Universal principles, the association role, and when codes work.

Organizations are paying more attention to ethics. People actually talk about ethics. But are our organizations - and are we - behaving more ethically? As our expectations about the ethical behavior of politicians have plummeted, have our expectations about the ethical behavior of organizations risen?

I invite you to listen in on the thoughtful conversation of six academic and organizational ethicists, convened last summer by ASAE's Ethics Committee to generate a discussion about ethics as it unfolds in our work lives. (See sidebar, "Fueling the Discussion.") Committee Chairman David J. Noonan, deputy executive vice president, American Academy of Ophthalmology, San Francisco, guided the exploration.

Such dialogues have to begin with agreed-upon understandings of what is meant by ethics, organizational ethics, and universal ethical principles. Even at that broad level, it's easy to apply the discussion to a workplace context - for instance, are we treating members fairly if we give privileges to some and not others? How do organizations communicate their values, and what is the association role in helping organizations create ethical environments? What role do associations have in teaching children about ethics in business?

The questions drive this dialogue into some tough territories. Tough because, as one participant observed, "All of us struggle daily with temptations to do things that we ought not to do." And tough because questions may lead to more questions before suggesting answers. But tough can also be enlightening, propelling us to pay attention to these important issues.

In next month's ASSOCIATION MANAGEMENT the dialogue continues with insights about how the voice of ethical standards can be present in an organization and how new technologies have a way of bringing new challenges to workplace ethics. Part II will also include a select bibliography of ethics resources. - Ann I. Mahoney, CAE, Editor in Chief

NOONAN: LET'S BEGIN WITH A WORKING DEFINITION OF THE FIELD OF ETHICS.

Murphy: Ethics deals with general principles, or guidelines, of behavior. It also has to do with character development.

Navran: I refer to ethics as those behaviors that reflect our values. So if we act in ways that are consistent with what we say we believe in - our principles and our values - that is ethical behavior. Acting in ways that contradict what we say we believe in is unethical behavior.

Dubinsky: I look at business ethics as the application of moral rights and wrongs in an organizational setting. It describes what we ought to be doing, but it also allows for intense disagreement, because these concepts don't give you absolute right or wrong answers. Business ethics gives us the framework within which to talk about those differences.

Chonko: I have always viewed ethics as guidelines that were interfered with by human judgment. Sometimes human judgment steps outside the value of those guidelines.

SOME UNIVERSAL PRINCIPLES

Hoffman: An absolute ethical principle is that every human being is intrinsically valuable and worthy of dignity and respect. Yet, in a "lifeboat" situation, in which you have to make difficult decisions to save as many people as possible, you may have to hurt some people to help others. So there is room in those situations for legitimate ethical disagreement.

Some people would say that in downsizing corporations, we are in a lifeboat situation - maybe not as dramatic as being out on the high seas, but still a pretty traumatic experience. Saying that we should treat all human beings as intrinsically valuable is pretty much saying that we ought not to harm people unjustifiably. Of course, the disagreement comes in defining justifiable harm.

Another idea that comes out of the principle of not causing harm is that we owe reparation for causing unjustifiable harm. One more concept is that we ought to try to prevent harm that may occur to people accidentally or by others.

Navran: A fair amount of research says certain principles apply in every culture - honesty, integrity, compassion, respect. And yet the social contract within a culture can look very different from culture to culture. The way we care for people, for example, looks different in Japan and the United States. In the United States we might put an elderly relative in a long-term care facility, out of caring and compassion. The Japanese would think that was uncaring.

Murphy: In the increasingly multicultural society of the United States, the notion of respect is absolutely imperative. We also can respectfully disagree. For example, most of us in the United States do not subscribe to the way women are treated in the Middle East. Yet we can respect their sociocultural and religious backgrounds.

DEFINITIONS OF FAIRNESS

Hackett: I relate some of this discussion to issues that association executives struggle with in terms of being fair, treating all association members with the same respect when certainly some have more influence than others in terms of running the association.

