All Posts in Business Ethics

|In: Business Ethics|Last Updated:

According to our national philosophy, we have a government “… of the people, by the people and for the people.”

People, in other words, precede government, which is why people have inalienable rights. Corporations, in contrast, are legal fictions. They exist only within the framework of government and have whatever rights and privileges we give them. Government can revoke or extend any or all of those rights at any time without raising constitutional issues.

I mention this because of how frequently people talk about corporations as if they were people, only bigger. “Our budget is like your household budget,” is a favorite example, used by executives to explain why the company can’t afford something important.

The company budget, though, has little in common with my household budget. I subscribe to cable television, go to the movies, buy new clothes even when the old ones haven’t worn out, and enjoy a bunch of other stuff for which there’s no return on investment of any kind. Unlike most corporations, I spend a significant chunk of my budget on fun stuff.

Also, I’ve never downsized either of my children, no matter how tight the budget or how annoyed I am that one or the other left dirty socks on the couch.

Here’s another: “We do the right thing.” I don’t even know what that means, especially since the company also maximizes shareholder value. In biological terms, morality is a species-specific trait of Homo sapiens. John Wayne Gacy’s behavior was immoral (and nauseating). In contrast, when a seagull eats a chick in the next nest, it isn’t acting immorally at all. Morality applies only to human beings.

Corporations, not being big Homo sapiens, aren’t moral entities. (For more on this subject, check out Carlton Vogt’s excellent “Ethics Matters” column on Infoworld.com.) They are, however, supposed to obey the laws and regulations that define the acceptable boundaries of corporate behavior. It’s because corporations aren’t moral entities that we need extensive laws and regulations — they have no internal restraints.

Which creates a dilemma. You are a moral entity, and confine your actions to what’s allowed by your moral code. But you’re employed by a corporation, which isn’t one, and you’re supposed to act in that corporation’s best interests. I’ve even been told that this is a moral obligation.

Which is nonsense. “Maximizing shareholder value” is a financial proposition, not a moral one.

Which is why, if you want your company to behave morally, you’ll have to bring the morality there yourself.

Comments

|In: Business Ethics|Last Updated:

I’ve figured out the difference between scientific knowledge and business knowledge. Scientific knowledge depends on facts, logic, and the rigorous testing of ideas in the laboratory and field. Business knowledge depends on the assertion of pet biases with great confidence and exorbitant billing rates.

For example …

By now I’ve read or listened to at least a dozen authorities in the field of managing organizational change. Most begin by explaining that resistance to change is wired into the human brain, natural and instinctive, the result of millions of years of evolution.

As it happens, my graduate studies were in the field of sociobiology, so I’m confident I know more than these “experts” about what is and isn’t hardwired into the human brain. Yes, there is some hard wiring in the human brain. For example, the ability to learn language is a native capability. Bipedal walking is another piece of standard equipment, although the ability to simultaneously chew gum must be learned.

So there is some hard wiring. Not a lot, but some. But no, resistance to change isn’t any of it, nor do people (at least, not those raised in Western cultures; I’m insufficiently knowledgeable about the rest to speak with confidence) resist all change as a matter of learned behavior either.

Want proof? Here’s a simple experiment you can perform in the privacy of your own organization. Offer your employees an upgrade to a piece of core technology they use every day: Buy them a new car of their choosing. You’ll pay for the gas, insurance, maintenance and repairs, and there are no strings attached.

How many employees do you really think will resist this change?

Few people automatically resist change. What’s most commonly mistaken for resistance to change is something quite different: Fear of the unknown.

Most people do fear the unknown. The nature vs nurture question notwithstanding, it’s easy to understand why the unknown is to be feared. Whether you imagine a Toe Monster lurking under your bed, a crazed mugger lurking in some dark alley, or layoffs lurking under the current process re-engineering effort in your company, the possible risks of the unknown — death, destruction and unemployment — outweigh the possible benefits.

Which is why the most useful tools in any change leader’s toolkit are the “Three C’s”: Communication, communication, and yet more communication.

That’s what’s required to change the unknown into the known. If the known is a new car, so much the better. If not, at least employees know the worst that can happen, which is always better than the worst they can imagine.

Comments