Business Ethics definition and bad apples

Linda Treviño and Katherine Nelson, authors of “Managing Business Ethics”, define ethical behavior in business as the “behavior that is consistent with the principles, norms, and standards of business practice that have been agreed upon by society”. I find this definition to be correct but incomplete. I would add that the behavior needs to be consistent also with gospel principles for the following reason. In the Book of Mormon, King Mosiah taught that “it is not common that the voice of the people desireth anything contrary to that which is right; but it is common for the lesser part of the people to desire that which is not right.” What happens when the contrary happens and it’s the lesser part only that desires that which is right? Then the definition above will create a dangerous view on ethical behavior. Only an alignment with gospel principles can maintain the purity of ethical standards.

The authors also make a good case in chapter 1. They present the idea that ethical problems are not always caused by bad apples in the organization but also by bad barrels, things inside the organization that are causing the apples to spoil. I quote from the book: “work environments that either encourage unethical behavior or merely allow it to occur”. This reminds me of a situation I faced in my own business. The manager was a very trusted employee; I had worked with her for a long time, before she even came to work for me. Things started very well at first but worsened over time as I became less involved in the business because of other life projects. Numbers reported by the manager seemed wrong, and the business declined month after month. I remember that one December, our biggest selling month, revenue was awful and cash in the bank didn’t match the money recollected. I instantly detected that she was stealing and lying.

After this event, I spoke to my father and he said: “Employees will always steal but your job is to reduce that to a minimum”. Of course this is not true for every employee but the principle applied in my situation. The environment that I provided had rotten an apple. I stopped, overtime, many of the financial controls and procedures that would have allowed me to identify the problem in a very early stage. Instead, I lost a very good employee and manager, someone with great potential. My father also mentioned: “If you put cash in front of an employee, even the most ethical person will be tempted to take it. The key is to remove the temptation”. Temptations can make even the greatest to fall, like King David. He was characterized by his unfailing courage, faith and integrity but he couldn’t stand the temptation of see Bathsheba bathe.

The work environment, as the authors mention, has to be such as to discourage unethical behavior and prevent it to occur. Blame cannot be attributed solely to employees.