Does Your Organization Have a Conscience?

Does your organization set an example of professionalism in the industry? Is your organization morally responsible? Does your organization value all of its stakeholders, including customers, employees, suppliers and investors? Does your organization encourage respect? Does your organization have a written Credo and a Code of Ethics? In short, does your organization have a conscience?

The conscience of an organization is reflected in the values of its leadership and the culture of the people who work for it and with it. These values are given voice through a written credo and a code of ethics. Simply put, a credo is a statement that expresses the values of an organization. A code of ethics is a set of standards of conduct.

Today, almost all organizations have accepted that it is crucial to create a mission statement to clearly define the organization's purpose--its destination. It is interesting that many of these same organizations have not developed a credo or a code of ethics. These provide the road map that will assist an organization on the journey to its destination.

Many industries, such as healthcare, are made up of organizations that employ professionals. Although it is common for some of these personnel to have ethical codes specific to their fields, these professionals are only a part of those employed by the organization. Furthermore, all of the employees make up an organization's culture and contribute to its unique value system.

Judith Neal, PhD, director of The Center for Spirit at Work, University of New Haven, West Haven, Connecticut, states, "Just as it is important for individuals to know who they are and what they stand for, it is equally important for healthcare organizations to identify their core values and assess how well they are living in alignment with them. A recent doctoral dissertation on organizational values found that the hospitals that were the clearest in stating their values and in implementing them throughout the organization were the ones with highest patient satisfaction. Interestingly enough, the type of values that made the most difference were spiritual values--caring for the whole person, including the human spirit.

"Improved patient satisfaction is tied to increased market share, a reduction in complaints and lawsuits, and reduced employee turnover. It takes a lot of effort to identify your key values, to involve everyone in the dialogue and to develop policies and practices to assure that your organization is living those values, but the payoff in both human and organizational terms is well worth it."

Some managers make a mistake in thinking employees know the difference between right and wrong, thus there is little need for a credo and ethics code. Don't be misled by the simplicity of the explanations of a credo and a code of ethics given earlier. Values and ethics are complex ideas that can become even more so in the workplace. It's true that most people in a society know the difference between right and wrong, but the choices most employees face at work are more often between right and right.

This is at the core of what's known as a moral dilemma. Factor in the element of diversity, including religion, race, culture, etc., prevalent in most urban communities, and the intricacies of these issues increase exponentially.

Consider the example of a healthcare facility administrator who has a wife and three young children. He enjoys his work and is anxious to move up the corporate ladder, but he also loves his family and feels a responsibility to assist his wife with the children. He is reminded of the opportunities for those who work hard and stay long hours by the corporate vice-president, who makes frequent visits to the facility. The administrator knows that in order to get promoted, he will have to spend even more time at work which, in turn, will cause him to miss time with his family and create a burden for his wife. His children are growing up quickly and, while he doesn't want to be an absentee father, the family is financially comfortable. He reasons that if he works hard and does get promotions, he will make more money and be better able to provide for his family.

This is an example of right versus right. It is right to want to do well at work, contribute to the organization, receive promotions and increased pay, and enjoy those rewards and better provide for your family. It is also right to want to be an active participant in your children's lives, assist your spouse and spend time with your family.

Another example might be that of a manager who is trying to do the right thing for the corporate parent by cutting costs and providing the necessary equipment for his employees to operate successfully. The manager has been directed by the corporate office, however, to reduce spending and eliminate equipment purchases. As it happens, the fax machine at the facility is broken. Faxes are integral to referral business. An astute vendor notices this problem while calling on the manager and offers to buy a new fax machine for the facility as a customer relations gesture.

If the corporation does not have policies related to this issue, this situation presents another common dilemma. It is right for the vendor to want to create a stronger relationship between the two organizations. It is also right that the manager might accept this offer and assist his company by reducing costs borne by equipment purchases, while not incurring loss of referral business and revenues. The risk, of course, is that because of such a decision, there might be a moral price to pay with this vendor and other suppliers in the future. Unless there are policies governing such events, there are no clear-cut guidelines toward the "right" managerial decision.

There are many theories used in ethical decision making, but three philosophies stand out as guideposts in thinking through such issues. The first is The Golden Rule: Do unto others as you would have them do unto you. This philosophy is a central component m most religious teachings throughout the world. The second moral philosophy, attributed to Immanuel Kant, is The Categorical Imperative, which says Act only on the maxim through which you can at the same time will that it should become universal law. This philosophy focuses on duty, obligation and standard setting. The third ethics philosophy is Utilitarianism, which is concerned with doing the greatest good for the greatest number. It is often referred to as "consequentialism," because it requires a kind of cost-benefit analysis implying that, in order to make a decision using this principle, it is necessary to reflect on the situation and try to envision which course of action will benefit the most people. This is often the philosophy used when setting public policy (one hopes).

Even though these philosophical guideposts have their weaknesses, they have been relied upon for centuries to offer assistance in ethical decision making.

Developing a values statement or a credo for the organization precedes developing the code of ethics. Developing a credo should begin with focused discussions among members of the organization and should consider the values of the various stakeholders. The next task is to establish a set of values from which the organization chooses to operate (and usually, in a credo, core values number between five and ten). It is important to differentiate between true values--how those within the organization behave--and preferred values--those that the members indicate are ideal. Then create a statement that aligns the preferred values with the organization's strategic intent.

Kenneth L. Murrell, DBA, professor of management and management information systems at the University of West Florida, Pensacola, co-author of the book Empowerment in Organizations and an expert on organizational development, offers the following IIlustration: "One of the best examples of a major global corporation's commitment to an ethical posture in its work around the world is the case of Motorola's worldwide ethics initiative. In this effort Motorola has used its two key beliefs to respect for people and integrity in all that they do to guide their business in all of the countries in which they operate. Their corporate credo is based solidly on these beliefs and they don't mind standing apart from other companies by letting these beliefs guide their actions more so than any limited and short-term economic advantage.

"By continuing the commitment to these values Motorala has gained the status of a visionary company as identified the widely respected research project that resulted in the book Built to Last by Jim Collins and Jerry Porras of the Stanford Business School. This core ideology is what supports Motorola's success over generations as opposed to the fleeting success of many of its competitors, measured in years or business quarters not decades."

The Motorola experience was written about by Murrell and E. Brian Peach, PhD, with the support of Motorola, and can be accessed through: http://uwf.edu/bpeach/motorola/.

Whatever the final product might be, there are numerous benefits to creating a credo and a code of ethics, and for developing an ongoing program that reflects the values of the organization. In addition to assisting with decision making, an ethics program often plays a critical role in strategic planning and is considered a key contributor to successful implementation of those plans. A credo and code of ethics can increase the performance and bottom line of an organization by:

* reducing costs of litigation by defining and establishing legal personnel policies in the workplace

* portraying a strongly positive image to the public

* expanding market share

* creating trust among the stakeholders

* balancing the organization's culture among its various stakeholders

* building teams and productivity

* helping improve the community in which the organization operates

* providing direction in rapidly changing economic and technologic environments

* recognizing and validating managerial actions

All of this is why organizational ethics is considered to be a valuable management tool.

I would like to express my appreciation to those who so generously helped in developing this column. If you would like to offer editorial suggestions for future topics, please address them to Laura Hyatt, Hyatt Associates, 2956 Kelton Avenue, Los Angeles, CA 90064. Be sure to include your name, the name of your organization, address, area code and telephone number.

Laura Hyatt, MBA, is president of Hyatt Associates, Los Angeles, California.