Facilitating Ethical Practice in Business: A Primer in Professional Ethics for Corporate Administrators

Dr Mark Debowski, Mr John De Reuck and Ms Lorraine Herschmann, Australia

This paper was published in March 2003.
 
ABOUT THE AUTHORS
Dr Mark Debowski has a doctorate in mathematics and a second doctorate is under examination in business administration. He is currently Principal of Taylors College, Martin College and Embassy CES, as well as the business manager for Study Group in Western Australia. Mark has particular interests in the use of ethical principles and practice in order to promote productivity and profitability in private sector corporations. He can be contacted by email at: m.debowski@sga.edu.au.

Mr John De Reuck is a graduate of Rhodes University and is currently enrolled in a Ph.D. program focusing on organisational planning. His current position as a lecturer at Murdoch University, in Western Australia, involves the teaching of skills in logic, ethics and cultural contexts of learning to business and management students. Mr De Reuck is actively involved in a number of world-wide community ventures, including international AIDS education programs and organizational planning and development activities.

Ms Lorraine Herschmann is currently enrolled in a PhD program focusing on applied linguistics. Her position of Director of Curriculum (DOC) at Taylors College, in Sydney, NSW, Australia, involves her overseeing the development of existing and new curriculum and academic support, providing awareness of professional development opportunities and ensuring the maintenance of high standards in the pursuit of academic excellence in all curriculum areas. Ms Herschmann is keen to develop strategies to enhance cultural sensitivity in the appreciation of different learning styles.

Synopsis

This article constitutes a follow-up paper from an unpublished DBA thesis submitted by Dr Mark Debowski. Doctoral research has strongly suggested that employee values vary with the type of corporation they work in (Debowski, M.B., 2002). These results justified the researcher dividing employment settings into three groups based on the corporation's treatment of values. It was also suggested by the results of that thesis that employee values vary little with training. Questions were raised about the validity and reliability of previous studies which had made claims of great success in varying value sets through training programs. The author's doctoral results strongly supported the worth of educating in values rather than the previous and common practice of training. Assuming the value set an employee holds will directly influence their ethical conduct, value set and ethical considerations may be perceived as intimately and intricately linked. This article attempts to spell out in detail some practices which may enforce and enhance the value awareness and hence promote the ethical nature of both the employee and the corporation.

The Characteristics of an Ethical Approach in Corporations

An ethical corporation is characterized by an ethical culture. This means that an ethical nature of the core business remains paramount and at the forefront of concerns embedded in the corporation's everyday activities. Furthermore, these ethical stances, by necessity, need to be explicit, accepted and openly acknowledged. In order to be considered 'ethical', then, first and foremost of all considerations, an ethical corporation will be characterized by ethical awareness. Secondly, with that corporation there need be an acceptance by corporate personnel of responsibilities for their actions, both individually and as a collective.

Codes of Conduct and Ethics

Many organizations develop a code of conduct for their employees. Such codes are often prescriptive and set out specific (but minimal) guidelines for their employees' conduct. There also exists another form of document called a code of ethics. These, unlike codes of conduct, are predominantly aspirational. They usually contain a smaller number of general or fundamental principles which will be of particular importance in instances where a code of conduct is silent or unclear.

A code of conduct may help to make staff sensitive to their own behavior and its ethical implications. Consequently, such a code may be a form of ethics education. However, it is this author’s experience that prescribing how staff are to behave by regulation will have very limited success in promoting ethical professionals and an ethical corporate.

There are many reasons why a set of regulations will be inadequate in ensuring that clients are properly protected. Firstly, regulations cannot cover every case and hence, without a good understanding of the 'spirit' of the regulation, it may be misinterpreted or considered irrelevant. Secondly, precise regulations create a climate in which people feel able to abandon any sense of personal responsibility, once they have made a token effort of what is required of them. Thirdly, if no attempt is made to help employees explicitly reflect upon, and internalize, an ethical standard (which includes an understanding of the purposes of the regulations and a commitment to those purposes) the employees' behavior may be reduced to legalistic rule-following or minimalist compliance, where the letter of the law is observed but its spirit is not. Fourthly, precise regulations can reinforce a 'culture of compliance', in which doing the right thing comes to be equated with following instructions, regardless of their content and regardless of the gaps or flaws they contain. We have consequently taken away the intellect and creative potential of an employee which often generates that 'human' approach.

Code of Ethics and Code of Conduct

Accordingly, both a code of ethics, as well as a code of conduct, are of benefit if we are to be genuinely concerned with promoting ethical corporations. For this promotion, employees need an awareness of what lies behind ethical choices, in order to be able to make 'wise' and ethical decisions. Ethical conduct requires decision-making and accordingly wise judgment, especially in those situations where it seems to be a matter of choosing between competing or conflicting values or value sets. Judgment in those instances requires awareness of competing ethical principles and how they interact to be undertaken 'correctly'.

