Factors to Determine Ethical Behavior Essay

Scott I couldnt agree more. And nowhere is this more evident than in corporate America. We see honorableity at go all told the cadence, with Bernie Madoff and his Ponzi scheme, the Enron scandal, Exxon, BP, and many, many more examples. Ethical expression can make or break a company. Diane Sure, I remember tribe passing up Exxon stations after the Valdez accident several years ago same with the BP oil spill. Boycotts against companies happen all the time if they forget they expect to be good corporate citizens, in addition to turning a profit.Scott I think the reappearance here, in a discussion of ethics though, is what determines respectable and un honest way. Can we give good deal any kind of a framework that might help to easily determine what is seen as objurgate behavior and what needs changing in a corporate setting? Diane Of course And while none of these ideas argon foolproof, in general, they cover the majority of signs or problems to assist out for and be aw a re of. You fork out to look at the individual employees stage of moral development, their individual characteristics, the structure of the company, the company culture and thus look at how big the issue itself really is.Scott Well, Im interested in a few concepts that Ive never really comprehend of before. Talk to us a little about the stages of moral development.Diane Gladly. There are three directs inherent in moral development. You establish the pre-conventional level, which deals with consequences from the international dictating moral behavior Scott So, an example might be my grandfather, whoalways talked about the nuns who taught at his Catholic school breaking out the rulers. That would be pre-conventional, right? Diane Exactly. Its all about how outside punishment or reward affects the choices people make between what is right and what is wrong.Scott So, if thats pre-conventional, Im betting that the second level is conventional, then. People just living up to the stan dards of society what other people believe for the most part is right and wrong. Diane That is it exactly, and that leads to the third level, which is the principled level. This is beyond responding to an outside stimulus or to our own notions of what others believe is right and wrong. At the principled level, people now look inside themselves and make a determination upstage from all those other factors affecting what they believe is right or wrong behavior. Scott Well, that does make a fortune of sense. So then, what are the individual characteristics that can engender an influence on moral behavior?Diane Values and personality are the two things that govern these individual characteristics. A persons individual set begin developing during childhood and continue to develop through experiences, discussions with other people and interactions with family, friends, teachers, religious figures, and others. A persons value system is in truth broad and includes many different areas. Personality deals more with two specific ideas, that of ego strength and locus of control.Scott Sure, ego strength influences a persons convictions. If you have a high degree of ego strength, then moral convictions will be easier to hold. Locus of control isnt a concept Im too familiar with though.Diane A persons locus of control has to do with fate. Some people believe they have a lot of control in their lives, while others believe that things are left to the wind. Those who have an internal locus of control believe they are in control, while those who have an external locus are more apt to believe that things will happen to them because of fate or luck or mere happenstance. Scott So I know weve talked before about how a company is structured whether or not it is centralized or decentralized. That plays a significant role as well, correct? Diane It does, very much so. The more hands touch something, the less likely it is that any strict controls put in place will stick. The less pe ople you have managing a process, the more tightly the controls can be monitored. This of course would be inaccurate if you had, say, one person managing everything who was inherently unethical. Then there would be nobody to call them to account.The structure of a company is a significant factor in the ethical behavior put into practice. Scott The ethical behavior of individuals is delightful and all, but what about the ethical behavior of organizational culture? Some companies encourage transparency and ethical behavior at all times. They have cognize that openness and honesty are good for the bottom line in the long run and ensure a strong core brand. Other companies whitethorn not overtly tell people to act unethically, but have individual bad actors inside the corporation who might encourage people to do things they shouldnt. Diane Exactly. And we all know examples of this. We hear about chemical companies dumping dangerous waste that contaminates ground water, about cigarette companies lying about how dangerous and habit-forming their product is, or about banks and the robo-signing scandal during the last recession.All of these activities, while not necessarily condoned by everyone across the enterprise, were OKd by trusted people within the corporation and seriously damaged the brands involved. Scott And of course, this is where issue intensity is important, because while we dont like to admit it, some unethical behaviors are worse or more impactful than others. While all unethical behavior should be avoided, dumping toxic chemicals into water that could kill thousands of people could arguably be seen as worse than, say, an employee who is skimming a few dollars here and there from a company. Both are bad, wrong, and can cause harm, but the characteristicsthat determine issue intensity turn out us that there are indeed levels of unethical behavior, and they can determine the likelihood of this kind of behavior occurring in the future.Diane And these characteristics greatness of harm, consensus of wrong, chance of harm, immediacy of consequences, proximity to the victim, and concentration of effect all play a role in determining when and why something unethical might occur. The less these factors play a role, the more likely for fraud or other unethical behavior to occur. If the victim isnt seen, if the consequences are far in the future, or if the behavior only affects one person, the possibility for unethical behavior is likely to see a jump.Scott And to talk more about this, wed like to welcome to the show Scott Hyder, attorney at law. Diane Hello Scott welcome to our show. Let me ask you, how does ethics play a part with respect to certain professions that require licensing to do trading? Scott Hyder Well, its incredibly important particularly in very regulated businesses such as businesses where you need a license. Im an attorney and so every attorney has to follow a certain set of ethics guidelines regardless of the s tate that youre in. Every state has passed very detailed ethical rules that are approved by the states Supreme Court and its not a matter of if, or a matter of choice, or just a matter of morals when following the ethical rules. Its a matter about whether your license will be revoked if you dont and many times youre violating ethical rules unintentionally its usually NOT an intentionalthing.It goes anywhere from disclosing client confidences to wrongful accounting practices, even if they are innocent mistakes. So, we really have to be careful as lawyers because if we dont comply with these rules, all it takes is one clients chuck out unsoundness to open up the flood gates. A client could complain about poor service from a lawyer, file a complaint with the state bar who regulates all lawyers but, by the end of the day, even if the clients complaint about the service of the lawyer is frivolous, the attorney could be sanctioned for other orthogonal things that become apparent as a r esult of the investigation.Its very common, for example, for a complaint to be filed but ultimate charges are implemented that have to do with wrongful accounting practices, competence issues and if that kind of thing happens, your license can be suspended and if its very egregious, it can be revoked. Scott genuinely interesting discussion, Scott, thank you so much for all your time. Diane And thank you all of you listening. Weve appreciated your time and hope that youve gained a great deal from this content.Scott Until next time