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| The Seven Signs of Ethical Collapse: M. Jennings
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| Intorduction |
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| No. 1. Pressure to Maintain Numbers |
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•High ROE; double-digit growth, etc.
•Pledges to continue the performance
•For government agencies: pressures include budgets, goals, congressional satisfaction, media issues
•Majority of government employees feel mounting pressure to act unethically
Pressure Antidotes
Antidote: Help employees distinguish between superior skill, foresight and industry and cheating.
Antidote: Watch unconsciously sent signals.
“Find a way.”
“Whatever it takes.”
“Sharpen your pencil.”
Watch for rationalizations
“Everybody does this.”
“This is the way it has always been done.”
“It doesn’t really hurt anyone.”
“If I don’t do it, someone else will just do it.”
“This isn’t bad! You should have seen . . . “
“It’s a gray area.”
“That’s the way they do it at __________.”
“No one likes a snitch.”
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| No-2. Fear and Silence |
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There is never a problem with employees missing the ethical issues.
Always a problem of not raising the issue, being ignored, not having an avenue for raising the issue, or being fired for raising the issue
The Sandwich Effect
Those at the top assume employees would tell-Those at the bottom assume that those at the top don’t want to hear about it
Fear and Silence Antidotes
•Anonymous reporting alone won’t do it
•Response and follow-up
•Review by most senior of officials
•Disciplinary actions
•Reward system: We reward results only
Remember two critical elements:
•That “tone at the top” thing
•Enforcement: Must be absolute, unequivocal, egalitarian
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| No.3 -Young ‘uns and a Bigger-Than-Life-Execs
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•Top leader a full generation older than direct reports and/or lack of depth in direct reports
•Iconic leader with driven young people/climbers as direct reports (Smithsonian)
•“I hire them just like me: smart, poor and wants to be rich.”
Iconic Leader and Young ‘uns Antidotes
•Always question the icon: Smithsonian
•Help the young ‘uns: ethics requires daily effort, reinforcement, and training
•Without it, you slip – Everyone believes they are ethical!
•Introspection is the key
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| No.4. Weak Supervision and Internal Controls
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•OIG difficulties and resistance to them
•Lack of support for investigations
•Conflicts
•A. Consulting
•B. Related parties transactions/interests
•C. Philanthropy
•D. Complexity of relationships
Antidotes
•Dig deep on conflicts: Paul Wolfowitz
•Challenge, but don’t micromanage
•Pay attention to travel expenses and perks
•MBWA
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| No.5. Culture of Conflicts
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•Nearly all of the missteps by government agencies began (and some ended) with conflicts issues
Antidotes
•Believe in conflicts of interest!
•Remember the two ways to manage a conflict:
•Don’t
•Disclose
•Establish definitive rules and follow them.
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| No.6. Innovation like no other
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•Dot-com mantra of EBITDA, “You know, if we hadn’t had all those expenses, we would have had earnings!”
•When you are innovators, you run the risk of arrogance and the classic view of teens, “The rules are for the others.”
•The end justifies the means.
Antidotes
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| No.7. Goodness in some areas atones for evil in others
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•Culture of philanthropy
•Culture of innovation
•Culture of diversity
•Culture of safety
•Culture of environmentally conscious operations
•Culture of volunteerism
•“The Changing Lanes” Phenomenon of Moral Schizophrenia
Antidotes
•Rethink popular notions of “goodness”
•Rethink activities, perceptions, realities
•Rely on virtue ethics and simplicity: Truth, Honesty, Fairness, Egalitarianism
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