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Friday, February 09, 2007

Morality in Business?

Morality in Business.

Perhaps you have never lied, cheated or stolen. If you haven’t please let me know because you are the first among thousands that I have asked this simple question to in my seminars who answered in the affirmative.

John Adams knew it. So did Thomas Jefferson and Alexander Hamilton. On the dollar bill we find “In God We Trust” and the second unstated part “but tie your camel” is alive and well too. This is why we are a country of laws – in other words, a republic. Recognizing man’s propensity for serving self over the common good, laws and legal agreements ensure we can uphold the behavioral requirements of a relationship, our country, our liberty and our pursuit of happiness. In other words, so we can keep intact our democracy in capitalism.
Recently, a client read a study that stated MBA students were more likely to cheat than other disciplines. Few if any are bad people. Those that cheated didn’t understand the fundamental importance of their role as future business people in our society and let their pursuit of short-term ambition for grades (and later greed) exceed their understanding of the bigger picture. Some were possibly not bright enough, but most were just not educated or influenced properly to actualize social truth. Thomas Jefferson enacted strong leadership in the direction of publicly funded universities for the purpose of educating people so they would assume responsibility for the common good. First UNC Chapel Hill and later other publicly funded universities were originally created with Jefferson’s purpose in mind. His view was that people receiving a strong liberal arts education would be less likely to overly self serve or cheat the system, thus fewer laws like Sarbanes Oxley would be needed. This of course would reduce the astronomical social waste of human time and money these types of band aids incur for most of us.
There is great confusion between the concept of ethics and morality. I will take some license here. One character finds a loop hole and decides that it is OK to self serve; another considers the common good and decides and acts differently. Both have a type of morality and neither broke the law, yet their morality is quite different. Morality implies a certain value or “belief” and presumes a “right way” of doing business which can be different for different people; whereas ethics doesn’t necessarily do so. This critically important distinction is at the root of many of our social-business issues today. Ethics are neutral, conscious agreements between people and/or institutions for conducting business. Morality, like the “golden rule” can play into the agreements, but ethics only implies people will hold discourse to openly discover an agreed upon path of action together. For example, there can be an ethical arrangement between two drug dealers, yet their behavior is quite wrong from most people’s moral standpoint. For some people morality is rooted in their religious faith with their beliefs and values serving as guiding principles. For others it is what they know in their heart to be the right way to do business. Two client CEOs I polled for this article; one from a large bank and the other from a leading engineering firm, both emphasized there should be no distinction between private and business morality. This view could be tested by hypothetically placing one’s important decisions and actions on the evening news and see if they continue to feel good about their decision and what their children would see, hear and learn to live by.
“…it is our responsibility to continually seek to understand right from wrong and when in doubt seek counsel.”

Being moral is not a passive activity according to one CEO I polled who runs a large services company. He says that it is our responsibility to continually seek to understand right from wrong and when in doubt seek counsel. CEO and owner of a very successful restaurant believes that to knowingly deceive at any time is wrong. Another president of a southeastern bank stated that it is always important to be truthful with associates and customers. If a problem or mistake is made, own up to it and say so. They went on to say if someone isn’t doing a good job let them know; that this act builds trust and a reputation for integrity.
The real test of one’s capacity for morality and ethics is first and foremost an issue of self awareness and maturity. It has been my experience that most of us know when we are doing wrong. When we do wrong we seem to not have the personal capacity to stomach emotional pressure associated with doing the right thing in a difficult situation. Bill McLaurin, Ph.D. a consultant in our firm calls it “the thirty seconds of discomfort to do the right thing.” A top tier executive from one of the premier manufacturing companies in the world said that “listening to the quiet voice of one’s gut tells most of us when things are right and wrong.” It’s easy not to pay attention to this feeling-voice inside when we don’t want to – and then revert to denial or rationalization.

Self-awareness is critically important in deciding rightly because the man who knows his weaknesses of character is much more likely to make the right decision especially when not inclined not to. It is too bad that most ethics courses don’t teach people about the emotional nature of man and instead prefer lectures and intellectual discussions around the content of decisions. Alexander Hamilton, the “original MBA” knew it too as he posed that the study of human nature was the science of sciences. Undoubtedly he and others that established our democracy in capitalism knew too well what would cause us to fail and also what would give us the opportunity to be great.
“The real test of one’s capacity for morality and ethics is first and foremost an issue of self awareness and maturity.”



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