Chonko: The problem is that people have different definitions of fairness. In my profession of teaching, students think fair means they get good things; as the teacher, I think fairness means you get what you earn and what you deserve. And so there we have a conflict.

Hoffman: Fairness includes conflict of interest, because one is worried that people who have conflict of interest can't be fair and objective in making judgments about particular organizational decisions. Fairness also includes trust because if you're acting unfairly, employees, stakeholders of all kinds, and customers may think you are being unfair and, therefore, don't trust you.

For example, an employee may feel unfairly treated when it comes to his or her raise or performance evaluation - complaints that need to be taken seriously by any ethics officer or ombudsperson. Giving employees some explanation is, at least, a way of responding and quite often sufficient.

The worst possible situation is the "NETMA" - nobody ever tells me anything - syndrome. Part of the purpose of any ethics program is to avoid "NETMA" and to at least provide some explanations about what employees think is either unfair or a potential violation of organizational values.

GAUGING THE ETHICAL CLIMATE

Noonan: Give me a sense of the ethical climate of American society today. Are we becoming a more or a less ethical society?

Dubinsky: What I can observe in my own business dealings for the last 15 years is that we are becoming more ethically aware, if not observant. All of us have heard that business ethics is an oxymoron, but I hear that much less frequently these days. There is also an increased willingness to talk about the ethical dilemmas in our occupations. (See sidebar, "Misconduct at Work.")

Petry: In 1997, the Ethics Officer Association co-sponsored a national survey that went to 5,000 workers across the country. (See sidebar, "The Link Between Workplace Pressure and Unethical Behavior.") One of the questions was, "Should and can business and ethics mix?" Ten or twenty years ago, the prevailing response was "no." Our survey found that 60 percent of the American public believe business and ethics can and should mix.

However, are we living up to our ideals? In that same survey, we listed 25 specific unethical or illegal acts. Forty-eight percent of the American public admitted to one or more of these violations in the last year. I think the public now has very low expectations of political figures and much higher expectations of their business and association leaders.

SHIFTING STANDARDS

Navran: I think we also need to differentiate between individual ethics and organizational ethics. "Are organizations behaving more ethically?" may be a different question from, "Are individuals behaving more ethically?"

Chonko: I wonder how much of the ethical awareness of organizations reflects a defensive posture, given things like federal sentencing guidelines. Organizations are rushing to put training into place so that they cover themselves when ethical violations occur. I think ultimately this will be a good thing, because as an ethics code becomes a value in the organization, the organization hires people who can live those values.

Petry: History shows that compliance programs slowly but surely begin to evolve toward more integrity-based programs.

Grove: I think the ethical behavior of associations is improving. I've seen how compliance does have a positive effect. I also observe that some of the very fundamental values and principles of ethical behavior are played out in the form of customer service - things like being fair and truthful and showing respect.

ETHICAL RELATIVISM 

Noonan: Are students looking at their business future in terms of ethics, or Is ethics just a necessary evil?

Murphy: I teach at a religiously based school (Notre Dame), so ethics and values are, I think, more central to the curriculum than at many universities. Still, I observe a certain ethical relativism such that, for example, it doesn't matter if one fudges a little bit on a resume. As educators or instructors, we have to signal to students that it is a slippery slope. I'm also a big proponent of letting students know they need to align their personal values as closely as possible with the organization they join, or they'll be unhappy and unproductive.

Petry: I saw students coming into the university as relativists - that is, they didn't know that they could make judgments about others. They confused tolerance with being nonjudgmental. A second observation is that many students, especially business students, believe that they're going to have to cheat to win. One very positive trend is that more and more businesspeople, ethics officers, and executives are going to campuses to say, "What you've seen in the movies, what you've heard in terms of the scandals, that's not how it works in our company."

Chonko: I ought to preface my remarks by saying that Baylor is also a church-related school, and so we probably see a more conservative group of kids than your typical university. If I asked a freshman business class, "Is plagiarism a violation of ethics?" I bet 40-50 percent of those 750 kids would say "no, if it's on the Internet, it's free goods." These kids have not been taught that taking of other people's work is not the right thing to do.

