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Personal ethics giving way to situational ethics

Professionals discuss importance of moral compass

As he signs checks for company purchases, a clerk who is behind on his personal credit card payments thinks how easy it would be to borrow the amount he owes from the company's account. After all, no one would need the money right now and he knows he could pay it back in a few months since this "loan" would be interest free.

Situations like this, which might seem innocent at first glance, are common occurrences in today's fast-paced world of growing markets and fluctuating moral standards where what's considered acceptable business behavior is becoming increasingly debatable.

The increase in high-profile cases in the news involving fraud is just one indicator of how our culture's view of ethics has evolved.

Strikingly, those involved in today's embezzlement scandals are not the usual hardened criminals but family men and women with otherwise successful careers.

Recently, a former governor in a southern state in the U.S. and the CEO of a leading health care company were sentenced to serve more than six years in prison for their roles in a bribery and corruption case. Both have families, one of them with nine children. Both had done much good for their communities, and yet both were charged with federal crimes.

Cause and Effect

Unethical behavior starts out innocently enough, said Kim B. Clark, president of BYU-Idaho and former dean of Harvard Business School. "When materialism works its way into people's hearts, they begin to lose perspective. This can happen to members of the Church like it could happen to anyone," he declared.

But it isn't just materialism that has contributed to the ethics decline, said Elder Clark, who was sustained as an Area Seventy during the most recent general conference. There are many factors affecting society's perspective on what's right and wrong. One of them is the educational system.

"We're seeing the effects of decades of educational institutions abandoning their commitment to character development and to values as part of their missions," Elder Clark said. "A kind of moral relativism has taken over and many faculty and administrators abandoned the idea that you should try to teach and develop students with character and honesty."

Part of the problem, said Elder Clark, is the growing mentality that it doesn't matter what people's values are so long as they don't impose their ideology on others.

"If you preach that long enough, a lot of students come out of those kinds of schools believing it's true — that the idea of being honest (all the time) is just one group's view of what you should do. As a result, you get people who don't think very much about rules and certainly don't think the rules apply to them," said Elder Clark.

W. Steven Albrecht, associate dean of BYU's Marriott School of Management and author of numerous books on business fraud, calls this a lack of "labeling." He explained that people form their ethical perspectives in two ways: modeling, which is the examples seen in others, and labeling, which comes in the form of teaching and training. A lack of labeling, as well as the prominence of bad modeling, has affected society's standard of ethics.

"Look at the news," said Brother Albrecht. "You can see more bad modeling and in greater detail than ever before. Good models don't make the news very often."

With regards to teaching and training, he agreed with Elder Clark and said, "In many ways, schools cannot teach integrity. They have to be value neutral."

Additionally, teaching and training used to happen in the home, but now, said Brother Albrecht, the average American family spends 10 hours less together each week than in 1980.

"It used to be a place where a family would sit down and have meals together and translate values and teach and train. Now homes are places where, by and large, both parents work and they sort of intersect in the hallway."

With bad modeling and insufficient labeling, a person can develop what Brother Albrecht calls situational honesty, where "people are honest when it pays to be honest and dishonest when it pays to be dishonest."

When an individual is involved in fraud, three things are commonly present: pressure (perceived or real) to act dishonestly, an opportunity to get away with it, and enough rationalization to justify the action. Although smart companies do all they can to minimize fraud opportunities, individuals are the ones who determine their own ability to handle pressure and rationalization. This is where Latter-day Saints are just as vulnerable as anyone else.

LDS Culture

Brother Albrecht said that, as Church members, "we live in a culture that has a lot of financial stress. We tend to have bigger families; we make larger contributions than most people and we value education at least as much, if not more, than most people do."

But, he explained, it's the financial pressures Latter-day Saints create for themselves that really have a negative effect. This happens when they develop a distorted understanding of what it means to be successful.

Instead of focusing on their relationship with their families, their friends and the Lord, said Brother Albrecht, some Latter-day Saints might think success means having more things. The most common rationale becomes, "I'm doing this for my family."

To avoid creating financial pressures for themselves, Church members should focus on living within their means, said Elder Clark. Those already in financial pressure should face the reality of their situation and be willing to sell some things, change spending habits and maybe even move into a more affordable home. With self-discipline, he said, every individual can avoid creating financial pressures.

Standing Up

But what if the pressure to act dishonestly or allow dishonest behavior comes from others?

In March 2005, Harvard Business School discovered that 119 of its applicants had hacked into a third-party Web site to get an early peek at their acceptance status, which had not yet been released by the school. In the midst of pressure, both from within and without the institution, then-Dean Clark had to decide how HBS would react to such actions.

Although many would later criticize the school for its "pious grandstanding," Dean Clark decided to reject the guilty applicants, saying the situation was akin to someone picking the lock on the door of the admissions office to see his or her file status.

In an official statement, Dean Clark wrote: "Our mission is to educate principled leaders who make a difference in the world. To achieve that, a person must have many skills and qualities, including the highest standards of integrity, sound judgment and a strong moral compass — an intuitive sense of what is right and wrong. Those who have hacked into this Web site have failed to pass that test."

For Elder Clark, the importance of standing up for what's right is best illustrated in the fact that even laws are not immune to erroneous interpretation. "Laws in and of themselves are a manifestation of power and (people) can change the law to get power."

Stephen Bills is a partner in a California business management firm. His career does not require him to be in the limelight, though he does handle the finances for clients who are well known in the entertainment industry. He is constantly faced with opportunities to cut financial corners that would save him and his clients both time and money. He said, "Sometimes you might be inclined to just go along and just let something happen in a certain way, but you have to stop and think. Sometimes you might have to take a stand or at least let people know." At times he has found himself explaining to his clients why they don't want to cut those corners and, in the end, those clients come around and end up respecting him or even thanking him for his decisions.

Brother Bills said his employees and clients are affected by the example he sets everyday. "You interact with people and through those interactions you will influence them. You can help strengthen people to do the (right thing) when they see that you didn't make the compromise or take the easy decision."

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