ethical issues as they arise in the workplace. By making it the ‘new normal’ to talk about ethics in everyday situations, organisations are much less likely to make poor decisions and individual unethical behaviour will be challenged and nipped in the bud a lot sooner.



Gary Bates >>




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