There are various moral theories which underlie ethical choices. Preston (1996) identifies various theories, such as the following.

• Virtue theory is the valuing of dispositions appropriate to human flourishing and an integrated life.

• Communitarianism is the appeal to the shared and evolving traditions of one's community.

• Utilitarianism is the determination of the value of an act by referring to its moral consequences.

• Deontological principles are reflected in the employee by an appeal to general principles, such as justice, human rights or respect for persons.

• An ethics of care is when the employee is being guided by care, compassion and a concern for the human relationships within each situation.

A comprehensive account of employee ethics would examine each of the above moral theories more closely.

Corporations as Ethical Communities

There are six distinctively ethical features identifiable within an ethical corporate community.

• Firstly, an ethical corporation is one where the people care about each others' well-being and seek to promote that well-being.

• Secondly, ethics is seen as something that is positive. Ethical conduct is envisaged as something to be consciously promoted in all human relationships, rather than a ‘something’ that serves to constrain us or promote 'guilt trips'.

• Thirdly, notions of others as persons worthy of respect and consideration are not abstract or impersonal. Employees are driven by principles based upon an awareness of how each person is different and special.

• Fourthly, the importance of consistency and justice as essential for an ethical community is the basis of all actions and considerations.

These principles are pursued in a context where an emphasis is placed on the worth of each person in a concrete, particular sense.

• Fifthly, the corporation's clients are persons also. They should be treated respectfully and in a caring manner.

• Finally, the actions of the professional planners in each corporate (and especially of the corporate leaders) should be guided by a concern to build up their particular corporation as a caring community, where every person is of worth and is helped to contribute to the well-being of the whole corporate community.

Prerequisites to an Ethical Culture

It is evident that the promotion of an ethical corporation will require that priority be given to the quality of the human relationships within that corporate community. Attention will need to be given to the one-on-one (microcosmic) relationship within the corporation. These relationships will include those between the employee and customer, the employee and other employees, the customer and other customers and between corporate administrators and each of the above. These relationships should be characterized by values of trust, respect and concern based on an understanding and awareness of each other as real and unique persons.

In addition, attention should be paid to the larger scale (macrocosmic) interactions between groups. This starts by acknowledging that all those within the corporate community are members of social groups and that their group membership will help define their identity. These social groups will not only be the obvious ones of employees and customers but will also be linked to racial, gender, ethnic and even geographical factors. Consequently, it will be important for corporate communities to have structures and processes in place that acknowledge group identities and also promote respectful and caring group interactions.

Differentiating Ethics Training and Ethics Education

It goes without saying that employers need to prescribe certain conducts for their personnel on ethical grounds and will consequently want to produce a Code of Conduct to serve this purpose. The induction of employees in this Code of Conduct is usually necessary and has conventionally taken in the form of an ethics training program. In general, such programs are directed to imparting knowledge, understanding and skills needed by employees for them to share in the task of supporting and maintaining the ethos of the organization.

An Ethics Training Program

Longstaff 1994(a) developed a typical ethics training program which encompasses the following phases:

• the induction of individuals into the ethos of the organization;

• the introduction and exploration of the organization's formal codes of ethics and conduct;

• the development of dispositions appropriate to the organization's ethos;

• the development of a critical capacity to identify (and where possible correct) practices and procedures that are inimical to the task of maintaining and developing the organization's ethos; and,

• the development of a critical capacity to reflect on the organization's founding principles.

Ethics training programs are usually directed at assisting employees to appropriately exercise their professional responsibilities addressed within a Code of Conduct. It is these authors’ experiences that these 'top-down' ethics training programs often will not be sufficient to equip employees and administrators to make the complex ethical judgments that, from time to time, are required. Such demands necessitate a different approach to imparting ethical knowledge and skills. That demand is met better by ethics education.

Ethics education is essential groundwork if employees are to develop into ethical decision-makers. Ethics education involves the imparting of knowledge, understanding and skills that will enable an employee to autonomously and authentically develop and maintain an ethical framework that is their own but is meshed in harmoniously with that of the corporation. Most significantly then, ethics education is directed towards developing moral autonomy.

A Code of Ethics

Consequent to the above considerations and the findings of the author's doctoral research, a valuable first step is to encourage employees to develop their own code of ethics. A personal code of ethics will assist corporate staff members to become ethical decision-makers. It will also enable employees to contribute to the building of an ethical corporate community within the workplace. The conviction on behalf of employees to achieve this is dependant upon ethics being internalized by staff members. The most effective way for this 'ownership' or internalization to occur is for the staff members to develop the code for themselves.

Longstaff, 1994(b) suggests a process of developing a code of ethics that will be an effective working document in a corporate.

