Creating Conscious Capitalists

Business Schools and Companies Work to Stem the Tide of Unethical Behavior

By Peri Kinder | Illustrated by Pat Bagley

September 9, 2013

“Business ethics” is not a contradictory phrase. But to many people, the vision of successful businessmen brings to mind the robber barons of the late 19th century, sitting on piles of money.  Known for their disreputable treatment of employees through low wages and long work weeks, these barons ruthlessly squashed their competition, creating monopolies where they reigned supreme.

From politicians to bankers, professional athletes to journalists, unethical behavior is still making headlines. So, is it possible for business leaders to create social corporate responsibility—and still make money? And what are business students being taught to combat greed and dishonesty?

Ethical Morass

In 2006, the Academy of Management Learning & Education released “Academic Dishonesty in Graduate Business Programs,” a study that found 56 percent of graduate business students admitted to cheating, compared to 47 percent of non-business program graduate students.

Brad Agle, a George W. Romney Endowed Professor with the Romney Institute of Public Management at Brigham Young University, looks at the survey in a different way. “If this was a self-reporting study, does it mean that the business students are the most dishonest or the most honest? Maybe everybody cheats and the study shows the business students are the most honest about it. Either way it’s frightening. Whether it’s 56 or 47 percent, that’s a really scary number.”

Agle has spent more than 20 years teaching business ethics courses and even attempted a comprehensive review about ethics in America. He found that some areas, like discrimination and sexual harassment, seemed to be improving. But in other ways, like cheating in school, the country is doing much worse. He says the number of cheating students has skyrocketed during the last 40 years.

Although he finds it frustrating, he also considers it a challenge to help students live honorably and do the right thing in business situations. “At BYU we have an honor code, and the whole notion of developing character is part of the university’s mission, but I spent most of my career elsewhere, and it’s the same challenge [across the country].”

In the 2011 National Business Ethics Study from the Ethics Resource Center, the results indicated a growing pressure for people to bend the rules, compromise ethical standards and, in some cases, break the law. The study states that when the economy is doing well, workplace ethics seem to drop as profit becomes more important than good behavior.

It also demonstrated active social networkers tend to believe questionable behaviors are acceptable. These behaviors included making negative tweets about the business, buying personal items with a company credit card (while planning to pay it back), doing less work to make up for pay cuts, downloading company software onto a personal computer or keeping confidential work documents at home to use at their next job.

 And for all employees, the top five unethical behaviors consisted of misusing company time (33 percent), abusive behavior (21 percent), lying (20 percent), abusing company resources (20 percent) and violating company internet-use policies (16 percent).

“A successful, ethical business person is a person who understands, and is able to create and capture value for him or herself, and other constituents, while embracing and living important ethical values like justice, beneficence and respect,” Agle says.

Banking on It

The banking industry has taken some big ethical hits during the last decade, and George Myers, executive vice president/human resource director at Zions Bank, says integrity is an ongoing conversation at the organization. Ethics is integrated into all aspects of the company, with employees and management expected to conduct business with honesty, dignity and privacy.

Behavior training and activities are conducted regularly with ethics courses held for new employees. New hires must commit to a code of conduct which spells out a specific definition of honesty.

“If you think you’re immune to these issues, you’re just asking for trouble,” Myers says. “Rationalization is just telling yourself rational lies. The most tragic stories come from the most competent individuals. As long as there is pride or greed, there will be unethical behavior.”

Myers has run across many “quick-hit” situations where an employee makes a bad decision that costs the company money or damages a relationship with a customer. But the most dangerous circumstances usually involve a person who has a long history with the company, a higher pay grade, great performance reviews and a position of significant responsibility.

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