business ethics %26 professional responsibility

7/27/2019 Business Ethics %26 Professional Responsibility

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Business Ethics &Professional Responsibility

Instructor: Dean R. Poirier

([email protected])Mount Olive College


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Unethical Behavior

Unethical behavior inbusiness is not just a recentphenomenon

In the sixth century, B.C., thephilosopher Anacharsis once said,The market is a place set apartwhere men may deceive oneanother.


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Unethical Behavior

The Old Testament also talks

about false balances(Amos 8:5; Hosea 12:7;Micah 6:11) despite Godscommand against such (Lev.19:36; Ezek. 45:10)


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Business Ethics

Business Ethics is about: Decision-Making By People in Business

According to Moral Principles or Standards


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Decision-Making

Conflicting duties, loyalties or interests create moral dilemmasrequiring decisions to be made


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Decision-Making

Ethical decision-making involves theability to discern right from wrong alongwith the commitment to do what is right.


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Decision-Making Some factors affecting decision-making (from Integrity

Management , by D. T. LeClair et al, Univ. of TampaPress, 1998): Issue Intensity

(i.e. how important does the decision-maker perceive the issue to be?

Can be influenced by company/managementemphasis)

Decision- Makers Personal Moral Philosophy Decision- Makers Stage of Moral Development Organizational Culture


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Decision-Making 8 Steps to Sound, Ethical Decision-Making

1. Gather as many relevant & material facts ascircumstances permit.

2. Identify the relevant ethical issues (consider alt.viewpoints)

3. Identify, weigh & prioritize all the affected parties (i.e.stakeholders) (see Johnson & Johnson Credo, Taking Sides,p.25)

4. Identify your existing commitments/obligations.

5. Identify various courses of action (dare to think creatively) 6. Identify the possible/probable consequences of same

(both short & long-term) 7. Consider the practicality of same. 8. Consider the dictates and impacts upon your character &

integrity.


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Decision-Making

Disclosure Test : How comfortablewould I feel if others, whose opinion of me I value, knew I was making thisdecision?


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Decision-Making

The higher the level of a decision-maker the greater the impact of the decision and the wider the range of constituencies

that will be affected by the decision.


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By People In Business

The moralfoundation of thedecision-maker matters

He doesnt have a moralcompass. Whistleblower Sherron Watkins describing

Andrew Fastow, former CFOof Enron. ( Watkins gets frank about days at Enron , EdwardIwata, USA Today, March25, 2003, p. 3B.)


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By People in Business

Ultimately, one's own motivation for ethical behavior must be internal to be effective . External motivationhas a limited value -- punishment and fear is onlyeffective in the short-run. If people believe that theyare above the law, they will continue to actunethically. Organizations that have a clear vision,and support individual integrity are attractive placesof employment. - Teri D. Egan, Ph.d, Associate

Professor, The Graziadio School of Business atPepperdine University, Corporate Ethics, WashingtonPost Live Online , Friday, Aug. 2, 2002;


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Ethics Values : guiding constructs or ideas, representing deeply held

generalized behaviors, which are considered by the holder, to beof great significance.

Morals : a system or set of beliefs or principles, based on values,which constitute an individual or groups perception of humanduty, and therefore which act as an influence or control over their behavior. Morals are typically concerned with behaviors thathave potentially serious consequences or profound impacts. Theword morals is derived from the Latin mores (character, customor habit)

Ethics: the study and assessment of morals. The word "ethics"is derived from the Greek word, ethos (character or custom).


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Morality

The most important human endeavor isthe striving for morality in our actions.Our inner balance and even our veryexistence depend on it. Only morality inour actions can give beauty and dignity

to life. - Albert Einstein (in a letter 11/20/50)


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Morality

The historian Arnold Toynbeeobserved: "Out of 21 notablecivilizations, 19 perished not byconquest from without but by moraldecay from within."


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Absolutism vs. Relativism Ethical Absolutism: What is right or wrong is

consistent in all places or circumstances. There areuniversally valid moral principles. ( only byobedience to universal moral norms does man findfull confirmation of his personal uniqueness and the

possibility of authentic moral growth. - Pope JohnPaul II, see also Rom. 12:2; Heb. 13:8)

Ethical Relativism (also called SituationalEthics) : What is right or wrong varies according to

the individual/society/culture or set of circumstances.There are no universally valid moral principles.(Related Biblical reference "everyone did what wasright in his own eyes" (Deut. 12:8, Judges 17:6;21:25) (see also Isa. 5:20 & 24, Jer. 2:13, Rom.1:18-32, 1 Cor. 5:6-7, 2 Cor. 6:14-15, 1 John 1:8)


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Relativism As R.H. Popkin describes relativism in his article on the

subject in The Encyclopedia of Religion , views are to beevaluated relative to the societies or cultures in whichthey appear and are not to be judged true or false, or good or bad, based on some overall criterion but are tobe assessed within the context in which they occur.

Thus, what is right or good or true to one person or group, may not be considered so by others there areno absolute standards Man is the measure of allthings (quoting the Greek philosopher Protagoras (481 -420, B.C.), and each man could be his own measure [Relativism] urges suspension of judgment about rightand wrong. (Ellis Washington, Reply to Judge Richard

A. Posner on the Inseparability of Law and Morality ,Rutgers Journal of Law and Religion, Vol. 3)


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Relativism

As Cardinal Joseph Ratzinger said, Relativism ispresented as a position defined positively by theconcepts of tolerance and knowledge throughdialogue and freedom, concepts which would belimited if the existence of one valid truth for all wereaffirmed affirming that there is a binding and validtruth in history in the figure of Jesus Christ and thefaith of the church is described as fundamentalism.Such fundamentalism, is presented in different

ways as the fundamental threat emerging againstthe supreme good of modernity: i.e., tolerance andfreedom. - Address to Congregation for the Doctrineof Faith, Guadalajara, Mexico, May 1996


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Absolutism v. Relativism

The demise of Americas legal foundationsoccur when society rejects laws that arebased on solid, irrevocable, moral, universal,absolute values, to a society that bases its

laws on an arbitrary system of relativism,situational ethics, materialism, individualism,hedonism, paganism, or in any secularistideology. This secularization of law hasinfluenced all branches of knowledge law,philosophy, business, religion, medicine,education, science, the arts, and massmedia. Harold Berman, The Interaction of Law and Religion 21 (1974).


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Absolutism vs. Relativism

According to a recent poll of collegeseniors, 73% agreed with the statementthat What is right or wrong depends ondifferences in individual values andcultural diversity. Only 25% agreedwith the statement that There are clear

and uniform standards of right andwrong by which everyone should be judged."


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Problems with Relativism Relativism undermines moral criticism of practices of

particular individuals or in particular societies wherethose practices conform to their own standards. For instance, it could be used to permit slavery in a slavesociety or it could be used to justify trade and

investment with basically evil regimes, e.g. Apartheidgovernments.

But, as Cardinal Ratzinger said, There are injusticesthat will never turn into just things (for example, killing

an innocent person, denying an individual or groups theright to their dignity or to life corresponding to thatdignity) while, on the other hand, there are just thingsthat can never be unjust. - Address to Congregation for the Doctrine of Faith, Guadalajara, Mexico, May 1996


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Problems with Relativism Relativism allows for oppression of those with

minority views by allowing the majority in anyparticular circumstance to define what is morallyright or wrong.

In Germany they first came for the Communists, and I didn't speak up because I wasn't a Communist. Then they came for the Jews, and I didn't speak up because I wasn't a Jew. Then they came for the trade unionists, and I didn't speak up because I wasn't a trade unionist.

