In an age when names like Ken Lay, Bernard Ebbers and Jack Abramhoff dominate the headlines, the issue of business and cultural ethics clearly needs to be raised again and again, in the hope that decisions and strategies can be charted because they are right, not just expedient and profitable.
This process is complicated by technology, which often seems to facilitate – if not outright encourage – unethical behavior.
At the upcoming Food Marketing Institute (FMI) Marketechnics conference in San Diego, scheduled for January 30-February 1, Marianne Jennings will deal with the connection between technology and ethics head-on. As professor of legal and ethical studies at the W.P. Carey School of Management at Arizona State University, Jennings not only teaches the leaders of tomorrow, but also works with outside companies in addressing the ethical challenges of the 21st century.
To get a preview of Jennings’ presentation at Marketechnics, MNB engaged her in this exclusive e-interview:
MNB: The ethical missteps by numerous corporations certainly have been in the headlines during the past several years. Do you think this is largely a media issue, or one that actually resonates with consumers?
Marianne Jennings: This all resonates with consumers. A couple of indicators are: integrity was the number one word that we looked up on line in 2005 -- even exceeding pandemic!
Trust in corporate executives has dropped to an all-time low – only 12% believe corporate executives behave with integrity. The recent pension issues only cement the issue in the minds of consumers: are we really going about this whole business of business in the right way?
MNB: Is the business community in an unusual period of ethical challenge by historical standards?
Marianne Jennings: We do go through cycles -- there were Enron-like creatures just prior to the 1929 crash, enormous frauds surrounding the gold rush, etc.
However, my view is that we have those who came of age in the postmodern era and are true moral relativists. They make decisions based on their circumstances and the pressures, not on standards of right and wrong. The result is always some really bad choices in business. While there is room in philosophy for the lesser of two evils, there is not a great deal of ethical wiggle room when doing business.
We also have a very short-term focus. Businesses are responding only to the quarter and the result is little strategic or long-term focus. As the boys at Google say, managing a business by the quarter is rather like a dieter stepping on the scale every hour. Not a whole lot of results and a drive to manipulate the numbers.
MNB: Does technology create ethical lapses, or just make them easier? (In other words, would people who are ethically challenged be behaving badly even if we were typing on manual typewriters and riding horses to work?)
Marianne Jennings: Technology is a boon and a bust for ethics. It is much easier to perpetrate a fraud with the fast communication. It is much easier to seem like we are at work when we are not because of technology.
But, technology also gives us the content of every e-mail we have written -- even those for which we press the delete button. It is more difficult to fabricate a resume with Google and the Internet. Information travels quickly and widely and discoverability is so much easier. DNA doesn't lie -- witnesses sometimes do or are mistaken.
Technology allows us to do much more, and possibly wreak havoc (as the young kids issuing the computer viruses have shown), but we also have the ability through that same technology to find them.
MNB: How can top executives in companies communicate effectively with underlings about business ethics without it seeming like posturing?
Marianne Jennings: They must communicate through example. There is a disconnect in too many organizations between what executives say and what they do. They put limits on employee gifts and then they take golf outings. They tell employees don't ever break a rule but constantly impose sanctions or withhold bonuses when the employees do not meet numbers because of good choices they made such as opting to disclose an accounting issue, raising concerns about a product's design, or refusing to take a safety shortcut in the workplace. There is too little recognition for doing the right thing and too much recognition for meeting numbers doing whatever it takes.
MNB: What roles do middle managers or division managers in a corporation have in making sure that a company is ethically sound?
Marianne Jennings: Middle managers are the front line. They have their thumbs on the pulse of the company. If employees are cynical about ethics or other company programs, middle managers should not only create an atmosphere that allows them to hear the employees' concerns but also be sure that those concerns are communicated to their supervisors.
They also have to set a good example. The example is not only in what they do at work but how they conduct themselves generally. One employee communicated to me that it was difficult to take his supervisor's ethics discussions seriously when he would see that supervisor at the bar on Friday afternoon acting inappropriately with women. Another said it was tough to take her boss seriously when he told insensitive jokes all the time.
MNB: In the retail business, we would observe that most companies have focused on “value” as a differentiator, as opposed to “values.” Do you think that this kind of bottom-line obsession is as responsible for ethical lapses as technology?
Marianne Jennings: Yes…what businesses increasingly fail to realize is how much it costs to win a new customer vs. what it costs to simply retain their existing ones through their candid and open treatment of those customers. They build value over time, not through financial sleight of hand.
Look at the companies that are long-term survivors, they have their ups and downs, but when we look at what they have in common it is very much the basics of business: good customer service, honesty, keeping costs down, and addressing consumer needs.
MNB: When people leave your presentation at FMI’s Marketechnics, what will their marching orders be?
Marianne Jennings: To jump right off the ethical cliff. That is, I hope they come to understand that they simply cannot survive without a recommitment to ethics. Also, I am not asking them to do ethics in isolation -- it is an integral part of all business decisions. When managers ignore the ethical implications of a decision, they ignore some fairly large landmines that will really cost them. For example, we will go for years with trials on Merck and its issues on Vioxx. Some juries will find for Merck, some for plaintiffs, but none of that changes the cost to the company -- a drug that gave it $3 billion in sales per year can no longer be sold. There is clear evidence that employees and others were raising concerns, but the company continued to sell the drug either without warning or without sufficient warning. How much better it would have been to just be completely forthright and take $2 billion in sales as the high risk patients opted not to use the product than where the company has landed today. It is a good drug, but the managers there missed an opportunity to ensure that it became a great drug. Now it is a lost drug. You have a blind spot if you do not think about ethics as part of your strategy, planning, and decision-making.
