Designing Ethical Workplaces

Donald D. Dunn

• Publisher: Business Expert Press
• Year: 2016
• Print ISBN: 9781631572364
• eBook ISBN: 9781631572371
• Topic: Business
• Subtopic: Business Ethics
• Index: Business

Executive leaders need a framework with which to evaluate current and to create new corporate ethical management systems in their organizations. This book offers such a framework, called the Moldable Model©, a system of consistent components that give leaders a framework and a guide to build an organization-specific corporate ethical management system (CEMS). This book teaches how to design ethical workplaces utilizing the role modeling, context, and accountability components. In a step-by-step process, the author guides the reader through the research-based components with definitions, theory, explanations, and the practical application of those components through suggested organizational activities. Readers can expect to develop ethical tools and a complete corporate ethical management system for implementation into their specific organizations. In just a few hours, a busy executive can have the knowledge and tools to design an ethical workplace that creates satisfied and committed employees who increase organizational productivity and competitive advantage.

CHAPTER 1

A System for Managing Company Ethics

We are people of plans, processes, and systems. We organize our lives around specific systems to accomplish specific tasks. Talk to a dozen people and there will be a dozen different methods to manage personal finances, household chores, vehicle maintenance, work, leisure and family time, grocery shopping, and calendar activities. There are different strokes for different folks when it comes to processes and systems for the creation and implementation of new programs in the workplace, at school and church, and at home.

In the workplace, leaders, managers, and employees have systems in place for nearly every function necessary to be productive, efficient, profitable, and to survive in a competitive and ever-changing global marketplace in order to deliver on customer needs (Burli, Kotturshettar, and Dalmia 2012; Dehghan, Shahin, and Zenouzi 2012; Ionut, Marcel, and Monica 2011; Kaushik and Khanduja 2009).¹ Companies use standardized efficiency tools such as Six Sigma, Total Quality Management, and Continuous Quality Improvement to continually improve those systems.

One glaring lack in organizational tools, plans, processes, and systems is the ability to intentionally and effectively manage company ethics. The ethical management of an organization results in the same outcomes that companies desire from quality improvement processes: productivity, profitability, and competitive advantage (Dunn 2013; Treviño, Hartman, and Brown 2000).² In addition, companies attain higher levels of employee satisfaction, commitment, comfort, and fun when managed ethically, which in turn fuels improved levels of business performance. Why then do companies lack in ethical management systems when the outcomes are so desirable?

The lack of a system to manage ethics at the corporate level could be because organizational decision makers believe that such a system is too costly or time prohibitive compared to other company priorities. Executive-level employees may not have the knowledge or the expertise to craft such a system to keep the ethical environment as a focus in the organization. Most companies cannot afford the luxury of a full-time staff position for an ethics officer. It is possible that some may believe that proper ethical behavior among employees should be intuitive, natural, and that intentionality in this area is not needed. Some may just assume that every employee knows proper ethical behavior and the difference between right and wrong in business. It is probable that many organizations sense that law-abiding behaviors are the equivalent of ethical behavior. Organizational leaders are trained in bachelor, master, and doctoral programs in many important and critical leadership and management processes; however, the understanding of ethics and how to manage and lead company ethics is usually a tangential thought represented by ethics courses that are electives and not required or ethics courses that are fewer credit hours than other business offerings. Many top-level executives have insisted that their behavior was within the boundaries of the law, while lower-level employees lost jobs and pensions from the actions of those executives. Certainly many companies have a code of ethics (COE) or a code of conduct that seems sufficient to guide company values; however, beyond a copy of the code in the policy handbook and a few posters on the walls, many companies lack a system to maintain employee accountability for and compliance to the code.

This book offers a system to effectively manage company ethics, called The Moldable Model© (MM). The MM consists of a research-based framework or model of consistent and necessary components to manage the ethical climate of any organization. Organizational decision makers will find that the MM is firm in its three-pronged framework, yet flexible in its application to any company, industry, or for- and not-for-profit sectors. The ethical system recommended in the pages that follow guides busy executives in the evaluation of current or the creation of new corporate ethical management systems (CEMSs). By using the MM, any organization can enhance executive and employee ethical behavior, employee work satisfaction, and company productivity with a distinct competitive advantage.

The Need for a CEMS

The surge into the 21st Century and the new millennium brought a sense of optimism after we knew that the world did not collapse from a computer glitch. Executives and employees returned to work on January 2, 2000 after survival of Y2K. From corporate board rooms to office cubicles, organizational employees used the leadership and management processes of direction setting, planning and budgeting, staffing and organizing, aligning staff to the new company direction through motivation, problem solving for control, and inspiring appeals to guide the needed change in direction (Kotter 1990).³ The hope and goal was for better productivity, financial performance, and competitive advantage in a global marketplace.

Unfortunately, the push for these worthy goals blinded some leaders to the ethical dimension of business. Because of success in the business world, many top leaders fell prey to a hubris, sense of impunity, loss of organizational and strategic focus, and to the push for personal gain over organizational good (Ludwig and Longenecker 1993).⁴ Several top leaders in major, global companies succumbed to the allure of success that is often the antecedent of unethical and destructive behavior. Unethical and destructive behavior from top leaders alone could not bring down a company without the aid of willing followers and organizational environments conducive to toxic leadership (Padilla, Hogan, and Kaiser 2007).⁵ A destructive leader with magnetism or charisma and a narcissistic personality could sway employees who chose to “conform” or “collude” with the leader’s personal goals (Padilla et al. 2007, 183).⁶ Without an organizational environment of checks and balances, leaders and employees could find a way to emphasize personal gain over organizational good. When these personal and organizational forces and limitations collide, the company environment is ripe for unethical behavior.