Then they came for the Catholics, and I didn't speak up because I was a Protestant. Then they came for me and by that time no one was left to speak up.

- German anti-Nazi activist, Pastor Martin Niemller


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Problems with Relativism

Relativists speak in terms that soften harsh realities.

"Intelligent, educated, religious people embrace illogicalabsurdities that set aside not only God's truth, but also

our responsibility for the well-being of others. Whenwords are warped and twisted perversely, they'reeventually emptied of their true meaning. When youshine the light of common sense on deceptive languagecouched in medical, philosophical or intellectual terms,the logic evaporates. Moral choices require that we uselanguage to describe reality. - Jean Staker Garton,

Author/Lecturer, Co-Founder of Lutherans for Life


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Relativists never need bother to examinewhy something is moral or immoral, theymerely accept/tolerate alternativedeterminations, so that none are held to

accountOver the years I have found that those who callthemselves atheists actually have a strong sense of the absolute truth they know exists. They just dont

want to acknowledge that its true - because if theydid, they would have to change the way they live.They flee on moral grounds; refusing to submitthemselves, they exchange the truth for a lie. -Chuck Colson - Being the Body , 2003.


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Commenting on the idea that legal reformscan compel corporate morality, MichaelProwse, in the Financial Times , stated that"The underlying problem is that we are livingin times that might aptly be called 'post-ethical.'" People are now "emotivists," whorelativize moral judgments and "obey the law,help others and respect customs and moresonly if they calculate that this will benefit thempersonally in some way. ... The root problemis a loss of belief in objective ethical

standards.


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Jesus said in John 8:31- 32, If youcontinue in my word, then are you my

disciples indeed; And you shall knowthe truth, and the truth shall make youfree. It would seem follow then that,

people cannot experience ultimate andtrue freedom unless and until they cometo terms with the absolute truth revealedby God.


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Absolutism vs. Relativism

Most ethicists reject the theory of ethical relativism. Some claim that

while the moral practices of societies may differ, thefundamental moral principles

underlying these practices do not. -Markkula Center for Applied Ethics


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ValuesTo ensure that employees can and willact with integrity organizations needa strong and consistent set of values

that dictate appropriate individualactions. - Conclusion of study conducted byProfessor Pratima Bansal, cited inRebuilding trust, The integral role of leadership in fostering values, honesty andvision,by Carol Stephenson in the IveyBusiness Journal, Jan/Feb. 2004, Vol. 68,

Issue 3.


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Values Navigating the complexities of a situation ... requires

a reliable compass. We can plot that "north" bydetermining clearly our own core values. We have toidentify - and articulate - what we believe is importantto us and to our companies. Our core values driveour behaviors, and our behaviors tell the world whowe are and what we stand for. ...Identifying andadhering to a core-values compass point provides astandard that will make decisions easier, consistent

and justified. - Parkinson, J. Robert, Thinking clearly,remembering values key to making the call, Milwaukee JournalSentinel, March 22, 2004.


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Values

Without commonlyshared and widelyentrenched moralvalues and obligations,neither the law, nor democratic government,nor even the marketeconomy will functionproperly. - (VaclavHavel Politics, morality,and Civility , Summer Meditations)


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Values

What are the core values that

are fundamental to thesuccess of any individual ororganization?


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Values

Honesty Respect

Responsibility Fairness Compassion Perseverance Courage


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Values - Honesty

Honesty - Being straightforward, sincere, truthful,free of fraud, deception or misrepresentation.

Transparency - To be open, honest and available,to provide clear, accurate, and understandableinformation (e.g. in the context of financialdisclosures). Some ethicists have argued that

ethical business practices are best measured by acompany's character and commitment totransparency than by their social vision or rhetoric (e.g. Jon Entine)


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Values - Honesty

Honesty Builds/Maintains Trust

Fosters Community Makes Communication more Efficient &

Effective Demonstrates Respect for the Dignity of

Others


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Values - Honesty

Moral Leaders welcome transparencyand truth as opposed to secrecy and

deception. Respondents to a recent Victor

James ethical leadership survey, by a

wide margin, cited honesty as thequality most admired in a leader.


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Values - Honesty Richard Sears founder of Sears

Roebuck and Company startedthe modern mail order industry,supplying a burgeoning nationwith innovative products andbuilding a business that gaveemployment to hundreds of

thousands of people. In his zeal tosell merchandise, Searsoccasionally would get carriedaway with catalogue descriptions,praising products far beyond theliteral truth. This in turn led to

returned merchandise andreduced profits. But Sears learnedhis lesson. In later years, he wasfond of saying, "Honesty is thebest policy. I know because I'vetried it both ways. - from Integri ty at Work , ed. By Ken Shelton.


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Values - Honesty Honesty and transparency make you

vulnerable. Be honest and transparentanyway. - Mother Teresa

Contra: "Speech was given to man todisguise his thoughts." - Charles-Maurice deTalleyrand


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Values - Honesty

Some scriptural references regardinghonesty in business: (Exodus 22:10; 23:1 3; Leviticus 19:11

12, 35-36, Deuteronomy 25:13 16,

Proverbs 6:16-19, 11:1, 12:17-19 & 22,Ephesians 4:25)


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Values - Respect

Respect: To give particular attention to, show consideration

for, or hold in high or specialregard (Merriam-Webster's OnlineDictionary, 10th Edition)

Should respect be given or mustrespect be earned?


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Values - Respect

Every man is to be respected as anabsolute end in himself; and it is a

crime against the dignity thatbelongs to him as a human being, touse him as a mere means for some

external purpose. - Immanuel Kant,Prussian geographer and philosopher (1724-1804)


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Values - Respect

Human Dignity is the intrinsic worth that inheres in everyhuman being. From the Catholic perspective (among other Christian perspectives), the source of human dignity isrooted in the concept of Im ago Dei , in Christs redemptionand in our ultimate destiny of union with God. Humandignity therefore transcends any social order as the basisfor rights and is neither granted by society nor can it belegitimately violated by society. In this way, human dignityis the conceptual basis for human rights. While providingthe foundation for many normative claims, one directnormative implication of human dignity is that every humanbeing should be acknowledged as an inherently valuablemember of the human community and as a unique

expression of life, with an integrated bodily and spiritualnature. In Catholic moral thought, because there is a socialor communal dimension to human dignity itself, personsmust be conceived of, not in overly-individualistic terms, butas being inherently connected to the rest of society. - fromthe Ascension Health Code of Ethics


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Values - Respect

Civilizations should be measured by "thedegree of diversity attained and thedegree of unity retained. - W.H. Auden,English poet (1907-1973)

Never look down on anybody unless

you're helping him up. - Jesse Jackson,American political activist and preacher


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Values - Respect - Tolerance?

What about tolerance?


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Values - Respect - Tolerance?

"Our culture has fallen into a kind of moral vertigo we value tolerance somuch that we don't know how to talkto each other about what is right andgood, - Rev. Kevin Phillips, director of the Business Leadership and SpiritualityNetwork (BLSN) quoted in Competing

Values, by Jane Lampman, Chris t ian Scienc e Moni tor , August 1, 2002.


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Values - Respect - Tolerance? Did you know that the term tolerance (or in

some translations sufferance Gk. eao ) is rarelyused in the New Testament, and that where it isused it is generally used in a negative sense?For example: Notwithstanding I have a few things against thee,

because you tolerate that woman Jezebel, who callsherself a prophetess, to teach and to seduce myservants to commit fornication, and to eat thingssacrificed unto idols. Rev. 2:20

By contrast, the New Testament uses the term love Gk. agapeo nearly 150 times in a positivesense. So whats the difference between love and tolerance?


