Business Ethics: Facing up to the Issues
This book seeks, first, to highlight how important it is for companies to address ethical issues and, second, how firms can in practice go about addressing those issues. Business Ethics includes a key chapter on Ethical Fitness® by Rushworth M. Kidder, president of the Institute for Global Ethics, and Sheila Bloom, director of the Institute for Global Ethics UK Trust.
An excerpt from the first chapter of the book follows.
Ethical Fitness® in Today's Business Environment
by Rushworth Kidder and Sheila Bloom
"It began as a simple request. As chief legal officer, Alistair was asked by his board of directors to look into rumours of price-fixing in the company's continental operations.
Alistair's firm specialised in producing low-cost medical kits for use in developing countries, refugee areas and combat zones. It also operated in high-end international markets, where competition was fierce. Alistair took his assignment seriously. His firm had a long-standing commitment to ethical business practice. His directors especially opposed price-fixing, bribery and kickbacks.
The price-fixing rumours proved groundless, but Alistair kept hearing whispers about "the Bosnia contract". A global relief organisation had underwritten the distribution of a million kits in some of the most conflicted regions of Bosnia. Like most such contracts with charitable organisations, it contained hardly any profit for his firm. What's more, the contract looked ordinary except for a large commission to a Romanian distributor. Seeking out the person in his own firm who had negotiated the contract, Alistair had one question in his mind: was this a bribe?
Yes and no, was the reply. The Romanian distributor had said that local militia units regularly set up roadblocks throughout Bosnia and demanded money from the drivers distributing the kits. Drivers without cash had been taken from their trucks and shot. If the kits were to be delivered, it was argued, this was a cost of doing business.
Alistair felt sure that none of the money had flowed back to the person who negotiated the contract, whose only motive was to get the kits delivered. By this time, the contract was completed. Yet Alistair still faced a dilemma. Should he let the matter rest or should he inform the board?
Weighing the options, Alistair felt that this kind of activity was not in the firm's long-term interests. Everything in his background told him this was not the way to do business. Bribery was unacceptable to the directors, who felt strongly that once this barrier was breached there would be no stopping future shakedowns. Alistair agreed in principle. In everything he did, at work and with his family, he tried to hold to principles that he felt ought to be universally, generally applied and fair. "Don't give bribes" was certainly one of them.
But as a compassionate individual, Alistair also felt that it was vital to provide medicine for the wounded. Yes he could stick to his principles - and people would die because the trucks would never get through. Besides, this was a war zone, where the normal ethics of commerce could not be so easily applied. The medicine could have been delivered using other methods, but these would almost certainly have caused delays that might have meant the difference between life and death for innocent sufferers. The Bosnia contract had not been ideal but it had accomplished much good for many people.
What should Alistair do? What would you do?
These questions force us to come to terms with one of the toughest challenges facing managers today: ethical dilemmas in which both sides are "right". The usual definition of ethics - that it is a matter of right versus wrong - is not much help. Alistair had done no wrong, yet he still faced an ethical dilemma. The colloquial description of "grey areas" doesn't help. Alistair was not facing a woolly, fuzzy issue. There were powerful moral arguments on each side, clearly identified in black-and-white terms. The issue permitted no greyness: either you bribed or you did not, people either died or lived, and you reported or you kept quiet.
Alistair knew that he faced a difficult dilemma. But he also had a quality not universally found in today's business culture, something we call "ethical fitness". He was in shape to spot and respond to moral issues and prepared to flex his thinking when encountering new challenges. Ethical conundrums did not frighten him, any more than a hard workout scares an athlete. Alistair's ethical fitness had been built over time, through steady mental exercise. He had stayed in shape by running to meet moral issues rather than fleeing from the encounter."
The rest of this chapter explores a four-part framework for ethical decision-making, and applies it to the present-day global business culture.
Ethical Fitness®: a four-step workout
- Step 1
Moral awareness: a sensitivity to merging ethical issues and a willingness to see their broad implications. This awareness helps create conditions of trust enabling people to deal with issues and to read the moral barometer astutely and accurately. - Step 2
Values definition: discovering and articulating the core, cross-cultural, shared moral values underlying any ethical activity, regardless of culture or geographical location. - Step 3
Ethical analysis: identifying and categorising various paradigms for right-versus-right dilemmas facing individuals and institutions in business and elsewhere. - Step 4
Dilemma resolution: applying a set of principles to arrive at a reasoned, acceptable, defensible choice between the two right courses of action posed by an ethical dilemma.
