Corporate v Individual Integrity

Corporate v Individual Integrity – Any difference?

The integrity of the organisation and the values held by the individual manager may not be the same.

The key issue is this: When does a person follow individual values and when does a person follow corporate values?

When these values are not compatible, a conflict may arise between organisational pressure that impels a particular action and what the individual believes ought or ought not be done.

The typical conflict in such cases involves a manager or employee who holds a higher standard of behaviour than that expected by the organisation. In such situations, the manager may be pushed toward an action that reflects ignoring or lowering personal standards in order to achieve some organisational goal.

These dilemmas produce “moral stress” in the manager because the core values of the organisation, as embodied in the corporate culture, seem to imply a choice different from that which would be selected by the manager based on personal values.

Another real issue occurs when the boss orders you to do something that violates organisational values as well as your own values. One way organisations have addressed this issue is to explicitly develop a “values statement” for the firm.

By identifying major or ‘core’ values  such as respect, integrity and responsibility, the ‘values statements’ are intended to guide the firm when it is faced with ethical quandaries.

Corporations with an organisational climate that causes managers to act contrary to their individual values need to understand the costs of unethical behaviour.

Sometimes managers who choose to follow organisational pressures rather than their own conscience rationalise their decisions by maintaining that they are simply ‘agents’ of the corporation.

In other words, as company agent, the manager assumes the duty to do exactly what the organisation most desires – often translated to mean maximizing return on investment, sales or some other managerial objective.

The weaknesses of assuming that managers are merely organisational agents who need to override their personal values are several, including the following:

1. Managers can never totally abdicate their personal responsibility in making certain business decisions. The defence of being an agent of the corporation sounds suspiciously like the defence given by certain war criminals that they were only following orders. (Companies frequently prosecute rule breakers to make an example of them even if the manager’s intention was to help thefirm.)

2. It is quite possible that the manager does not fully understand what is in the best interest of the organisation. Short-term profits, even if advocated by the manager’s immediate supervisor, may not be the most important consideration for the organisation.

3. The manager has an irrevocable responsibility to parties other than his or her organisation. This is often referred to as the ‘stakeholder concept’ (explained separately), which explicitly identifies various publics to which organisations have duties and obligations.

TRADE OFFS

While the trade-off involving appropriate personal values and questionable organisational values is most typical, other situations are also found.

We can envision instances where organisational values should trump personal ones, such as when the employee has a character flaw or does not subscribe to legitimate corporate expectations.

Another circumstance involves organisational values that are more rigorous than personal values. Here the manager may not appreciate the reasoning behind certain policies and,  for personal or organisational gain, is inclined to violate them.

To avoid ‘values misalignment’, senior management must bring clarifying ethical standards into employee selection, orientation and training as well as advancement or dismissal decisions.

Still another situation generating ethical anxiety is when an employee’s ethical standards are overly scrupulous, leading to actions – or omissions – that unnecessarily disadvantage the employer. For example, concerns about lavish customer entertainment may prompt an inexperienced employee to avoid even modest lunch or dinner expenditures and thus neglect the kind of social interaction on which sound customer relationships may be built or reinforced.

If the goal is to establish a workable set of ethical norms for an organisation and its personnel, management policies and programmes must strive for agreement between what individuals and companies view as acceptable and unacceptable. Openness in communications is necessary for this goal to be attainable.

INDUSTRY SECTORS

Industries vary greatly in the approach they take to ethical issues. Some industry sectors have out of necessity developed detailed strategies to address ethical problems peculiar to their sector, such as the promotion of responsible drinking by the brewing industry. Other industries are highly regulated by government, such as the chemical industry. And still others, like private waste haulers and construction trades, have a reputation for being somewhat tough minded in the way they operate.

The point is that the amount of ethical guidance an individual manager receives from “industry norms” is highly idiosyncratic.

Nevertheless, whatever norms are operant should be learned and integrated into the ethical decision-making calculus. Companies and their management can take some cues from the industry, but each firm must make a conscious attempt to set and maintain its own high ethical standards.

TRUST & REPUTATION

All good relationships are built on trust which is enhanced when people behave with integrity and damaged when they do not. Ultimately the reputation of the firm may be at stake.

Like trust damaged, a tarnished reputation can be very difficult to restore.

This was recognised over two millennia ago by Socrates who advised:

“Your good name is the richest jewel you can possibly possess. For reputation is like fire – when once you have kindled it you may easily preserve it, but if you once extinguish it, you will find it an arduous task to rekindle it again”.

 

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