Begin With a Values Audit

Start with a 'values audit'. This would involve asking the employees to indicate:

• what they think are the most important values the corporate stands for;

• how prominent they believe each of these values ought to be in the corporate; and,

• how prominent they believe each of these values actually is in the corporate.

This activity may initiate the identifying of a 'values gap' between the individual and the corporation. Such a gap may provide a springboard for a code of ethics as the development of a set of principles which will contribute to closing that gap. Guidance in this process should be given to employees. This can be done by indicating a number of issues that should be incorporated in the code, for example, confidentiality and a broad statement of the rights and responsibilities of customers and protection of 'whistle-blowers'.

Within that framework, the code of ethics should be hammered out by the corporate staff members themselves. The outcome is more likely to be relevant to the daily experiences of that corporation, while the process will reflect the principles founded in the notion that all individuals within the organization are respected and will promote a culture in which trust is engendered and value differences are acknowledged and negotiated. It will also be very important to 'authenticate' the code by applying it to actual ethical dilemmas confronted by corporate staff members.

The process of developing the code should not be allowed to take too long but should be done in such a way as to retain the sense of ownership sought at the outset. This code then needs to be reviewed at regular intervals to avoid becoming 'stale' and forgotten. The consequent issue that different divisions within the corporation will develop different codes should be encouraged provided that the principles in the code are consistent with the overall ethical principles espoused by the system. Corporations should go through the process of developing their own codes rather than using a code already developed at another corporation as ownership is the key to success within this context. The process is as important as the result.

Procedural Constraints on Ethics Education

It is here, in the theorisation of the procedural constraints that govern this educational process, that we believe the answer to the problem of employee compliance lies. If ethical autonomy is an essential goal of any ethical education, with its recognition of the need for un-coerced choice and of the concomitant acceptance of personal responsibility then the educational process through which core values are explored should be non-coercive and responsive only to thoughtful deliberations.

In other words, the procedures that constitute the educational process should deliver ethical commitments by the participants that result from carefully considered and freely embraced personal choices. In previous publications (De Reuck et al., 2000; 2003, forthcoming) we have argued that sincere commitment to change, including value change, is best secured by rational vindication rather than by any emotional persuasion or ideological conversion. Thus, we have argued that the procedural rules governing the communicative and pedagogical context of ethical education should require mutual respect and group acceptance of fallibility coupled to the recognition by all of the role the better argument plays in achieving socially warranted decision outcomes.

In a paper in progress, the present authors are exploring the development of a new form of emancipatory leadership we believe is central to the contemporary corporate demand for sophisticated knowledge and decision management. Clearly, the role and style of leadership in ethical education is crucial. What we will argue is that our theory of emancipatory leadership will be central to such an undertaking.

The rational ethos that permeates such procedural practices should, we believe, foster the recognition by the participants of the natural-ness of continual, life-long ethical development while at the same time reducing any pressure upon the participants merely to acquiesce to the stated values of corporate ethical codes.

A critical, creative intelligence informed by a schooled appreciation of the ethical challenges the corporate world presents, should be the explicit goal of any well considered ethical education program.

Leadership in Promoting an Ethical Corporate

Corporate administrators can best contribute to an ethical corporate culture by 'leading by example'. This is best achieved in their relations with the other members of the corporate community. Such relationships should be characterized by respect, trust and consideration. Additionally, the corporate administrator has a more formal leadership role. Among other things, they should encourage ethical discourse by encouraging the discussion of ethical questions by staff members. Leaders should set in train a procedure for developing a corporate-based code of ethics along the lines suggested above and should include the ethical scrutiny of corporate policies and practices within the regular processes of whole corporate self-evaluation. Finally, and importantly, leaders should promote the shared responsibility that is a hallmark of an ethical corporate community by working for genuinely collaborative decision-making structures and processes.

References:

• Debowski, M.B. 2002. The promotion of value cognition as a change heuristic within workplace settings (a study in treating corporations as targets of ethical discourse.) Unpublished DBA thesis Murdoch University, Western Australia.

• De Reuck, J., Schmidenberg, O. & Klass, D. 2000. 'The Logic of a Command Methodology: Decision Conferencing Reconceptualised', in International Journal of Management and Decision-Making, Vol. 1, No 1, 2-13.

• De Reuck, J., Schmidenberg, O. & Klass, D. 2003. ‘General Decision Assurance Principles and Procedures for Strategic Planning’, in International Journal of Management and Decision-Making, forthcoming.

• Longstaff, S. 1994(a), ‘What is ethics education and training?’ in Preston, N. (Ed.) Ethics for the Public Sector, The Federation Press, Annandale.

• Longstaff, S. 1994(b), ‘Why codes fail (and some thoughts on how to make them work)’, in Preston, N. (Ed.) Ethics for the Public Sector, The Federation Press, Annandale.