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posted on 10 November 2017

Perspectives, Experiences, And Cultures

by Michael Bret Hood

An Investigator's Guide to Ethics, Part 7

Using a scale of 1 to 100 with 100 being the most ethical, how would you rate your ethical fortitude? Would you rate yourself more or less ethical than your peers? What about your organization? Is your organization more ethical than most companies or less ethical? Why? Do you believe that your answers to these previous questions could depend on your perspective, your life experiences, and your culture?

ethics.components.sign.posts

People often say that the leader is responsible for the corporate culture, including the ethical viewpoints adopted by employees. While there is certainly some truth to that maxim, solely attributing the organization culture to a single individual would not accurately account for everyone’s uniqueness. There are times when you deem a decision, behavior and/or action to be perfectly ethical while someone else will perceive the same decision, behavior, and/or action to be unethical. Which one of you would be correct?

The answer to the above action isn’t always as clear-cut as we think. We can certainly agree that certain decisions, behaviors, and/or actions are ethical and unethical, but there are a number of gray areas where people tend to disagree. For example, when an insurance company finds a reason to drop a chronically ill customer, your culture, your experiences and your perspectives will play a role in whether you determine the decision to be ethical or unethical. If you or someone you cared for suffered physically, emotionally, and/or financially because they lost their insurance due to a terminal illness, you might be more likely to consider the insurance company’s act unethical. However if you were a shareholder or employee of the insurance company who relied on the company earning profits and paying dividends and/or salaries, your perspective on the ethicality of the previous situation is likely to be different from the first perspective.[1]

There are also generational perspectives that play a role in deciding what is and what isn’t ethical. Millennials, those people born in the early 1980s up to the late 1990s or early 2000s, are frequently credited with changing the ethical stance of corporations by demanding corporate social responsibility (CSR). Principles for Responsible Management Education performed a global survey and found 75% of the 1,700 students surveyed from 40 different countries agreed that corporations should do more for the environment and society.[2] The pressure mounted by millennials has resulted in corporate action. IKEA recently invested in a Netherlands plastic recycling plant with the belief that doing so would reduce deforestation and plastic waste.[3] In addition, Perdue Farms has changed chicken breeding operations due to the demands made by millennials for a cruelty-free breeding environment.[4]

Although they clearly have influenced the ethical culture in organizations, millennials also have their shortcomings, which could be a harbinger of an increase in organizational ethics investigations. Millennials are more likely than other generations to recognize behaviors as unethical such as lying, stealing, bribery, and fraud, but they are also more likely to perceive certain unethical behaviors such as keeping copies of confidential documents, copying software applications for personal use, and using the company network to accomplish personal tasks such as uploading pictures on social media as ethically acceptable.[5] In 2006, 32 graduate schools in the United States and Canada were studied in relation to their ethical beliefs. “56% of graduate business students said they had cheated on an exam in the past year."[6] In a 2008 study of business and non-business majors, business majors had significantly increased levels of narcissism and significantly lower levels of empathy.[7]

Baby boomers and Generation X members also have their own perspectives on workplace ethics. Baby Boomers tend to look to senior management for guidance on ethical issues while Generation X members tend to use formal systems such as whistleblower hotlines because of their lack of trust in senior management.[8] It appears that as organizations have implemented formal mechanisms for reporting compliance and ethics issues, millennials as well as Generation X members have been more willing to adapt to these new controls than have baby boomers, who are somewhat reluctant to use the latest technology.

As with any generation, personal experiences have played a role in what things are acceptable when dealing with ethical dilemmas. Millennials have grown up with social media, instant communication, and the Internet. Baby Boomers, and to some extent Generation X members, view the Internet as innovative technology that transformed from a slow dial-up connection to the instantaneous broadband connections enjoyed in today’s world. Most millennials grew up with broadband speeds and immediate access to information, which has made them much more comfortable utilizing technology in every aspect of their life. The rise in technology, however, has raised an entirely new set of ethical issues. For example, more millennials are willing to share annoying habits of co-workers, personal opinions about their company, personal opinions about politics, and pictures of co-workers drinking on social media than are members of the Baby Boomer and X generations.[9] In effect, the sharing of personal information on social networks has become such an important part of the millennials’ culture, things that may have been considered unethical by previous generations are now considered completely ethical by newer generations.


