Why bad things happen to good companies—and what can be done

Telling employees to be ethical is not enough; the employees must be allowed to be ethical in their own ways. ~ _ _ " ~ t V 7 hy is it W that bad things sometimes happen to good companies? By good companies I mean those in which top management wants its employees to be ethical and tells them so. Why is it that no matter how many times or how forcefully top management tells its employees, "Be ethical," some employees nonetheless choose to go off on unethical larks of their own? Let me suggest three reasons why corporate employees may sometimes choose to act unethically. First, some employees may believe that unethical activity is in the company 's best interest and is thus expected of t h e m o r will at least be tolerated. Top management wants employees to be ethical and tells them so, but some employees may not believe it, thinking instead that requests to be ethical are simply window dressing. Because of their loyalty to their company they engage in unethical conduct. We can call an employee who acts this way an ethical cynic. Second, some corporate employees act unethically because they may believe that such conduct is in their own self-interest. Employees who want to get ahead sometimes seek ways to distinguish themselves by outperforming others. Such employees may believe that unethical conduct is a way to improve their performance and is thus in their own self-interest. We can call these employees ethical egoists. Third, corporate employees may not always be aware that they're doing something unethical. There certainly is a sense in which ethics is a matter of op in ion-an art rather than a science. Where is the line be tween the sharp deal and the shady deal? Between profit maximization and social irresponsibility? Between clever advertising and fraud? These can sometimes be complex and difficult questions for an employee to answer. An employee who can't answer such ques t ions-or who doesn' t even ask t h e m c a n be called ethically uncertain. What can be done about the ethical cynics, the ethical egoists, and the ethically uncertain? The easy answer is to say, "Fire them." But this assumes that one can tell in advance of their acting unethically that certain employees fall into one or more of these three categories. Further, it may be the case that some of a company 's most effective employees are ethically cynical, egoistic, or uncertain. It would be wiser to change such people into employees who are ethically aware and ethically prudent than it would be to discharge them. How can such changes be accomplished? Like most problems that involve changing people's attitudes and habits, it's not easy. We all tend to resist change, especially when the change requires a new perception of reality. We also tend to translate messages sent to us in such a way as to reinforce our current perceptions rather than using them to develop new perceptions. Nonetheless, it is possible to change the ethically cynical, egoistic, and uncertain into ethical employees. How this is done will vary from company to company, depending on the circumstances of each particular situation. I don't intend to lay out all the possibilities in detail here, but I will outline some ideas that relate directly to each of the three character types that have been identified.