Through the actions of unethical organizational employees and the ensuing glare of social media at the start of this millennium, leadership researchers became quite interested in the study of ethics in organizations, including unethical or dark leadership. Society in general has replaced its enchantment with organizational leaders with anger, frustration, and a real sense of betrayal due to the unethical behavior of many executives (Morris, Brotheridge, and Urbanski 2005).⁷ The media glare placed on the unethical behavior of top leaders has had a positive effect—the public today longs for leaders who act ethically (Ciulla 2003).⁸ Years ago, Frankl (1959, 1984) believed that the Statue of Liberty on the East coast, which represented freedom, should be offset with a statue of responsibility on the West coast to remind us that all freedom is encompassed with huge responsibility.⁹ Organizational leaders of the last several years needed Frankl’s wisdom.

The study of leadership, including ethical leadership, has been in progress for over 100 years (Baumhart 1961; Donham 1929).¹⁰ As with any research, the study of ethical leadership has moved from basic quantitative analysis to a more sophisticated correlational analysis of action and outcome variables. Variables under study often included ethical processes such as codes, rewards and discipline, training, communication, and executive role modeling and the variables’ effect on organizational behaviors such as employee satisfaction, productivity, and job commitment (Collins 2010; Howell and Avolio 1992; Klein, Laczniak, and Murphy 2006; Trevino, Butterfield, and McCabe 1998; Valentine and Fleischman 2008; Vitell and Davis 1990).¹¹ Qualitative research in ethical leadership has also surged in the last 15 years. Researchers desire to understand the lived experiences of organizational members in the areas of ethical and unethical leadership, resulting in the rise of increased qualitative studies to understand the perceptions of employees. This recent and focused interest in ethical leadership grew exponentially due in large part to the unethical activity of several major companies during the early years of the 21st Century. Enron, WorldCom, and Tyco remain household names in the study of ethical or unethical leadership. Companies came under intense social and ethical scrutiny at the turn of this century, and that intense scrutiny continues today.

The management of company ethics, however, must be motivated by more than intense scrutiny and simply an attempt to avoid the dark leadership of past executives and that leadership’s devastation to employees and organizations. A CEMS should do more than just help companies comply with the Sarbanes–Oxley Act and to just keep organizations from legal issues, though good reasons. Research now demonstrates that some type of ethical management system has critical, positive results as well. Companies that manage internal ethics see better productivity, better business results such as financial performance and competitive advantage, and improved employee performance as employees are more satisfied with and comfortable at work while having more comfort and fun (Dunn 2013; Treviño et al. 2000).¹² Customers who receive ethical treatment are return customers (Dunn 2013).¹³ Teleological reasoning allows companies to focus on outcomes and results as motivation to be ethical.¹⁴ From a deontological ethics perspective, ethical behavior at the organizational level is the “right thing to do.”¹⁵ Zenger and Folkman (2012) found that integrity and honesty are 2 of the top 3 of 16 competencies needed by executives.¹⁶

Therefore, the leadership and management of company ethics must now take priority in direction setting and visioning of organizational goals. Company ethics must be an intentional thrust of top leaders (Treviño et al. 2000).¹⁷ No longer can ethics be a tangential thought or a sidelined activity until money and time permit. Employees, customers, and communities where organizations operate should not only expect but demand ethical corporate behavior. A CEMS is the answer for that demand.

A Research-Designed CEMS: The MM

According to research, a system to manage company ethics provided improved ethical climate, employee ethical behaviors, and company performance (Donker, Poff, and Zahir 2008).¹⁸ Treviño, Hartman, and Brown (2000) found that ethical leadership in an organization resulted in employee satisfaction, commitment, comfort, and fun, which in turn brought improved productivity and financial performance.¹⁹

The research on ethical leadership has offered many helpful tools to the management of ethics at the corporate level. To manage ethics at the corporate level, several system components have been suggested in the research literature: codes of ethics, value statements, communication of company ethics, ethical training, ethical audits, and rewards and discipline for compliance or noncompliance to company ethics (Cohen 1993).²⁰ However, the extant literature lacked a consensus for a consistent component model or framework by which any organization could encourage, monitor, and correct the ethical behavior of its employees (Dunn 2013).²¹ The literature demonstrated ...

Table of contents

• Cover
• Half Title Page
• Title Page
• Copyright Page
• Dedication
• Contents
• Preface
• Chapter 1 A System for Managing Company Ethics
• Chapter 2 Context: Why be Ethical?
• Chapter 3 Role Modeling
• Chapter 4 Role Modeling the Company Code of Ethics
• Chapter 5 Accountability Through Making Ethical Decisions
• Chapter 6 Accountability Through Communicating Company Ethics
• Chapter 7 Implementation of the Moldable Model© in your Organization
• Case Studies
• Works Cited
• Index