You are "IT"

how global are your ethics?

Introduction

Until recently ethics was viewed as one of those intangible virtues that was expected to exist in organizations with little conscious effort on the part of its leadership. The recent scandals created by the collapse of three major US firms, landmark legislation by the US Congress in 2002, and the resultant impact on the global financial markets, have created a need for agreement on common set of business values such as honesty, fairness, and integrity. This paper seeks to present ethics in a project management context by outlining the need for the determination of organizational integrity; the relationship between organizational integrity and project integrity; the ethical accountability of the project manager; the concept of moral courage; the use of a project Code of Ethics document; and citing examples of ethical situations and proper ethical behaviors.

Basic Definition of Ethics

Ethics is a derivative of the Greek word ethos meaning disposition, character, or attitude. The New Webster's dictionary defines ethics as the science of duty and grounds of moral obligation. This definition suggests a call to action - duty from the standpoint of responsibility and obligation from the standpoint of requirement. Given this call to action, ethics, therefore, should be an integral part of every project plan as well as part of the project manager's role and responsibility. Further, the Project Management Institute (PMI®) through the Project Management Professional (PMP®) Code of Conduct has clearly outlined ethical expectations for responsibilities to the profession and responsibilities to customers and the public at large. Adhering to the code is an ethical requirement for individuals who wish to practice project management as a project management professional, a distinction highly regarded by all global corporations. One of the most all-encompassing statements of the code is Section II. B. 1. Conflict of interest situations and other prohibited professional conduct. This section states that the project management professional is responsible to ensure that a conflict of interest does not compromise legitimate interests of a client or customer, or influence/interfere with professional judgments. Clearly, moral dilemmas are included in the PMP Code of Professional Conduct.

Ethics as the New Corporate Flavor of the Day

Over the past two years hardly a week goes by without an article appearing in the business section of a local newspaper, a magazine or a periodical on the topic of ethics. The subject of ethics has become the new corporate bandwagon for training gurus, consultants, professionals and academicians. Many CEO's of corporations have been led to believe that if they spend hundreds of thousand of dollars to send their executive management personnel to ethics training suddenly their organization will be baptized in a pool of ethical purity. Some of these organizations are treating ethics as if it was a course in computer science.

Ethics has been branded with a number of different labels such as, business ethics, global ethics, global integrity, and moral courage. Are these labels suggesting that the same ethics one practices in his or her personal life is different from that practiced in the business environment? Or the ethics practiced in North America can't be practiced in any other part of the world? One of the initiatives of The Ethics Resource Center (ERC), a non-profit organization in Washington, DC with a mission to strengthen ethical leadership worldwide, is Character Development. This organization is partnering with educational institutions to institute character development education programs for young people in over 200 schools in the United States as well as secondary schools in Latin America. ERC has recognized through its research that people bring into the business environment the ethical practices they developed in their early adult years. (ERC, 2004)

Where does Ethics begin?

By definition, the three components of ethics are: (a) Disposition - one's, customary manner of emotional response or temperament; (b) Character – moral strength, integrity, and fortitude; and (c) Attitude – a state of mind or feeling with regard to some matter. It is clear from these definitions that ethical behavior cannot be legislated. However, the consequences of unethical behavior can. Ethics begins with the individual and the moral standards we set for ourselves. As a result of our heritage and upbringing we develop certain basic principles of right and wrong. We also develop the code of conduct associated with these principles that are manifested in the specific moral choices we make and the relationship we have with others. We bring these principles into the workplace. Principles that are deep-rooted in solid cultural norms shouldn't change based on circumstance. Hence, the decision to do right or wrong should not be circumstantial, but rather a demonstration of character and courage. Courage is a virtue recognized through practice. Courage is synonymous with fortitude and does not have borders or geographical boundaries. Therefore, courage and ethics are global.

Determining Organization Integrity

Central to the core of an organization's existence are the values that drive the organization's work and results. The organizational environment has a direct impact on the success of the project. Exhibit 1 shows some of the key elements that should be considered by the project manager in order to gauge the level of impact organizational integrity might have on the integrity of the project and the decision-making capability of the project leadership. Finding out the integrity level of the organization is time well spent. It allows the project manager to develop a sense of what kind of support or lack of support to expect when tough decisions must be made.

