Managerial Ethics

It’s hard to do the right thing as a manager – especially when you’re not sure what the “right thing” is. Sometimes you must balance your own sense of ethics with organizational pressures.

Take the case of employees at a cabinet manufacturing company. A number of them routinely work on their own projects on company time. The manager is aware. But there’s a labour crunch in the booming construction sector and she’s concerned about retaining staff. So she turns a blind eye. The organization tacitly supports the manager’s decision not to stop the practice because labour is hard to find.

Nevertheless, the manager is uncomfortable. The decision doesn’t sit right and she’s noticed that allowing the practice has affected other workers. People are taking longer lunches and breaks and talking on the phone during company time. Productivity is starting to slide.

This problem can be familiar to managers struggling to balance their own moral code with some of the demands being placed on them by changing markets and opposing organizational mores. The fact that there is no obviously positive outcome makes it difficult to distinguish right from wrong.

So, how does a manager go about making an ethical decision when faced with situations that don’t seem to have a discernible right from wrong?

According to Richard Daft and Dorothy Marcic at Vanderbilt University, Ross Bradford at the University of Alberta and Heather Stevens at George Brown College, there are eight guidelines for ethical decision making.

1. Identify the problem

Sometimes the problem or dilemma is not what it appears to be. Taking time to assess the situation is the first step in making an ethical decision. Perhaps you have been asked to quickly sign off on a report that you haven’t read due to time constraints. Your boss wants to send the report out quickly and needs your signature. You feel pressured but also have faith that your boss would have done due diligence. The problem put before you appears to be one of helping the company meet a deadline. It is in fact an ethical dilemma since you are responsible for having read and approved the document. While the problem seems to be a time management one, it is really an ethical issue.

2. Consider the legality and the ethical nature of the issue

A truly ethical decision takes into account both legal and ethical factors. Many have found themselves in ethical hot water even after making legal or technically sound decisions. To engage in ethical decision making means going beyond the letter of the law. Just because a particular action complies with the law does not mean it is ethical. Identify if the action you wish to take is legal but also consider its moral veracity. Does it pass your own moral test and conform to your value system? Does the action benefit others, uphold their rights or does it exploit another or benefit only a few? Does the action provide a short or long term solution? Asking these kinds of questions can help a manager stay within the law and meet ethical business standards.

3. Understand the Opposition

The staff who may oppose your decision have reasons that must be understood. Those who use company machines and time to do their own projects, for example, may feel entitled to this perk because they feel they aren’t paid enough or work many unpaid overtime hours. Once you have determined the opposing viewpoint, ask yourself if this is a reasonable approach or rationale for the behaviour or request. Is it reasonable for your boss to ask you to sign off on regulatory documents you haven’t read?

4. Assess Harm and Benefit

Consider who the action benefits and who it harms. If you were to make a particular decision, who would benefit? For example, when accountants at WorldCom agreed to CEO Bernard Ebber’s request to make accounting adjustments that reduced expenses and boosted earnings, they were making decisions that had ramifications for shareholders, staff and their own livelihoods. In addition, asking how much harm would be done and for how long is important. In the case of WorldCom, the decision to make dubious accounting adjustments brought the company down and landed the CEO in jail.

5. Ask: Should Others Do This Too?

Think about the problem from the point of view—“what if everybody did this?” What would the effect be if this action was common practice and others followed suit? It may be that the action would have a positive effect. However, when considered from the vantage point of the practice becoming company policy or a commonplace event, the action may not be as desirable an option. Sometimes when making an ethical decision, it is tempting to say to oneself, “Well, I’ll just do this once to deal with the issue at hand”. However, this can be a slippery slope since what might have remedied a problem once will become a tempting solution later. This is true especially for issues that involve money. “I’ll just allow this disbursement or expense this once”, can have a negative effect if others do the same thing or the pattern is repeated.

6. Ask Someone

Seek the opinion of others who are knowledgeable in the area and who can be objective about the issue. Sometimes it is difficult to weigh the pros and cons of a decision when competing needs and pressures vie for attention. Asking a trusted colleague about their thoughts on the matter might help clarify a difficult situation. Ensure that the individual you seek out is knowledgeable about the area and not vested in the outcome. It can be tempting to find someone who you believe will agree with you. It’s good to have support in some situations but ethical decision making requires help from an unbiased source.

7. Would Your Decision Be Embarrassing?

If your family, friends, co-workers or supervisors knew of the decision, would you be embarrassed? This is different from feeling uncomfortable. Ethical decisions can be very uncomfortable but if the action you are contemplating would cause embarrassment, it may require more thought. If you think through your decision from this vantage point you will be able to ascertain the rationale for your decision. If you like the sound of the rationale as you explain it to yourself, you are probably on the right track. The manager who stops the use of work time for personal projects may find herself saying, “I stopped the behaviour when I saw people taking advantage of the company. Or if she wasn’t stopping the behaviour, she might say, “I didn’t stop them because they wouldn’t cooperate with me the next time I needed a rush job done”. When weighing each rationale, the manager might find herself uncomfortable enforcing the first decision and embarrassed explaining the second. In the second scenario, the manager looks like an ineffectual leader; in the first scenario, she looks like a leader with integrity and vision.

8. Go With Your Gut

It may be that you make a decision but it still doesn’t feel right. Perhaps only a few people will be hurt in the short term or another colleague says the action is ethically sound or it’s legal. Yet you are still feel uncertain. Trust your instinct or review the ethical decision making protocol and look at the issue from another angle. Take the time to decide.

Ethical decision making is about working with a set of undesirable outcomes, or choosing what seems to be the lesser of two evils. So, don’t be surprised if the decision you finally make doesn’t feel like a relief but a prescription for more headaches. Ultimately, if you make a good ethical decision you’ll gain a sense of having done the right thing while you prepare for the difficult road ahead. It may mean hard conversations with staff, saying “no” to the boss or making more work for your self. While not easy, the end result is probably a better long term solution for you, the other staff and the company.

Dr. Jennifer Newman and Dr. Darryl Grigg are registered psychologists and directors of Newman & Grigg Psychological and Consulting Services Ltd., a Vancouver-based corporate training and development partnership. Identifying information in cases cited has been changed to protect confidentiality. They can be contacted at: sunmail@newmangrigg.com

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