Rewards and Challenges

So far, we’ve tended to focus more on the downside of unethical organizational activities. On a more positive note, ethical and socially responsible behavior can have many rewards. First, when employees perceive their organization as having high integrity, they are more likely to be committed and satisfied in their work. An ethical organizational culture fosters employees’ trust which is passed on to customers, suppliers, and other clients. Second, organizations that are perceived as ethical and socially responsible often have a strong and loyal customer base. A national survey indicated that three out of four consumers are avoiding or refusing to buy from certain businesses because of misconduct. A survey by Cone Communications and Roper Starch Worldwide found that 54 percent of respondents would pay more for a product that supports a cause they care about; 66 percent said they would switch brands, and 62 percent said they would switch retailers, to support a cause they care about. Yet another study found that nearly 90 percent of consumers surveyed would be more likely to buy from the company that has the best reputation for social responsibility when quality, service, and price are otherwise equal among competitors.

These attitudes contribute to our third point, that there is growing evidence that ethical companies are also profitable ones. We do know that some companies’ profits have declined after misconduct is publicized. Bausch & Lomb, for example, watched its earnings fall 54 percent after managers "played fast and loose with accounting principles and ethics." Finally, many organizations that have experienced long-term success acknowledge the role ethics has played in their longevity. The reasons listed above provide a convincing rationale for the positive relationship between ethics and organizational success.

The essential place to begin evaluating the rewards of workplace integrity is to determine employee attitudes toward legal compliance and ethical conduct. Dr. Terry Loe, a professor at Baylor University, has found the employees’ perception of legal and ethical compliance is associated with increased levels of trust, commitment to quality, and a market orientation. Firms that have greater levels of trust function more efficiently and are more productive on a daily basis. Employees committed to customer service and the quality of products should provide a competitive advantage. Furthermore, a high level of market orientation and associated high integrity can potentially increase organizational performance by improving employees’ responsiveness to the market and customer needs. This responsiveness often includes a focus on organizational relationships that require expectations for behavior that are higher than industry or government standards. These actions that "go beyond the law" usually fall into the category of ethical decisions, or those based on core values that promote a good citizen organization. Important measures of success, including profits, should be the result of integrity efforts to enhance legal and ethical compliance.

Understanding workplace integrity is valuable for many other reasons. Many people believe that if an organization hires good, ethical people, then it will be a good "corporate citizen." However, an individual’s personal values and moral philosophies are but one factor in the decision-making process about potential legal and ethical problems. True, moral rules can be related to a variety of situations in life, and some people do not distinguish everyday ethical issues from those that occur on the job. Our concern, however, is with the application of rules and principles in a work environment.

Just being a good person and, in your own view, having sound personal ethics may not be sufficient to handle the integrity issues that arise in the workplace. It is important to recognize the relationship between legal and ethical decisions. While abstract virtues such as honesty, fairness, and openness are often assumed to be self-evident and accepted by all employees, a high level of personal moral development may not prevent an individual from violating the law in an organizational context, where even experienced lawyers debate the exact meaning of the law. Some organizational ethics perspectives assume that ethics training is for people who have unacceptable personal moral development, but that is not necessarily the case. Because organizations are comprised of diverse individuals whose personal values should be respected, a collective agreement on workplace integrity is as vital as other managerial decisions. For example, would your organization expect to achieve its strategic mission without communicating this goal to employees? Would your firm expect to implement a quality management system without educating every employee on his or her role in the process? In our view, integrity needs to be treated similarly—with clear expectations as to what comprises legal and ethical conduct.

Many people who have limited work experience suddenly find themselves making decisions about product quality, advertising, pricing, hiring practices, and pollution control. The values they learned from family, religion, and school may not provide specific guidelines for these complex decisions, especially when the realities of work objectives, group decision making, and other issues come into play. Many ethics decisions are close calls. Years of experience in a particular industry may be required to know what is acceptable.

Even if you are experienced, knowing more about workplace integrity will help you identify both legal and ethical issues and recognize and manage the decision processes for resolving them. By focusing on this area, you will be in a better position to assist employees and your organization with conflicts between personal values and the objectives and needs that guide work behavior. Finally, this book will expose you to the types of programs, policies, training, and creative approaches that promote integrity in organizations.