Hackett: What you're describing is a scary phenomenon. In gauging the reading on our ethical barometer, I just wonder if this is a new phenomenon.

Murphy: I think it is somewhat a new phenomenon - a symptom of our highly competitive society. Associations may have more of a role to play in high schools and junior high to raise some of these values issues.

COMMUNICATING THE STANDARDS

Navran: A lot of our clients are saying that they see part of their organization's role as being a communicator of values because people coming into the workforce either don't have an appropriate set of values or have undeveloped values. Consequently, organizations are spending a fair amount of time and energy transmitting standards that the organization expects all employees to abide by - and letting them know the consequences if they don't.

If employees believe the organization is adopting guidelines out of a sense of doing what's right and creating an ethical and moral framework for doing business, then they embrace them.

If businesses perceive their role to be transmitters of values and transmitters of corporate culture, then they may in fact look to associations for support in doing that. It is much more cost-effective for an association to develop ethical frameworks for its members than it is for each member to do that individually. (See sidebar, "Key Ethics Program Components.")

WHEN CODES WORK

Noonan: One of the tools is a code of ethics, but do codes work?

Petry: Today, nearly 100 percent of large organizations have a code of ethics, but if that's all they have, it won't work. A code of ethics works when

* employees have some say in drafting or revising it;

* it is a living document and actually governs the way work is done;

* the principles embodied in it also show up on performance appraisals and in the compensation system;

* people are disciplined, hired, fired, and promoted based on that code; and

* an ethics officer or someone in the organization has the job of communicating ethical principles to employees and communicating employee concerns to management.

Navran: There is a phenomenon with codes of ethics that I call the three P's: print, post, and pray, which is where some organizations fall down. They print it, they post it to all, and then they pray for change. This not only doesn't work, it backfires because it creates cynicism.

I think there are two critical issues that don't get talked about enough. One is employees' perceptions of senior executives' agendas. Why are we doing this? What is the motive? Is it to protect the executives? Is it to create a facade? Is it a whitewash? Or is it something that is sincerely believed?

The second issue concerns critical events. What happens when the organization has to either put up or shut up about what it says it believes in? What happens in the situation where the organization succeeds because of bad business in the short term? Does the organization bite the bullet short-term for the long-term good to be consistent with what it says it believes in, or does it cave?

Hoffman: You have to have a code that states the values of the organization. You also have to provide some rules indicating how employees should behave so that if they behave outside of that framework, they understand they ought to go elsewhere and the organization will see that they do.

Dubinsky: In each organization, you figure out how you're going to use the code - for instance, how it fits in with employee performance evaluations and the organization's business ethics training.

RAISING ETHICAL AWARENESS

Hoffman: The process that we go through in creating the code and in making it a living document is probably just as important as, if not more important than, the actual product produced by the process. If employees participate in writing the code and if they believe the code is theirs, then the code's value statement is theirs.

Murphy: I wrote a book about a year ago in which I talk about three different types of ethics statements [Eighty Exemplary Ethics Statements, University of Notre Dame Press, Notre Dame, Indiana, 1998]. One is the code of ethics, more of a compliance document. The values statement is the second type. And the third type is a corporate credo. Many organizations have multiple ethics documents. I am a firm believer in both communicating and promoting these documents. Associations can play an important role in telling member organizations that if they have an ethics statement, they should not only give it to their employees but also look to getting it out to stakeholders.

GONE ARE THE MYTHOLOGIES

Navran: That gets to something that we are discovering in more and more of our clients. Traditionally, employees used to absorb the organization's core set of beliefs through osmosis. A mythology told you what the values were, what the priorities were; you heard the stories and you understood how things worked. That was when organizations were fairly stable and employees had time to learn.

In today's organizations, 25-30 percent of the total employee population are temporaries and contract employees, and 40-50 percent of the total employee body have less than five years of service. So the traditional, informal methods of communication that we used to rely on aren't working anymore. You have to be much more aggressive in the way you get the message into people's hands and the way you reinforce it.