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Values - Respect - Tolerance?Tolerance: Demonstrating sympathy for, indulging,or making allowances for, beliefs or practicesdiffering from, or conflicting with, one's own.

Love: In the Christian context, from the Gk., agapeo ,

an active and beneficent interest in, and concern for,the well-being of another. It is given unconditionallyand unselfishly. It involves a clear determination of will and judgment (i.e. a responsible choice). Aloving person, honestly (Rom. 12:9) gives respect

and demonstrates compassion. Demonstrating suchlove often requires courage. The source of such lovecomes from above (James 1:17).

Would you rather be loved or tolerated?


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Values - Compassion

Compassion: "sympatheticconsciousness of another's distresstogether with a desire to alleviate it"

[Webster's 7th New Collegiate Dictionary], fellowfeeling, the emotion of caring concern; theopposite of cruelty, in Hebrew rahamanut ,from the word rehem , 'womb', based on

the idea of sibling love (coming from fromthe same womb).


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Values - Compassion

"The word 'care' finds its roots in theGothic 'Kara' which means lament.The basic meaning of care is: to

grieve, to experience sorrow, to cryout with.. . . A friend who caresmakes it clear that whatever happensin the external world, being presentto each other [now] is what reallymatters." [Henri Nouwen, Here and Now ,p. 105]


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Values - CompassionSouthwest Airlines CEO Herb Kelleher has openly

demonstrated a willingness to go the extra mile for Southwestemployees. He has made it a priority to learn their names andto chip in and work alongside them when the situation hasdemanded his help. He has been observed lugging baggageand greeting customers in an Easter Bunny costume. He has

repeatedly demonstrated a truly exceptional level of caringand compassion for his employees, and his employees haveresponded in kind. Perhaps the most dramatic example of their commitment to their beloved leader occurred when theypooled their own money and ran a $60,000 ad in USA Todayrecognizing him on Bosses Day. In the ad they thankedKelleher for being a friend, not just a boss. - from TheLeadersh ip Wisdom of Jesus , Charles C. Manz, 1998.


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Values - Compassion

I expect to pass through the world but once. Anygood therefore that I can do, or any kindness Ican show to any creature, let me do it now. Letme not defer it, for I shall not pass this way

again. - Stephen Grellet, French/Americanreligious leader (1773-1855)

"Men are only great as they are kind. - ElbertHubbard, American entrepreneur and philosopher (founder of Roycroft) (1856-1915)


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Values - Compassion

"No act of kindness, no matter how small, is ever wasted." - Aesop, 6th Century B.C. Writer of Greek fables

"If the world seems cold to you, kindle fires towarm it. - Lucy Larcom, American poet (1826-1893)

"The individual is capable of both great

compassion and great indifference. He has itwithin his means to nourish the former andoutgrow the latter. - Norman Cousins, Americanessayist & editor (1912-1990)


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Values - Compassion

"There are two ways of spreading light: to be thecandle or the mirror that reflects it. - EdithWharton, American novelist (1862-1937) -

Compassion is the basis of morality.'' - Arthur Schopenhauer, German philosopher (1788-1860)

All we need in order to be moral human beings iscompassion. - Nina Rosenstand summarizing theview of David Taylor in Good and Evi l , from Th e Moral of the S tory : An In t rod uct ion to Eth ics ,McGraw-Hill, 2004.


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Values - Compassion

Some scriptural referencesregarding compassion: (Matthew 18:27, Luke 10:30-37,

(Parable of the Good Samaritan),1 John 3:17, Jude 1:22)


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Values - Responsibility

Responsibility/Accountability/Reliability:Moral Leaders take responsibility for their ownactions/failures and those of their companies and theydemand accountability from their subordinates. (e.g. at Delltheres no The dog ate my homework. Dell ruthlesslyexposes weak spots during grueling quarterly reviews andexecs know they had better fix the problem before the nextmeeting. What You Dont Know About Dell, Bus ines s Week , Nov. 30, 2003, p.79) Involves a commitment tocompetent quality performance. Implies fidelity to promisesand other commitments and not making promises thatcannot be kept, such as committing to unrealistic deliverydates. Also calls for acknowledgment of implicitcommitments, such as the protection of confidences.


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I am only one, but still, I am one. I cannotdo everything but I can do something.And, because I cannot do everything, I willnot refuse to do what I can. - EdwardEverett Hale, American clergyman and writer (1822-1909)

The question for each man to settle is notwhat he would do if he had the means,time, influence and educationaladvantages, but what he will do with thethings he has. - Hamilton Wright Mabee

V l R ibilit


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Any mans life will be filled with constantand unexpected encouragement if hemakes up his mind to do his level besteach day. - Booker T. Washington, Americaneducator (1856-1915)

I long to accomplish some great andnoble task, but it is my chief duty toaccomplish small tasks as if they weregreat and noble. - Helen Keller, Americansocial activist, public speaker and author (1880-1968)


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Values - Fairness

Fair: just, equitable, impartial, unbiased,objective. Involves a elimination (or at least aminimalization) of one's own feelings, prejudicesand desires, so as to achieve a proper balance of conflicting interests. Implies an equitabledistribution of burdens and benefits. John Rawlsargues in A Theory o f Jus t i ce that rules are fair if they are rules that the people operating under

them would have agreed to, had they been givenan opportunity to accept or reject thembeforehand.


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Values - Fairness

Justice: demonstrating fairness, equity,impartiality, righteous action, To some, justice is about conformity to truth. To

others, its about conformity to law But law and justice are 2 different concepts.

The law is something we must live with. Justice issomewhat harder to come by. - Sherlock Holmes, in TheCase of the Red Circle.

This is a court of law, young man, not a court of justice. ~Oliver Wendell Holmes, Jr.

justice occurs on earth when power and authoritybetween people are exercised in conformity with Gods

standards of moral excellence. - Gary Haugen, in The Good NewsAbout Injustice, InterVarsity Press, 1999.


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Values - Perseverance Perseverance/Fortitude -

steadfast determination tocontinue on despite adversity

usually over a long period of time.


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Values - Perseverance Nothing in the world can take the place

of perseverance. Talent will not; nothingis more common than unsuccessful menwith talent. Education will not; the worldis full of educated derelicts. Genius willnot; unrewarded genius is almost aproverb. Persistence and determinationalone are omnipotent. - Calvin Coolidge


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Values - Perseverance

Some Biblical References: Job 17:9a, the righteous oneholds fast to his way; Hos. 12:6b, endure to the end, John8:31-32, 2 Cor. 13:5, keep proving yourself; Gal. 5:1 4,stand fast; Gal. 6:9, do not give up in doing what is fine;Phil. 1:27, stand firm, striving side by side; Phil. 4:1, standfirm; 1 Thes. 5:21, hold fast to what is fine; 2 Thes. 2:15 17,stand firm, maintain your hold; 1 Tim. 6:11 12, pursueendurance; 2 Tim. 2:12, go on enduring; 2 Tim. 3:14,continue in the things you have learned; 2 Tim. 4:7 8, fightthe fine fight, finish the course; Heb. 2:1, pay attention towhat you have heard that you not drift away; Heb. 3:14,make fast your hold to the end; Heb. 10:23, 35 36, hold fastto the declaration of our hope, you have need of endurance;James 1:2-4, perseverance must finish its work, 2 Pet. 3:17,do not fall from steadfastness.

God helps those who persevere. - The Koran


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Values Which of the core values is

the most important?

V l C


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Values - Courage

The first place to start is for everyindividual to become aware of their core values and to have the courage

and discipline to live out of them inall aspects of their lives. (The rising tidewon't lift this economy: Unless we're willing toconfront the trust problem we've helped to

create, Bill Grace, Founder & Executive Director,Seattle's Center for Ethical Leadership, GuestColumnist, Seattle Post-Intelligencer, June 16,2003.)