Bribery, in some countries however, is a necessary process for doing business.


If you have traveled to foreign countries, then you are probably aware that there are certain things you should and should not do in each country. Traditions, religion, and other guiding principles dictate what is acceptable to the general society and each of these things contributes to the ethical values exhibited by the people within the culture. Once again, what you see as unethical may be viewed as completely ethical within a different region of the world.

In the last decade, the United States, England and other countries have established and/or aggressively enforced laws banning the paying of bribes to obtain business. Bribery, in some countries however, is a necessary process for doing business. For example, let’s say that you were just hired as the chief executive officer(CEO) for a multi-national corporation with offices in fifty different countries and revenues over one billion American dollars. Would you, upon assuming your role of CEO, immediately fire all other executive officers and replace them you’re your family members and your friends? The answer depends on where you grew up and where you live currently. In the United States, you would certainly not be able to get away with doing something like this, but in South Korea, immediately hiring your closest family members and friends to executive positions is considered normal and expected.

“Being the owner of a successful company therefore means you are expected to share your influence and power with friends and relatives, through gifts, benefits, or a job. If you refuse or don’t try, you are placing these ties in jeopardy. For Koreans, the management and protection of family/friend loyalties is a top cultural priority."[10]

Organizational culture also plays a role in the overall ethical profile. Wal-Mart is an international organization with an ethics policy that states, “Never cover up or ignore an ethics problem." Yet in September 2005, one of Wal-Mart’s lawyers received an email from a Wal-Mart executive in Mexico carefully detailing a disturbing pattern of bribery involving permits for new stores all over Mexico. At the time of the allegations, the Mexican Wal-Marts were one of the company’s top business success stories and in 2012, one out of every five Wal-Mart stores were located in Mexico.[11]

It is alleged that when top executives initially learned about these allegations of bribery, they dispatched a team of internal investigators to their Mexican corporate offices. The investigators quickly found evidence confirming the likelihood that the bribery allegations were truthful. Upon seeing the investigative report, top Wal-Mart executives are likely to have faced a very serious ethical dilemma. If these executives disclosed the alleged bribes and investigations to the public, the damage to their brand reputation as well as their stock price could be substantial yet their written ethical code mandated disclosure. Based on the allegations, it wasn’t long before bounded ethicality likely took over the decision-making process.

“Another person familiar with the thinking of those overseeing the investigation said Wal-Mart would have reacted ‘like a chicken on a June-bug’ had the allegations concerned the United States. But some executives saw Mexico as a country where bribery was embedded in the business culture. It simply did not merit the same response."[12]

The executives, by using the excuse that Mexico was a culture that openly accepted and expected bribe payments, could have altered the ethical basis of the issue by transforming the payments into a necessary cost of doing business despite Mexico’s legal framework, which clearly stated that the payment of bribes was an illegal act.

It was alleged that Wal-Mart eventually decided to take the case away from the internal investigative team and re-assign the investigation to the Mexican corporate office. The person who was to oversee the bribery investigation for Wal-Mart just happened to also be the main subject of the case. Not surprisingly, this executive quickly prepared a report for Wal-Mart’s top executives stating there was no believable evidence to support the bribery allegations. Wal-Mart, at the direction of top corporate executives, then closed the investigation. Wal-Mart executives eventually informed the United States Justice Department that there may have been violations of the Foreign Corrupt Practices Act (FCPA). Subsequently, Wal-Mart executives allowed the investigation to be re-opened.[13] Reportedly, Wal-Mart has been offered the opportunity to settle the FCPA civil claims by making a payment of $300 million to the United States government. This amount is on top of the $840 million Wal-Mart has spent on its’ internal investigation to date.[14] If these same Wal-Mart executives learned of a scenario where one of their competitors used bribery and corruption to create and/or sustain a competitive advantage, what is the likelihood that they would object to those circumstances?

