Jonathan has a new job. Just promoted from the accounting group at headquarters, he is now the controller for a regional sales unit of a consumer electronics company. He is excited about this step up and wants to build a good relationship with his new team. However, when the quarterly numbers come due, he realizes that the next quarter\u2019s sales are being reported early to boost bonus compensation. The group manager\u2019s silence suggests that this sort of thing has probably happened before. Having dealt with such distortion when he sat in corporate, Jonathan is fully aware of its potential to cause major damage. But this is his first time working with people who are creating the problem instead of those who are trying to fix it.<\/p>\n
This may seem like a mundane accounting matter. But the consequences\u2014in terms of carrying costs, distorted forecasting, compromised ethical culture, and even legal ramifications\u2014are very serious. And except in extraordinarily well-run corporations, this kind of situation can arise easily. All managers should know how to respond constructively (indeed, learning to do so is a key piece of their professional development), and senior managers must be able to change the cultural norms that gave rise to bad judgment in the first place.<\/p>\n
Over the past four years, I have studied the moments when people decide whether to speak up about an ethical issue, and what they say when they do. I\u2019ve collected stories from managers at all levels, with a particular focus on the earlier years in careers and on individuals who have positive stories to tell. These stories\u2014along with the social-psychology research on decision making\u2014shed light on what enables people to be candid when they encounter ethical conflicts in the workplace. The insights I describe here can help younger managers raise their voices when they should and help senior managers build a strong, honest organizational culture.<\/p>\n
Many Excuses for Silence<\/strong> It\u2019s standard practice.<\/strong> It\u2019s not a big deal.<\/strong> It\u2019s not my responsibility.<\/strong> I want to be loyal.<\/strong> Jonathan, of course, faces this tension. Adjusting the quarterly sales report for his group will reduce everyone\u2019s compensation bonus, and his colleagues may accuse him of disloyalty.<\/p>\n Here\u2019s a higher-level example: Donald was chairman of the board of a high-technology firm whose senior executives had been caught in an options-backdating scandal. Even after he had taken all the steps that were recommended by external legal advisers\u2014ordering a special investigation, dismissing the executives involved, bringing on a new director with a reputation for hard-headed integrity\u2014the firm was still being pilloried in the press and struggling on Wall Street. So his advisers then argued for a clean sweep of the board, including Donald himself. Although he came to believe that his advisers were right, he worried that if he resigned and urged his colleagues to do the same thing, their reputations would suffer and they\u2019d become targets for litigation. Fiduciary responsibility appeared to be pitted against personal loyalty.<\/p>\n Other excuses emerge, as well\u2014for instance, time pressure\u2014but they\u2019re usually paired with one of the rationalizations above.<\/p>\n by Mary Gentile<\/p>\n ~to be continued<\/p>\n","protected":false},"excerpt":{"rendered":" Jonathan has a new job. Just promoted from the accounting group at headquarters, he is now the controller for a regional sales unit of a consumer electronics company. He is excited about this step up and wants to build a good relationship with his new team. However, when the quarterly numbers come due, he realizes … <\/p>\n
\nWhen a manager encounters an ethical problem, chances are he\u2019ll also hear\u2014or tell himself\u2014one of four classic rationalizations for keeping silent.<\/p>\n
\nJonathan will probably encounter this excuse when he questions his group\u2019s quarterly sales report. Though this kind of distortion is common, that does not diminish the costs it can trigger, the fact it is unethical, or the dangerous ripple effects it can have on the business down the road.<\/p>\n
\nWhen Maureen, a product-engineering manager at a computer systems company, learned that her group\u2019s single-wipe process for reconfiguring hard drives was failing 5% of the time, she knew that some customers would end up with a reconditioned machine that still contained the previous owner\u2019s information. But her colleagues argued that no one had complained, that it was unlikely to cause a problem anyway, and that no one wanted to take on the cost of resolving the issue in a time of budget cuts.<\/p>\n
\nYou or your colleagues may be tempted to say that you\u2019re too new in the job to chime in, that you don\u2019t have the authority, or that you\u2019re not the expert. Junior employees often get this message from others\u2014but, I was surprised to discover, so do senior executives. For example, Denise, a senior vice president and the COO at a regional hospital, had a hunch that a trusted consultant was supplying her CEO with inaccurate financial analysis. She was afraid that, as a result, her boss would make a bad call about whether to sell the institution. This possibility weighed on her, because a sale would mean a host of problems for patients. She was new in her position, though; the CEO had brought her over from a nurse executive role, and she was still learning the ropes. She knew that the CEO believed in the sale, and she worried that her insights would not seem as credible as those of her boss\u2019s expert adviser. Indeed, when she first broached the topic, the CEO dismissed her concerns and her right to play a role in the decision making.<\/p>\n
\nMany times people feel there is a conflict between doing what\u2019s right and being loyal to their coworkers, manager, or company. Though this question of loyalty may at times represent a true ethical dilemma, it is often just a rationalization.<\/p>\n