Ethical Considerations for the Project and the Project Manager

Exhibit 1

Exhibit 1 - Ethical Considerations for the Project and the Project Manager

During the Feasibility Study phase of a project it is important to make an assessment of the integrity posture and the values of the organization. This can be accomplished through the development and use of an Integrity Questionnaire and interviews with members of the project committee, and executive management. Based on the responses, an integrity climate should be identified. Given the climate, the project manager should determine whether the success of the project could be compromised. The project manager should discuss and share the results of the questionnaire with members of the project committee and the project sponsor.

The Integrity Questionnaire

All projects reside in an organizational environment. The ability of the project manager to make the right decisions for the project and the business could be hampered by the integrity status of the organization.

The integrity questionnaire should be directed at executive management and consist of the following questions.

  1. What are the core values of the organization?
  2. How do the organization's core values relate to ethics?
  3. What does the organization use as an ethical guideline?
  4. Is there a set of behavioral standards for all employees?
  5. How do the organization's systems and goals support ethical behavior?
  6. How do the organization's systems and goals deal with unethical behavior
  7. To what extent is the organization dedicated to doing the right thing?
  8. What kind of support do employees get for doing the right thing?
  9. How important is winning?
  10. Is there a written commitment to personal responsibility, and is this carried out consistently?

The intent is to understand the ethical nature of the organization and to recognize any systemic ethical pattern. The project manager should be careful not to accept the corporate platitudes as the answer to these questions. Rather, the project manager should be persistent in getting to the heart of the organization's ethical structure. Any reluctance by senior management to deal with these questions should raise a “red flag” and send a signal to the project manager that the organization might be in ethical decay. It is the duty and responsibility of the organization's leaders to develop and foster the kind of environment that will allow ethical practices to flourish.

Ethics and Accountability

Best-selling author, John C. Maxwell in his book entitled “There's No Such Thing As Business Ethics” (2003) talks about the Golden Rule – “Do unto others as you would have them do unto you.” Although of Biblical origin, this principle points to the individualistic nature of ethics. Maxwell's projection of the Golden Rule evokes personal responsibility. It is a set of ethical standards that cross international boundaries; is the same in any language; it is simple; and requires no extensive manuals or documentation. It has low implementation cost and extremely high consequences on the downside as well as the upside. When practiced, the Golden Rule builds cohesive relationships, creates corporate profitability, and results in personal success. In short, this ethical standard is a character-building tool with which everybody wins.

The project manager is the ethical leader for the project. Strongly supported by the project sponsor, the project manager is responsible for recognizing ethical situations and making the proper decisions about them. For example, in order not to miss a critical material delivery date that would create a delay in the final delivery date of the project, a supplier offers the project manager a readily available product of lesser quality. The project manager, intent on making the committed project delivery date, accepts the supplier's offer and did not communicate this change to the stakeholders. What is the ethical implication of the project manager's decision? What are the consequences to the project and the business? What ethical leadership example is displayed? Being accountable means having the character and the courage to make the right decisions in the interest of the project, the business and its stakeholders.

Ethics and Communication

Truth Tells

Truth is easy if you are in the habit of telling it. Being truthful to yourself dictates that you can be truthful to others. Truth in communication is vital to the practice of good ethical behaviors. Truth is synonymous with honesty and forthrightness. Lying, cheating, or taking unfair advantage are behaviors that are in direct opposition to honesty. Some might argue that there is nothing wrong with a little bit of these behaviors and that any society ought to be able to tolerate them. They might also argue that these behaviors are standard in a capitalistic society and rationalize the practice on the grounds of degree of magnitude or cultural norms.

