Putting virtuous values into practice

"What can managerial leaders do on a proactive basis to encourage ethical behavior? At least five practices help leaders steer their organizations toward ethical conduct.

First, any gap between knowledge about what to do and actual actions needs to be closed. If you know what is the right thing to do, just do it. Unfortunately, too often "white collar" criminals will tell us that they knew what was right, yet they failed to do it. John Maxwell, in his recent book "There's No Such Thing as Business Ethics," explains various reasons for ethical transgressions, including that people just rationalize their choices with relativism. While the reasons for the transgressor's actions are varied and complex, the simple truth is that they failed to "do the right thing" in spite of their knowledge. They did not act with wisdom.

Second, managerial leaders must be very deliberate about who joins their organization. Many organizational leaders believe that selecting people for their values is as important as selecting for skill sets. Jim Collins, in his compelling book Good to Great: Why Some Companies Make the Leap . . . and Others Do not, underscores how long-term success depends on putting the right people in place. Larry Bossidy, as CEO of Allied Signal, made people selection a top priority and considered it a key task of top management. Selecting people who share your virtuous values is critical to building an ethical culture and long-term business success.

Third, new personnel need to be socialized into the organization so as to advance virtuous values. As an executive, one should attend regularly new employee orientations to espouse the organization's values. As a way of promoting and influencing ethical behavior, it is very powerful for new employees to hear managerial leaders espouse core virtuous values and to see those values affirmed through the actions of others in the organization.

Fourth, accountability and follow-up are critical in putting virtuous values into practice. Systems and procedures can remind people of commitments and help connect words or promises with deeds. In organizations with behavioral integrity, words and deeds count. When virtuous values are driving behavior, the alignment of words and deeds serves to advance the creation of an ethical work culture.

Finally, managerial leaders can positively impact the practice of ethical behavior by fairly allocating organizational resources and linking them appropriately. All managerial leaders have five key resources to manage: people, money, capital assets, information and time. Allocation of these resources and the process managers use to accomplish such distribution can create perceptions of equity and fairness, or inequity and unfairness. Managerial leaders who value justice and fairness are more likely to deal the cards fairly - thereby modeling ethical behavior - than are those who do not.

Behavioral standards and codes of conduct: the safety net

Ideally, managerial leaders and their people will act ethically as a result of their internalized virtuous core values. Think about ethics from the "inside out." Relying solely on this "inside out" approach, however, is simply naive in many circumstances.

Established behavioral standards and written codes of ethical conduct can help bolster virtuous values and promote ethical organizational behavior. Behavioral standards usually incorporate specific guidelines for acting within specific functional workplace areas. For example, a sales department may clearly outline criteria for expense reimbursements.

Codes of ethical conduct have received varying degrees of attention over the past three decades. They can be categorized into three types:

Type 1: Inspirational-Idealistic codes of conduct specify global themes such as "Be honest," "Show integrity in all matters," "Practice wise decision making," etc. Such themes are not anchored to specific behavior or situations.

Type 2: Regulatory codes of conduct proscribe clearly delineated conduct. This type of code is designed to help as a jurisprudential tool when disputes occur. It is more of a "do and do not" approach.

Type 3: Educational/Learning-Oriented codes of conduct offer principles to guide decision making and behavioral reactions into likely situations. This approach is compatible with building a learning organizational culture. For example, the principle and value of fairness might be applied to allocating a bonus pool. Managerial leaders responsible for this process could be engaged in scenarios wherein they would be asked to take "fair action" in making these allocations. Such learning experiences can serve to enlighten and inform so as to foster ethical decision making.

Behavioral standards and codes of ethical conduct can help steer ethical behavior by offering a cue or written rule to remind personnel of the right thing to do-an "outside in" process for ethical behavior management. These standards and codes trigger peoples' internalized values, thus gaining strength through firm yet fairly administered consequences.

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