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    Why Do Good People Make Unethical Choices

    Despite taking all the right steps for creating an ethical environment – providing ethics training, developing a code of conduct, implementing a reporting hotline, etc. – organizations are still not immune to inappropriate behavior. According to the most recent National Business Ethics Survey, approximately 41 percent of workers witnessed some form of unethical conduct within […]

    Why Do Good People Make Unethical Choices

    Edward Vesely April 18, 2019 Uncategorized

    Despite taking all the right steps for creating an ethical environment – providing ethics training, developing a code of conduct, implementing a reporting hotline, etc. – organizations are still not immune to inappropriate behavior. According to the most recent National Business Ethics Survey, approximately 41 percent of workers witnessed some form of unethical conduct within the previous 12 months.

    While many believe that it’s only a few “bad apples” who commit ethical breaches, the reality is that many violations occur due to lapses in judgment by honest individuals who end up making some very poor decisions. As former federal prosecutor Serina Vash told the Harvard Business Review, “When I first began prosecuting corruption, I expected to walk into rooms and find the vilest people. I was shocked to find ordinarily good people I could well have had coffee with that morning. And they were still good people who’d made terrible choices.”

    So why do seemingly honest, hard-working people who started out with the best of intentions commit unethical, or in some cases, illegal acts? What is it that leads them astray? The truth is that there is no one simple reason good employees turn bad – it is often the result of a combination of various cultural and personal factors.

    Cultural/Environmental Factors

    Organizations can set themselves up for an ethical disaster by unwittingly creating an environment where employees ultimately feel compelled to make unethical choices. This can occur in several ways:

    Pressure to achieve unrealistic objectives – The pressure to meet exceedingly high expectations, especially in numbers-driven functions such as sales and finance, can cause employees to cut corners or make compromising choices. Employees who feel they have no chance of hitting a target may attempt to falsify documents or lie about their progress, often due to the fear of being fired.Perception of unfair treatment – Good employees who feel that their efforts are not being adequately recognized or rewarded by the organization may resort to unethical behavior to retaliate for the slight, or to attain what they believe is rightly theirs. For example, an employee who was passed over for a promotion may decide to cheat on expense reports or take home company property. The sense of unfairness can permeate the organization – several disgruntled employees may band together to collude against the company on a wide scale.Lack of focus on ethics and compliance – There are still many organizations that do not make ethics and compliance a part of the routine conversation – they only address it after a serious event or ethical crisis occurs. By not making ethics a primary component of the everyday work environment, organizations are, in effect, encouraging unethical behavior – even the most honest employees may receive a message that “anything goes.” In addition, a lack of attention to ethics may result in employees not being able to recognize the difference between acceptable and unacceptable behavior.Misguided loyalty – Sometimes, employees who are doing something wrong may believe they are doing the right thing for their company. They may think if they fail to act in an unethical manner, they are being disloyal to the boss or the organization. Misplaced loyalty can also occur when employees do not speak up when witnessing misconduct because they do not want to get a friend into trouble.Poor example from leadership – Leadership is responsible for setting the ethical tone in any organization. If top executives fail to “do the right thing” when making key decisions or handling ethical dilemmas, it sends the wrong signal to the entire organization and opens the door for inappropriate behavior.

    Personal Factors

    Sometimes, it’s an individual’s personal situation that leads to misconduct. Research points to three behaviors that can make good people make unethical choices:

    Need – An employee may elect to take a bribe, cheat on an expense report or embezzle company funds to fulfill a major financial need like paying off debts or covering a medical bill. There can also be a psychological need such as a lust for the power that comes with money or a desire to own luxury items that would otherwise be unaffordable.Opportunity – Even good people are not always able to resist an opportunity to take advantage of a situation. We often hear about trusted employees in smaller organizations whose actions undergo little or no scrutiny – and eventually use this lack of oversight to steal funds or engage in other forms of unethical behavior to further their own interests.Rationalization – Many who commit unethical acts can justify their behavior in their own minds. For example, an employee who skims from the company’s accounts may convince himself that he is doing no harm because he tends to replace the missing funds at some point.

    Organization Solutions for Preventing Unethical Behavior

    Organizations can take several steps to limit the likelihood of good employees behaving inappropriately:

    Train employees to recognize the impact that misconduct has on their coworkers and the entire organization. Cite specific examples that link the behavior to the harm it causes.

    Ensure that all managers weigh the ethical consequences of their decisions – employees are quick to notice hypocrisy, and the failure to “walk the walk” will send a message that there is nothing wrong with unethical behavior.

