Study debunks ethics management myths

Study debunks ethics management myths

University Park, Pa. -- The process of managing ethical behavior in a corporate setting has been undermined by various oversimplified responses to the issue, which have fueled common myths about ethics that do not hold up under greater scrutiny, according to a new article co-authored by Linda Klebe Trevino of Penn State's Smeal College of Business.

"Managing to be Ethical: Debunking Five Business Ethics Myths," which is forthcoming in the journal Academy of Management Executive, addresses the myths that it's easy to be ethical, unethical behavior in business is simply the result of "bad apples," managing ethics can be accomplished through formal ethics codes and programs, ethical leadership is mostly about leader integrity, and people are less ethical than they used to be. Trevino and her co-author, Michael E. Brown of Penn State Erie, provide guidelines for effective ethics management, which are based upon research and are tied most closely to the ability of an organization to foster a strong ethical culture.

"The corporate ethics scandals of recent years have harmed millions of employees and investors, which makes this an emotional and volatile issue that oftentimes prompts emotional rather than intellectual responses," Trevino said. "We put corporate ethics under the microscope and found that many of the pre-conceived notions on the topic are simply incorrect."

Myth: It's easy to be ethical
Fact: "Ethical decisions are ambiguous," the authors write, "and the ethical decision-making process involves multiple stages that are fraught with complications and contextual pressures. Individuals may not have the cognitive sophistication to make the right decision or the courage to do the right thing. Most of them will be influenced by peers' and leaders' words and actions, and by concerns about the consequences of their behavior in the work environment."

Myth: Unethical behavior in business is simply the result of "bad apples"
Fact: "Most people, including adults, are followers when it comes to ethics. When asked or told to do something unethical, most will do so. Bad behavior in business does not necessarily result from flawed individuals. More often, it results from an organizational culture that encourages or supports flawed behavior."

Myth: Managing ethics can be accomplished through formal ethics codes and programs
Fact: "For formal systems to influence behavior, they must be a part of a larger, coordinated cultural system that supports ethical conduct everyday through leadership, reward systems, and other cultural systems. Further, a culture that demands unquestioning obedience to authority is particularly harmful while a culture in which employees feel fairly treated is especially helpful if supporting ethical conduct is the goal."

Myth: Ethical leadership is mostly about leader integrity
Fact: "Employees must be 'led' from the top on ethics just as they must be led on quality, competitiveness, and a host of other expected behaviors. In order to be an effective ethical leader, executives certainly must demonstrate integrity -- that they are ethical themselves. But they must also make their expectations of others' ethical conduct explicit, and they must hold all of their followers accountable for ethical conduct every day through attention to ethics in the performance management system."

Myth: People are less ethical than they used to be
Fact: "Unethical behavior is nothing new and people are probably not less ethical than they used to be. But, the environment has become quite complex and is rapidly changing, providing all sorts of ethical challenges and opportunities to express greed. That's just one more reason why ethical conduct must be managed in the workplace."

About the Lead Author
Trevino, who also directs the Smeal College's Shoemaker Program in Business Ethics, conducts research in the areas of ethical leadership, the management of ethical conduct in organizations; the management of organizational climate and culture to support and encourage ethical behavior; and organizations' varied approaches to ethics management. She co-authored the textbook "Managing Business Ethics; Straight Talk About How to Do it Right," which is being used to teach undergraduates, MBAs, and executives, and is in its third edition. Another book, "Managing Ethics in Business Organizations; Social Scientific Perspectives," was published in 2003 by Stanford University Press. In January, Trevino was named as a core faculty member for the newly founded Business Roundtable Institute for Corporate Ethics.