Ethics Awareness Andrew L. Urich, J.D. Puterbaugh Professor of Ethics & Legal Studies Spears School of Business Oklahoma State University

Ethics Awareness I am NOT here to moralize. “Awareness” changes human behavior.

Who Am I to Discuss Ethics? I am a hypocrite. I play favorites. I interpret rules to my benefit. I have been known to ignore rules that get in my way. I hate to admit I’m wrong even in those rare situations when it looks like I might be. I am much more likely to believe things that benefit me. I like my ideas better just because they’re mine.

Who Am I to Discuss Ethics? Sometimes I think it’s fun to say “no” just because I have the power to do so. Here is how I make decisions: I decide what I want the answer to be – and then make up the logical reasons to support my decision. I tend to judge myself by my intentions rather than my actions. I tend to judge others by their actions rather than their intentions.

Key Points to Remember Human nature is not naturally ethical. Ethics is gray – not black and white. (In other words, you can’t just say you’re an ethical person – and that’s all there is to it) It is difficult to be ethical all of the time.

Ethical Lapses in the News Enron inflated earnings by $586 million — investors lost $60 billion Adelphia founder used corporate assets as collateral for $3.1 billion in personal loans — company bankrupt WorldCom overstated profits by $7.1 billion — 17,000 workers laid off Barings Bank’s Nick Leeson caused his employer's collapse in 1995 after losing US$1.3 billion in unauthorized derivatives trading.

The Tyco Party Tyco CEO looted company of $600 million

Management cares!! Why are we here today?

Because our reputation is worth it! Remember Enron’s real problem! Why are we here today?

Ethics Today Times are changing in society! Do ethics change with the times???

Case problem The Thrifty V.P.

Case problem 1 The Thrifty V.P. Just following orders Ethics and young people Entrapment Does everyone have their price?

Discussion Question What do you use as an ethical guideline? In other words, how do you decide what’s ethical? Should ethical decisions be based on “gut instinct” or “conscience?”

Examining Unethical Behavior Overview of Topics 1. It’s easier not to be ethical. 2. Beliefs about the ethics of others 3. Attitudes toward the company 4. Self-delusion (Rationalization)

It’s Easier Not To Be Ethical Easier to do what’s convenient Easier to conform to norms Easier to do what’s profitable Easier to win if you cheat It is very difficult to overcome the challenges of human nature

It’s Easier Not To Be Ethical But It’s Worth the Trouble Ethics is the key to leadership and influence. “A lie can travel halfway around the world while the truth is putting on its shoes.” Mark Twain

2.Beliefs About the Ethics of Others Everyone thinks like me. People follow the leader. Different ethics for different situations? Do you use the same standard of ethics in all aspects of your life? For example, is your standard the same with your family, at church, at work, with personal business, etc.?

Case Problem The Sniff Test

3. Attitudes Toward the Company The Need for Ethical Leadership “The fish rots from the head down.” -Sir Andrew Louis Do managers practice what they preach? (You are the messenger) Employees want to “even things out.” Authority is Out—Influence is In

Trust other people David Halper, British Sociologist 34% Americans 29% British 31% Mexicans up from 19% in % Dutch 68% Scandinavians

Harris Poll on Trust 22% trust media 8% political parties 27% government 12% large corporations Convicts vs. MBAs

Big Idea Do you trust your boss? Productivity and ethical behavior Mercer Management Consulting– 60% of US workers do not trust their manager to communicate honestly People at work trust the same people Stacking photos Management impacts trust

Showing Respect & Building Trust You will never prove them wrong Admit to your mistakes “My child choked on a chicken bone” Winston Churchill’s thoughts on the subject

Showing Respect

Trust is Competence Warren Buffett, “It takes 20 years to build a reputation and five minutes to ruin it.” I’m the manager, I can coast while others do the work. Demotivation What do you think of people who cover their bottoms? Trust equals candor– if they trust you they will tell you the truth. What if we train people and they leave?

4. Self-Delusion Rationalization: polite term for self-delusion “The greatest of all faults, I should say, is to be conscious of none.” --Thomas Carlyle (1795 – 1881) Scottish writer

Case Problem Bedlam Football

Guideline for Ethical Decision Making 1. Is there an applicable law or organizational policy? 2. Should I ask about this before acting? 3. Have I taken time to think carefully before acting? 4. Would I disclose my decision to my supervisor, CEO, mother, etc.? (What if everyone found out?)

Guideline for Ethical Decision Making 5. Am I avoiding the appearance of impropriety? 6. Am I defining the problem correctly? 7.Am I rationalizing? 8.Finally, when in doubt, do I know who to contact?

The Secret to Happiness  Self-delusion  Hypocrisy  Ignorance

The Secret to Happiness Ignorance is Bliss “People who do things badly are supremely confident in their abilities — more confident, in fact, than people who do things well. Not only do they reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the ability to realize it.” Dunning, David Journal of Personality and Social Psychology December 1999.

Thank You I appreciate your time and attention. Andrew Urich

References Ailes, Roger. You Are the Message. New York. Doubleday, Bazerman, Max H. Smart Money Decisions, Wiley & Sons, Blanchard, Kenneth, et.al. The Power of Ethical Management. William Morrow and Company, Inc., Buckingham, Marcus, et.al. First, Break All The Rules. New York: Simon & Schuster, Cialdini, Robert B. Influence: The Psychology of Persuasion. Harper Collins, Cohen, Randy. The Good, The Bad, & The Difference. Broadway Books, Covey, Stephen R. The 7 Habits of Highly Effective People. New York: Simon & Schuster, Covey, Stephen C.R. The Speed of Trust, New York: Simon & Schuster, Fisher, Roger and William Ury. Getting to Yes. New York: Viking Penguin, Inc., Koch, Charles G., The Science of Success, Wiley & Sons, Lakoff, George. Moral Politics: How Liberals and Conservatives Think. The University of Chicago Press, Lattal, Alice Darnell, et. al. Ethics at Work. Performance Management Publications, Lewicki, Roy J., et. al. Negotiation. 2nd Edition., Irwin, Lewicki, Roy J., et. al. Essential of Negotiation, 4 th Ed. McGraw Hill, Maxwell, John C. There’s No Such Thing as “Business” Ethics. Warner Business Books, Nelsen, Jane, et. al. Positive Discipline, Three Rivers Press, Paul, Richard. Critical Thinking. Santa Rosa, CA: Foundation for Critical Thinking, 1993.