POINTING OUT MULTIPLE AVENUES

Noonan: Can you have a values statement - what we hold near and clear to us - without a code or set of rules backing it up?

Dubinsky: I see a combination of things working. For one, an organization needs an up-front statement that says, this is who we are and why we're an organization. Then, I usually find a statement of key values. For a nonprofit, those key values might be a combination of fairness, trust, respect, promise keeping, accountability, stewardship.

Some specific rules of the road are also useful. And because you do not have a rule for every situation, if you hearken back to your primary values, you give employees the opportunity to figure out how to resolve a problem for which there isn't an exact rule. A code of ethics also tells you where to go for help - as in, who in your organization is empowered to listen to you and help you solve a problem.

Petry: Another helpful tool can be a question-and-answer document. Involve as many in the organization as you can in focus groups, perhaps to come up with questions that may be used in the ultimate document.

Murphy: Every code should have multiple avenues to which an individual can turn.

Petry: Demystifying the process is another important element. Tell employees what to expect when they make that call - that is, when they raise an ethics question. If you can't guarantee anonymity or confidentiality, say so - don't mislead. Tell them what kinds of questions they will be asked.

ENFORCEMENT OF CODES AND DUE PROCESS

Noonan: Should associations enforce adherence to ethical standards as a condition of membership?

Chonko: I'll say yes to that on the basis of one example: The Direct Selling Association has a code that all members must subscribe to before they can be accepted into the association. And I have been an observer at meetings in which companies in violation of the DSA code of ethics have been recommended for discontinued membership in DSA.

Dubinsky: How do you set those expectations [about dismissal from the organization]? Ostracism may work. Shame may work. Shunning may work. And, in honesty, that may be the best enforcement mechanism. You're saying, "These are the rules of the game."

Navran: Talking about members as customers puts you in an interesting situation. If an employee deviates from the ethical standard, the organization can step in and say that's not acceptable behavior, and if it continues, these are the consequences. But what is the role of the association when a member who joins voluntarily and pays dues chooses not to conform to the standards of the industry or association? Are you imposing your ethical standards on the association and its employees, or are you imposing it on your members or offering it as a support system? Or are you dealing with both?

Hackett: We have a code of ethics that all members agree to abide by as a condition of membership that has a very detailed grievance process providing a lot of due process. With 30,000 members, we've only had a few cases that have gone to any level of censure; indeed, only a few cases are investigated each year. Still, members believe there is a certain importance to abiding by the code of ethics.

Navran: Another issue concerns the fact that if you expel members, you lose your ability to influence those members. Associations are asking, "Do we keep members within and try to reform them, or do we kick them out?"

Olson: I think there's some nomenclature that needs to be clarified if you're going to talk about how associations can better serve their members in the business community. We are closer than implied by some of this discussion to the behavior and the standard and norms in the business community, because we have become businesses ourselves. We are created as tax-exempt entities by the Internal Revenue Service codes. But we function as business enterprises. We are profit-oriented, we are bottom-line directed, and I think our boards recognize and respect the fact that we are coming closer to their way of doing business even though we're created as tax-exempt entities.

ACTING OUT A MORAL POINT OF VIEW

Hoffman: As a society we have more expectations of organizations than we used to. But then the question shifts to, "Are organizations living up to those expectations?" I think this is where the distinction between individuals and organizations begins to break down.

There is a reciprocity between the ethics of organizations and the ethics of individuals. None of us are islands unto ourselves. We are very much influenced by organizations, communities, cultures, our families, and the like.

All of us struggle daily with temptations to do things that we ought not to do. Organizations, being made up of individuals, consequently also struggle daily, moment to moment. The struggle to act out of a moral point of view is never going to go away.

