"Is the Ethics of Business Changing?" asked professors Steven Brenner and Earl Molander in an eponymous 1977 article. In it, they compared the results of a situational ethics test that 1,200 HBR readers had taken the previous year with a similar test readers had taken back in 1961. They posed four hypothetical situations, asking in each case, first, What would you do?, and second, "What do you think your colleagues would do?" It's a quick test, and intriguing, and you can take it here right now:
Case 1: An executive earning $30,000 a year has been padding his expense account by about $1,500 (or 5%) a year. Is that
- Acceptable if other executives in the same company do it
- Unacceptable regardless of circumstances
- Acceptable if the executive's superior knows about it and says nothing
Case 2: Imagine you're president of a company in a highly competitive industry. You learn that a competitor has made an important scientific breakthrough that will substantially reduce, if not eliminate, your company's profit for about a year. If one of the competitor's employees who knew the details were available to hire, would you?
Case 3: The minister of a foreign nation where bribes are common asks for a $200,000 consulting fee in return for special assistance in obtaining a $100 million contract that would generate at least $5 million in profits. Would you
- Pay the fee, feeling it was ethical, given the moral climate of the nation
- Pay the fee, feeling it was unethical but necessary to ensure the sale
- Refuse to pay, even if you lose the sale
Case 4: On becoming a new member of the board of High Fly Insurance Co. (HFI) you learn that it's the officially approved insurer of the Private Pilots Benevolent Association, whose 20,000 members are automatically enrolled in a HFI accident policy when they pay dues. HFI pays a fee to PPBA for this privilege and gets access to the PPBA mailing list, which it uses to sell aircraft liability policies (its major source of revenue). PPBA's president sits on the HFI board, and the two companies are located in the same building. Would you:
- Do nothing
- Raise the issue in a private meeting with HFI's chairman
- Express opposition to this at a director's meeting but accept whatever position the board takes in response
- Express vigorous opposition and resign if corrective action were not taken
The answers were pretty clear and comparable in both years ? in other words HBR readers' moral compass had held pretty steady. In Case 1, more than 80% of respondents opted for option 3. In Case 2, opinions were divided pretty much 50/50. In Case 3 (which was only asked in 1976) a heartwarming 42% said they'd refuse to pay, 22% said they'd pay despite feeling it was unethical, and 36% would pay up with a free conscience. In Case 4, fully 55% said they'd do nothing at all, 29% would have a quiet word with the chairman, 16% would raise objections, but only 3% of them would do anything if action were not taken.
HBR readers back in the day saw themselves as somewhere in a middle ground, ethically ? less ethical than professors or doctors but more ethical than government officials, lawyers, elected politicians, and union officials (in that order). If there were a difference between the two groups, it was that HBR readers of 1976 were somewhat more cynical than their counterparts of 1961 in that they were more quick to attribute questionable behavior to their colleagues than to themselves.
That was a mistake, said Brenner and Mollander, suggesting that managers needed to reexamine a number of their unwisely held assumptions. You will face ethical dilemmas in which values will conflict, they warned; don't use that to rationalized unethical behavior. Don't expect ethical codes to solve your problems. And finally, they advised in the strongest possible terms, decades before the communications revolution let loose by the internet, don't deceive yourself into thinking you can hide unethical actions. If you wish to avoid being the victim of someone else's ethical code, make self-enforcement work.
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