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Before we enter the work place, we are never warned that the work can deform us ethically. We hear about accidents, sexual harassment, or even fraud, but how many of us are warned about the way that work can deform us ethically? The question is not an idle one. We find a scandal such as the Rotherham Council where people made ethically dubious decisions to defend the council or to protect themselves. They did what the system asked, without questioning the scale or scope of the problem. Despite critical external reports telling them of the problems, senior managers never investigated the scale or scope of the problem. The scandal continued for over 10 years, which indicates that unethical behaviour had become embedded. New employees were likely initiated into that culture, which helped to continue even as they worked on the problem’s symptoms. Such a scandal, though, is not isolated or new. In the past 20 years major firms such as Enron, WorldCom, Tyco, and Lehman Brothers, failed because of unethical and criminal behaviour.[1]

It takes time for an organisation to become unethical.

In each case, the unethical behaviour did not happen in one instance or overnight. It happened over a number of years and through a series of decisions. Rotherham council became ethically blind to the problems in the council and in the community. I have argued elsewhere, invoking Hannah Arendt’s argument, that the organisation and its employees stopped thinking.[2] What we see in each organisation is that the unethical behaviour became a learned behaviour where staff stop thinking about the larger ethical questions. They accept it as part of the culture. The people involved thought they were doing what was best for the company or for themselves and therefore for the company. They made the system work and delivered profits or organisational goals. Yet, at some point they began to filter their ethical decisions by the company’s best interest. They began to surrender their ethical responsibility to the organisation. How did this happen?

How does the work deform us?

We enter work as good people who want to act ethically. We want to treat others as we are treated and have others treat us we treat them. We believe our behaviour has to live up to a standard such as the company’s policies as well as the law. In time, though, our ethical standards become eroded. The change does not happen instantly or even in a short time. Instead, it is a constant and steady drip of ethically dubious decisions. Soon, we do not treat people as we expect to be treated. Instead, we remove ourselves from the ethical process and use the organisation as an ethical proxy. The organisation takes responsibility and we become passive actors. As Arendt pointed out in her book on Eichmann, a bureaucracy dehumanizes people. They become another cog in the machine. The organisation decides and we are just doing what is asked. In the process, the individual avoids ethical responsibility and ethically dubious decisions become easier to make.

Is compliance getting in the way of making money or getting the job done?

You may wish to hold ethical standards, but in time, they get in the way. In particular, if your senior managers or the corporation want to make a profit, they want to get on with the work, and compliance (following an ethical standard) can get in the way. Even if you are not a compliance officer, the senior managers will want you to say yes to something that if it is not illegal is at least ethically dubious.^[3] We slowly learn to be unethical. We become initiated into the culture–the “way things work around here”.^[4] For people who are self-aware, they may be able to see the path by which they were seduced or encouraged to become unethical. However, most people will conform because there is little reward for speaking up or speaking out.[5] Recent research suggests that honesty appears to be punished according to MBA graduates. In other words, higher ethical standards seem to lead to lower earnings.

Single loop learning can lead to unethical behaviour

You may find that your managers want to impress their superiors by “getting things done”. They will want to find ways to solve the problem as it appears to the superiors. They do not want to know why something went wrong. They just want the problem fixed. This behaviour is often called single loop learning. Double loop learning occurs when the organisation not only solve the presenting problem but seek to understand its causes so as to prevent them. When such an attitude sets in, junior staff solve the problem that presents itself. They do not ask why the problem occurred. They learn to avoid bringing more problems by asking why the problem occurred in the first place. The junior staff then realize to discuss the source of a problem, means to give bad news.^[6] We can see how senior managers can encourage this by saying something like “If the regulator finds out, we can say, “It was a mistake”, and I will take one for the company”. Even when the regulator does arrive, if they ever arrive, they will only be provided with the minimum information and the organisation may even omit evidence and avoid providing anything unless specifically and unambiguously requested.^[7] Unethical organisations will likely see fines or regulatory action as “The cost of doing business”. When unethical behaviour becomes the cost of doing business you know you have a problem. The company (and senior managers) now accept noncompliance as normal behaviour.

Do we ever realize when we have become ethically compromised?

At what point do we realize the change that begins to disfigure our integrity and corrupt our organisation? We see with Eichmann, an extreme example, that he never thought about the question. He has stopped thinking as he was conditioned by the political regime. Some employees do think about it and they leave. Others might stay to try and change things. Some will stay and suffer stress and illnesses as they try to reconcile their internal ethical standards against the toxic or morally ambiguous work culture. The answer, though, is not to become a whistleblower. Whistleblowing is a different issue because it is about a specific incident rather than a culture. Instead, the focus here is about the daily decisions that shape and potentially deforms our integrity to fit the organisation’s culture. The choices are rarely obviously illegal and usually show an ambiguous ethical issue.

Are you flexible? Are you an effective team?

One way to understand this change is to look for situations where your integrity is challenged. You might face statements or scenarios like the following.

“You need to be flexible.” You may find that people who are flexible in finding solutions for the company are praised. If you hold an ethical line, you are told that is inflexible and the company prides itself on a “can do” spirit rather than a “can’t” spirit.

