Did you ever play a game as a child when you made up the rules as you went along? I’m guessing that those evolving rules often proved to be a source of contention!

Leaders at work find the same to be true. When managers decide to disregard their moral compass as the official business handbook, they begin to make up the rules as they move along. Anything can happen, and the situation frequently proves to be a source of conflict.

Since the rash of high-profile cases from insider trading to bribery to CEO collusion on pricing to shenanigans surrounding political campaign fraud, attention has been focused on business ethics. But business morality—or the lack thereof—is nothing new. Dwight Eisenhower observed back in his day, “A people that values its privileges above its principles soon loses both.”

These recent corporate and political scandals have generated regulatory agencies, court rulings, authors, speakers, and university professors to attempt to provide a moral compass. But seriously now, is this the first time people have heard of ethics in the workplace?

According to the Society of Human Resource Management (SHRM), the overwhelming majority of all organizations have ethics policies on the books.  Just glancing at the latest crime statistics in corporate America would tell us that knowing what’s right does not translate to doing what’s right.

Karen’s Case—Personal Trauma

Several years ago, a colleague of mine, Karen, was dismayed to find herself up close and personal with white-collar crime in a short-term job for a home-health care system. Quickly, she discovered the organization was fraudulently billing Medicare for unused supplies and services not performed. She conferred with another nurse there, who confirmed that the fraudulent practice had been going on for a long time and agreed to go with Karen to report it to the owner.

When Karen wrote her resignation letter and report the situation to the absentee owner in another city, he offered to hire her as a quality assurance consultant to go back to the office and identify all the discrepancies. She accepted that job—only to discover that the owner was working behind her to “fix the charts” and using her “quality assurance” work only to identify the errors that needed “fixing.” She promptly left the organization the second time and reported the practice to the Nursing Board—but not without fear and personal emotional trauma.

This is but one example of the kind of moral dilemmas and their consequences courageous leaders face routinely when they decide ethics matter. Other situations can be less clear-cut:

 Michael’s Case—The Path Less Chosen?

Take Michael’s situation at a large computer company during a massive layoff. His region is being lopped off. At the director level, he has a choice to save his own job during the cut-back:

Option 1) He can bid for another job in another region in a highly competitive situation. If he loses, he’s off the payroll altogether, out the door, and on the street.

Option 2) He can bump one of his four direct reports out of their job and take it for himself.

His decision? His direct reports have all done excellent work and have given him no reason to remove them from their position. He chose option 1, based on doing the right thing—which is usually one step above the ethical thing, which is usually one step above the legal thing.


To settle most conflict—and sleep peacefully at night—the best leaders decide on the rules they intend to live, work, and play by before the game starts.


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