It sounds so simple and straightforward: the concept that good morals allow an individual, a group, a nation, and the world to be upright and honest with an understanding of right from wrong. However, in today’s complex society, it is not always black and white, right or wrong. Sometimes, there are shades of gray.
Companies that earn the most revenue… face unique pressures that tend to drive up the level of misconduct in their workplaces.
- Ethics Resource Center
“‘The right thing’ is not nearly as straightforward as conveyed in a great deal of business ethics literature. … Many ethicists assert there’s always a right thing to do based on moral principle, and others believe the right thing to do depends on the situation,” according to the Free Management Library website.
The results of a national business ethics survey, conducted by the Ethics Resource Center (ERC) and released on July 24, show more shades of gray than white.
In a statement issued by the ERC, former U.S. Congressman Michael G. Oxley, co-sponsor of the Sarbanes-Oxley Act of 2002 and chairman of the ERC’s board of directors, said that Fortune 500 companies (companies with annual revenues of $5 billion and more) should not only be business role models, but also ethics role models.
Heartburn for Business Management
“Companies that earn the most revenue work hard to build strong ethics programs and cultures, but they also face unique pressures that tend to drive up the level of misconduct in their workplaces,” according to the ERC business ethics survey.
Tools for a comprehensive ethics program are available. According to the survey, 60 percent of Fortune 500 companies instituted comprehensive ethics programs that included all six core components established by the ERC. The percentage of Fortune 500 companies that integrate the most important elements into their ethics programs is 20 percent higher than all other companies located in the United States.
The report suggests that during accelerated growth, workplace stress increases and impacts morals and ethical standards in the workplace. The more stressful the business environment inside and outside the company, the more risk taking and misconduct can be found.
The survey takers discovered that “90 percent of Fortune 500® workers who felt pressured [to break the rules] said they observed misconduct on the job—twice the observed misconduct rate among those who didn’t feel pressured to compromise standards.”
The survey results also show that employees react adversely in a company oriented toward high growth, responding with cutting corners and imperfect job performance, in essence cheating by providing the customer with lower quality products.
“Workplace conduct tends to move with the economy such that acceleration in economic growth is usually accompanied by a rise in misconduct. Flush times seem to encourage greater risk-taking,” according to the ERC survey.
According to the survey, 74 percent of employees in Fortune 500 companies became whistle-blowers after discovering wrongdoing versus 65 percent in the remainder of U.S. companies.
Management greatly influences misbehavior by employees. Managers who stressed ethical behavior had less than 50 percent of their employees involved in wrongdoing versus almost double that number in a company where management didn’t emphasize ethical behavior.
On the other hand, employees will not report every kind of misconduct. Actions, such as fraud, theft, and offensive behavior, which could result in a company coming under investigation or losing its brand name, will be reported. Such actions as personal use of the Internet, social networking, or excessive coffee or lunch breaks, are generally not considered strong enough to be reported.
“The most reported [misconduct] is bribes to clients (79 percent). The least reported is conducting personal business on company time (38 percent),” the ERC report said.