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Values - Courage

Courage is the greatest of all virtues; because, unless aman has that virtue, he has no security for preserving anyother. - Samuel Johnson

Courage is the ladder on which all the other virtuesmount. - Clare Booth Luce (1903 - 1987), in Reader'sDigest, 1979

Courage is the footstool of the virtues, upon which theystand. - Robert Louis Stevenson

Courage is not simply one of the virtues, but the form of every virtue at the testing point. - C.S. Lewis

Courage is strength of mind, capable of conqueringwhatever threatens the attainment of the highest good. -St. Thomas Aquinas


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Values - Courage

Courage is a perfect sensibilityof the measure of danger and amental willingness to endure it.

- General William T. Sherman (for whom the Sherman tank wasnamed).

Courage is being scared todeath . . . and saddling upanyway. - John Wayne


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Values - Courage Whenever you see a successful

business, someone once made acourageous decision. - Peter Drucker

We must constantly build dykes of courage to hold back the flood of fear. -Martin Luther King, Jr.

One isn't necessarily born with courage,but one is born with potential. Withoutcourage, we cannot practice any other virtue with consistency. We can't be kind,true, merciful, generous, or honest. -Maya Angelou (1928 - )


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Values - Courage

The credit belongs to the man who isactually in the arena... who strivesvaliantly... who spends himself for a

worthy cause; who, at the best, knows, inthe end, the triumph of high achievement,and who, at the worst, if he fails, at leasthe fails while daring greatly, so that hisplace shall never be with those cold andtimid souls who knew neither victory nor defeat. - Theodore Roosevelt

V l C g


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Values - Courage Courage: the ability to disregard fear;

bravery. The Latin root of this word is cu r ,which means heart. Courage literallymeans to take heart. Fear exists along acontinuum. Courage involves recognizinga reasonable amount of fear or nervousness, facing it and then taking anintelligent risk.

Moral courage involves standing up for ones principles, in spite of possibleadverse consequences to such things asreputation or emotional well-being.


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Corporate Culture


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Corporate Culture


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Corporate Culture

"Moral behavior is concerned primarilywith the interpersonal dimension of our behavior: how we treat one another individually and in groups and,increasingly, other species and theenvironment." The key here is thatmorality brings us into contact with othersand asks us to consider the quality of thatcontact. -

Quote from The Leadersh ip Com pass , John Wilcox and SusanEbbs, as quoted in Everyday Ethics, by Thomas Shanks, S.J.,Markkula Center for Applied Ethics.


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Corporate Culture

"The first step in theevolution of ethics isa sense of solidaritywith other humanbeings." AlbertSchweitzer, early 20th-century German Nobel

Peace Prize-winning missiondoctor and theologian

Corporate Culture


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Corporate Culture

The Pressure to Conform

We are all a kind of Chameleon, takingour hue - the hue of our moralcharacter, from those who are about us.- John Locke (1632 - 1704)

C t C lt


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Corporate Culture The Pressure to Conform

Some years ago, a social scientist named Solomon Aschwanted to see how people dealt with social pressure sohe designed an experiment to measure the results. Hecame up with a simple test that showed a series of lineson a board in front of the room, with one of the linesmatching another in being the same length. The otherswere either much shorter or much longer. A person wasbrought into the room, along with others in a group,which unbeknown to the subject, were helpers to theprofessor. The whole group was asked to match the twolines that were the same length together. The helpersintentionally gave the wrong answer and it was found thatin almost 75% of the time, the subjects would go alongwith the wrong answer, knowing full well it was wrong,but not wanting to stand out. - Opinion and SocialPressure, Scient i f ic American , Nov. 1955, 31-35.

Corporate Culture


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Corporate Culture The Pressure to Conform

Culture shapes behavior. There are plenty of perfectlydecent people who go astray because they're in aculture that creates an environment in which they can'tget their jobs done unless they engage in unethicalactivities. - Harvard Business School professor andbusiness ethicist Barbara Toffler, former partner atArthur Andersen. Toffler left Andersen in 1999, wellbefore the Enron and Global Crossing scandalsdestroyed the company. Her book, Final Accounting:Ambition, Greed, and the Fall of Arthur Andersen

(Random House/Broadway Books, 2003), describes theprocess of ethical erosion in grim detail. Postcardsfrom an Ethical Wasteland, CIO , June 1, 2003

Corporate Culture


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Corporate Culture In Moral Man and Immoral Society,

Reinhold Niebuhr proposed thatindividual persons are always more moralfunctioning alone than when they functionin a social group. - Institutional Ethics:An Oxymoron, By Joe E. Trull, Editor,Chris t ian Eth ics Today, Jo urn al of Chr is t ian Eth ics , Issue 035 Volume 7 No 4

August 2001 .

Do you agree with this?

Corporate Culture


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Corporate Culture

Rarely do the character flaws of alone actor fully explain corporatemisconduct. More typically, unethicalbusiness practice involves the tacit,if not explicit, cooperation of othersand reflects the values, attitudes,beliefs, language, and behavioral

patterns that define an organizationsoperating culture. - Lynn SharpPaine, Harvard Business School

Corporate Culture


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Corporate Culture A strong corporate culture founded on

ethical principles and sound values is avital driving force behind strategicsuccess. - Thompson & Strickland

One company stressed its commitment to

RICE : respect, integrity, communication,and excellence. The words have been onT-shirts, paperweights, and on signs. Thefirm printed a 61-page booklet with itscode of ethics and every employee had tosign a certificate of compliance. Thatcompany was Enron!


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According to Ethical or

Moral, Values, Principlesor Standards

Whose Values?



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According to Ethical or Moral, Values, Principles or Standards

Personal

Family Peers Religious

Company Community, Regional, National,International


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Moral, Values, Principles or Standards

Learned Where?


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According to Ethical or Moral


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According to Ethical or Moral,Values, Principles or Standards

The average American, by the age of 65, will have spent theequivalent of 15 years of their life watching television.

By contrast, over the same time period, the average weeklychurch-going American will have spent only 8 months of their life receiving spiritual instruction.

American children will take in 63,000 hours of media (television, radio, internet, i-pods, etc.) input between theages of 5 and 17.

By contrast, if they go to church once a week for an hour,over the same number of years, that's 600 hours.



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gMoral, Values, Principles or

Standards In the middle of an interview for acceptance to a prestigious

Ivy League school back east, the interviewer asked his

sure of himself candidate, If no one would ever find out,and no one got hurt, would you lie for $1M? The youngman thought for a moment and said, If no one found out,and no one was hurt? Sure, I think I would! The interviewer then asked, Would you lie for a dime? The young man

shot back, No way, what kind of man do you think I am?The interviewer responded, I have already determined that,I am just trying to determine your price.



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According to Ethical or Moral, Values, Principles or Standards

So fearful were the ancient Chinese of their enemies on the norththat they built the Great Wall of China, one of the 7 wonders of the

ancient world. It was so high they knew no one could climb over it,& so thick that nothing could break it down. Then they settledback to enjoy their security. But during the first 100 years of thewalls existence, China was invaded 3 times. Not once did theenemy break down the wall or climb over its top. Each time theybribed a gatekeeper & marched right through the gates. According

to the historians, the Chinese were so busy relying upon the wallsof stone that they forgot to teach integrity to their children.


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According to Ethical or Moral, Values, Principlesor Standards

33% of teens would act unethically to get aheador to make more money if there was no chance of

getting caught, according to a new Junior Achievement/Harris Interactive Poll of 624 teensbetween the ages of 13 and 18. 25% said theywere not sure and only 42% said they wouldnot. These results confirm our belief that ethicseducation must begin in elementary school. saidBarry Salzberg, U.S. Managing Partner of Deloitte& Touche.