The problem with this rationalization is that it multiplies in exponential proportion and people become addicted as they continue to get away with not being caught. The problem gets even bigger when, through consistent practice, they become such experts at the cheating game that they are totally oblivious to the harm they are doing to themselves and those around them. A pertinent example, though sad, is the story of a mutual friend who was a closet (home) alcoholic. For 44 years he took pride in the fact that he doesn't drive when he drinks. Finally one day, he thought he could handle the level of alcohol he had consumed. He got behind the wheel of his car and collided with a truck less than two miles from his home. Fortunately, he got by with only a few bruises, but the car was totaled. The police gave him a DUI (driving under the influence) citation at the scene and booked him into the local jail. The outcome was that he received a felony on his record, he lost the use of his driver's license for six months, and lost his home and automobile insurance coverage for which he is now paying five times what he had in the past. Obviously, he was not in the habit of being truthful, let alone to himself. He became addicted to his behavior and ultimately, he paid the price.

Project Code of Ethics

Values must be articulated and shared, not compromised. A Code of Ethics document is an ideal vehicle to communicate shared ethical responsibilities and values to all stakeholders. It is also used to convey project values to the project team in the early stages of team selection and development as well as throughout the life of the project. The project manager is responsible for setting the ethical tone for the project. Because stakeholders understand the negative impact of unethical behaviors they want to know how integrity is valued. The communication on project ethics should be timely, clear, open, and unambiguous. Putting the spin on the truth will make it what it isn't and send the message that improper behaviors are acceptable. The Project Code of Ethics is not worth the paper on which it is written unless it can be supported by the organization leadership. Like other project documents, the Code of Ethics communicates to the project team and all stakeholders what is tolerated and what is not. It is a model for everyone to follow.

Project Manager Considerations for Development of the Project Code of Ethics Document

  • Obtain buy-in from the executive leadership and senior management.
  • Establish and clearly outline the desired ethical business behavior for the project.
  • Identify the appropriate organization values that support the desired behaviors.
  • Identify the organization's chain-of-command that support the desired behaviors (make sure the Project Sponsor and members of the Project Executive Committee are included).
  • Outline how the project organization will support ethical behaviors.
  • Clearly state the acceptability of everyone associated with the project to talk about ethics.
  • Include time in project meetings to discuss ethical conduct. Be prepared to give examples of unethical behavior regardless of how minor it may seem.
  • Explain what the lines of communication are and how people can move information up the flagpole without feeling pressured or threatened.
  • Clearly articulate the ethical expectations, the consequences, and rewards.
  • Present yourself as the model and openly allow others to challenge your behavior.
  • Make ethical conduct a part of the project plan.
  • Keep the Code of Ethics current.

Ethics and Globalization

It has been said many times by some in corporate America that if you want to do business in certain parts of the world you have to do business their way. Oftentimes, “doing business their way” means compromising ethical standards. One of the compelling reasons why John C. Maxwell believes that the Golden Rule should be used as a guideline to govern all ethical decision-making is because he discovered in research that this rule exists in a number of different religions. Given his finding, it was clear to Maxwell that the Golden Rule cuts across cultural and religious boundaries, and is embraced by people from nearly every part of the world. Thus, the Golden rule can most likely provide a common platform to which any reasonable person may subscribe. The Golden Rule provides a basis for taking a closer look at cause and effect relationships of an intended decision. What I like best about the Golden Rule is that it puts you in charge of the action. There isn't anywhere to run or hide. You must face the issue head-on and bring it to closure. Dedication to doing the right thing is a primary ingredient of global success.

Ethical Legislation

The collapse of several major US companies, among them Enron and WorldCom, caused the US Congress to pass the Sarbanes-Oxley Act on Corporate Responsibility in 2002. The Act imposes a number of financial reporting requirements on corporations and places the onus on management for proper financial disclosures. In order to comply with the requirements of the Act companies are establishing control standards by looking at factors such as integrity, ethical values, competence, authority, and responsibility. Many countries from Brazil to Japan, from Italy to South Africa now mandate ethics programs for organizations.

After the financial disaster of Enron, WorldCom, Arthur Andersen, Tyco, and Global Crossing and the implication of these companies’ executives for wrongdoing, public corporations began to examine their practices and to fix their organizations to comply with the Act, and the new requirements of the Securities Exchange Commission. Since the passing of the Act there has been a flurry of activity by consulting firms and other organizations to capitalize on the compliance void that exists in most large companies.

