Test Yourself: Would You Act Unethically on the Job?
This post has been updated since it was originally posted.
You'd like to think that even under pressure, your moral compass would keep you from doing anything unethical at work. Only unscrupulous types get caught up in things like backdating stock options and peddling subprime mortgages -- right? But Babson College scholar Mary Gentile says acting ethically isn't as easy as wanting to do the right thing; it's about knowing how to do the right thing even when the stakes are high. Practice helps.
More than 80 business schools around the world are pilot testing a new approach to teaching ethics developed by Gentile, along with the Aspen Institute and Yale School of Management. The idea is simple: Teach MBAs to anticipate how they will be tempted to rationalize unethical behavior, and get them to practice countering the impulse. The goal: to make ethical choices come naturally, even in difficult situations.
Here are three case studies from the curriculum that are based on real-life dilemmas. In each case, the real subject successfully managed both the ethical issue and the internal politics. Vote for how you would handle each one and then click below for the real-life answer.
Situation #1:
You're a rising executive just promoted to corporate controller. Shortly after you land the new job, several senior executives pressure you to distort the company's restructuring charges in a way that would be misleading but not criminal.
Situation #2:
You join a nonprofit firm in a junior accounting role. As you review the year's corporate donations, you quickly realize that no standard procedure exists to determine the value of in-kind donations (gifts in the form of goods or services rather than cash). Some of your most prolific donors inflate valuations to deceive the IRS. Your overworked executive director makes a point of emphasizing relationships above data.
Situation #3:
You're a junior employee at a large investment bank. Hours before a client meeting, a portfolio manager tells you to review the portfolio of one of the bank's smallest customers and find a new benchmark that will make it look like the portfolio had performed better than it really had. You know that the client remains with the bank as a favor to a friend who works there.
Click to the next page to find out what really happened in each scenario.
What really happened:
Situation #1: D. Go over the senior execs' heads right to the CEO.
Several arguments could justify inaction: You're too new; you need to wait until you're more settled into the role and have the trust and confidence of the senior execs. Plus, raving about ethics to the team is a sure way to establish antagonistic relationships only a few days into the job.
On the other hand, if you wait to speak up until you're fully entrenched, it could be much more difficult to reverse course. In the real-life situation that inspired the case study, the comptroller used his newness in the position as a way to break with the status quo. He went directly to the CEO with a new guiding vision for the finance department emphasizing its commitment to integrity. He focused on wanting to ensure the long-term survival of the company and rather than ask, the comptroller simply assumed that he and the CEO would be on the same side. It worked; the CEO supported his plan and in the process the comptroller successfully established his authority in the new role.
Situation #2: C. Find an ally in a senior position and keep pushing for a solution.
In this kind of a scenario, junior employees typically can't get past the feeling of powerlessness, says Mary Gentile, a Babson College researcher who helped develop the ethics curriculum. They're low on the totem pole, so they "question their standing, their judgment, and their legitimacy" in taking a stand against unethical behavior that has become part of the company culture, she says.
In this case, the new hire decided to use his naïveté to his advantage. He approached the executive director and simply asked, "How do we standardize our donation valuations here?" The director never did act on his concerns, and soon left the nonprofit. The junior employee finally took his questions to the lead accountant and an outside auditor. He worked with them to establish an "average cost per box" formula the company would use if donors didn't submit a written audit. Since it was a formal policy change, donors did not see it as a personal affront. "He positioned himself as someone who wanted -- and ultimately did -- come up with a solution, rather than just a naysayer," says Gentile. "He also recognized that he needed a partner, especially given his junior status."
Situation #3: D. Duck the request to mislead the client and prepare a presentation that encourages the client to focus on the future.
You could justify not saying anything because the bank creates the benchmark and as long as you footnote it, you've done nothing illegal. Plus, given the size and relative importance of the portfolio, in all likelihood the manager simply overlooked it. If you refuse to lie on moral grounds, you'll offend the manager and he will just ask another associate to take care of it anyway.
The woman in the case tried a different approach. She explained to the portfolio manager that she wouldn't have time to provide an analysis for the new set of numbers before the meeting. Instead, she offered to provide data explaining the portfolio's underperformance, which the manager could use to suggest a more suitable investment plan for the client. To her surprise, he agreed.