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According to MoralPrinciples or Standards

Does society require a moralcode to survive and prosper?


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A di t M l


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According to Moral

Principles or StandardsThe institutions of our society are founded on thebelief that there is an authorityhigher than the authority of the State; that there is a morallaw which the state ispowerless to alter; that theindividual possesses rights,conferred by the Creator,which government mustrespect And the body of theConstitution as well as the Bill

of Rights enshrined thoseprinciples. Justice WilliamO. Douglas, in McGowan v.Maryland , 366 U.S, 420 (1961)

A di t M l


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According to Moral

Principles or Standards Without civic

morality

communitiesperish; withoutpersonal moralitytheir survival hasno value. Bertrand Russell, 20th-century Britishmathematician andphilosopher


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A di g t M l


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According to Moral

Principles or Standards We have grasped the

mystery of the atom and

rejected the Sermon on theMount. The world hasachieved brilliance withoutwisdom, power withoutconscience. Ours is aworld of nuclear giantsand ethical infants. --General of the Army, Omar Bradley

A di g t M l


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According to Moral

Principles or Standards There are seven sins in the

world: Wealth withoutwork, Pleasure withoutconscience, Knowledgewithout character,Commerce withoutmorality, Science withouthumanity, Worship withoutsacrifice and politicswithout principle. -Mahatma Gandhi (1869 -1948)


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Ethics

R. H. Tawney, the Britishhistorian, once wrote: ''Toargue, in the manner of Machiavelli, that there isone rule for business andanother for private life, isto open the door to anorgy of unscrupulousnessbefore which the mindrecoils.''


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Ethics


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Ethics

Strategic v. Real Ethics What is the motivation/purpose

for acting ethically?

Integrity


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Integrity Integrity: from the Latin in tegr i tas , meaning

wholeness, completeness, or purity. Tocourageously hold to what one believes is rightand true, without compromise. To standundivided, immovable, consistent in both heartand action, word and deed. Involves themaintenance of virtue and the pursuit of moralexcellence. Integrity is demonstrated by not onlyespousing your values, but by living according tothem. Integrity describes both who you are andwhat you do. People of integrity areconscientious, trustworthy, accountable,committed and consistent. A key to maintainingintegrity is counting the cost before committingyourself.

Integrity


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g y

Psychologists have found integrity to beessential to an individual's sense of identity andself-worth, enabling the successful navigation of change and challenge. Links between integrityand the ability to gain and maintain the trust of

others have often been noted. Many purveyors of practical advice, including Cicero and BenjaminFranklin, have counseled that integrity is thecornerstone of worldly success. According toFranklin, "no Qualities [are] so likely to make a

poor Man's Fortune as those of Probity &Integrity" (quoted in Beebe, 1992, p. 8) - fromBlackwells Encyclopedic Dictionary of Business Ethics .

Integrity


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g y In Living a Life That

Matters Rabbi HaroldKushner describes thekind of people who areable to overcome thenegativity in their lives asshalem, people who arewhole, united withinthemselves, their internalconflicts ended. Becauseof this, he says, they arepersons of integrity.Integrity, says Kushner, is

a quality just as essentialto human well-being as isthe pursuit of peace and

justice .

Integrity


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Integrity

The Bible/Talmud says that: The man of integrity walks securely, but hewho takes crooked paths will be found out.(Prov. 10:9)

The integrity of the upright guides them, but

the unfaithful are destroyed by their duplicity.(Prov. 11:3) Integrity brings peace (i.e. a clear conscience)

and marks the perfect man (Hebrew Word: Tam= Man of Integrity) (Ps. 37:37, 1 Kings 9:4)

The just [man] walketh in his integrity: hischildren [are] blessed after him. (Prov. 20:7) A good name is better than precious ointment.

(Ecc. 7:1)

Integrity


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Integrity

Some Biblical Examples of Integrity: Joseph, Gen. 39:1-12 Jacob/Israel (Gen 32:29) known as a simple man (tam,

Gen 25:27) that is to say, that his mouth was like hisheart.

Job (Book of Job, see in particular description of Job at2:3, 27:5) Daniel, Shadrach, Meshach & Abednego (Daniel

Chapters 3 & 6) David (Ps. 7:8)

Solomon (1 Kgs. 9:4)

Contrast: Ananias & Sapphira, Acts 5:1-11 and Acts 20:16-36

Integrity


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Integrity According to Michael Useem,

Director of the Center for Leadership and ChangeManagement, WarrenBuffett's influence derivesfrom his moral stature andintegrity. In the aftermath of

scandals that have rockedU.S. companies in the pastfew years, it is difficult tooveremphasize theimportance of ethics as afactor in leadership. -Leadership and Change: Becom ing the Bes t : What You Can Learn f rom the 25 Most Influential Leaders of Our Times ,Knowledge @ WhartonNewsletter, Jan.28-Feb.4, 2004

Character


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Character: The notable/conspicuous/distinguishing moral/ethical traits or characteristics of a person that giveevidence of their essential natureand which ultimately shape their reputation.

Character


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President HarryTruman used tosay: "Fame is avapor, popularity

an accident, richestake wings, thosewho cheer todaymay curse

tomorrow, onlyone thing endures-- character.


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Character

"What you are stands over you... and thunders so thatI cannot hear what yousay to the contrary. -Ralph Waldo Emerson


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Character In his book The Death of Character , James Hunter, a noted

sociologist from the University of Virginia, concludes that while Americans are innately as capable of developingcharacter as they ever were in the past, there are now fewcultural or institutional guidelines in our society that callfor its cultivation or maintenance. The reason, he

suggests, is because there is no consensus of moralauthority. Do you agree with this?


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Character Character vs. Reputation :It has been said

that an individuals character can beillustrated by a barrel of apples. The applesseen on top by all represent onesreputation, and the apples that lie hiddenunderneath are his character.


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Reputation Eli Lily introduced a drug, fialuridine, intended to treat hepatitis B.

However, 15 patients who submitted to trials of the drug suffered livertoxicity and 6 died. Rather than follow the companys long -standingno comment policy, the new Chairman and CEO, Randall Tobiasopenly acknowledged the failure. His view was that communicationstands at the top of the list in the elements of good leadership. Inaddition, he believed that if a company leaves a communications void, others will fill it with misinformation. (Put the Moose on the

Table:Lessons in Leadership from a CEOs Journey Through Business and Life , Randall and Todd Tobias, Indiana University Press)


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Virtue

Virtue :The quality of doing what is right and

avoiding what is wrong. "Virtue develops from a habitual commitment topursue the good. - Ronald F. Thiemann, a professor ofreligion and society at Harvard Divinity School

Wisdom is know what to do next; virtue is doing it. -David Starr Jordan (1851 - 1931), American naturalist


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The Role of Leadership inDeveloping a Culture of Integrity

According to Marshall Schminke, who teaches business ethics at theUniversity of Central Florida, A persons individual moral framework is only the third-most important factor in deciding what theyll do. Themost important is what does their boss do . Workers look to their bossfirst for cues on what constitutes moral behavior. Second, they look attheir peers, and finally at their own moral code.-Experts: Ethics not Just Codes , Marshall Schminke,Raleigh News & Observer , June 8, 2003, p.12E,based on an article by Harry Wessel in the Orlando Sentinel .)


