Managing to Be Ethical: Debunking Five Business Ethics Myths

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Academy of Management Executive, 2004, Vol. 18, No. 2

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Managing to be ethical: Debunking five business ethics myths Linda Klebe Trevino and Michael E. Brown ˜ Executive Summary

........................................................................................................................................................................ The twenty-first century has brought corporate ethics scandals that have harmed millions of employees and investors, and sent shock waves throughout the business world. The scandals have produced “perp walks” and regulatory backlash, and business ethics is once again a hot topic. Academics and managers are asking: What caused the recent rash of corporate wrongdoing, and what can we do, if anything, to prevent similar transgressions in the future? Perhaps because everyone has opinions about ethics and personal reactions to the scandals, a number of pat answers have circulated that perpetuate a mythology of business ethics management. In this article, we identify several of these myths and respond to them based upon knowledge grounded in research and practice. Myth 1: It’s Easy to Be Ethical A 2002 newspaper article was entitled, “Corporate ethics is simple: If something stinks, don’t do it.” The article went on to suggest “the smell test” or “If you don’t want to tell your mom what you’re really doing . . . or read about it in the press, don’t do it.”1 The obvious suggestion is that being ethical in business is easy if one wants to be ethical. A further implication is that if it’s easy, it doesn’t need to be managed. But that suggestion disregards the complexity surrounding ethical decision-making, especially in the context of business organizations. 69

In the aftermath of recent corporate scandals, managers and researchers have turned their attention to questions of ethics management. We identify five common myths about business ethics and provide responses that are grounded in theory, research, and business examples. Although the scientific study of business ethics is relatively new, theory and research exist that can guide executives who are trying to better manage their employees’ and their own ethical behavior. We recommend that ethical conduct be managed proactively via explicit ethical leadership and conscious management of the organization’s ethical culture.

Ethical Decisions Are Complex First, ethical decisions aren’t simple. They’re complex by definition. As they have for centuries, philosophers argue about the best approaches to making the right ethical decision. Students of business ethics are taught to apply multiple normative frameworks to tough dilemmas where values conflict. These include consequentialist frameworks that consider the benefits and harms to society of a potential decision or action, deontological frameworks that emphasize the application of ethical principles such as justice and rights, and virtue ethics with its emphasis on the integrity of the moral actor, among other approaches.2 But, in the most challenging ethical dilemma situations, the solutions provided by these approaches conflict with each other, and the decision maker is left with little clear guidance. For example, multinational businesses with manufacturing facilities in developing countries struggle with employment practice issues. Most Americans believe that it is harmful and contrary to their rights to employ children. But children routinely contribute to family income in many cultures. If corporations simply refuse to hire them or fire those who are working, these children may resort to begging or even more dangerous employment such as prostitution. Or they and their families may risk starvation. What if respecting the rights of children in such situations

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Academy of Management Executive

May...
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