How pressure and greed turns managers into rotten apples

Jan 19 2006 by Nic Paton Print This Article

Pressure from management or the board to meet unrealistic business objectives and deadlines is the leading factor most likely to cause unethical corporate behaviour, according to a new survey.

The desire to further one's career and to protect one's livelihood are ranked second and third respectively as leading factors, according to the global survey by the American Management Association and the Human Resource Institute.

The survey of 1,121 managers and HR experts around the world found unethical behaviour flourished in environments where there was cynicism or diminished morale and improper training about the ethics of actions.

Simple ignorance that some acts are unethical was another common leading factor of unethical behaviour, as was a lack of consequences when employees were caught.

The "only following orders" excuse was another common reason cited, along with peer pressure or the desire to be a team player, a desire to steal from or harm the organisation and, paradoxically, wanting to help the organisation survive.

"Laws and regulations are, and will remain, the most influential external drivers of corporate ethics, but legislation is no substitute for the presence of leaders who support and model ethical behaviour," said Edward T Reilly, president and chief executive of the American Management Association.

"Corporate leaders need to communicate ethical values throughout the organisation, but they must do more than talk the talk in order to establish and sustain an ethical culture," he added.

What can companies do to combat unethical behaviour? According to the poll, organisations should establish policies and processes for ensuring an ethical culture.

These include leadership support and modelling of ethical behaviour, consistent communications from all leaders, integrating ethics into goals, processes and strategies and making ethics a part of both performance management systems and recruitment and employee selection process.

The survey also found that the single most important ethical leadership behaviour was keeping promises, followed by encouraging open communication, keeping employees informed and supporting employees who upheld ethical standards.

If an organisation had leaders who simply did not "walk the talk" when it cames to ethics, there was little hope of maintaining a strong ethical culture, it suggested.

As for specific programmes and practices, a corporate code of conduct was viewed as being most important.

Such a code had to reflect and reinforce the values and principles of the organisation, the AMA added.