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The Role of Leadership inDeveloping a Culture of Integrity A company's commitment to integrity

flows from the commitment, action, andcredibility of its leaders. - Responsibility Lies InLeadership , By: Ruettgers, Mike, Chairman of the Board of EMCCorporation, Vital Speeches of the Day, 0042742X, 12/15/2003, Vol. 70,Issue 5, Delivered to The Fall 2003 Raytheon Lectureship in BusinessEthics, Bentley College, Center for Business Ethics, Waltham,Massachusetts, October 8, 2003


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Role of Leadership in Developinga Culture of Integrity A leaders integrity is probably the single

most important factor in an organizationsability to develop a culture of integrity Numerous business leaders have

described the development andmaintenance of a culture of integrity as the very purpose of leadership?


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Edgar Schein argues that leaders shape culturethrough what they notice, measure, reward anddislike. e.g. At Enron and Worldcom, executives and Board

members elevated growth and short-term profitsabove all other considerations and nurtured a cultureof cut-throat competition within the company.


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The Role of Leadership inDeveloping a Culture of Integrity A report by former U.S. Attorney General Richard

Thornburg explained how the corporate culture createdby CEO Bernie Ebbers and CFO Scott Sullivan fostered anenvironment that led to the largest ever bankruptcy in U.S.history. Ebbers resisted efforts to establish a company

code of conduct calling it a colossal waste of time. Healso made numerous, often highly emotional demands forresults. (Reports:Ebbers knew of gimmickry, Matthew Barakat, Raleigh News & Observer , June 10, 2003, p.1)


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The closer the enterprise the greater thecorrelation between the corporate cultureand the personal ethics of its leaders (e.g.small, family business (note: Malden Mills was a family business), contrast: amultinational corporation)


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Role of Leadership in Developinga Culture of Integrity

Perhaps Skilling and Lay couldn't know all thegoings-on at Enron, as they claim. However,"people at the top tend to set the target, theclimate, the ethos, the expectations that fuel

behavior," says Thomas Donaldson, a businessethics professor at the Wharton School at theUniversity of Pennsylvania. (Corporate Ethics: Right Makes Might , Business Week, 4/11/02)


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f


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Role of Leadership in Developinga Culture of Integrity In his new book, "Authentic Leadership" (2003),

Bill George, CEO of Medtronic, discusses how todevelop 5 essential dimensions of the authenticleader: 1) Purpose

2) Values 3) Heart 4) Relationships 5) Self-discipline.

Role of Leadership in Developing


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p p ga Culture of Integrity Malden Mills/Aaron Feuerstein A Profile in Ethical Business

Leadership Feuerstein was thrust into the national

spotlight in December 1995 when firenearly completely destroyed his 130- year-old textile company.Demonstrating an all-too-uncommonloyalty to his 2,400 workers, hecontinued paying them for 90 days at acost of $1.5 million per week while the

factories were being rebuilt. He alsogave generously to support charitiesthat helped the families of ninecritically injured workers who havesince recovered.



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p p ga Culture of Integrity Sense of Responsibility to a Broad

Range of Stakeholders Feuerstein spurned the recent

rush to downsizing stating that,The fundamental difference isthat I consider our workers anasset, not an expense. I have aresponsibility to the worker, bothblue-collar and white- collar,Feuerstein added, his voice taking

an edge of steely conviction. Ihave an equal responsibility to thecommunity. It would have beenunconscionable to put 3,000people on the streets and deliver adeath blow to the cities of

Lawrence and Methuen.



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p p ga Culture of Integrity Compassion: Feuerstein

arranged Heart-bypassoperations for several

workers that could notafford them and heprovided free soft drinksand extra breaks foremployees when thesummer heat drovetemperatures to morethan 90 degrees on themanufacturing lines.



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p p ga Culture of Integrity While many other American mill

owners moved their operations toforeign countries, where employeesearn as little as $1 or $2 an hour,Feuerstein said he was committed to

keeping his business in Lawrence, MA where he paid his workers $12.50 anhour. In fact, Malden Mills' new $70million plant was situated in the heartof a ghetto in Lawrence, one of thestate's poorest cities. "I think it's theduty of government and industry to

[remain committed to urban America],"he said. "Because if we don't, we won'thave our cities in another 20 to 30 years. And if we don't have our majorcities, we won't be the leader thefinancial world."



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p p ga Culture of Integrity Respect: Employer/Employee

Loyalty That Goes Both Ways How many corporate CEOs inthe downsize-crazed

companies today could ask their employees to doubleproduction in a few weeksgiven no changes in thecurrent plant, much less giventemporary plants set up in old warehouses? How many of youremployees would work 25hours a day because thecompany needed it to filloutstanding orders?



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p p ga Culture of Integrity More than a year after the fire,

Feuerstein said he was as movedby his workers' gratitude as they were by his generosity. He told ofone employee who thanked him forhis support after the fire and said,"We're going to pay you back tenfold." Feuerstein said he didn'tcompletely comprehend themeaning of the worker'scomments until, after two months'time, production in oneundamaged portion of the mill wasboosted to 200,000 yards of fabrica week - far beyond its capacitybefore the fire.



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p p ga Culture of Integrity Customer Loyalty also goes

both ways : Feuerstein gavesome young companies creditearly on to help them grow and

Feuerstein made sure thecompany kept its customerssupplied even in difficult times.These customers returned thefavor by remaining loyalcustomers even when MaldenMills was nearly destroyed.



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p p ga Culture of Integrity Integrity : The real test of

leadership is maintainingconvictions during hardtimes. The most importantcommunication is not what you say but what youdo. Actions Speak LouderThan Words

Spiritual Foundation


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Spiritual Foundation Spiritual Foundation :Feuerstein

recently concluded a speechquoting from Jeremiah 9:22-23, inflawless Hebrew, then giving theEnglish translation. His message was "Let the rich man not praisehimself," but rather, bydemonstrating the will of God,show kindness, justice andrighteousness in his actions. Hisresponse to the catastrophe wasin accordance with the Torah: youdo not sacrifice the lives of people who are depending on you.



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Feuerstein alsoquoted the famousfirst century Talmudicscholar Hillel - twice:"In a situation wherethere is no righteousperson, try to be arighteous person and"Not all who increasetheir wealth are wise.



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Spiritual Foundation Feuerstein's father, Samuel, was one of

the early pioneers of the Jewish DaySchool movement and a leader with theUnion of Orthodox JewishCongregations. In fact, Feuersteinrelated, it was, in part, his grandfather'sdevotion to Judaism that led him tofound Malden Mills at the turn of thecentury when he emigrated fromHungary. "My grandfather felt that byowning a textile mill it would not onlyenable him to bring his children into

the business, but would provide theopportunity to observe the Sabbath."Since the family worked together, itallowed them to schedule work hoursaround religious observances.



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Feuerstein grew up in afamily where Talmudicdiscussions around thedinner table helpedformulate his beliefsabout how to act in the world. "Judaism gives youa complete and thoroughethical framework within which you and your familycan live," he explained.



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Spiritual Foundation Feuerstein and his wife, Louise, are

ardent supporters of their temple, Young Israel of Brookline, Mass.Coincidentally, their synagoguesuffered a fire a year before themill burned down and they playeda role in helping to rebuild it. ForLouise, who converted to Judaismnine years ago, her religion is a way "to focus on the here andnow." She adds, "It's a positiveimpetus to make life meaningfulevery day, not just concentrate on what's down the road.



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Spiritual Foundation Spiritual study remains an

important part of AaronFeuerstein's life, and he refersto it as "exercise for my mind."

Also, each day he alternatesbetween doing an hour ofrunning and an hour ofcalisthenics. During that time,he goes over memorizedpassages from either Jewishliterature (his favorites are theProphets, the Psalms and Pirke Avot) and English literature(specializing in Shakespeare'stragedies).


