Virtually every decision we make in our business and personal lives reflects our values and our ethics. Unfortunately the authors of most management textbooks, and many management instructors and mentors do a terrible job of explaining what values and ethics are, are not, and where they come from. The philosophy and liberal arts instructors do no better and often worse. In this short essay I will offer some rational clarifications that will hopeful help to undo some of damage done by less than competent authors, faculty and mentors.

Many business and management practitioners and students have difficulty with the concept of “values” and the role that values have in a person’s behavior and decisions. One’s values are those ideas, beliefs, reasons and relationships that he or she holds most precious, that which will not be surrendered for the sake of expediency and if necessary will be defended with sacrifice.

What one truly and deeply values may be human virtues, principles, qualities or they may be specific people, but generally one’s true values number no more than five. Society or culture does not dictate one’s value set. One’s values are influenced by one’s family, environment, experiences, education and religious training, but ultimately your values are the outcome of your unique reasoning.  A human’s values set, the reasoning behind it, the order of priority and how it manifests as behaviors are unique to each individual.

A person’s set of ethics or manner of ethical reasoning flows from and is a reflection of his or her individual values. Our ethics can best be defined as our personal standards of behavior. Our individual ethical standards are those ties by which we freely bind ourselves to act within certain boundaries toward our fellow creatures and ourselves. Those freely chosen ties are the truest expression of our humanity, that which makes us different from baser creatures. Fidelity to our own freely chosen set of ethics or manner of ethical reasoning is an affirmation of our individual values.

As an example: A manager may hold “truth” as a foundational personal principle (a value).  In the workplace, this translates to the expectation of honesty (a workplace value), and as such this person is honest, encourages honesty, rewards people who tell the truth, and avoids people that he cannot trust. One might hear people say that this person is highly ethical because they are honest, but it would me more correct to say that truth, in the form of honesty is part of their set of values and a foundation of their ethics.

Our freely chosen ethics are our source of strength to resist the tyranny of the supposed consensus, the emotional draw of the mob, the intimidation of the collective and the pull of ignoble emotions. Only by holding a set of ethical principles inviolate can an individual have the strength and fortitude to walk the path less traveled. The choice of one’s set of ethics or manner of ethical reasoning is the free choice of one’s own standards of personal conduct.

Ethics are always personal, in that they are created only by people and are unique to each person. The ethics of two people may seem similar, but the reasoning behind their ethics or the values behind their ethics will surely be different in at least some small aspect. If we act with integrity to ourselves, then we do not judge our ethics by the behavior, choices or opinions of others. We should truly answer only to ourselves for our ethical standards.

Unfortunately many authors, faculty and mentors confuse or fail to make a distinction between ethics and social norms. Social norms are the community’s accepted behavioral standards which individuals in society can choose to follow to avoid conflict within society. Generally a person’s values and therefore their ethics stabilize as they mature; however, society and therefore social norms are always in some state of change. Confusing ethics with social norms can lead to a series of serious misunderstandings.

Some people who claim that social norms are ethics, will point to changing social norms and claim that ethics are merely situational, constantly changing with the circumstances or the culture. Some people will point to the obvious differences in individual behavior, and argue the ethics are merely relative; nothing more than an individual’s choice of the moment. Such arguments quickly break down under rational scrutiny. Their example of changing social norms is incorrect, because as I have explained, social norms are not ethics. Additionally, the actions or the opinions of others are irrelevant because, as I have explained, ethics are an individual’s freely chosen standards of behavior not a universally or societal imposed standard. Finally, If one’s self-imposed limitations are subject to change for mere convenience, then they are without firm foundations. Employing a so-called situational approach to ethics is the same as not having any ethical standards or limitations at all. Since real ethics are based on one’s values, constantly changing one’s ethics means that nothing is really consistently valued.

Some behavior is so outside of social norms and is so offensive to one of the values of a majority of the population that laws are created to restrict or prevent such behavior. The legal and societal boundaries that we live within and voluntarily obey may be more or less restrictive, than our own values and ethics.

