Tag Archives: Business Ethics Alliance

Ethics

May 16, 2017 by

Years ago, my colleague Butch Ethington showed me a graphic he designed when he was the ethics officer and ombudsman at Union Pacific Railroad. I still use this graphic in my Creighton classes and the department uses it in our Business Ethics Alliance programs.

It is a pyramid. At the bottom are all the rank-and-file employees, the heart and soul of business. Their No.1 ethical issue, Butch says, is fairness. “She got more time off.” “He was given the opportunity for travel.” “She got to work from home.”

In the middle of the pyramid are the managers and directors. In between the top dogs and rank and file employees, managers and directors have tough roles. Their No. 1 ethical issue is accurate reporting. “How do I make my boss happy about the numbers?” “How do I showcase my subordinates?”

At the top of the pyramid are the executives and board members of the organization. They spend a great amount of time interfacing with government, the public, and all stakeholders. Their No. 1 ethical issue is conflict of interest.

Of course, conflicts of interest can occur at any level of an organization. Think about the conflicts that arise for salespeople, or the ones that occur in procurement. Executives have other ethical issues, for example, telling the truth or community responsibilities. Let’s focus on executives and board members and their conflicts of interest.

Three key questions arise. What is a conflict of interest? Why is it so hard to recognize our own conflicts of interest? What can be implemented to reduce conflicts of interest?

As for the first question, we all know that a conflict of interest can arise when someone is responsible for serving competing interests. But this is not, in and of itself, unethical. It is what a person does about the competing interests that matter. Classic examples of conflicts of interest focus on financial interests, for example, an executive who shares confidential information, thereby decreasing his firm’s assets and increasing his own. But a more nuanced definition of conflict of interest includes multi-dimensions and is not always about making more money. For example, what about a board member who provides a building to the firm at reduced rent? In this case, she provides a benefit because of her interest. Is this a conflict that is unethical?

It has been said that half of the battle in ethics is being aware that there is an ethical situation in front of you. Why is it so hard to see one’s conflicts of interest? Behavioral ethicists shine a light on this second question. We have psychological dispositions to think or act in certain ways, due to chemistry or socialization, which are unnoticed or disbelieved. Deeply entrenched and habitual dispositions can be healthy, like being confident. But confidence can become extreme and turn into a bias. Overconfidence bias can block one’s perception of a conflict of interest and when this happens we say a person has a psychological blindspot.

Overconfidence bias can be heard when an executive says, “This is not a problem. If anyone can handle it, I can.” But no one is immune to psychological blindspots and unethical conflicts of interest. No one. The best we can do is recognize our human nature and develop strategies to overcome our extremes. Which takes us to question three.

What can we do to reduce conflicts of interest? At the policy level, it is helpful to have executives and board members sign conflict of interest statements. But make sure the documents are multidimensional, addressing possible financial, as well as non-financial, conflicts. Most conflict of interest statements do not. Second, we can learn from something Bruce Grewcock, CEO of Kiewit, once told me. He says that the company has leaders who are willing to speak up and point out to him when he needs to examine a situation again. He’s expressing the old adage, “surround yourself with good people.” When we do this, we have the best chance of recognizing our overconfidence and reducing the chance that we will act inappropriately and wreak havoc on our world.

Beverly Kracher, Ph.D., is the executive director of Business Ethics Alliance, and the Daugherty Chair in Business Ethics & Society at Creighton University.

 

 

 

 

 

 

 

 

 

 

 

This article was printed in the Spring 2017 edition of B2B.

 

Wicked Problems

October 27, 2015 by

Two intractable sides battling back and forth.

“How can you be so heartless? Where is your sense of compassion?”

“Why do you foster weakness? Where is your respect for authority?”

The sides play themselves out on the issues of the day: 

Against capitalism: It exploits labor by preying on the powerless. 

For capitalism: It depends on hard work and creates prosperity. 

For gay marriage: Love and partnership is acceptable for heterosexuals and homosexuals alike. 

Against gay marriage: A union between a man and woman is the only marriage sanctioned by God and the church.

Against capital punishment: We need to address the root causes of violence.

For capital punishment: Extreme penalties are needed to deter crime.

Like Perry Mason and Hamilton Burger in a courtroom drama striving to win by showing that one is right and the other is wrong, each side fights for superiority.

Policies about capitalism, gay marriage, and capital punishment are the kinds of issues that can’t be solved by getting more facts.

These are issues that are much more difficult to solve because the sides are shaped by disparate, deeply held world views, visions, and values. And these are what Horst Rittel and Melvin Webber described in a 1973 treatise as “Wicked Problems.”