Marianne Jennings is scheduled to speak at FMI’s Marketechnics conference on February 1, 2006, at the 12 noon General Session.
This process is complicated by technology, which often seems to facilitate – if not outright encourage – unethical behavior.
At the upcoming Food Marketing Institute (FMI) Marketechnics conference in San Diego, scheduled for January 30-February 1, Marianne Jennings will deal with the connection between technology and ethics head-on. As professor of legal and ethical studies at the W.P. Carey School of Management at Arizona State University, Jennings not only teaches the leaders of tomorrow, but also works with outside companies in addressing the ethical challenges of the 21st century.
To get a preview of Jennings’ presentation at Marketechnics, MNB engaged her in this exclusive e-interview:
MNB: The ethical missteps by numerous corporations certainly have been in the headlines during the past several years. Do you think this is largely a media issue, or one that actually resonates with consumers?
Marianne Jennings: This all resonates with consumers. A couple of indicators are: integrity was the number one word that we looked up on line in 2005 -- even exceeding pandemic!
Trust in corporate executives has dropped to an all-time low – only 12% believe corporate executives behave with integrity. The recent pension issues only cement the issue in the minds of consumers: are we really going about this whole business of business in the right way?
MNB: Is the business community in an unusual period of ethical challenge by historical standards?
Marianne Jennings: We do go through cycles -- there were Enron-like creatures just prior to the 1929 crash, enormous frauds surrounding the gold rush, etc.
However, my view is that we have those who came of age in the postmodern era and are true moral relativists. They make decisions based on their circumstances and the pressures, not on standards of right and wrong. The result is always some really bad choices in business. While there is room in philosophy for the lesser of two evils, there is not a great deal of ethical wiggle room when doing business.
We also have a very short-term focus. Businesses are responding only to the quarter and the result is little strategic or long-term focus. As the boys at Google say, managing a business by the quarter is rather like a dieter stepping on the scale every hour. Not a whole lot of results and a drive to manipulate the numbers.
MNB: Does technology create ethical lapses, or just make them easier? (In other words, would people who are ethically challenged be behaving badly even if we were typing on manual typewriters and riding horses to work?)
Marianne Jennings: Technology is a boon and a bust for ethics. It is much easier to perpetrate a fraud with the fast communication. It is much easier to seem like we are at work when we are not because of technology.
But, technology also gives us the content of every e-mail we have written -- even those for which we press the delete button. It is more difficult to fabricate a resume with Google and the Internet. Information travels quickly and widely and discoverability is so much easier. DNA doesn't lie -- witnesses sometimes do or are mistaken.
Technology allows us to do much more, and possibly wreak havoc (as the young kids issuing the computer viruses have shown), but we also have the ability through that same technology to find them.
MNB: How can top executives in companies communicate effectively with underlings about business ethics without it seeming like posturing?
Marianne Jennings: They must communicate through example. There is a disconnect in too many organizations between what executives say and what they do. They put limits on employee gifts and then they take golf outings. They tell employees don't ever break a rule but constantly impose sanctions or withhold bonuses when the employees do not meet numbers because of good choices they made such as opting to disclose an accounting issue, raising concerns about a product's design, or refusing to take a safety shortcut in the workplace. There is too little recognition for doing the right thing and too much recognition for meeting numbers doing whatever it takes.
MNB: What roles do middle managers or division managers in a corporation have in making sure that a company is ethically sound?
Marianne Jennings: Middle managers are the front line. They have their thumbs on the pulse of the company. If employees are cynical about ethics or other company programs, middle managers should not only create an atmosphere that allows them to hear the employees' concerns but also be sure that those concerns are communicated to their supervisors.
They also have to set a good example. The example is not only in what they do at work but how they conduct themselves generally. One employee communicated to me that it was difficult to take his supervisor's ethics discussions seriously when he would see that supervisor at the bar on Friday afternoon acting inappropriately with women. Another said it was tough to take her boss seriously when he told insensitive jokes all the time.
MNB: In the retail business, we would observe that most companies have focused on “value” as a differentiator, as opposed to “values.” Do you think that this kind of bottom-line obsession is as responsible for ethical lapses as technology?
Marianne Jennings: Yes…what businesses increasingly fail to realize is how much it costs to win a new customer vs. what it costs to simply retain their existing ones through their candid and open treatment of those customers. They build value over time, not through financial sleight of hand.
Look at the companies that are long-term survivors, they have their ups and downs, but when we look at what they have in common it is very much the basics of business: good customer service, honesty, keeping costs down, and addressing consumer needs.
MNB: When people leave your presentation at FMI’s Marketechnics, what will their marching orders be?
Marianne Jennings: To jump right off the ethical cliff. That is, I hope they come to understand that they simply cannot survive without a recommitment to ethics. Also, I am not asking them to do ethics in isolation -- it is an integral part of all business decisions. When managers ignore the ethical implications of a decision, they ignore some fairly large landmines that will really cost them. For example, we will go for years with trials on Merck and its issues on Vioxx. Some juries will find for Merck, some for plaintiffs, but none of that changes the cost to the company -- a drug that gave it $3 billion in sales per year can no longer be sold. There is clear evidence that employees and others were raising concerns, but the company continued to sell the drug either without warning or without sufficient warning. How much better it would have been to just be completely forthright and take $2 billion in sales as the high risk patients opted not to use the product than where the company has landed today. It is a good drug, but the managers there missed an opportunity to ensure that it became a great drug. Now it is a lost drug. You have a blind spot if you do not think about ethics as part of your strategy, planning, and decision-making.
Marianne Jennings is scheduled to speak at FMI’s Marketechnics conference on February 1, 2006, at the 12 noon General Session.
- KC's View:
