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Corporate Accountability and Ethics

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Enron code of ethics book cover
Enron code of ethics book cover

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About this article

This article is based on extracts taken from the Open University Business School courses: Winning Resources and Support (B624) and Managing Performance and Change (B700).

Selling without selling out

A high-pressure environment like sales can pervert moral values. How can companies remain ethical marketeers?

A disregard for ethics can lead to trouble: remember the Enron saga? This article, based on course extracts from the OU Business School, asks how can we ensure our companies operate with ethics and accountability?

Ethical behaviour is a major concern in many areas of our lives. We cannot turn on the radio without hearing discussions about ethical dilemmas that face people in all sorts of situations. These may include:

  • purchasing dilemmas, such as whether or not to buy furniture made from tropical hardwood, perhaps contributing to the destruction of the rainforests;
  • individual and family decisions about whether to make use of private medicine and education;
  • professional dilemmas about withholding or rationing medical treatment in certain circumstances;
  • corporate dilemmas such as holding investments in arms manufacture or tobacco.

Reflection on these may prompt you to think that behaving ethically is not always easy. You may be clear that you think certain types of behaviour are wrong – but you will be aware that there are issues where other people hold passionate views on both sides of the debate, particularly around issues of life and death such as euthanasia or legalised abortion. Ethical behaviour is about making moral judgments about what is right and what is wrong and then developing codes of practice to hold these beliefs in place and provide the basis for expressing them in action.

What we regard as ethical or morally right arises from our values: what we regard as important about how we, and the organisations where we work, ought to behave. When words like ‘good’, ‘should’ and ‘ought’ enter the vocabulary, it is an indication that we are in ethical territory. In essence, when we talk about values and ethical behaviour we are talking about the criteria we use in our day-to-day work to make decisions. Indeed, you may not be wholly conscious of doing this, until someone challenges your decisions and you are forced to justify them.

It is this underpinning of values that makes ethical behaviour a ‘slippery concept,’ for values have many different sources. We have dominant values in our society – historical, religious, political and cultural contexts – and these in turn affect the way our organisational values are shaped. The latter will come from the founding stories, missions and values that subtly shape and make organisations distinctive from one another, even within the same field. We will also hold values as a group.

We often make statements about what and who we are as a person through the organisations and associations that we join. For example people who join the League Against Cruel Sports are making a values statement about believing in respect for all animal life. Those who join the British Field Sports Association are making a similar statement about their views on hunting animals as a sport and on the need to control vermin and protect the livelihood of farmers. Similar issues apply to work groups within an organisation who may develop differing values about how things should be done. And finally, we each hold sets of individual values and these may connect or clash with those of the group, organisation or society.

This is tricky stuff to pick your way around and there is no getting it right all the time. Two things stand out about the issue of dealing with values.

First, arguments about values are not always arguments about ‘right and wrong’. One dilemma for managers is that conflicts over values are usually conflicts between different and incompatible rights. If you consider the example of field sports above you can see that to sustain these arguments the proponents of differing positions are drawing on different types of values to support their arguments and no amount of debate will produce a compromise between the two positions. The anti-hunting people tend to see animals as part of a complex web of nature, or as ‘cute’ or indeed as vested with ‘rights’. The pro-hunting people may emphasise individual human freedom to pursue sports that other people may not like but which do not harm them, the economic contribution of hunting, or the right of farmers to protect their livestock.

Second, the language in which ethical debates are conducted often creates confusion and misunderstanding. People rarely distinguish between the different types of values, behaving instead as if all values are consistent with each other, although they are not. However, we often choose to ignore this, for it is uncomfortable to realise that what is good for private individuals does not always line up with what is good and right for our work colleagues, our organisations or even political movements.

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Content last updated: 24/10/2005

 

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