Jon Haidt, one of the premiere social scientists of our day, identifies, names, and addresses Wicked Problems in his compelling TED talk, “Three Stories About Capitalism.” It’s a must-see, as are all of his TED talks.

A grand thinker, Haidt recognizes two very important points.

First, Wicked Problems are polarizing. We tend to be judgmental about people on the other side. We demonize, castigate, and criticize anyone who holds the opposing view. When this happens, it is hard to arrive at acceptable solutions.

Second, assuming we want to build a stable, flourishing society, perhaps we should refrain from picking one side over the other. We could find a way to “go between the horns of the issue” and find some middle ground. For Wicked Problems, the middle ground can be established by finding a way to include both perspectives into one “supervalue.”

When it comes to the debate about capitalism, Haidt proposes “dynamism with decency.” This is somewhat like the “Conscience Capitalism” recommendation from John Mackey, the Whole Foods CEO. It is a way to bring together the two sides by joining the fundamental values for each into one supervalue.

This might be a good solution to the capitalism debate. By uniting values from each side, we may find a way to stabilize discussion and continue to move towards the betterment of all.

What about gay marriage or capital punishment? What is the supervalue that can help us solve these Wicked Problems? I’d love to learn what Haidt thinks. And I might be able to, since he is coming to town in October for the Business Ethics Alliance Annual Trustees Meeting.

But I fear that supervalues cannot solve gay marriage and capital punishment public policy issues. Not to make light, but these public policy issues are akin to couples’ disagreements. In any relationship there are two or three issues for which values, desires, or beliefs cannot be merged. Love or disdain for sports, yearning for or disinterest in travel, desire or not for kids…one person’s values win and the other losses. Someone ultimately has to give in and let the other side’s values reign.

Unraveling such public policy issues as gay marriage or capital punishment might not be about finding a supervalue. It may be about intentions.

A loving couple’s relationship succeeds because, through thick and thin, they live out their intentions to stay together no matter what. So, too, our Wicked Problems may never be “solved” in any true sense. But by not giving up, by coming back again and again, we co-create a society that has what it takes for longterm success.

Beverly Kracher, Ph.D., is the executive director of Business Ethics Alliance, and the Daugherty Chair in Business Ethics & Society at Creighton University.

Beverly Kracher, Ph.D., is the executive director of Business Ethics Alliance, and the Daugherty Chair in Business Ethics & Society at Creighton University.

Beverly Kracher, Ph.D.

August 26, 2013 by
Photography by Bill Sitzmann

Beverly Kracher, Ph.D., has been teaching and researching business ethics for more than 20 years. She has been professor of Business Ethics at Creighton University since 1991. But the seasoned academic holds a strong belief that ethics discussions should reach outside the classroom and into Omaha’s day-to-day business life.

She found soulmates in many of Omaha’s business leaders who shared her passion for ethics. Working together, Omaha’s business community launched the Business Ethics Alliance in 2008. The group consults, trains, and speaks on ethics.

Founding partners are the Creighton University College of Business, Greater Omaha Chamber, Better Business Bureau, and the Omaha business community. The Business Ethics Alliance isn’t just for business. The group also interacts with college and K-12 students, as well as executives, employees, and entrepreneurs.

Business Ethics Alliance programming focuses on the core values of accountability, community responsibility, integrity, financial vitality, and moral courage. As holder of the Robert B. Daugherty Endowed Chair in Business Ethics & Society, Kracher is free to work outside the classroom. She teaches one Creighton graduate class each year.

Otherwise she leads the Business Ethics Alliance as executive director and CEO, often traveling to countries worldwide.

“Words are power. One of the easiest things we can do is practice articulating our ethics.”

“I spoke in Ethiopia recently, and they said they had never conceived of a relationship between ethics and success in business,” Kracher says.

But companies considering relocating to Omaha are well aware of the relationship, according to David Brown, president and CEO of the Greater Omaha Chamber. One Illinois company, reeling from the indictment of the state’s governor, found solace in Omaha’s ethical business community.

“Another client specifically asked us to make part of our presentation about ethical practices in Omaha because they wanted a community that took ethics seriously,” says Brown. “We blew them away.”

Helping found the Business Ethics Alliance brought Kracher a great deal of satisfaction—and an award from the Greater Omaha Chamber as the 2013 Business Woman of the Year. She’s earned it, says Brown: “She has taken a fledgling organization and turned it into something unique to Omaha. It requires business acumen, as well as the ability to work with business leaders.”

Kracher said that ethical business communities have leaders with strong, shared, positive values who are fair to their workforce, give back to their communities, and have honest and accountable employees. The ethical communities have non-corrupt government and nonprofits that partner with for-profits.

