Business Ethics at Work – IBE Ethics and Work Survey – Comments by Chuck Gallagher Business Ethics Expert

First I reported on the KPMG survey from India and now the Institute of Business Ethics published their “at work survey” which shows similar results.  Lack of workplace ethics is rising due to the pressures from our worldwide current economic situation.  There’s nothing like a good recession to bring out the worst in folks!  By the way the full report on the IBE’s survey is found HERE.

According to the British Guardian:

The IBE’s ethics at work survey, which was last carried out in 2008, asks employees about their attitudes to ethical issues in the workplace, their perceptions regarding ethical practices in their organizations and what formal assistance on ethical matters their organizations provide for them.

Encouragingly, the majority of British (84%) and mainland European (77%) employees say that honesty is practiced “always or frequently” in their organization.

Although the proportion of British full-time workers who say they have felt pressure to compromise their organization’s ethical standards remains similar to 2008 (9% and 11% respectively), as does the prevalence of an unethical culture (18%), British employees seem to be significantly more likely to experience certain types of pressure to behave unethically than in previous years. The most common of these include meeting unrealistic business objectives or targets (19%) and being asked to take short cuts (14%).

Wanting to help their organization survive was mentioned for the first time as a source of pressure (7%), an indication that the recession is taking its toll on ethical standards.

Of the fifth of British employees who have been aware of misconduct in their organization in the last year, only half of these (51%) say they have reported it. Similarly, of the quarter (28%) of mainland European employees who said they had been aware of misconduct, only half raised their concerns.

As the head of the Ethics Resource Group – an organization that provides ethics training, presentations and consulting to companies worldwide, the statement above that “meeting unrealistic business objectives” creates a significant pressure is true.  Logically when business is booming the NEED to meet an unrealistic objective is reduced.  However, especially during periods of weak economic performance, the NEED increases and pressure seems to mount from all sides.  The most significant part of this problem is if the “unrealistic business pressure” is supported from the top where the discipline for ethics must originate.

To deter unethical and potentially illegal behavior, three things must be present: (1) Delivering swift and consistent justice for unethical actions; (2) Identify the weak areas within your organization and target them for ethical training and attention; and (3) develop ways to foster ethical behavior among leaders and monitor management integrity.  This is the three legged stool from which a company creates a foundation for positive ethical behavior.

Lapses in Business ethics are not just caused by one person!

The report in the Guardian is quite telling:

In business ethics, there are no lone gunmen – the theory that integrity failures are caused by just one person behaving badly. UBS was fined £29.7m last month by the FSA for failures in its systems and controls that allowed former employee Kweku Adoboli to conduct Britain’s biggest bank fraud. Integrity crises are usually the result of a gradual erosion in behavior over time, which develop into an unethical culture, rather than one person acting on their own while everyone else stands by, powerless.

While we celebrate that the majority feel their workplace is one where honesty is practiced, this is undermined by the statistic that a third of those in managerial or supervisory roles in British organizations perceive “petty fiddling” as inevitable.

But why fret about a few biros and A4 pads missing from the stationery cupboard when there are bigger risks like bribery and corruption and health and safety to mitigate against?

Consider the broken windows theory: a building is vandalised with a few broken windows. If the windows are not repaired, the vandals break a few more; eventually the building is broken into and squatters move in. The theory is that petty crimes, if unaddressed, create a culture which leads to larger ones.

New York’s Mayor, Rudy Giuliani, put this theory to practical use in his zero-tolerance of petty crimes such as vandalism in New York. The result was turning around a city that once seemed ungovernable, particularly when it came to crime. Overall crime rates dropped by 44% to their lowest in more than a generation, and the city’s murder rate went down by 70%. Petty fiddling at work is a little like those broken windows.

New research by Dr Muel Kaptein of the Rotterdam School Of Management into why good people do bad things may give cause for concern. Kaptein cites “acceptance of small theft” as something which may indicate a culture susceptible to integrity failure. If small thefts of highlighter pens are ignored, then so are slightly larger ones, like over-claiming expenses or accepting unauthorized business gifts. It doesn’t take long for people to begin pushing those limits, and before long you have a large scale integrity failure on your hands.

A major multinational corporation unnamed states the following in their Code of Business Conduct:  “At XXXXXX assets should be used for legitimate business purposes, incidental and occasional personal use of XXXXXX assets such as computers, telephones and supplies is permitted.”  It is interesting here that Sr. Management recognizes that there is no way to completely control the petty actions by employees so they have defined those actions and made them tolerable.  Yet, there is a challenge that is found in the written policy, namely what is “incidental and occasional personal use?”

The ethics at work survey found that just under half of the UK’s full-time workforce thinks it’s acceptable to take pencils and pens (41%) and make personal phone calls (45%) from work and about a third (30%) said it was OK to post personal mail from work. A quarter think it is acceptable to use the internet in work time and a fifth of British employees feel it is acceptable to “take a sicky”. The survey also showed that there is little difference in attitudes between employees and managers.

If the tone is set by managers that these small ethical breaches are unacceptable, then perhaps the tone and culture will follow. Most people do not start out to be malicious, or to harm the organization or defraud it – they are just trying to do their job.

The challenge so aptly presented in this report is where is the line and perhaps, more importantly, should we tighten the reigns when the NEED increases or is the presentation of acceptable ethical tolerance levels best when dealing with the mundane at work?

Credit is given to: Simon Webley is research director at the Institute of Business Ethics. The Employee Views of Ethics at Work: 2012 British Survey and Employee Views of Ethics at Work: 2012 Continental Europe Survey are both available as free downloads from www.ibe.org.uk