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Is it necessary to believe in God to bemoral?


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Spiritual Foundation In a recent poll, 58% of Americans said yes. This is not the view in

most developed countries. For example, in France, only 13% said yes.(Nicholas D. Kristof, N.Y. Times}

However, only 4 % of U.S. adults have a biblical worldview as the basisof their decision-making, according to a new study by Barna ResearchGroup. "Although most people own a Bible and know some of itscontent, our research found that most Americans have little idea how

to integrate core biblical principles to form a unified and meaningfulresponse to the challenges and opportunities of life," said researcherGeorge Barna. Among the most prevalent alternative worldviews waspostmodernism, dominant in the two youngest generations.



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the happiness of a people, and the goodorder and preservation of civil government,essentially depend upon piety, religion, andmorality." -The Massachusetts Constitution of1780, Ch. V, Sec. 2



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"Religion, morality, and knowledge, beingnecessary to good government and thehappiness of mankind, schools and themeans of education shall forever beencouraged. - Northwest Ordinance, enacted

by the Continental Congress in 1787, Art. 3, 1Stat. 51, 53 n. a (July 13, 1787, re-enacted Aug. 7,1789)



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"Where there is no religion,

there will be no morals. -Benjamin Rush, Speech inPennsylvania Ratifying Convention(Dec. 12, 1787)



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[T]he most important of all lessons[from the Scriptures] is the denunciationof ruin to every State that rejects the

precepts of religion. . . . I believe thatreligion is the only solid base of moralsand that morals are the only possiblesupport of free governments. -Gouverneur Morris, who spoke on floor of the Constitutional Convention 173

times, more than any other delegate.

Spiritual Foundation I have read your manuscript with some attention. By

h i i i i l


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the argument it contains against a particularProvidence [Christianity], though you allow a generalProvidence, you strike at the foundation of all religion.For without the belief of a Providence that takescognizance of, guards, and guides, and may favorparticular persons, there is no motive to worship aDeity, to fear his displeasure, or to pray for hisprotection. I will not enter into any discussion of yourprinciples, though you seem to desire it. At present Ishall only give you my opinion that . . . the consequence

of printing this piece will be a great deal of odium [hate]drawn upon yourself, mischief to you, and no benefit toothers. He that spits into the wind, spits in his own face.But were you to succeed, do you imagine any goodwould be done by it? . . . [T]hink how great a portion of mankind consists of weak and ignorant men and womenand of inexperienced, inconsiderate youth of both sexeswho have need of the motives of religion to restrain

them from vice, to support their virtue. . . . I wouldadvise you, therefore, not to attempt unchaining thetiger, but to burn this piece before it is seen by anyother person. . . . If men are so wicked with religion,what would they be if without it. - Benjamin Franklins1790 reply to Thomas Paine regarding Paines request of Franklin to review his new book, The Age of Reason:



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Spiritual Foundation " our ancestors established their

system of government on morality andreligious sentiment. [T]he cultivation of the religious sentiment represseslicentiousness . . . inspires respect for law

and order, and gives strength to thewhole social fabric. Moral habits, they

believed, cannot safely be trusted on anyother foundation than religious principle,nor any government be secure which isnot supported by moral habits. . . .Whatever makes men good Christians,makes them good citizens " - DanielWebster, December 22, 1820 atPlymouth, Mass.

Of all the dispositions


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and habits which lead to

political prosperity,religion and moralityare indispensable

supports Reason andexperience both forbid

us to expect thatnational morality can

prevail in the exclusionof religious principle.

George WashingtonsFarewell Address, September

17, 1796


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Business and religion are not separate worlds. Businessis people they take their religion to work with them

True religion is is the life we lead, not the creed weprofess A character standard is more important to astable world than an international gold standard. - TheSpiritual Responsibility of American Business and Industry. By:Johnson, Clement D.. Vital Speeches of the Day, 12/15/55, Vol. 22 Issue

5, p151, 3p; (AN 9867986)



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[T]he loss of God leaves man at

the naked mercy of his fellows, where might makes right. JohnMontgomery,The Law Above the Law ,55 (1975)



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What if, under your particularunderstanding of the universe, otherhuman beings were not created inGod's image, had no inherent dignity,

and were yours to do with as youpleased? And what if your particularresponse to the mystery of lifehappened to be the same as that of EricHarris, one of the two young killers inLittleton, Colorado, who said, "My beliefis that if I say something, it goes. I am

the law"? or, as Fyodor Dostoevsky wrote, "Without God, everything ispermitted"? - The Necessity of Truth

by Senator Rick Santorum, HeritageLecture #643, August 6, 1999



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In Business and Religion: Odd Couple or Bosom Buddies? Evan Gahr reports that:

Among leaders of the nation's top 100 businesses, 65 % attendchurch or synagogue regularly--compared to 40 % of the generalpopulation.

IBM chairman Louis Gerstner, Jr., a graduate of an all-boysCatholic high school, attends mass daily.

Dallas-based Interstate Battery company, the top replacement-battery manufacturer in North America, boasts a full-timecorporate chaplain who leads voluntary prayer sessions andBible study groups.



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Illinois-based ServiceMaster was founded by 2 evangelicals.Originally just a rug-cleaning operation, it has since blossomedinto the nation's top provider of cleaning workers. The company'smotto is, "To honor God in all we do."

Thomas Monaghan, the founder of Domino's Pizza, also founded

Legatus, an international organization for Catholic businessleaders that holds seminars on business ethics and sponsorsconferences featuring prominent Catholics from the pope ondown. Monaghan calls Legatus his "number-one priority.



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Allou Health and Beauty Care, Inc., whichboasts one of the highest profit margins in theindustry, bases its business operationsprinciples enunciated in the Jewish Talmud.



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According to a recent national survey by the American Research Group: 70 % of respondents believe that corporate scandals

would be avoided if CEOs followed biblical principles. 94.4% of respondents believe companies run by

individuals who follow the Bible will grow at least asfast or faster than those that do not.

54% percent of respondents said they would be morelikely to invest in a company run by a CEO who uses theBible to guide his or her business decisions.


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Spiritual Foundation Christian philanthropist Sir John Templeton, regarded by Wall Street

as one of the world's wisest investors, contends in his book, TheTempleton Plan 21 Steps to Personal Success and Real Happiness,that "the most successful people are often the most religiously

motivated. They are likely to have the keenest understanding of theimportance of ethics in business. They can be trusted to give fullmeasure and not cheat their customers. In his extensive research,Templeton found that "the common denominator connectingsuccessful people and successful enterprises is a devotion to ethicaland spiritual principles." Templeton believes that "the person wholives by God's principles is the same person who will succeed in life,making lasting friendships and, most likely, reaping significantfinancial rewards. -Christian Ethics in Business - Asset or Liability, IanBuchanan, www.christianity.ca.



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Does a leaders strong spiritual foundationguarantee that he will lead his company indeveloping a culture of integrity?



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Note that inBusiness as a Calling Michael Novak reportsthat:

Kenneth Lay, Chairman and CEO ofEnronCorp., confided that "Igrew up the son of a Baptist minister. From this background, I wasfully exposed to not only legal behavior but moral and ethicalbehavior and what that means from the standpoint of leadingorganizations and people. I was, and am, a strong believer thatone of the most satisfying things in life is to create a highly moraland ethical environment in which every individual is allowed andencouraged to realize their God-given potential. There are fewthings more satisfying than to see individuals reach levels ofperformance that they would have thought was virtuallyimpossible for themselves."

