Ethics in business Featured

10:25am EDT July 30, 2006
You cannot judge the ethics of a whole group by the actions of a corrupt few. During the last decade, the corporate business community has begun implementing safeguards that will prevent companies from becoming future Enrons or Worldcoms.

The real answer to corporate moral misconduct, however, may lie in the next generation of managers.

“Most people assume that they understand the concept of universities,” says David Fry, D.B.A., who is president and CEO of Northwood University. “Most universities consider themselves venues. We take a different view. We are an incubator of enterprise and character. We take in product and transform it. The business equivalent is value-added.”

Fry contends that character, ethics and morality must be taught. Smart Business asked him how.

In the context of business, where do ethics begin?
One key ethics issue is integrity, which is what you do in the dark when nobody is watching. And you are never better than the most deficient example you can provide. These days, integrity is providing visibility into the company and what it does, and always performing or attempting to perform at the highest limit of what you promise, and to exceed expectations, if possible.

How do you teach integrity and other business virtues to raw college undergrads, many of whom aspire to become future leaders?
Don’t just find a list in a book and put it on a wall and forget about it. Every successful business manager is skillful at inspiring colleagues to be creative and effective. If not, the organization fails. But first, a manager must have a view of the role of the entity: a paradigm of what the business does. The first thing a business owner must figure out is the context of its environment such that the product enhances the environment.

We get students, faculty and administrators together, then use a brainstorming technique in several dozen values-clarification sessions to solicit what they think appropriate ethics are. The groups will develop very similar lists and feelings about what’s ethical behavior. Having gone through the process, they develop an investment in the list. And the list becomes our Code of Ethics.

Ethics become much more top-of-mind, and they become the ethics that we pledge to each other. The faculty holds students to those, and students hold faculty to those, and they call each other on it if we fail to perform.

Don’t most colleges and universities attempt to teach virtue?
Unfortunately, their method is to discuss ethics, not to demand them. Go to a university Web site and type ‘code of ethics’ in the search box. Most will have to do with dating behavior, because administrators and students are always hassling about it. For them, that’s the context of ethics: very situational, very immediate.

A true code of ethics, however, deals with the basic values that you find important in your life. We try to define those and require them of each other.

Can you give us an example?
In any given term, we choose a single book that everybody masters and talks about in a series of threaded discussions woven into every classroom <m> for instance, Tom Friedman’s book, ‘The World Is Flat.’ If you go into a CEO’s office, she might not have an accounting book on her desk, but she might have Friedman’s book. And the point is that you have to be engaged in the ideas that are driving today’s business leaders.

What are some elements of a corporate code of ethics?
Our students and professors have defined the following as our Code of Ethics.

Integrity - In all our actions we shall be guided by a code of behavior that reflects our values, unimpeded by circumstance, personal gain, public pressure or private temptation.

Respect - We will treat all others with consideration for their circumstances and with thoughtful regard for their value as human beings.

Honesty - We will embrace truthfulness, fairness and probity, and demand the absence of fraud or deceit in ourselves and others with whom we act.

Responsibility - We will be accountable for the care and welfare of others and responsible for the intended and unintended consequences of our actions.

Freedom - We will exercise personal freedom while insuring others be immune from arbitrary interference on account of condition or circumstance, insuring that freedom will be constrained only by our responsibility for its consequences.

Empathy - We will endeavor to understand the feelings, thoughts and notions of others in order that compassion and fairness of our actions may result.

Spirituality - We will seek the spiritual development necessary for our happiness and growth, and encourage an environment that supports this growth for all.

Achievement - We will exercise our skills to create high achievement and applaud the high achievement of others.

DAVID FRY, D.B.A., is president and CEO of Northwood University. Reach him at (989) 837-4229 or