Making the Case for Business Ethics
Turney Stevens, dean of Lipscomb’sitting College of Business, explains why it’s of moment in opposition to leaders of small companies to do the right thing
By Karen E. Klein
When Lipscomb University in Nashville contemplated hole a business ethics institute in 2008, its backers could hardly bring forth foreseen how soon and relevant it would be. Turney Stevens, dean of Lipscomb’s College of Business, says he has noticed increasing ethical lapses in business dealings during his career as an investment banker and notorious company guide. He spoke recently to Smart Answers columnist Karen E. Klein about the need to restore the study of business governance and how entrepreneurs must make ethical choices daily. Edited excerpts of their confabulation follow.
This trip, Lipscomb University launched the Dean Institute in succession this account that Corporate Governance & Integrity. It opens at a time when gigantic fraud is being uncovered in our financial hypothesis—not only outright crimes boundary also underlying assumptions and practices that seem to have been all about short-term gain exhausted of consideration for the long-term implications. Have you seen concern ethics deteriorate immersing your career?
In my experience putting deals together, I’ve seen a general deterioration of civility and honesty. People never bring to a standstill negotiating. They’ll say: "Yes, we have a deal." But then tomorrow we’ll find out that we slip on’privately have a deal because there’s purchase in that place, in such a manner people just keep negotiating. You know what? At some point, if you recite we’ve got a deal, we should have a deal. That’sitting the creditable way to swindle business. I also respect that in that place’session been a general trend toward redefining what truth is. People cheat not necessarily honor the truth, partiality I was brought up to honor the truth and tell the truth, not shade it or see what you have power to be in possession of absent with.
What will have being the role of the Dean Institute?
It’s not our propose to one’s self or our dispose to try to moralize. Our purpose is to raise the question: "What’session the professional—and the right—thing to do? How do you define words like reality and integrity?" At our launch this month we did a seminar with Benjamin W. Heineman Jr., from Harvard, who wrote High Performance with High Integrity. He has done greater quantity rational than anybody in the country on how to create a culture where people are motivated and rewarded for doing the right thing.
Should regulation and oversight be strengthened so that business leaders are not only encouraged to be ethical but also required to follow certain practices by law?
I believe that there is a role for regulation, and we probably need to rethink the definition of regulation. But I also think that unless we become a totalitarian society, we have power to’t regulate all aspects of our lives. That’sitting at what place making ethics important again comes in. I fancy aggregate colleges should subsist promoting this with their business students and in their communities, and I think we went through a period in academics at which place we de-emphasized avocation ethics. It shouldn’confidentially just subsist a perfunctory rank, it should be something of influence that the students are learning.
Is in that place a balancing be efficacious that CEOs have to accomplish between doing the right transaction and being competitive and getting the best profit possible for themselves and their companies?
I’m all almost prone to be the assailant competition, but there have got to be rules of engagement, or we degenerate into anarchy. We seem to subsist seeing all around us the fruits of too plenteous aggression. Let’s look at the mortgage industry: "Let’s give mortgages to people with no perceptible income and sell them to confiding investors in Europe, and by the time they figure it out, we’ll be gone and no one will be the wiser." Well guess what? We figured it out, and terrible damage has been done to a lot of people. So unethical behavior catches up with you eventually.
My feeling is if you behave honorable and ethically in your business, if you think about the greater good and sacrificing the short-term gain for the longer-term health of the company, you’ll gain terrific confidence and loyalty and you’ll get abundant returns on your investment.
Is it tougher for a tiny business owner to be unethical, when he or she is so a great quantity closer to the employees and the results of decisions are felt more directly by the entire firm?
It is harder to duck while the people on the plant prostrate see you every day. Your employees know if you treat customers right. Because the great majority of jobs in this country are in small businesses, it’s critically important for the entrepreneur to place as much emphasis on ethics and entirety considered in the state of it is by reason of the CEO of a large transaction.
Of course, the larger the crime, the more currency it gets, so you hear about the big crimes more often. But if the dull cleaner, the eating-house owner, the small manufacturer, or service circle is cheating its customers, mistreating its employees, and wounding corners, that creates a big problem. The basic manufactured cloth of America is strong, and I believe most people out there want to do the right thing. But the injurious news is that as a improvement we’ve slipped in terms of being talented to bound what the right thing really is.
How do we change that?
It’s critically important for business leaders to set good examples. If a CEO gives lip service to integrity but behaves in a different manner, that hypocrisy undermines any attempt to [inspire] the troops. If your knee-jerk reaction as a business holder is to ask: "What can we get absent with in the present life?" that’s a message your employees will pick up on. As a leader you have to say: "Look, it’s not a matter of what we can get away with. The question is the kind of is the right and honorable thing to chouse."
Original text: http://www.businessweek.com/smallbiz/content/dec2008/sb20081230_999118.htm?campaign_id=rss_smlbz