Perspective changes the way we perceive our actions and decisions. You, as the investigator, are equally susceptible to bounded ethicality as are the people you investigate. To avoid succumbing to bounded ethicality, ethical fading and other ethical maladies, try to find confidantes and/or peers who are willing to tell you the truth and who are not affiliated with your investigation. You can also play devil’s advocate and work your investigation from different angles such as looking to find evidence that disproves your investigative theory as hard as you look to find evidence that supports your ideas of what occurred. Lastly, being aware of the possibility that your perspectives, experiences and cultures can lead you to unethical decisions, behaviors, and/or actions can also be a way to maintain your own ethical standards.

Investigators are supposed to remain objective while seeking the truth. Yet despite this desire, there are times when your perspectives, experiences and culture determine how you view the evidence you find. If you truly want to be ethical, shouldn’t you try to make it a common practice to consider perspectives, experiences and cultures other than your own before making your investigative decisions?

Footnotes

[1] Bazerman, M. & Tenbrunsel, A. (2011). Blind Spots: Why We Fail To Do What’s Right And What To Do About It, Princeton University Press, Princeton & Oxford, 2011, p. 107

[2] Paulas, R. (2017). Do Ethics Have A Place In Business Schools, Pacific Standard, June 6, 2017. Taken from the Internet on June 9, 2017 at https://psmag.com/economics/millennials-youre-our-only-hope

[3] Gould, H. (2017). IKEA’s Solution To Peak Stuff? Invest In Plastics Recycling Plant, The Guardian, May 15, 2017. Taken from the Internet on June 10, 2017 at https://www.theguardian.com/sustainable-business/2017/may/15/ikea-peak-stuff-plastics-recycling-renewables

[4] Argenti, P. (2016). Corporate Ethics In The Era Of Millennials, National Public Radio (NPR), Public Broadcasting System, August 24, 2016. Taken from the Internet on June 8, 2017 at http://www.npr.org/sections/13.7/2016/08/24/490811156/corporate-ethics-in-the-era-of-millennials

[5] Gabrini, C. (2016). Understanding Generational Differences: Millennials Views Of Ethics, PA Times, American Society for Public Administration, June 21, 2016. Taken from the Internet on June 9, 2017 at http://patimes.org/understanding-generational-differences-millennials-view-ethics/

[6] Paulas, R. (2017). Do Ethics Have A Place In Business Schools, Pacific Standard, June 6, 2017. Taken from the Internet on June 9, 2017 at https://psmag.com/economics/millennials-youre-our-only-hope

[7] Ibid.

[8] Unknown Author(s) (2013). Generational Differences in Workplace Ethics: A Supplemental Report of the 2011 National Business Ethics Survey, Ethics Resource Center, 2013. Taken from the Internet on June 12, 2017 at http://www.duq.edu/news/ethics-of-millennials-more-aligned-with-boomers-than-gen-x-research-shows

[9] Ibid.

[10] Fendos, J. (2016). South Korea’s Corruption Culture, The Diplomat, November 17, 2016. Taken from the Internet on June 14, 2017 at http://thediplomat.com/2016/11/south-koreas-corruption-culture/

[11] Barstow, D. (2012). Vast Mexico Bribery Case Hushed Up By Wal-Mart After Top-Level Struggle, The New York Times, April 21, 2012. Taken from the Internet on June 14, 2017 at http://www.nytimes.com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe-inquiry-silenced.html?_r=1&

[12] Ibid.

[13] Ibid.

[14] Viswanatha, A. (2017). U.S. Asks Wal-Mart To Pay $300 Million To Settle Bribery Probe, Fox Business, Fox News, May 9, 2017. Taken from the Internet on June 14, 2017 at http://www.foxbusiness.com/features/2017/05/09/u-s-asks-wal-mart-to-pay-300-million-to-settle-bribery-probe.html

Previous Articles in this Series

21 Sep 2017 - How Personal And Organizational Ethical Responsibility Is Easily Diffused

12 Aug 2017 - The Rule Of Reciprocity

23 Jul 2017 - Losing Your Ethical Way Through Competition And Rivalry

06 Jul 2017 - The Ethical Dimensions Of Power

10 Jun 2017 - An Investigator's Guide To Ethics, Part 2: Why Good People Do Bad Things

23 May 2017 - Why Traditional Ethics And Compliance Training Programs Don't Deter Fraud

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