Marymount University & Digital Focus Business Ethics Survey of Technology CEOs Technology CEOs Ethics Forum May 15, 2001 McLean, Virginia

Overview 1.Context & Caveats 2.Practices: Importance & Effectiveness 3.Organizational Values & Norms 4.Summary 5.Questions “Leadership always comes down to a question of character” Warren Bennis

Context & Caveats Co-sponsored by Marymount University & Digital Focus Developed collaboratively, with assistance from the Ethics Resource Center Administered in Fall/Winter 2000 Forty-three (43) CEO-level respondents, representing Northern Virginia high technology companies ranging in size from under 100 to thousands of employees Potential non-response bias and non-probability sampling design preclude statistically valid inferences to the population of high- technology companies. Responses may not reflect the views of non-senior level employees.

Practices: Importance & Effectiveness Technology CEO Ethics Forum With one exception, (hiring & maintaining a diverse work force), there is a gap between perceived importance & perceived effectiveness. A few practices identified in the literature as important determinants of organizational health received relatively low importance ratings (e.g., practices ) 6. Having a corporate code- of-ethics 6.0(1.37)5.5(1.47) 7. Hiring & retaining a diverse work force 5.8(1.34)5.8(1.11) 8. Measuring ethical performance as an organization 5.7(1.17)4.7(1.28) 9. Providing organizational support for ethical practices & behaviors 5.5(1.14)4.8(1.44) 10. Community outreach/involvement programs 5.0(1.33)4.7(1.67) 4

The Ethics of Business Practices There is surprisingly large variation in whether respondents perceive certain practices to be ethical or not, e.g., monitoring accounts. The mode of communication appears to influence whether a practice is ethical or not -- e.g., monitoring phone conversations versus monitoring accounts.

The Ethics of Business Practices The Ethics of Business Practices (con’t.) In general, practices are consistent with the judgments about the ethics of the practice The exception is shown to the right. While the relationship is not statistically significant, there appears to be some disparity between perception and reality.

Organizational Values & Norms: All Respondents. Scale: 1= Strongly Disagree 5= Strongly Agree

Organizational Values & Norms: The Influence of Organizational Size The larger the size of an organization, (defined as number of employees), the lower the ratings for several key dimensions, including: Respect for one another, regardless of position...

Organizational Values & Norms: The Influence of Organizational Size The larger the size of an organization, (defined as number of employees), the lower the ratings for several key dimensions, including: Level of trust within the organization…

Organizational Values & Norms The Influence of Organizational Size The larger the size of an organization, (defined as number of employees), the lower the ratings for several key dimensions, including: Extent to which employees have control over work- related decisions affecting their lives.

Organizational Values & Norms The Influence of Organizational Size The larger the size of an organization, (defined as number of employees), the lower the ratings for several key dimensions, including: Acceptability of turnover rates.

Organizational Values & Norms The Influence of Organizational Size For other ethical dimensions, however, organizational size appears to have little or no influence, as reflected, for example, in the consistency of respondents’ agreement with the statement: “I expect my organization to do what is right, not just what is profitable”.

What Are Significant Predictors of Key Organizational Values and Norms? All predictors marked ( ) are statistically significant (p. <.05)

Survey Summary Gaps between perceived importance and effectiveness. Variation in perception of whether certain practices are ethical or unethical; some discrepancies between espoused values and practice. The larger the organization, the lower the perceived trust, respect, and employee involvement in decision making. Trust is a significant predictor for multiple variables including balancing ethics with profitability, maintaining an ethical image with clients, and intra-organizational honesty.

Select Discussion Points 1.What is the relationship between ethical practices, and organizational performance and profitability? 2.What role does ethics play in attracting and retaining employees? 3.What is the role of senior management in fostering ethical behavior within an organization? 4.How applicable is a Code of Ethics in an organization’s day-to-day business operations…how is it made “real”? 5.Since Trust is such a pivotal value in predicting ethical behavior, what does it mean in the business context, and how we can foster it as a value within our organizations? 6.What policies and practices foster and sustain an organizational culture of respect, and honesty? 7.To what extent would the views of CEOs represented in the data coincide with the views of the employees, were they asked the same questions? 8.Why are common practices such as monitoring viewed so differently by different persons? Are these practices ethical? If so, why? If not, why?