Role of Leadership in DevelopingC l f I i


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a Culture of Integrity Courage to do the right thing:

Unfortunately, subsequent years ofmounting debt forced Malden Mills intobankruptcy. Questions inevitably aroseabout whether Feuerstein'sbenevolence may have helped bringhis company to bankruptcy. ToFeuerstein, though, the point is moot. InMarch, he was asked by the CBSprogram "60 Minutes" if, knowing howthings played out, he would do thesame thing he had done, he responded

"Yes, it was the right thing to do.Maybe on paper my company is now worth less to Wall Street. But I can tell you it is worth more.

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a Culture of Integrity Barbara Lee Toffler an adjunct

professor at Columbia University'sGraduate School of Business andan expert on corporateresponsibility, when asked by The

New York Times last Novemberabout Mr. Feuerstein's actions inthe wake of the Malden Mills fire,and about the company's newlyprecarious economic prospects,suggested that "it may have beenthat the desire to take principledaction somehow blinded him tothinking long term.Perhaps SHE was the one not thinking LONGTERM? (Mark 8:36)

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a Culture of Integrity

It seems appropriate thatFeuerstein, translated

from the Yiddish, meansfirestone , or a stone which can endure intenseheat, because it is clearthat his integrity surviveda literal trial by fire.

Role of Leadership in DevelopingC lt f I t it


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a Culture of Integrity Postscript: Aaron Feuerstein filed a reorganization plan to emerge

from Chapter11 bankruptcy on March 7, 2003. Creditors have alreadyarranged to strip Feuerstein of his chief executive's title, though theyhaven't kicked him out of his office. Feuerstein retains the titles ofpresident and chairman but owns just a minority stake. Malden MillsBoard now includes Feuerstein, two independents and four membersappointed by creditors. The company has laid off about 70 people andhas set aside Feuerstein's pledge that fabric made in Asia withcheaper labor wouldn't be sold to US consumers, a policy he felt wouldprotect local jobs. A mill in China recently began producing thecompany's signature Polartec for garments sold in the United States.Some members of the board would like to move "substantial" parts ofthe mill overseas, whereas Feuerstein "believes that it is not onlyfeasible, but desirable, to maintain manufacturing operations in the

United States."The board is also looking into developing housing orcommercial assets on parts of the mill's 25-acre site. Feuerstein hasto raise $125 million to pay off creditors and retain control of MaldenMills. Feuerstein's connections won Malden Mills valuable militarycontracts to supply troops in Afghanistan with Polartec garments and won some leverage with creditors. His social capital (with thesupport of Senator John Kerry) also helped him gain $35 million infinancial guarantees from the US Export-Import Bank.



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a Culture of Integrity Vision - Moral leaders tend to maintain a clear, strong and

positive vision and purpose for themselves and their

organizations that takes into account their organizationsimpact on society, and they must inspire others tobecome invested in the pursuit of that vision. (RelatedScriptures, Prov. 29:18, Hab. 2:2-3)

According to Wess Roberts, author of Leadership Secretsof Attila the Hun, vision is the Northstar for anyorganization.



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a Culture of Integrity Servant Leadership - Moral leaders benefit their

organizations by empowering as opposed tocontrolling others. They do this by firstrecognizing, and then helping actuate, the latentpotentialities of others. (see Matt. 20:25-27)

The key concept behind servant leadership is thebelief that true leadership emerges from those whose primary motivation is a deep desire to helpothers.


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a Culture of Integrity An increasing number of companies have adopted

servant-leadership as part of their corporate philosophy

or as a foundation for their mission statement. Amongthese are the Toro Company (Minneapolis, Minnesota),Synovus Financial Corporation (Columbus, Georgia),ServiceMaster Company (Downers Grove, Illinois), theMen's Wearhouse (Fremont, California), Southwest Airlines (Dallas, Texas), and TDIndustries (Dallas, Texas).

Role of Leadership in


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Role of Leadership in

Developing a Culture of Integrity

Front-line Actors - Moral leaders reallylead. They become consciously andactively involved in the promotion ofethical behavior in their organizations,both by word and deed.

3 Theories of Social


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3 eo es o Soc a

Responsibility Classical Theory

Stakeholder Theory Corporate Social Responsibility Theory

(CSR)

Classical Theory


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Definition: The role ofbusiness is tomaximize profits

within the law (seeMilton Friedman, "TheSocial Responsibilityof Business Is toIncrease Its Profits.",New York Times Magazine , 1970)


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Cl i l Th


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Classical Theory

Serve the interests of the shareholders Social obligations limited to ordinary moral

expectations. Views obligations to non-shareholders as a constraint Trusts in Adam Smiths Invisible Hand (The Wealth of

Nations) - The assumption that society benefits most

when individuals are allowed to define and pursue theirown self-interests, with minimal interference fromgovernments or other authorities.

Classical Theory - Contra


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Problems with: MarketFailures (e.g. pollution& resource depletion,

see Pacific LumberCase, Desjardins,Introduction toBusiness Ethics, p.39,a successful,balanced enterpriseruined)

Classical Theory - Contra


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When the 1990s Tech Stock Bubble burst it sent layoffssoaring, 401(k) assets tanking. According to the Center onBudget and Policy Priorities,between 1997 and 1999 thebottom 20% of earners sawtheir income decline, while therichest 1% saw their incomemore than double. The invisiblehand is a bit partial in the way itdispenses favors. (MarjorieKelly, The Divine Right ofCapital)

Classical Theory -Contra


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In fact, the purpose of a businessfirm is not simply to make a profit,but is to be found in its veryexistence as a community ofpersons who in various ways are

endeavouring to satisfy their basicneeds, and who form a particulargroup at the service of the whole ofsociety. Profit is a regulator of thelife of a business, but it is not theonly one; other human and moral

factors must also be considered which, in the long term, are at leastequally important for the life of abusiness. - Pope John Paul,Centesimus annus, May 1, 1991

St k h ld Th


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Stakeholder Theory

Definition : The primary consideration inbusiness decision-making ispreserving/promoting the rights ofstakeholders

Takes into consideration the moralprinciple of mutual respect.

Stakeholder Theor


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Stakeholder Theory Goal: to maintain the benefits of the free

market while minimizing the potentialethical problems created by capitalism(Phillips, Wharton School)

Primary difference from Classical Theory:elevation of nonshareholding interests tothe level of shareholder interests informulating business strategy and policy.

Stakeholder Theory


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Stakeholder Theory Stakeholder : an individual or group, inside

or outside the organization, who has ameaningful stake in its performance.

Who are the stakeholders of a business? Narrow view vs. Wide View


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Stakeholder Theory


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Stakeholder Theory

Some Additional Possible Stakeholders:

Local Community National Citizens Global Inhabitants Non-Human Life the Environment


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Stakeholder Theory


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Stakeholder Theory

Problems with wider view?

Discourages Investment - Undermines/Dilutesshareholder property rights Interest Group Politics - Leads to waste and

inefficiency

Corporate Social


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Responsibility Theory Definition: A voluntary assumption of

responsibilities, beyond the legal andeconomic, that take into accountmoral/ethical/socially desirable goals andoutcomes.

Concept originated in the 1950s and beganto gain a significant following in the 1960s.

Corporate Social ResponsibilityTheory


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Theory Possible Examples Merck: moved to develop

Mectizan, a drug that wouldtreat river blindness, a disease

that primarily affected thepoor. Merck knew that it wouldcost millions to develop andthat they would most likely notrealize a direct profit from theeffort. But this resulted in apublic relations windfall!



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Theory

Intel: provideseducation inscience & math incountries where ithas plants.


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Theory

Man ought to regard himself,not as something separatedand detached, but as a citizen

of the world, a member of the vast commonwealth of nature to the interest of this greatcommunity, he ought at alltimes to be willing

business ethics %26 professional responsibility

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