You are holding up the decision. You may be told that you have lost a sale or kept a project from working because you insisted on the ethical standards.

You are regularly bypassed to find someone who is less ethical. Senior managers might go to your line manager to “encourage” your cooperation or simply bypass you.

Truth in jest is another scenario. A senior manager will jokingly mention something if it is not illegal it is definitely unethically or immoral. When challenged, or they find the audience unresponsive, they will say they were joking about doing it.

“If we could only make these files disappear we would not have to deal with this claim. I am joking; of course, I did not mean that we would really get rid of the files.”[8]

What are we to do?

As a new employee, you are most likely to notice ethically dubious behaviours. In your induction, you will be told about the law or other technical compliance issues. However, this is not enough. Organisations need to train employees to be ethical. The goal has to be more than awareness because employees need to understand the psychological pressures that can shape decisions. Successful training requires an ethical framework that encourages ethical behaviour. What is also required is a mechanism to report unethical behaviour so it can be addressed. The following indicate if such a framework exists.

1. Ethical standards are publicized.
2. Employees are trained to be ethical
3. Ethical behaviour is modelled by senior managers.
4. Unethical behaviour is addressed immediately.[9]

What the Rotherham scandal and others show is that unethical behaviour is usually a learned behaviour. As a learned behaviour, unethical behaviour can be avoided or unlearned. This means is that it can be changed if people and corporations are willing to change. Does your company offer training in how to be ethical? Perhaps it might be time to start before it is too late for you and the company.

[1] As in the case of Enron, there is a big difference between unethical behaviour and criminal behaviour. There is no law against unethical behaviour. There is a law against fraud, but that requires the court to prove the intent to commit the fraud, which is difficult to do. (See http://web.bryant.edu/~gpae/Vol3/Enron%20and%20Aurhur%20Andersen.pdf  One has to note that Arthur Andersen was vindicated when the Supreme Court overturned their conviction. However, it was too late as the company had been bankrupted and disappeared several years earlier.) However, the Sarbanes-Oxley Act does provide a possible remedy as it holds the CEO and the CFO responsible for the financial statements, which creates a higher level of accountability than existed previously. http://bizfinance.about.com/od/smallbusinessfinancefaqs/a/sarbanes-oxley-act-and-enron-scandal.htm

[2] Hannah Arendt Eichmann in Jerusalem: a report on the banality of evil 1963 (http://platypus1917.org/wp-content/uploads/2014/01/arendt_eichmanninjerusalem.pdf )

[3] The demands will rarely be as explicit as the political realm where the government has the electoral mandate to shape the public interest. There you may find leaders who make demands that can be seen as the rule of three refusals. You may refuse because you believe it illegal or it is a matter of principle but at some point, your manager explains that we do not want you to tell us that it cannot be done but show how it can be done within the law or by bending the law and we will work out the risks.

[4] The phrase is one definition of a corporate culture. The overall culture may appear ethical but there may be micro-cultures, such as within a team, a service, or a department that are unethical. However, unethical behaviour is not simply a rogue employee; it is a context that enables unethical behaviour to flourish.

[5] To counter this, an organisation needs to encourage a “candid culture” where such issues can be raised and discussed. http://blogs.hbr.org/2014/07/4-ways-leaders-can-create-a-candid-culture/  This is related to an internal communications system that encourages critical upward communication. See the work by Dennis Tourish. http://www.sciencedirect.com/science/article/pii/S002463010500066X

[6] For a classic account of the way that single loop learning encourages unethical behaviour consider the example from Chris Aygris Double Loop Learning in Organizations Harvard Business Review http://hbr.org/1977/09/double-loop-learning-in-organizations/ar/1. (Accessed 14 September 2014)

[7] The company will make a show of cooperation even as it withholds information and refuses to comply. An immediate example of this is the way that News of the World consistently claimed that they were cooperating fully with the police investigations when they stonewalled the police investigation at every stage. (see for example Dial M for Murdoch p.175-176) http://www.amazon.co.uk/Dial-Murdoch-Corporation-Corruption-Britain/dp/1846146038?tag=chrome03-21

[8] What is depressingly common in these scandals it the amount of files and records destroyed to avoid detection. Enron and Arthur Anderson shredded thousands of documents. Rotherham Council destroyed files of previous investigations and reports that helped to indicate the scale and scope of the problem.

[9] For more on managing ethically consider these resources Compliance Strategists, When Good Employees do Bad Things, https://www.kpmg.com/NL/nl/IssuesAndInsights/ArticlesPublications/Documents/PDF/Dag-van-het-onderzoek/Why-good-people-sometimes-do-bad-things.pdf  (Accessed 10 September 2014) Managing with integrity. http://actoolkit.unprme.org/wp-content/resourcepdf/201106171723110.Managing%20organizational%20integrity.pdf (accessed 9 August 2014)

Related articles

• Institutions and the banality of evil: Learning from Rotherham and Savile (blogs.lse.ac.uk)
• Formal and Cultural Influences in Successful Corporate Ethics Training (academic-capital.net)