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Survey: Unrealistic Business Goals, Deadlines Cause Unethical Behavior

Jan. 18, 2006 — Pressure from management or the Board to meet unrealistic business objectives and deadlines is the leading factor most likely to cause unethical corporate behavior, according to a new survey on business ethics.

The desire to further one's career and to protect one's livelihood are ranked second and third respectively as leading factors. That's according to a global survey commissioned by American Management Association (AMA) and conducted by the Human Resource Institute (HRI).

The AMA/HRI survey on "The Ethical Enterprise" included responses from 1,121 managers and HR experts from around the world. The survey was conducted in conjunction with AMA's affiliates and global partners, including Canadian Management Centre in Toronto, Management Center de Mexico in Mexico City, Management Centre Europe in Belgium and AMA Asia in Japan.

According to the AMA/HRI survey, working in an environment with cynicism or diminished morale, improper training, and the lack of consequences when caught are the next leading factors likely to cause unethical behavior. These factors are followed by the need to follow the boss's orders, peer pressure/desire to be a team player, desire to steal from or harm the organization and, paradoxically, wanting to help the organization 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 behavior," said Edward T. Reilly, president and CEO of American Management Association. "Corporate leaders need to communicate ethical values throughout the organization, but they must do more than talk the talk in order to establish and sustain an ethical culture," Reilly added.

What can companies do to combat unethical behavior? According to the AMA/HRI survey results, organizations can establish policies and processes for ensuring an ethical culture. These include leadership support and modeling of ethical behavior, consistent communications from all leaders, integrating ethics into goals, processes and strategies, and making ethics a part of performance management systems and a part of the recruitment and employee selection process.

The survey also found that the single most important ethical leadership behavior is keeping promises, followed by encouraging open communication, keeping employees informed and supporting employees who uphold ethical standards. If an organization has leaders who simply don't "walk the talk" when it comes to ethics, there's little hope of maintaining a strong ethical culture.

As for specific programs and practices, a corporate code of conduct is viewed as being most important. Such a code must reflect and reinforce the values and principles of an organization. Rounding out the top five programs are ethics training for all members of the organization, corporate social responsibility programs, ombudsman services, and help lines. In summary, employees need to have a code to set the ethics foundation, training to help people truly understand it, and programs that permit them to inquire about and report ethical violations.

A copy of the survey summary is available at www.amanet.org/research.