Beverly Peters, Assistant Professor
Do competition and the pressure to succeed in today's global business environment encourage individuals and companies to act illegally or unethically? If so, what can you do about it as a project leader? These are two important issues that students discuss in American University's online course Professional Ethics and Project Leadership.
Understanding the Ethical Landscape
Lebaton Sucharow's Wall Street Fleet Street Main Street: Corporate Integrity at a Crossroads provides insight into the first question we are addressing. 500 senior members of the financial sector completed this financial services industry survey in the U.S. and U.K., and 26 percent indicated they had observed or had firsthand knowledge of wrongdoing in the workplace.
Perhaps more troubling, nearly 1/3 of respondents reported feeling pressured by bonus or compensation plans to violate the law or engage in unethical conduct; and 1/4 felt similar pressure from other sources. Frederick Allen, leadership editor at Forbes, suggests these numbers are troubling in his Financial Executives Confess: Sure, We Lie and Cheat: If 24 percent admitted they had to break rules to be successful, how many more executives experience this but do not want to admit it?
Beyond Financial Crime
Scandals from automobile to energy companies to charitable nonprofits show no industry, no sector, is immune to illegal and unethical activity. Thomas Friedman urges us to examine the bigger picture: Today, there are fewer boundaries between politics, culture, technology, finance, national security, and ecology. In the last two decades we have seen companies, groups, and individuals respond to opportunities and threats; and at the same time, corporate scandals have impacted the business environment and the global economy negatively (Friedman 2000).
In the wake of Enron and other scandals, public confidence in business is low, making the need for ethical decision-making processes even more important (Weiss, 2014).
Exploring the Ethical Decision-Making Process
One goal of American University's online course is to teach students how to engage in ethical decision-making processes so that their leadership will set the stage for ethical business practices.
Students start out by deconstructing ethical principles that are important to them personally and professionally. The class then exposes students to different ethics theories and requires them to apply these to case studies of current-day ethical dilemmas and failures.
Depending on the ethical principles and theories applied, a range of legal and ethical decisions and policy options are available. Students weigh the roles and perceptions of stakeholders and the political, economic, legal, technical, demographic, and regulatory environments under which dilemmas occur and management decisions are made (Weiss, 2014).
This process, from applying your own ethical principles, to considering different theories of ethics and the positions and interests of stakeholders, to suggesting different courses of action, gives you a framework to analyze ethical dilemmas thoroughly and objectively. This provides the foundation of ethical decision-making.
Remaining neutral, you conduct stakeholder, SWOT, and PMI analyses and consider the range of choices available. This flexible process helps you make balanced decisions that impact your ability to be an effective, ethical leader.
Considering Internal and External Factors
Internal controls and external regulations also guide decision-making. Joseph Weiss (2014) refers to these as the carrots and sticks of legal and ethical decision-making, placing the carrots and sticks on a continuum. The carrots are on the ethical, values-based side and include voluntary self-regulation such as the vision and values of the organization, ethics programs, risk management, and philanthropic activities and the environment you set in the office through ethical leadership.
In contrast, sticks are on the legal and rules-based side and include external regulation and enforcement. Examples are laws and regulations, federal sentencing guidelines, fines, and government oversight (Weiss, 2014). In practice, firms that voluntarily adapt and meaningfully implement good corporate governance practices are less likely to require sticks to ensure ethical business practices.
The complexity of the dilemmas we face as project leaders means there is no one-size-fits-all approach to ethical decision-making. Rather, it is a flexible process guided by the kinds of tools that students in Professional Ethics and Project Leadership discuss and practice in class. As you develop as a project leader, you will find that each individual, and by extension organization, determines an appropriate approach to ethical decision-making, depending on the particular circumstance.
About the Author
Assistant Professor Beverly Peters, Ph.D., is a specialist in human security in Africa and has written extensively on economic development, democratization, and HIV/AIDS. She has more than twenty years experience teaching, conducting research, and managing projects in southern and West Africa.
An expert on political and economic development in Zimbabwe, she has provided political analyses to the government of South Africa and the private sector, and she is regularly featured in local and international media including the South African Broadcasting Corporation news, The New York Times, Voice of America, and Radio France International.
To learn more about American University's online MS in Measurement & Evaluation or Graduate Certificate in Project Monitoring & Evaluation, you can request more information or call us toll-free at 855-725-7614.
Allen, Frederick. "Financial Executives Confess: Sure, We Lie and Cheat." Forbes. July 10, 2012. https://www.forbes.com/sites/frederickallen/2012/07/10/financial-executives-sure-we-lie-and-cheat/#718a86d52b5f
Friedman, Thomas. The Lexus and the Olive Tree: Understanding Globalization. 2nd ed. New York, NY: Picador, 2012.
Labaton Sucharow. Wall Street Fleet Street Main Street: Corporate Integrity at a Crossroads. New York, NY: Labaton Sucharow, 2012. http://www.labaton.com/en/about/press/upload/US-UK-Financial-Services-Industry-Survey.pdf
Weiss, Joseph W. Business Ethics: A Stakeholder and Issues Management Approach. Sixth edition. Oakland, CA: Berrett Koelher Publishers, 2014.