Ethics are not black and white and cannot be entirely legislated. Project managers leading virtual projects face an added complexity, since ethics tend to be different depending on the culture or country. This paper will explore how a project manager defines and establishes ethics on a virtual or distributed project. Some project managers may rely on legislation, while others lead by example. A combination of the author's personal experience combined with an academic literature review was done to support the conclusions and recommendations presented in this paper. The U.S. Financial Industry is one of the most regulated industries. However, ethics in the form of greed has helped to topple the financial industry. Therefore, ethics through leadership is the recommended approach for the virtual project manager.
Ethics and leadership are usually perceived by means of “I know it when I see it,” but academics and project managers have a difficult time succinctly defining both. So, how does a project manager establish ethics on a virtual project when it cannot be defined? The United States legislates some behaviors. The project manager's company may have a vision or mission statement, processes/procedures, and a culture that may provide guidance. However, how does the project manager provide the leadership and the ethical foundation for a project team that may include many cultures from around the world? This paper will explore some of the issues surrounding ethics and provide suggestions for implementing an ethical project. The focus is companies headquartered in the United States that conduct international virtual projects.
Ethics do not have a universal definition among cultures nor among academics. For the purposes of this paper, ethics is viewed from a more western view and more succinctly from a view shared by those who teach business ethics in various college-level courses. An MBA-level course at George Washington University (2009) defined business ethics as “acting responsible, leading passionately, and thinking globally.” However, this definition does not delve into the value set or conduct rules of a culture or a business. Normally, in the United States, it is understood that bribes and taking advantage of employees are not tolerated. Yet, there are incidents such as what occurred with Enron, where the future livelihoods of the employees were annihilated through greed. It could be argued that this was, at the time, possibly not illegal, but in the U.S. culture it was certainly unethical.
The virtual project depends on technology for communication and is separated geographically, with the project team rarely meeting face-to-face (Khazanchi & Zigurs, 2005; Curlee, 2002). The project team may be separated by a few miles or by continents. Leadership develops and provides the vision and strategy for the project while motivating the project team to embrace and implement them (PMI, 2008). Normative ethics are the practical aspects of ethics that regulates a person's moral standard. It helps the individual decide on right and wrong behavior (The Internet Encyclopedia of Philosophy, 2007). Applied ethics examines controversial issues (The Internet Encyclopedia of Philosophy, 2007) and may result in establishment of legislation or rules.
Associations, Western Countries, and the Law
The Project Management Institute (PMI) is the major professional society for project managers. A conclusion could be drawn that PMI would drive the ethical expectations of the project manager. There is a noticeable lack in defining ethics or even addressing ethics and a project in the various standards and A Guide to the Project Management Body of Knowledge (PMBOK® Guide)—Fourth edition published by PMI (PMI, 2008). Perhaps, PMI's leadership believes that the Code of Professional Conduct (referred to as Code) is sufficient. The Code mentions ethics once. The word ethics is used in regard to reporting conduct violations. More importantly, the Code provides a prescriptive view of professional conduct (rules based) that is separated into two major categories: 1) responsibilities to the profession and 2) responsibilities to customers and the public.
The United States and several Western countries have established legislation to drive ethical behavior. Most notably, in the United States, the project manager needs to be aware and understand Racketeer Influenced and Corrupt Organizations Act (RICO), Sarbanes-Oxley (SOX) and Foreign Corrupt Practices Act (FCPA). Each of these legislations was enacted in response to unethical behavior, and the lack of self-regulation within some United States–based companies. The project manager needs to understand how the legislation may have to be enacted on the project. Things to ask include but are not limited to the following:
- Are legislative requirements built into the project management methodology that I am using?
- Do I need to create processes/procedures to enforce the legislation?
- Do I need to provide training for the project team members on ethics as it pertains to this project?
- Which legislation is applicable to the project (e.g., is the project global or domestic)?
- Will cultural norms be an issue in other countries (e.g., is bribery commonly used to conduct business)?
- Does the company I work for have a code of conduct/ethics that all employees must adhere to? Are the vendors/subcontractors required to adhere to the company's code of conduct?
- Does the company have a culture that will help or impede ethical behavior on the project?
The project manager needs to understand his or her own ethical behavior and how he or she will implement ethics on the project. Will ethics be implemented via processes and procedures? Will ethics mean obeying the law and corporate policy? Will it be a combination of rules with ethical leadership? Each of these items will establish a tone and underlying current on the project. Total rules-based ethics has its pros and cons, as does the leadership approach.
Rules-based ethics may drive the project team members to view ethics as white or black. There are gray areas regarding ethics that rules and legislation cannot anticipate. In a rules-based ethics environment, the greater the intrinsic value, the greater temptation there is to bend the rules. U.S. financial practices are heavily regulated; however, there is a vast amount of “rule-bending” and unethical behavior. Enron and Worldcom's issues stemmed from financial dealings and making the companies appear healthier than they were. Some of these “rule-bendings” resulted in legislation.
Ethics and Leadership
Ethics via leadership is the most difficult to implement on the virtual project. The project manager must understand his or her leadership style and his or her ethical behavior, and must constantly uphold ethics. This form of ethics is centered on trust. In fact, trust is the pivotal factor for a successful virtual project (Curlee, 2004; Gordon & Curlee, 2006). Ethics & Policy Integration Centre (EPIC) (2007) stated the ethical leader has to inspire trust. The project team needs to know that the project manager can be trusted to set the example of ethical decision making, inspire others to look for the ethical solution, and not tolerate those who violate the trust of ethical behavior and decision making (EPIC, 2007; Lashway, 1996)
What is the best means of establishing ethics on the virtual project? The project manager has to balance the law, the organization/company culture, the countries involved, and his or her own ethical behavior. This is never an easy solution. In most cases, the project manager needs to implement a hybrid solution. Uniting various cultures/countries/organizations into a new unit needs to have an ethical foundation. The project manager should take advantage of any online ethics training available and should make this a requirement. If none is available, the project manager needs to take the time to create a PowerPoint presentation that details the legislation applicable to the project.
Once the training is done, the project manager must implement and take on the role of the ethical leader. Some might believe that ethical leadership is gentle and forgiving. However, research demonstrates otherwise (Lashway, 1996; EPIC, 2007). The leader needs to make sure that he or she does not create resentment for being tough and autocratic, a form of ethical leadership. Altering leadership styles can assist the project manager to create the trust and perception that the ethical improprieties are addressed appropriately.
Five different leadership styles will assist the project manager in handling various ethical situations. The suggested styles adapted from EPIC (2007) and Block (1993) are shown in the Exhibit 1.
Leadership is the pivotal foundation of the ethical character of the project. Rules, legislation, processes, procedures, and management plans may create a very black and white perception of ethics. The U.S. financial industry is a prime example of how legislation is only a stopgap effort to help regulate ethics. When individuals perceive ethics as not breaking the law, then legislation is in a constant catch-up cycle. Leadership needs to establish the ethical tone or soft criteria for those areas that fall in the gray areas.