Leland Teschler – Executive Editor
On Twitter @ DW—LeeTeschler
Suppose you were the one who set the prices your company charged for its products. Further suppose two of your chief competitors called and suggested the three of you collude on a bid for an upcoming contract. Simply put, they wanted to engage in price fixing. Price fixing is not just unethical but also illegal. People have gone to jail for it. So of course, in this hypothetical example, your reply would be a forceful no.
Most business professionals could probably give a sophisticated and carefully reasoned argument against engaging in this kind of illegal action. But the evidence is that the same individuals who can state a good case for acting honestly may also be the ones who end up behind bars for ethical lapses.
Eugene Soltes, a Harvard Business School professor, noticed this ambiguity when he studied white-collar criminal cases. He summarized his findings in a book called Why They Do It. “No student graduates with a plan to become successful and then, later, to engage in some fraudulent behavior that could lead to prison and professional ruin. Yet, even at (HBS), where every student has the intellectual capacity to successfully resolve and avoid decisions that could lead to prison, there have been more than two dozen graduates who’ve engaged in white collar crime,” he writes.
Soltes points out that it’s easy to see decisions that deserved more attention in hindsight, but not in the heat of the battle. And that’s one of the problems with trying to teach ethics in a classroom: “Most of the significant challenges associated with decision making have already been vastly simplified or eliminated by identifying the salient issues. So the judgments reached during classroom discussions of ethical dilemmas can reflect a decision-making process that bears no resemblance to one used to resolve such dilemmas in day-to-day life,” he says.
It’s easy to see how things can go awry when there is a fine line between criminal behavior and innovative solutions to business problems. For example, some of today’s most noteworthy entrepreneurial efforts have arisen out of exploiting loopholes in regulations, or in interpreting regulations aggressively to get around business obstacles. Once people get in the mindset of finding ways around legal or regulatory obstacles, the boundaries between what’s illegal and legal can become blurry. Worse, the media tends to celebrate entrepreneurs who exploit loopholes and applauds them as being inventive. But sometimes courts interpret these kinds of shenanigans as simply being unlawful.
Of course, engineers get involved in their share of ethical dilemmas. Evidence is that they are just as prone to heat-of-the-moment lapses as anyone else. Perhaps the most notorious example might be that of 1970s-era Ford Pintos bursting into flames when rear ended.
Dennis Gioia, now a professor at Penn State, was a vehicle recall coordinator at Ford when the Pinto problem emerged. He says all his available patterns and experiences at the time suggested that the Pinto case was not a red flag. Among other things, frequencies of occurrence were low and comparable to those of kindred models. Apparently, the engineers involved had similar reactions. Gioia says this cognitive “short cut” let him process the Pinto case and move on to others. He now teaches the Pinto case to MBA students as a cautionary tale about ethical considerations.
Rachelle Hollander, director of the National Academy of Engineering’s Center for Engineering Ethics empathizes with engineers in situations like that which unfolded at Ford. “Ethics is thought of as a deliberative practice that needs to be worked on over time. I have great sympathy for people who don’t realize they are doing something unethical until it is pointed out to them,” she says.
And in today’s high-pressure/fast-to-market climate, there’s often little time to reflect on the ethics of any single decision. As Hollander observes, “People don’t want to do the wrong thing, but they are often not in an environment that encourages them to do the right thing or that helps them figure out what the right thing is.”