Do we have the right to judge the behavior of others by our ethical standards? Yes, absolutely, no one has right to tell us what we can or cannot think, analyze and decide for ourselves. We have every right to associate and not associate, to admire and to disapprove of and dislike who we wish. However, those that we judge have the right to ignore our opinions should we make them known to them, unless they are our employee, it is at work and criticism is specifically job related. As a manager or owner of a business, we have the right to demand that our employees, while performing their job, conduct themselves in a manner that we consider ethical, according to our stated standards for professional conduct.

Some people behave in a way that indicates that they value something different from what they say they value. Incongruity between an adult’s behavior and their stated values and ethics is a consequence of one or more of three things: 1) The person not having fully examined and clarified what they truly value and how they should behave. 2) The person, acting spontaneously or emotionally did not consider whether the behavior matched what they believe in. 3) The person has no sense of personal integrity, and therefore engages in disingenuously rationalizing every physically or emotionally satisfying whim. The remedy to the first is self-reflection for the purpose of examining and clarifying one’s own values. The remedies to the second are self-awareness, reflection and self-discipline. The only remedy for the third is a life changing event that is severe enough to cause them to reflect and re-evaluate their approach to life.

As you see, reflection for the purpose of examining and clarifying one’s own values is of great practical value. I urge you to ask yourself, what are the things, concepts, principles or people that you truly value above all else?  Then ask yourself if your actions always reflect those values. If there is any inconsistency, then you should consider whether you should modify your behavior, or to reconsider what you really care about. Reflection along with self-awareness and self-discipline are skills and qualities that every manager should cultivate.

The concept of an “ethical dilemma” is often misunderstood or misstated. Everyone, especially managers face ethical dilemmas. An ethical dilemma is when a person is faced with making a decision or choice that puts two or more of their personal values or freely accepted obligations in conflict. A very common ethical dilemma is the choice between doing an activity that could advance them professionally and instead going home to spend time with their family. The values that may be in conflict are “professional achievement / recognition and money” and “family”. One logical way to resolve an ethical dilemma is to identify what values are in conflict and ask yourself which is more important to you. Of course these situations are seldom easy to resolve and seldom are win-win choices. The ideal choice is always the one that allows you to meet the obligations which you have voluntarily accepted and is in accordance with your values. In this way your personal integrity can be maintained. No person can rightly be called ethically unless their personal integrity is intact.

One of the greatest mistakes that any manager can make is to adopt what is known as the utilitarian approach to ethics. The utilitarian approach is actually the opposite of having ethics. A Utilitarian believes that decisions should be made based on what is best for society as a whole, instead of one’s individual values. This standard is often referred as the greater good. On the face of it, this approach seems reasonable or at least harmless. However, in practice the standard of what is best for society as a whole is so non-specific and so broad that it can be and is used as a justification for almost any behavior. Every dictator or group of elitists have that seized power, or restricted the rights of individuals, have justified their actions as what is best for society as whole or the greater good. The utilitarian rule is a common justification for imposing one’s will on others and even for taking their property from them. Hitler, Stalin and Mao Zedong all justified their atrocities as being what is best for the greater good. The utilitarian viewpoint places little value of individual’s rights and human freedom. The utilitarian rule is not a rational approach to ethics, but instead just a rationalization of individual whim, and a facilitator of evil. The utilitarian approach is the absence of ethics.

The most important point to remember is that a manager’s business ethics is a reflection of their personal ethics. An ethical person does not operate according to one set of ethics at their workplace and then another ethical set at home or in social setting. It is just business is not a valid excuse for acting outside of one’s ethics. Participating in business does not require anyone to act outside of their ethics. If one surrenders one’s ethics to expediency, there is no rational justification, although most people who do surrender will try to rationalize their conduct. The essence of integrity is acting in accordance with one’s own freely chosen values, ethics and freely accepted obligations, regardless of the circumstances, the opinions or threats of others and /or the probability of personal discomfort or financial loss.

When a person accepts a management position, they must understand that they are voluntarily obligating themselves to make management decisions that are in the best interest of the company and its owners. These managers must also understand that their decisions will affect their employees, their customers and perhaps the community around them. Additionally, these managers must understand that their company depends upon the public buying their products or services, and therefore negative public opinion can adversely affect their company, it owners, employees and their community. We now see that the business decision is more difficult than a purely personal decision. Management is fraught with the possibilities for ethical dilemmas.