In early 2004 PriceWaterhouseCoopers (PWC), a global public accounting firm, published their annual survey of nearly 1400 CEO's in 40 countries. The intent of the survey was to determine whether corporate America was becoming too risk-averse – apparently caused by the residual effect of the scandal from the collapsed companies. The responses showed that 57% were at least somewhat risk-averse. PWC used this information to develop an approach called “Integrity-Driven Performance”. This approach allows for “informed risk-taking in conformance with an organization's values, policies, standards, and business objectives.”

While the issue pursued by PWC was more one of risk management rather than ethics, an interesting outcome was the concept of a Chief Courage Officer. The question was also raised as to whether an organization needs a chief courage officer and whether the Chief Courage Officer was a person, a position or a philosophy. In an attempt to answer the question, PWC came up with the following:

“The marketplace is asking for courage from management, boards and employees as well. Doing the right thing is an imperative. Seeing opportunity in the maze of perceived risk is how companies move forward. The world we live in is uncertain. The best strategy, therefore, is insight, a clarity of purpose, a well-thought out plan and the fortitude to act.” (2004)

Another interesting observation is that nowhere in the above description is any mention of the word “ethics.” The fact of the matter is that no one person or system can make a company ethical. Given the definition of ethics, everyone is his or her own chief courage officer and this ought to be a requirement for any successful company.

The Tenets of Good Ethical Behaviors

  • Acting ethically is a choice.
  • Know your strengths and weaknesses.
  • Do not allow yourself to be exploited.
  • Stand up for what is right.
  • Make good choices. They are not necessarily easy or convenient.
  • Understand that winning doesn't mean win at any cost.
  • Make sure your actions are consistent with your beliefs.
  • Combine ethical behavior with a zest for competence.
  • Find the ethical standards you want to follow and have the courage to follow it.
  • Develop the discipline to practice ethical behaviors.
  • Value your team members and those with whom you work.
  • Be willing to admit when something goes wrong.

Summary

Given the integrative nature of the global economy it is clear that organizational integrity and project integrity must be closely aligned. Without organizational integrity there can be no project integrity. An organization needs to build a robust ethics infrastructure with a strong reliance on the will and commitment of its people to implement the ethical standards. This infrastructure should include public commitment to being an ethical organization, what this means for both employees and the public, and the moral courage of the organization's leadership to stand behind the articulated values.

When it comes to Ethics, in any environment YOU ARE “IT”; YOU ARE ACCOUNTABLE FOR “IT”; and YOU ARE RESPONSIBLE FOR “IT”.

Question: WHAT IS “IT”?

Answer: THE RIGHT THING

References

Arrington, A., (2003), Pigs at the trough, New York, N.Y. USA: Three Rivers Press

Ethics Resource Center (2003) The best of ethics today 1(September 2002 to August 2003) [Electronic Version] Retrieved on October, 2003 from http://www.ethics.org/today/et_v1n50103.html

Global Ethics, Retrieved from Ethics Resource Center, Washington, DC website at http://www.ethics.org/global.html, May 10, 2004

Maxwell, J. C. (2003), There's no such thing as “business ethics”, New York, USA: Warner Books

Kidder, R.M. & Bracy, M. (2001) Moral courage, A white paper. Institute for global ethics: Ethics Newsline 4(45, November 5) [Electronic Version] Retrieved October 2003 from http://www.globalethics.org/newsline/members/issue.tmpl?articleid=11050100011417

Project Management Professional (PMP®)(2003) Code of professional conduct, Project management institute certification handbook. Newtown Square, PA, USA: Project Management Institute,

Price Waterhouse Coopers (2004) Your new realities: Is the chief courage officer a person, a position or a philosophy?, Retrieved September 1, 2004 from http://www.pwcglobal.com/extweb/insights.nsf/docid/B65EF9727EF7AF0F85256EDD003E728C#

The Institute for Global Ethics, (2003), IGE solutions, Retrieved May 10, 2004 from http://www.globalethics.org/solutions.html

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2004, Barbara J. Wong
Originally published as a part of 2004 PMI Global Congress Proceedings – Anaheim, California

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