How to Build Ethics into an Organization

Just one small ethical lapse can snowball into big trouble, a recent study found.

As BusinessWeek reported on June 26, workers and companies are vulnerable to scandal unless managers snuff out ethical transgressions, even those that seem minor.

When incentives for little fibs slowly morphed into incentives for big lies, rates of unethical behavior more than doubled in a recent study. “Because of the rationalization process — what we call ‘moral disengagement’ — people are more likely to slip into a pattern of behavior,” researcher Deirdre Snyder of Providence College said. “We call this ‘the slippery-slope effect.’

The concept of an 'ethical slippery slope' is one that defines behavior when a decision-maker first decides to deceive others by consciously covering up or lying about past behavior. This begins the slide down the proverbial ethical slippery slope where it becomes more difficult to reverse course because the decision maker is committed to the deceitful action; then since most people don't want others (i.e., superiors) to know about the initial, wrongful action over time cover up or lying slowly become untangled and the truth emerges.

There are many examples of the ethical slippery slope such as the case of Lance Armstrong where he lied for years about taking performance enhancing drugs. We've also seen it by Bill Clinton in the Monica Lewinsky affair. In the corporate world, the ethical slippery slope can stifle one's career and do harm to that person's reputation. Betty Vinson learned this the hard way in the WorldCom fraud where she went along with financial wrongdoing even though she knew it was wrong.

So what causes a person to take the first step down the ethical slippery slope? The primary reason is not that the decision-maker is a bad person rather that pressures in the workplace can create a workplace environment that leads an otherwise good person to commit a wrongful action or stay silent when others do the same thing.

Darnell Lattal, CEO and president of Aubrey Daniels International, addresses this issue by pointing out that leaders should fight the human tendency to think, “That could never happen to me.” No one is infallible, and any organization can fall into ethical lapses. That’s why leaders should consider taking a more proactive stance to guard against such behavior.

“[Any] executive in a company might say, ‘I am ethical; I always want to be ethical; I never want to do any shortcuts. The fact is we get shaped by conditions that are subtle — it’s called the slippery slope. We don’t even know it’s happening. By omission, we can fail to say something that can lead to unethical actions being unreported. In the end, we’re judged not by what we intended to do, but by the impact of our behavior,” Lattal said. “So that’s from a behavioral perspective what’s most critical and what businesses need to do differently.”

Upon discovering an unethical act, some leaders will automatically point their finger at the performer. But instead of merely firing the person and thinking that will end the problem, leaders should look at the bigger picture and reflect on how they may have contributed to the problem.

This, Lattal said, is what organizations sometimes fail to do. “We do not step back and say, ‘What in this organization set up the conditions for that unethical behavior to occur?' "You have a greater duty now to look at how you’ve established the possibility of unethical behavior occurring.”

Every so often, it’s important for leaders to take a step back and examine the organization’s decision-making process to ensure there isn’t room for ethical compromises.  Since leaders need to make countless decisions or choices on a daily basis, examining the organization’s decision-making process can help mitigate the risk of ethical compromise.

Lattal recommended leaders ask themselves questions such as: “What are the short-term consequences of saying yes? What are the longer-term consequences of saying yes? What does that do to our ethical fabric? Do you feel right about this? Do you feel it was a good thing to do? Is it good for our common culture?”

Kirk Hanson, the director of the Markkula Center for Applied Ethics at Santa Clara University, provides excellent advice to avoid the ethical slippery slope.

• Listen to your instincts: Don't disregard that disquieting feeling when something doesn't feel right or your being asked to do something that makes you uncomfortable.
• Look for backup: Approach others in the organization that you believe have a good 'moral compass' whose values will stand strong in the face of bad behavior.
• Collect Information: Gather information to support your own behavior and make it clear that even though an action may be acceptable in the organization you will not act in the same way.
• It's never too late to pull back: While it is challenging to reverse course on the ethical slippery slope, one can change behavior once the moral issues have been identified and risks of certain behaviors are considered.

The moral high road is fraught with dangers in certain corporations. My advice is for corporate leaders to establish an ethical tone at the top that permeates the organization supported by clear policies with the consequences of not following them communicated to employees and supported by ethics training.

Blog posted on July 17, 2014 by Steven Mintz, aka Ethics Sage. Dr. Mintz is a professor in the Orfalea College of Business at Cal Poly, San Luis Obispo. He also blogs at: www.ethicssage.com.

“We’re not born with an ethical sense of right and wrong — it’s a culturally shaped notion,” Lattal said. “We’re shaped by the conditions around us — what we learned early, but also what happens to us in life.