By accepting a position as a manager, we voluntarily obligate ourselves to hold as a value the good of the company and to consider the opinions of the stakeholders when making a decision that affects the company. The challenge then becomes respecting the stakeholders and doing good for company without abandoning one’s values. Management is not easy!

So, what is a manager to do? In the end, it is up to you or any manager to act within your authorized powers, in a way that is within the law, good for the company and in accordance with your values. To successfully do this one has to be able to rationally explain and argue their positions and decisions, and to conceptualize and communicate legitimate ethical alternatives and options. Remember that acting on sound values and ethics is always clearly rational and good for your business, if you look beyond the short time results to the intermediate and long term outcomes. Also remember that acting ethically is always a rational defense against any criticism.

What if circumstances conspire to leave you no choice but to do what you consider to be ethically wrong if you wish to keep your job?  The simple fact is that the ethical person must always be willing to suffer consequences for keeping their integrity. What is the price of your integrity?

Dr. Doug

To whom is a manager, any manager, responsible to?

This is a complex question! The first and primary loyalty and responsibility of any manager must be to the owners or shareholders, followed by their own managers. Many managers also feel a responsibility to their customers and their employees. In last ten years, many activists have been advocating that businesses and therefore managers must have as their primary loyalty the welfare of the general public, specifically their local community. This is generally referred to as corporate social responsibility. Corporate social responsibility is often defined as “the managerial obligation to take action that protects and improves the welfare of society as a whole”; with organizational interests being second. This normally means charitable giving from the financial resources of the business. Supposed examples of this are funding corporate nonprofits, foundations, scholarships, and sponsorships.

Is this emphasis on “corporate social responsibility” a good thing? Many, perhaps most people, might say yes. They might argue that every business has a moral obligation and a financial interest in protecting and improving the welfare of society as a whole and therefore passivity is not enough. They further argue that business institutions, as citizens, have the responsibility to become involved in certain social problems that are outside their normal areas of operation.

A significant number of thoughtful people, including myself, reject the current concept of corporate social responsibility believing it to be inherently unjust. They object to the interests of the stockholders or owners being downplayed. They say that people buy stocks to make money, and when the companies spend that money on charity instead of giving it to the stockholders, they are stealing from the stockholders. They point out that most corporation stocks are owned by mutual funds and retirement funds that are holding the investments of average working people. They say that when you take money that is due stockholders, you are stealing for them.

Some in the labor union movement have also opposed corporations giving to charities, arguing that if a corporation has money to give away, they should instead use it to raise the pay of the employees or give bonuses to the employees.

Many small business owners are offended by the phrase “giving back to the community” that proponents of corporate social responsibility often use. The implication that they, as business people, are “taking from the community” is offensive and, they believe, incorrect. They point out that they pay taxes, create jobs and provide needed services and products to the community. They also point out that small business owners often work long hours for limited financial gain. Many business leaders and their managers have simply bowed to the pressure of social responsibility activists, reasoning that it is good public relations and marketing. Many business leaders and managers actually feel coerced into supporting charitable activities.

Managers of businesses have most of the responsibility for determining how much corporate social responsibility is enough. When it is primarily a public relations effort, they will monitor and evaluate the public perception of them. Certainly stakeholders, particular investors and shareholders will express their opinions. Ultimately management must make the decision.

My advice is to never surrender to blackmail. If you or your employees, of their own free will, want to give or work for a charitable cause, then do so, and enjoy the feeling of virtue that comes with voluntary sharing, but never do so under duress. There is no virtue in surrendering to blackmail, and justifying surrender as a “marketing cost” is just an ethical failure.

Dr. Doug

There are facts, skills, procedures, techniques and methodologies applicable to the field of management that are generally agreed upon. However, the field of management is still evolving and is filled with diverse options and conclusions concerning events, trends, and desired outcomes.

As a manager or a student of management, you should listen and read the diverse options and ideas and research of a broad spectrum of people, and then to come to your own conclusions based on your own logic and understanding of all the information. That process is the essence of individual intellectual growth. Being able and willing to listen to and read diverse and often contradictory arguments, come to your own conclusion and then be able to explain your conclusion and support it with a logical and rational explanation, is the mark of an educated person. While you may disagree with some or even most of an author’s or speaker’s opinions, analysis or ideas, you are still personally enriched by reading and hearing other perspectives.

