Not according to Economist columnist "Schumpeter", who argues in this week's edition that "when in Rome, behave like a Swede."
The columnist makes the case that doing the right thing is smart business.
I'd really like to think that people do the right thing because it's the right thing to do.
But I know that there are lot of folks out there who think that, in the "jungle" of business, it's eat or be eaten, and if that means you have to slip a couple of bills into someone's hands or cut some other ethical corners, well, that's just part of being a tough business person.
In other words, it's a macho thing.
Sadly for the macho among us, hard analysis indicates that they're wrong.
"Schumpeter" points to research by Wharton School economist Philip Nichols and by World Bank researchers David Kaufmann and Shang-Jin Wei; their paper, "Does 'Grease Money' Speed Up the Wheels of Commerce?", is available online here.
I know what you're thinking: What do those eggheads know?
Well, among other things, they know that "companies that pay bribes actually end up spending more time negotiating with bureaucrats. The prospect of a payoff gives officials an incentive to haggle over regulations. The [World Bank] paper also found that borrowing is more expensive for corrupt companies, probably because of the regulatory flux."
Moreover, the "hidden costs of corruption are almost always much higher than companies imagine. Corruption inevitably begets ever more corruption: bribe-takers keep returning to the trough and bribe-givers open themselves up to blackmail. Corruption also exacts a high psychological cost on those who engage in it..."
Our macho business guy is snorting here, I know: "High psychological cost? Only if they're spineless wimps to begin with."
Or not.
Still, if those reasons don't convince you, how about this?
"Schumpeter" also points out that "the likelihood of being caught is dramatically higher than it was a few years ago."
Whistle-blowers have more ways of getting information out, and getting it in front of a lot of people. Prosecutions are up. Prison sentences are getting longer and fines are getting bigger.
So if you aren't impressed with the "do the right thing because it's the right thing" argument, ask yourself: How would you have liked to be the Siemens CEO, having to explain to your shareholders why you had to pay $1.6 billion in American and German fines to settle bribery allegations? (click here for a Guardian story from December 2008 on the settlements)
Subscribe to:
Post Comments (Atom)
.jpg)
Some thoughts:
ReplyDeleteEthics is concerned with morals, fairness, respect, caring, sharing, no false promises, no lying, cheating, stealing, or unreasonable demands on employees and others, etc. Ethics can be taught in a classroom, if the school/university, professor and the students adopt a practical approach in preference to a philosophical one. But ethics training programs cannot prevent Bernie Madoff, Vincent Lacroix, Conrad Black, etc. from being themselves, although a well-designed & implemented program can
(a) help good people to do the right thing consistently
(b) make it more difficult for wrong-doers to succeed &
(c) raise people’s ethical IQS
In business, the bottom line is often considered to be money. Many leaders follow the stockholder approach, rather than the stakeholder approach (which emphasizes the needs of stockholders and others, such as employees, customers, suppliers, the government, the community, and the environment).
Business decisions often concern complicated situations which are neither totally ethical nor totally unethical. Therefore, it is often difficult to do the right thing, contrary to what many case studies will have you believe! Moral values such as respect, honesty, fairness and responsibility are supposed to dictate our (ethical) behaviour, but are often ignored in times of stress
and confusion, when one must stand by one’s principles.
Business ethics is concerned with dealing with dilemmas that sometimes do not have a clear indication as to what is right or wrong. Leaders have to deal with potential conflicts of interest, wrongful use of resources, mismanagement of contracts, false promises and exaggerated demands on resources which include personnel. In a proposed sale, is it the seller’s duty to disclose all material facts regarding the product or service in question or is it the buyer’s responsibility to find out the pros and cons of what he or she is getting into? Should the seller answer each question exactly as it was asked, and ignore some pertinent information? Or should he address the spirit of the question? Is the buyer responsible for due diligence? This is a gray area.
Business ethics calls for an awareness of social responsibility and this includes addressing social problems such as poverty, crime, environmental protection, equal rights, public health and improving education. Hence the stakeholder theory and the emphasis on public relations, better HR management and other areas.
For free abridged books on leadership, ethics, teamwork, women in the workforce, sexual harassment and bullying, trade unions, etc. send an e-mail request to crespin79@primus.ca.
Maxwell Pinto, Business Consultant and Author: leadership, ethics, teamwork, women in the workforce, sexual harassment and bullying, trade unions, etc.
http://www.strategicbookpublishing.com/Management-TidbitsForTheNewMillenium.html
http://www.youtube.com/watch?v=p34hB50lv-8