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PROF. JAMES L. HESKETT, BAKER FOUNDATION PROFESSOR, EMERITUS, AT HARVARD BUSINESS SCHOOL
An important question for leaders: How ethical can we be?
Prof. James l. Heskett, Baker Foundation Professor, Emeritus, at Harvard Business School, writes an hbs working knowledge paper on how managers like to think they act ethically, but at the end of the day, their ethical action is subjective.
Issue Date - 22/12/2011
 
2: Ajay Kumar Gupta, Doctoral Researcher and Faculty, Tata Institute of Social Sciences: Hiring ethical people may not necessarily make people or organisation ethical. We need practices that encourage and reward ethical decisions and that is top down. Organisations that do not value performance or profitability over ethical decisions may fail to realise the benefits of ethics. On the other hand, when leaders are more concerned about numbers and their positions, unethical practices take place. So, publicly rewarding ethical decisions, committed effort and employees extra initiatives will definitely create and value ethics in the organisations. Leaders should follow SSCEE Model to restore and create ethics in organisations. They need to take initiatives which establish ethics. Creating opportunity for people to take ethical decisions, engaging and encouraging them to take ethical decisions will help organisation become ethically right. Listening skills are more important than talking skills. Managers should design performance appraisal to include decision, effort and initiative that lead to building brand reputation and leadership credibility in future. Long term value creation should be focused more than short term profitability alone. Societies can play both complementary and supplementary roles to help organisations to encourage ethical decisions. For this, organisations should engage them into employee feedback system and also what they think about activities of the organisation.

3: Joe Schmid, Managing Principal, Oak Leaf Consulting, LLC: If you think about behavior as a mountain of possibilities, surrounding the mountain close to the base is a fence line. That fence separates legal from illegal behavior. Somewhere up higher on the mountain is a second fence that separates ethical from unethical. The posts that hold that fence are foundational principles (e.g. vested power is for service; statements made should only be made in an objective and truthful manner; one shall not maliciously or falsely, directly or indirectly, injure the reputation and prospects of another). A bit further up the mountain is a third fence. I’ll refer to it as the “Stuck-on-Stupid” fence. It bounds behavior that is not illegal or unethical but just plain stupid. Is there an ethical litmus test? The California Ethics Orientation online certification (except for 2 pages out of 200) deals with misuse of power for personal financial gain. Is this what bad behavior boils down to – I don’t think so. Should the “12th man” be barred from football stadiums - I don’t see that happening - it’s part of the game. Is “fair” in the eye of the beholder – sure is. Are “precommitment devices” the answer? My guess is it will be some time. Codes of behavior and ethics set the table. How you behave at the table is always very visible and defines who you are (a true pig or a gentleman)
 
4: Jacoline Loewen, Director, Loewen & Partners: Who defines a “fair” boss? The workers, the managers, the CEO, the owner, the Board, the community, the labour board, the government, the UN – or all of these stakeholders? A fair boss is situational. Canada is a remarkably “fair” place to do business because of the level of ethics drilled into the Canadian culture from childhood. Yet, many Canadians will say their boss is not fair because expectations for standards of fairness rise as all boats rise. A Zambian miner would think they were in heaven if they were working for a Canadian boss. The Canadians may think they deserve more pay or consistency in treatment because they are higher up the Maslow’s Hierarchy of Needs. Canadian employees do indeed regularly say their boss is not “fair”. The problem is that it is cheaper to do business in Zambia with the lower level of definition of “fair” boss. In Zambia, The Economist reports that workers do not have safety helmets. This would be illegal in Canada, never mind unfair. I believe that if you want to see “fair” boss levels, it shows at a granular level in the economy. Right at the company level, you can see the turnover rate. In private equity, we work with family owned businesses and I notice just anecdotally that there is zero turnover rate. Consequently, I look more to see who is being a “fair” employee and who is behaving in an entitled manner. In the private sector, with businesses under $300M, it is very hard to hide unfair treatment in the market place where employees come from the same town. As for the ethics – researchers not returning their books – I would assume that the people interested in ethics are on the more touchy-feely side of business rather than the harder core finance types. Who defines “fair” is the most important question of all.
Steven Philip Warner           

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