She is a columnist for B2B Omaha magazine and co-authored the book Ethinary, An Ethics Dictionary: 50 Ethical Words to Add to Your Conversation. The book sits on many business professionals’ desks around the country. “Words are power,” Kracher said. “One of the easiest things we can do is practice articulating our ethics.”

Professor, researcher, author, columnist, CEO, she also is vice president of Plant Pros of Omaha, which puts her in the small-business arena.

Ethics haven’t changed over the years, she believes: “The ancient Persians used to burn bakers in their ovens for adulterating bread with straw, etc. So bad business has been around for centuries. Good has, too.”

An Omahan in Omo Valley

It all started with National Geographic magazines. If you were a kid like me, you thumbed through them and dreamed about the exotic places that were halfway around the world. African stories always caught my eye. So unusual. So different from life in Nebraska.

Especially Ethiopia

I recently traveled to Ethiopia, spending several weeks exploring the culture and the country. Like most of you, when I travel, I pack my passions. In my case, that’s business ethics. Wherever I went, I asked about business practices and economic development. I learned a great deal about the ethics of the people and, in the process, I reflected on our Greater Omaha values. Let me share two experiences.

Hawassa University

At Hawassa University, I spent time with Dean Fitsum Assefa’s faculty and MBA students. We talked about business ethics as a competitive advantage. In a country ranked 114 of 147 on Transparency International’s Corruption Index, the consensus among students was that being ethical would not lead to business success. My experience is that our Greater Omaha students think differently than this. What is your opinion?

Omo Valley and Economic Development

One of the most intriguing destinations in Ethiopia is the Omo Valley. Through the heat and the mud, we traveled to the Valley to interact with its tribespeople. I grew up on a farm, but I have never experienced this kind of outdoor life where people live with their cattle herds and have only the most basic shelters. The customs of the people are exotic—the Mursi women wear lip plates, the Hamer people use cattle jumping as a rite of passage to manhood, and the Bumi participate in scarification. There are no other people on the planet like the people of the Omo Valley.

Herein lies the rub. The Ethiopian government has a plan for economic development. They are selling tribal land in the Omo Valley, primarily to foreign investors, to create sugar cane plantations. In tandem, they are building factories to process the sugar cane. The plan is to entice the tribespeople to work in the factories to alleviate their extreme poverty.

It is difficult to imagine the challenges for Ethiopian leaders, one of the poorest countries in the world. They must promote economic development. (Our Greater Omaha leaders have that responsibility here, too, right?) But their plan will literally destroy the tribal cultures.

So I talked to Mrs. Moges, the CEO of Travel Ethiopia, the largest travel agency in the country, and a member of the Addis Ababa Chamber of Commerce. I asked what she thought of the plan and its implication for the tribes. Mrs. Moges said, “The Omo Valley is Travel Ethiopia’s daily bread and butter. I know that the plan will destroy tribal culture and affect my business. But I think that is okay. Why? Think of the women. Daily, they carry bundles of sticks for firewood. They walk one to five miles a day with heavy containers to collect water. Childbirth is a nightmare. Is it okay to change the tribal cultures? You bet it is.”

I have been deep in thought since returning from my Ethiopian trip. When is it acceptable to change a people’s way of life for the sake of economic development? When should we save a way of life, knowing that doing so will stifle economic development? In Omaha, we have asked these kinds of questions, too, about our culture, our historical buildings, etc.

This I know: There are those who hold onto the past and those who grasp towards the future. In that tension, change is generated, and this is where communities’ values are revealed.

Beverly Kracher, Ph.D., is Executive Director of Business Ethics Alliance and Chair of Business Ethics & Society at Creighton University’s College of Business.

Bringing Community Responsibility to Life

May 25, 2013 by

Pythons. Hooded Pitahuis. Pygmy Marmosets.

Omaha is known by many across the nation because of Wild Kingdom, Mutual of Omaha’s primetime television show that brought animals to life in our living rooms.

But the show’s impact has been more profound for us (Omahans) than it has ecologically speaking. We identify with and claim the show’s reputation as our own. We feel community pride because, after all, it’s Omaha’s Wild Kingdom. This pride generates a strong sense of community responsibility. So maybe not coincidentally, community responsibility is accepted as one of the five Omaha City Values.

Wild Kingdom is one of the coolest examples in Omaha of what is called “traditional philanthropy.” This kind of philanthropy refers to the age-old practice of companies making cash donations or in-kind contributions to worthy causes. Most companies participate in traditional philanthropy because of their sincere desire to be involved in their communities and/or to give something back. Traditional philanthropy promotes reciprocity that produces important business benefits, including increased customer loyalty, higher employee retention, and enhanced corporate reputation.

