Good Managers and Bad Ethical Choices

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--By Sujit Mundul
 
It remains a classical debate if the aggressive city-centred, technology-driven, consumerist ethos fosters a greedy and grabbing motivational atmosphere. And this leads to unethical behaviour in the man vs. nature relationships in the first place, followed inevitably by a virtually uncontrollable flood of ethical violence in human relationships.
 
As early as 1930, when life nowhere experienced the present rates of technological invasions, Rabindranath Tagore had voiced his grave misgiving whilst delivering lectures at the Oxford University: “...of those who believe that a constant high pressure of living, produced by an artificially cultivated hunger of things , generates and feeds the energy that drives civilisation upon its endless journey.”
 
To this end Eliot (1934) lent his voice* 
 
“That, men both deny Gods and worship Gods, professing first reason 
 
And then money and power, and what they call life...
 
In an age which advances progressively backwards...?
 
What does the world say, does the whole world stray…
 
In high powered cars on a big by-pass way...?
 
And Men have forgotten
 
All Gods except usury, Lust and Power.
 
But all dash to and fro in motor cars,
 
Familiar with roads and settled nowhere.”
 
Yet we could experience the mindless juggernaut of ‘Progress’ that has been rolling along, with no time to heed the warnings of these two poet-sages. With the onslaught of TV and other such mass mesmerisers, the young population mainly in the emerging countries like ours, is in a more vulnerable position than its counterpart in the rich countries.
 
Against this backdrop let us take a look at the modern day events where ‘Good Managers’ make bad ethical choices. Newspapers often carry stories of corporate misconduct. As for example, Manville Corporation (Ref Harvard Business Review, 2003) suppressed the danger of asbestos inhalation (now a banned item worldwide); E F Hutton pleaded guilty to 2000 counts of mail and wire fraud. How can normally intelligent, honest and conscientious managers work in the ways that seem callous, dishonest and wrongheaded?
 
As I narrated earlier, the answer could be found in human nature as has been clarified by Saul W. Gellerman (H B R 2003)—in the way ambition and duty get distorted under constant pressure for higher performance. The demarcation between right and wrong gets erased and takes a shift towards convenience, though the manager perhaps has no intention of ignoring it.
 
What influenced the top executives at Manville Corporation to suppress evidence for decades that proved that asbestos inhalation was killing their own employees?
 
Why did the senior managers at E F Hutton find themselves pleading guilty to 2000 counts of mail and wire fraud, accepting a fine of 2 million USD and putting up an 8 million USD fund or restitution to the 400 banks that the company had systematically cheated?
 
How can one explain the incidents that took place in these organisations – or in any other place public or private, that appear in the front pages of our newspapers: alleged bribes and kickbacks that honeycombed New York city government; a company that knowingly marketed an unsafe birth control device; the decision making process that led to the space shuttle challenger tragedy.
 
The events are always different; but they have a lot in common since they are carrying the oldest questions in the world, that is the questions of human behaviour and human judgement applied in day-to-day situations.
 
In Saul W Gellerman’s view, the explanations could be traced to four rationalizations that people have relied on through the ages to justify questionable conduct:
 
Believing that the activity is not “really” illegal or immoral;
 
That it is in the individual’s or the corporation’s best interest;
 
That it will never be found out; or
 
 
That as it helps the company, the company will condone it.
 
Why do managers do things that ultimately inflict great harm on their companies, themselves and people on whose patronage or tolerance their organizations depend? Detailed study of the above referred cases as well as the current crop of examples in each day’s papers, supply ample evidence of the motivations and instincts that underlie corporate misconduct. Although the particulars may vary— from the grave dishonesty to the mundanity of illegal money management – the motivating beliefs are pretty much same. We may examine them in the context of the corporation, but we know that these feelings are basic throughout society.
 
The most extreme examples of corporate misconduct were due mainly to managerial failures, of course with hindsight. A good way to avoid management oversight is to subject the control mechanisms to periodic surprise audits, perhaps as a function of the board of directors. The point is to make sure that internal audits and controls are functioning as planned. I strongly believe that it is upto top management to send a clear and pragmatic message to all employees that good ethics is still the foundation of good business.
 
Human development, including managerial development, has to be defined in terms of aspiring upwards to elevating idealism, and not bending downwards to degrading realism. We are aware that the argument of achieving competitive excellence in the global context will be invoked to support this line of action. But, does the industrial history of any nation show that it has attained world-class stature initiated by so shallow an initial mind-set as greedy band rapacity? To our satisfaction, we find that ‘inspiration’ to rise above one’s little self towards a much bigger, higher cause has been their spark and trigger for success.
 
Sujit Mundul is former CEO of Standard Chartered Bank Nepal where he currently serves as a member of the Board of Directors.

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