Ethics

The Enron scandal has certainly gotten all of our attention. What is the message being sent? Is this an aberration? Not in today's business world, unfortunately.

By Mary Bresnahan
the Bresnahan Group

The more I read and listen, the message is clear: There are many (not all) companies operating under the code of greed without accountability. For years we have seen the shareholders as the focus. They were the ultimate concern, and determined policy and practices.

Years ago, universities did not teach ethics because they did not have to. Today, the message has been sent that senior management does not have to be held accountable if they are not caught in indiscretions. They can just work deals in order to collect huge amounts of money at the cost of all others. Look at who has reaped profits in the mergers/ acquisitions that have taken place in the last decade.

What happened to the importance of the stakeholder (employee)? There are still companies out there who have remained true to the code that the stakeholder is their most important concern. It seems to me that if you treat the stakeholder well, then the market share and the well being of the shareholder will be taken care of.

Nothing is going to change quickly, but maybe an awareness of the downside of greed has been raised. All of us who are in the stock market want our stocks to do well, but do we want this at the cost of the stakeholders? In scenarios such as Enron, we are not only talking about the stakeholders as employees but also the community and other vendors who do business with the company. When the Tylenol scare happened years ago, we could all look at Johnson & Johnson and comfortably say that it operated by a code of ethics and put the welfare of its customers before the cost to the company. The company survived the crisis and continues to perform well.

Another more recent example is the money Ford Motor is losing because of lawsuits over the Explorer, and the ongoing denials and cover-ups of design problems. It would appear that this is costing the company more than if the problems were dealt with in an up-front manner years ago.

Does your company operate with a code of ethics that is above reproach? Do senior managers send the message to all stakeholders about how the company will operate through their actions? Ethics need to be part of the fabric of the culture. It is time to take a look. Do the stakeholders trust you? If you cannot answer this with a resounding "yes," it is time to do some hard work and begin to make changes.

Trust. For such a short word, it carries a lot of importance in every relationship, whether personal or business. Trust is like a bank account. It is in good balance when you first meet a person. Then, with time and interactions, either additional deposits or withdrawals are made. If there is an ongoing trend of withdrawals, the account becomes severely impaired until there is a point of no return on investment and the relationship is severed.

If you have had numerous bad relationships, the tendency is to be leery and untrusting. If you are in a management position, this can be very difficult. The message is sent by your behavior that you do not trust others. Consequently, the returned feeling and behavior are mutual. It becomes an unending circle. The only way to get out of it is to take the risk to trust someone and recognize the differences you experience.

In the work environment, trust can increase productivity and quality. This happens with employees and customers too. Without trust, there is no loyalty or commitment. Turnover is high. How can trust be boosted? Here are a few suggestions from Dr. Stephen Covey, author of "The 7 Habits of Highly Effective People":

• Keep promises and honor commitments
• Share information -- the good and the bad
• Do not talk about coworkers with other coworkers
• Recognize mistakes and apologize
• Involve people in business decisions that affect them
• Give credit where due

Some of the benefits of following these practices include:

• Improved quality
• Increased commitment
• Better client relations and loyalty
• More effective teams
• Decreased frustration
• Reduction in office politics

Mary Bresnahan is the president of the Bresnahan Group, which specializes in providing training and assisting companies with human resource issues and projects. Bresnahan has authored several articles for Springs, The Fabricator, Cast Metal, and The Business Ledger. She is part of the adjunct faculty for Waubonsee Community College and National-Louis University. Readers may contact her by phone at (630) 653-1933, e-mail at mary @ bresnahangroup.com or Web site at www.bresnahangroup.com. This article is reprinted, with permission, from the Bresnahan Group newsletter.

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