In my career, I have read listened to numerous speakers and read many textbooks and popular books on various aspects of  management and leadership. Some were very good, some not so good, and unfortunately some were very misleading. In any presentation or book, the background and interests of the authors are evident by what information and perspectives that they include and exclude, and the contexts they chose to place their opinions within.

In my opinion, some of the worst books on management and leadership are being authored by academics from related disciplines with little or no practical management experience outside of academia. Authors from the field of Public Administration are giving credence to bureaucratic models and approaches that were long ago proven inferior to the enlightened anti-bureaucratic models of modern entrepreneurs. A disturbing amount of pseudo-science supposedly from the fields of sociology and psychology has made its way into the management textbooks of major publishers. In many cases, political correctness trumps facts and true science. Foundational theories of management and human behavior are being inadequately explained or incorrectly presented leading to chains of fallacious extrapolations.

If you are serious about improving your managerial knowledge and abilities, then listen to or read every textbook, article or essay that you can, but do so with a critical perspective. By a critical perspective, I mean that you should ask yourself, does that make sense? Does it fit into reality? Is it an oversimplification?  Is it based on facts or assumptions? Is it logical or just wishful thinking? If not, then why? I think you will actually enjoy your readings more and feel you are learning more if you engage in this sort of critical analysis. One final thought, the Roman philosopher Plutarch once wrote, “The mind is not a vessel to be filled, but a fire to be kindled”.

Dr. Doug

1. “It Ain’t Necessarily So” is the title of a popular song by George and Ira Gershwin. The song comes from the Gershwins’ opera Porgy and Bess (1935).

Why do I like the subject of management? Why do I like managing? Those are questions that I have been asked many times and my answer has remained the same since I first experienced being a manager. Simply put, I like making a difference. When you achieve a management position, you have an opportunity to improve the experiences of your customers, employees and partners through your wise decisions and the professional application of your skills and knowledge. While there are always organizational and societal restrictions on all managers, still you can always improve the lives of others or make thing less difficult for others. The higher one goes in management the greater the opportunity to make a difference. Virtually everyone has at one time or another complained about a manager or wondered what their managers do. What managers do is often invisible to employees, but not to the success of an organization. Frankly, being a manager is not easy; if it were then anyone could do the job. The reality is that managers and the field of management are often misunderstood.

Consider the negative way that business managers are portrayed in popular literature and in the media. Managers are often portrayed as people of limited talent and education, focused only on making money, unconcerned for others, undeserving of their position and pay, and unethical.  In the popular Dilbert comic strip, the manager is portrayed as a short, pointy-haired, unethical idiot. I suggest that these characterizations reflect many people’s general disappointment with their own managers and supervisors.

Many people without any management training or education think they are perfectly qualified to manage an organization. Unfortunately, many, if not most, people equate managing one’s own life with managing an organization. The reality is that the skills and knowledge necessary to successfully lead a medium size or larger organization are far different and more complex than what is necessary to manage one’s own life and career.

Some people believe that the only way to learn to manage is to learn on-the-job. Learning on-the-job is not the best or the most efficient way to learn, but it is the most painful way to learn. The subject of management is large, complex and multidisciplinary.  It takes a lot of courage and dedication to be a good manager. Managers carry the weight of the success or failure of their organization on their shoulders. Often their decisions and their actions will affect the financial health of their employees and their families. When things go well for the organization, then they share in the glory, but when things go badly in their part of the organization, then they often receive all the blame.  For many people, the responsibility inherent in managing is scary.  Other people crave the responsibility inherent in managing. They want to lead and manage. Some want to make decisions that affect other peoples’ well being, while others seek to empower other people to make decisions that give them greater opportunities for success. They do not fear the future because they do not focus on what can go wrong; instead they focus on a positive vision of the future and what they can achieve for the organization.

Fear will only hold you back; focus on the exciting possibilities of the future! Find your courage and then you can achieve more than you ever thought possible. Few things in life are as rewarding as managing an organization well.

Dr. Doug