FUELING THE DISCUSSION

LAWRENCE B. CHONKO

Holloway Professor of Marketing, Baylor University, Waco, Texas 

JOAN ELISE DUBINSKY

President, The Rosentreter Group, Kensington, Maryland 

W. MICHAEL HOFFMAN

Executive Director, Center for Business Ethics, Bentley College, Waltham, Massachusetts 

PATRICK E. MURPHY

Professor of Marketing, University of Notre Dame, Notre Dame, Indiana

FRANK J. NAVRAN

Director of Advisory Services, Ethics Resource Center, Washington, D.C.

ED PETRY

Executive Director, Ethics Officer Association, Belmont, Massachusetts 

DAVID J. NOONAN

ASAE Ethics Committee Chair and Deputy Executive Vice President, American Academy of Ophthalmology, San Francisco

KAREN HACKETT, CAE

ASAE Ethics Committee Vice Chair and Executive Vice President, American College of Healthcare Executives, Chicago

MICHAEL S. OLSON, CAE

President and CEO, American Society of Association Executives, Washington, D.C.

JON GROVE, CAE

Then-Executive Vice President, American Society of Association Executives, Washington, D.C.

MISCONDUCT AT Work

A 1997 Society of Human Resource Management/Ethics Resource Center Business Ethics Survey found that during a one-year period, more than half of the 747 human resource professionals surveyed had observed workplace conduct in violation of the law or in violation of the organization's standards of ethical business conduct. The most common types of misconduct cited were

* lying to supervisors (45 percent);

* abusing drugs or alcohol (36 percent); and

* lying on reports or falsifying records (36 percent).

Eighty-nine percent also said that the average employee misrepresents information in communication with supervisors.

Seventy-three percent of survey respondents said their organizations have written standards of ethical business conduct. Sixty-one percent said their organizations do not provide training on ethical standards. Only 31 percent said their organizations have ethics officers or ombudspersons.

THE LINK BETWEEN WORKPLACE PRESSURE AND Unethical Behavior

In a study examining the extent of pressure experienced by American workers in the workplace, a 1997 nationwide survey jointly sponsored by the American Society of Chartered Life Underwriters and Chartered Financial Consultants and the Ethics Officer Association provides a definitive link between workplace pressure and illegal or unethical behavior by employees.

* Workplace pressure has increased significantly from five years ago and from one year ago. Today, 57 percent of the respondents feel more pressure than five years ago, and 40 percent feel pressure has increased since last year.

* The majority of workers (60 percent) feel a substantial amount of pressure on the job, and more than one out of four (27 percent) feel a "great deal" of pressure.

* Most workers (56 percent) feel some pressure to act unethically or illegally on the job.

* Half of the respondents (48 percent) reported that, due to pressure, they had engaged in one or more unethical or illegal actions during the last year. The top five actions are:

16 percent Cut corner on quality control

14 percent Covered up incidents

11 percent Abused or lied about sick days

9 percent Lied to or deceived customers

7 percent Put inappropriate pressure on others

* When asked if they believed that "ethical dilemmas are an unavoidable consequence of business and cannot be reduced," only 15 percent agreed.

* Consistent with previous responses that pinpointed poor communication and leadership as sources of pressure, workers cite "better communication/open dialogue" (73 percent) and "serious commitment by management to address issue" (71 percent) as the best solutions to the problem.

Source: Sources and Consequences of Workplace Pressure: Increasing the Risk of Unethical and Illegal Business Practices, sponsored by the American Society of Chartered Life Underwriters and Chartered Financial Consultants, Bryn Mawr, Pennsylvania. and the Ethics Officer Association, Belmont, Massachusetts, copyright 1997. Reprinted by permission.

KEY ETHICS PROGRAM Components

The following 12 components are necessary to develop, implement, and manage an industrywide comprehensive ethics program:

1. Focus on ethical leadership

2. Vision statement

3. Values statement

4. Code of ethics

5. Designated ethics official

6. Ethics task force or committee

7. Ethics communication strategy

8. Ethics training

9. Ethics help line

10. Ethical behavior - rewards and sanctions

11. Comprehensive system to monitor and track ethics data

12. Periodic evaluation of ethics efforts and data

Source: Ethics Resource Center, Washington, D.C., copyright 1998. Reprinted by permission.