As compared to traditional philanthropy, strategic philanthropy is a concept that has grown in prominence since the 1990s. This kind of charity involves a process where companies align their community relations initiatives with their core business products and services. Instead of a Wild Kingdom animal television show sponsored by an insurance firm (What’s the connection there?), corporations donate to specific community projects that align with their core competencies. For example, ConAgra does strategic philanthropy by focusing its charity on food and hunger issues, like Kids Cafés.

Some organizations are finding ways to impact their communities through employee engagement practices. Firms like PricewaterhouseCoopers (PWC) recognize that young professionals crave choice. So they’ve created an innovative program for performance incentives that offers a choice to support a cause in their name. Every staff member gets to choose how they receive their incentive—cash, a charity match, a tech package, or a gift card. This is an ingenious way to bring community responsibility to life.

At the furthest end of the community responsibility spectrum are social enterprises. These organizations flip the capitalist model on its head. Maximizing profits is no longer the purpose of these businesses. Profit is a means to a broader end of enhancing the well-being of the community. Nonprofits, as well as for-profits like Herman Miller, Grameen, and PlanetReuse, are bringing community responsibility to life in this way. Their employees and clients are supporting their model with extreme loyalty.

From traditional philanthropy to social enterprise, we challenge Omaha businesses to continue to enjoy the intrinsic and extrinsic rewards that come from bringing community responsibility to life. And don’t forget—a sense of community responsibility starts with our kids. One of the ways the Business Ethics Alliance has promoted this is with our team of moral superheroes who live in the Itty Bitty City at the Omaha Children’s Museum. Take your kids to the museum and kick-start their sense of community responsibility by spending time with superhero Reese.

Beverly Kracher, Ph.D., is Executive Director of Business Ethics Alliance and Chair of Business Ethics & Society at Creighton University’s College of Business.

Politics and Moral Distractions at Work

November 25, 2012 by

The elections were over in November, but the political conversations continue in the workplace.

“How did this happen? I can’t believe he’s President!”

“When is Congress going to get over the bipartisanship and get to work?”

“Those Super PACs completely changed the game. All they did was lie, and no one held them accountable!”

“I am so angry about the political climate in Washington that I could burst!”

It’s not just employee conversations over the cubicle walls. Employers are talking politics, too. For example, David Siegel is the founder and CEO of Westgate Resorts, the largest privately owned time-share company in the world. He sent a memo to his 7,000 employees before the election stating that they need to worry about their jobs if Barack Obama gets re-elected. Obamacare and higher taxes, Siegel argued, are running his firm into the ground (Bloomberg Businessweek, October 10, 2012).

When should employees and employers feel comfortable expressing political views at work?

The Business Ethics Alliance held its fall dialogue last October about politics, business, and ethics. One reocurring theme was that political conversations at work are morally acceptable, as long as they do not take away from the real purpose of business. In keeping with this idea, the point was made that business leaders can, and should, educate employees about how to unify their voices on political positions that can greatly affect the stability of the firm or its industry.

So the bottom line is—stick to business. Don’t get distracted from business while at work. Focus, focus, focus.

But there is something unsaid here, some unspoken truth that is left out of this bottom line picture. This unspoken truth was beautifully expressed after the Business Ethics Alliance Dialogue by Stuart Chittenden on his SquishTalks blog:

“If businesses’ inflexibly require employees to engage only in subjects or topics that are…purely related to work, then the outcome inevitably is minimal breakthrough success for that business, a bland organizational culture, and impossible personal growth and fulfillment for the employee.”

Stuart helps us recognize the unspoken truth of the bottom line paradigm. When we focus only on business at work, we deny the human yearnings that deeply engage us. In one sense, being whole people at work is actually advantageous for business. Success in business can be measured by the numbers, but also by enlivening cultures and human flourishing. In other words, politics and moral distractions can positively feed business success.

Yet…is there more to the unspoken truth? I cannot help but press our reflection one step further…because thus far we are making the “business case” for why we should break through to our deeply held political and moral values at work. But what if, just what if, human dignity and flourishing is not merely an instrument for business success but is, rather, its raison d’etre?

And these human yearnings are the real source of the ethics that drive us to do and be better.
Respect
Freedom
Human dignity
Deeper
Being human
Breaking through to the real

Beverly Kracher, Ph.D., is Executive Director of Business Ethics Alliance and Chair of Business Ethics & Society at Creighton University’s College of Business.