    स्रोत : www.lighthouse-services.com

    Why Ethical People Make Unethical Choices

    Companies unintentionally provoke bad behavior.

    Business Ethics

    Why Ethical People Make Unethical Choices

    Companies unintentionally provoke bad behavior.

    by Ron Carucci by Ron Carucci December 16, 2016

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    Most companies have ethics and compliance policies that get reviewed and signed annually by all employees. “Employees are charged with conducting their business affairs in accordance with the highest ethical standards,” reads one such example. “Moral as well as legal obligations will be fulfilled in a manner which will reflect pride on the Company’s name.” Of course, that policy comes directly from Enron.  Clearly it takes more than a compliance policy or Values Statement to sustain a truly ethical workplace.

    Corporate ethical failures have become painfully common, and they aren’t cheap.  In the last decade, billions of dollars have been paid in fines by companies charged with ethical breaches. The most recent National Business Ethics Survey indicates progress as leaders make concerted efforts to pay holistic attention to their organization’s systems. But despite progress, 41% of workers reported seeing ethical misconduct in the previous 12 months, and 10% felt organizational pressure to compromise ethical standards. Wells Fargo’s recent debacle cost them $185 million in fines because 5300 employees opened up more than a million fraudulent accounts.  When all is said and done, we’ll likely learn that the choices of those employees resulted from deeply systemic issues.

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    Despite good intentions, organizations set themselves up for ethical catastrophes by creating environments in which people feel forced to make choices they could never have imagined.  Former Federal Prosecutor Serina Vash says, “When I first began prosecuting corruption, I expected to walk into rooms and find the vilest people.  I was shocked to find ordinarily good people I could well have had coffee with that morning. And they were still good people who’d made terrible choices.”

    Here are five ways organizations needlessly provoke good people to make unethical choices.

    It is psychologically unsafe to speak up. Despite saying things like, “I have an open door policy,” some leadership actions may inhibit the courage needed to raise ethical concerns.  Creating a culture in which people freely speak up is vital to ensuring people don’t collude with, or incite, misconduct.  Elizabeth Morrison of New York University, in Encouraging a Speak Up Culture, says “You have to confront the two fundamental challenges preventing employees from speaking up.  The first is the natural feeling of futility — feeling like speaking up isn’t worth the effort or that on one wants to hear it.  The second is the natural fear that speaking up will lead to retribution or harsh reactions.” A manager’s reactions to an employee’s concerns sets the tone for whether or not people will raise future issues.  If a leader reacts with even the slightest bit of annoyance, they are signaling they don’t really want to hear concerns.There is excessive pressure to reach unrealistic performance targets. Significant research from Harvard Business School suggests unfettered goal setting can encourage people to make compromising choices in order to reach targets, especially if those targets seem unrealistic. Leaders may be inviting people to cheat in two ways.  They will cut corners on the way they reach a goal, or they will lie when reporting how much of the goal they actually achieved.  Says Lisa Ordonez, Vice Dean and professor at the University of Arizona, “Goals have a strong effect of causing tunnel vision, narrowly focusing people at the expense of seeing much else around them, including the potential consequences of compromised choices made to reach goals.”  Once people sense the risk of failure, they go into “loss prevention” mode, fearing the loss of job, status, or at-risk incentives. The Veterans Administration learned this lesson the hard way when trying to address the 115-day wait time in their Phoenix hospital. They set a new goal of reducing the wait to 14 days, which resulted in an alleged 24-day wait. But employees said they felt compelled to manipulate performance records to give the appearance of meeting these goals. As many as 40 veterans died waiting for care at the Phoenix center, some more than a year. Organizations must ensure people have the resources, timelines, skill and support they need to achieve targets they are given, especially ambitious stretch goals.Conflicting goals provoke a sense of unfairness. And once a sense of injustice is provoked, the stage is set for compromise.  Maureen Ambrose, Mark Seabright, and Marshall Schminke’s research on organizational injustice clearly shows a direct correlation between employees’ sense of fairness and their conscious choice to sabotage the organization.  Consider one organization I worked with whose pursuit of growth created conflicting goals. The head of Supply Chain was given a $3.5 million capital investment to overhaul a plant to triple its production. Some of that funding came from the 25% budget cut in marketing in the same division.  At the same time, Sales divided its quota territories to raise topline performance. The intensity of resentment in the salesforce at having to drive revenues with smaller territories was compounded by having fewer marketing dollars to sell more product. The conflicting goals created excess product capacity that was bottlenecked getting to market.  Two years later, the organization was indicted for channel stuffing.

