IT and Business Ethics

Technology, New Economies and Not-SoNew Ethics Professor Marianne Jennings W.P. Carey School of Business February 28, 2004 Ethics Why do ethics matter? Why do we hate ethics? What do I do about it? SECTION 1: Why Ethics Matter 1. The state of the union on ethics is poor. State of Ethics - Josephson Institute of Ethics 2002 74% of high school students cheated on an exam in the last year; 45% said they did it at least twice in the last year 93% lied to their parents in the past year; 79% say they lied twice 78% have lied to their teachers 37% said they would lie to get a job 38% took something from a store in the last year State of Ethics 70% have cheated at least once on a test 87% have cheated on written work 52% have copied work from others 54% have plagiarized - Rutgers University survey, Prof. Donald McCabe 2002 Ethics and College and Graduate School 115% increase between 1995 and 2000 in cases of reported academic dishonesty - Cal Berkeley 2001 75% admit some type of academic dishonesty - Center for Academic Integrity – Duke 2002 Ethics at Work 76% of employees in business have observed a high level of illegal or unethical conduct at work in the past 12 months 49% of employees in business have observed misconduct that, if revealed, would cause their firms to “significantly lose public trust” - KPMG 2000 Organizational Integrity Survey An IT Survey 100% of IT employees say they have lied at work in the past year Some IT Tidbits – 60% of all online purchases are done during the hours from 9 AM to 5 PM – 70% of all pornographic site visits are during those same hours – Only 10% say they use work computer to visit porn sites State of Ethics MOST (65%) DON’T REPORT 96% feared being accused of not being a team player 81% feared corrective action would not be taken 68% feared retribution from their supervisors – (Society of Human Resource Managers, 1999) State of Ethics None thought their ethical standards were lower than those of their peers in their organization (1%) Why the Focus on Ethics? 2. The Fish Bowl Existence of Business - These things do have a way of surfacing. Truth and Its Percolating Quality The laws of probability do not apply when it comes to the surfacing of unethical or illegal conduct Three people can keep a secret if two are dead. - Hell’s Angels’ motto Lying is good. It’s the only way we ever get at the truth. - Dostoevsky Circumstances beyond your control will cause bad acts to be discovered. - Anonymous Truth Percolates Like a Natural Force Despite the odds, ethical risk-takers abound. . . . Companies Suffering Adelphia Boeing Tyco International General Electric Global Crossing Merrill Lynch Enron Qwest WorldCom AT&T Xerox Kmart Citigroup Lucent ImClone Arthur Andersen HealthSouth Royal Ahold Parmalat HealthSouth Nine indictments, including one current and two former CFOs $2.5 billion in inflated earnings “We just need to get those numbers where we want them to be. You’re my guy. You’ve got the technology and the know-how.” former HealthSouth CEO, Richard Scrushy WorldCom Debacle Largest bankruptcy in history of US CFO and controller indicted q Nine employees entering pleas in exchange for leniency in sentencing Enron Debacle Second largest bankruptcy in the history of the United States Shares that traded at $83 per share on 1/14/01 traded at $0.67 per share on 1/14/02 Andersen Indictment and conviction Plea by audit partner Sunbeam, Baptist Foundation, Waste Management, Enron, WorldCom Five of the SEC’s 10 largest fraud cases Irony of Andersen’s firm ethical postures in the past 3. The Costs of the Rules-Based Society Avoid Jurassic Park Ethics Could I do this? -- The Rules-Based Society - Legalisms, litigiousness, and its costs Should I do this? -- The Ethical Society Spend more time asking “Should we?” not “Could we?” 4. Ethics and Long-Term Success Frank Shipper’s truthful survivors - Salisbury University The characteristics of successful sales people – They keep their promises – They are honest -- full disclosure – They give follow-up service - Jacques Werth, “High Probability Selling” Ethics, Performance, and Success The 100-year companies – They made money – They diversified – They knew what they WOULDN’T DO for success The only sustainable competitive advantage a company has is its reputation. The Story of Sandler O’Neill Fifteen years from now, my son will meet the son or daughter of one of our people who died that day, and I will be judged on what that kid tells my son about what Sandler O’Neill did for his family.” Jimmy Dunne III Sole surviving senior partner One of 17 survivors out of a firm of 83 from 9-11-01 The Jennings/Grossman 100-year companies Diamond Match* Ludlow*(Tyco) Stanley Works Corning** Scovill* Pullman* PPG Singer** Colgate-Palmolive GE Procter & Gamble General Mills Coca-Cola Johnson Controls Pennwalt* 5. Ethics: Its Role in Economics It’s the Right Thing to Do 26 The Interdependence of Trust, Business, and Government Relationships Business Investors Fairness Regulation Customers Government 2002 Corruption Perception Index Least Corrupt – – – – – – – – – – – – – – – – Finland Denmark New Zealand Iceland Singapore Sweden Canada Luxembourg Netherlands United Kingdom Australia Norway Switzerland Hong Kong Austria USA Most Corrupt – – – – – – – – – – – – – – – – Bangladesh Nigeria Paraguay Madagascar Angola Kenya Indonesia Azerbaijan Uganda Moldova Haiti Ecuador Cameroon Bolivia Kazakhstan Vietnam 6. Ethics, Trust, and Survival For exactly at the time when the fatal knowledge of how to destroy the entire human race has fallen forever into our hands, the knowledge of morality has fallen out. Exactly when the vehicle of our history has gotten a souped-up engine, we have lost the road map. - Peter Kreeft, Prof. of Philosophy, Boston College SECTION 2: Why Do We Hate Ethics? 1. The “Urban Legend” Excuse “You have to play the game.” “You can’t get ahead without cutting a few corners.” “You’ll be eaten alive.” “Ethics is for wimps.” “It’s a poker game. We’re all bluffing.” 2. The “Lack of Enforcement” Excuse What you are thunders so loudly that I cannot hear what you say to the contrary. - Ralph Waldo Emerson 3. The “It’s Too Difficult” Excuse I would never suggest that ethics is simple. Not only does one have to know the right thing to do -- one must also have the moral fortitude to do it. Norman R. Augustine Former Chairman Lockheed Martin 4. “Rationalize Rather than Analyze” Excuse “Everybody else does it.” What is right is right even if no one is doing it. What is wrong is wrong even if everyone is doing it. - Source unknown Rationalizing, Not Analyzing “If we don’t do it, someone else will.” “It doesn’t really hurt anyone.” “That’s the way it’s always been done.” “That’s the way they do it at __________.” SECTION 3: What Do I Do About Ethics? Establishing Values “What would you choose for values in your employees if it were your business?” Most common responses: 1. 2. Resolving Ethical Dilemmas Relativism Develop Your Ethics Stance Absolutism Pragmatic Idealistic Define Dilemmas by Values, Not Circumstances Avoid the “either/or” conundrum and its false security The ease of resolution vs. the long-term implications Failure to define the issue properly The Seduction of Habit George Lefcoe, former commissioner of the Los Angeles County Regional Planning Commission on his retirement and the seduction of public office: The Honeybaked Ham Resolving Ethical Dilemmas Categorical Imperative: How would you want to be treated? Are you comfortable with a world with your standards? Christian principle: The Golden Rule Do unto others as you would have them do unto you. Luke 6:29-38 Thou shalt love thy neighbor as thyself. Luke 10:27 Resolving Ethical Dilemmas Confucius: What you do not want done to yourself, do not do to others. Aristotle: We should behave to our friends as we wish our friends to behave to us. Judaism: What you hate, do not do to anyone. Resolving Ethical Dilemmas Islam: No one of you is a believer until he loves for his brother what he loves for himself. Hinduism: Do nothing to thy neighbor which thou wouldst not have him do to thee. Sikhism: Treat others as you would be treated yourself. Resolving Ethical Dilemmas Buddhism: Hurt not others with that which pains thyself. Plato May I do to others as I would that they should do unto me. TREAT PEOPLE THE WAY YOU WANT THEM TO TREAT YOU