    स्रोत : hbr.org

    Effects of Unethical Behaviour on Business

    Damaged reputation, no customers, employee attrition, lack of investors - just some of the effects of unethical behaviour on business. Worth the trouble?

    Effects of Unethical Behaviour on Business

    by Emily Newman | Nov 19, 2015 | Customer Service | 0 comments

    “Leadership that allows for mediocrity to first exist and then remain, rather than demand the highest level of conduct within a department, can create a climate ripe for misconduct.” – leb.fbi.gov

    Companies have probably never felt so compelled ever before to be customer-focused. Customers are more demanding, smart and know exactly how to get what they want. In the highly competitive and challenging business environment, companies have no choice but to comply. The challenges do not end with becoming oriented towards customer needs alone – customers must be able to trust that companies and their representatives are honest and ethical. Among the strongest pillars of any business relationship now, is trust, and customers prefer doing business with companies that have a reputation for being honest and transparent in their dealings. Research has shown that the effects of unethical behaviour on business are many and detrimental to a company and one incident that contradicts a customer’s belief in the company is often enough to destroy their trust. “Trust takes years to build, seconds to break, and forever to repair.”- SearchQuotes.com

    Despite the truth of the quote and the labour and investment required to gain customers, the harsh reality is that almost every company will have some ‘malefactors’ who are not ashamed to indulge in dishonesty. They completely ignore the effects of unethical behaviour on the business of their company. Unethical behaviour could be a range of things – using company property for personal gains, dishonesty in financial dealings, accepting and giving bribes and possibly the worst – insider trading. Some companies do not hesitate to offer huge ‘incentives’ to land lucrative contracts, government deals and other such transactions that will optimize their profits – irrespective of the damage they may cause to others. These companies, as they become stronger from building ‘associations’ care less and less for their employees and customers. Their only aim is to gain profits through whatever means possible.

    The effects of unethical behaviour on business begin to tell with time – as the line between right and wrong begins to blur. People within the organization that conduct themselves with high standards feel helpless and annoyed with the dishonest behaviour of their co-workers and or leaders. This frustration is compounded further by the fact that the company does not take action given that there may not be any legal implications or great financial damage. The honest employees then either look for alternative employment or if they are unable to find another suitable opportunity often end up with high stress and health related problems – thereby affecting the overall productivity of the company.

    While the unethical behaviour and practices may succeed for a while, they are soon found out. Persons and companies found guilty of such practices would then be scrutinized and publicly shamed. Companies often end up losing their license to conduct business and their reputation is damaged forever. Even if a company does not immediately get ‘found out’, customers and employees begin to perceive unethical behaviour.  The result would be that they would stop doing business with the company and leave the employment respectively.  Customers would most certainly let others know about the poor practices of the company, leading others to stay away from such a company – further damaging the chances of the company.

    Among the worst effects of unethical behaviour on business is that a company is unable to forge or maintain any long-term relationships with customers. In addition, it becomes vulnerable to long and expensive litigations. The fact is that even one such instance can make the company vulnerable to further accusations, many of which could be false, made by people and competitors seeking to harm the company’s reputation. While customers do have access to a lot of information by way of the internet and other market intelligence, they do rely heavily on the company and its representatives for accurate information and structured guidance on a number of aspects. Therefore, as the business environment becomes more competitive, companies must make the decision to act ethically or else face the highly damaging effects of unethical behaviour on their business and the representatives. It would be extremely immature and imprudent on the part of companies to believe that customers are naïve and would not find out eventually about the company’s malpractices.

    Another of the effects of unethical behaviour on business is that customers would completely shun the company’s products and start a campaign inciting others to follow. A drop in sales means a dip in profits and a fall in the company’s share prices, which eventually would drive investors and other stakeholders away from the company since no one would want to put their hard-earned money in a failing company. The company internally too would have an environment of confusion, distrust, stress and conflict since each person would doubt the intentions of the other. Such a poor work environment would lead to a drop in productivity, lowered morale and employee attrition, which would lead to the downfall of the company.

    The reason that unethical behaviour rises and survives is because people within a company are afraid and hesitant to ‘tell on’ their co-workers since they would be unsure of whom they can speak. If the culture seems to tolerate unethical behaviour, the fear of reprimand or being made an ‘outcast’ often leads people to remain silent. In order to counter the effects of unethical behaviour on business, the company must have strict rules and regulations in place that every employee must be aware and there should be no-tolerance policy for anyone that flouts the norms. Many companies have such guidelines in document form that is provided to each person that joins the company and they are expected to read and sign the document as acknowledgement of having understood the consequences in case they default.

    स्रोत : corp.yonyx.com

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