Workers should be wary of shady business deals

Eve Tahmincioglu • Profile • E-mail

Do you remember the Enron scandal and the whistleblower at the energy company Sherron Watkins, who was even named Time person of the year in 2002?

Seems like many employees and managers have forgotten her heroism and they’ve also forgotten the many ethical lapses among businesses just a few years ago epitomized by Enron.

The corporate crookedness of the past may be destined to repeat itself based on a new business ethics study.

A biennial survey recently released by the Ethics Resource Center found that 56 percent of employees observed some kind of misconduct that either violated company ethics standards or the law, and many saw multiple violations. And among those who observed the ethical lapses 42 percent of those polled did not report the missteps. But, it turned out, women are more likely to report misdeeds than men.

"The ethics risk landscape for American business is as bad as it was before Enron," says Patricia Harned, president of the Center that has been conducting the study since 1994. "And furthermore there is no increase in ethical courage among employees in U.S. companies. In other words, there is an ethics crisis in American business."

There were improvements in ethical behavior and reporting of dishonorable deeds right after Enron and a host of other major corporations crashed and burned because of major fraud issues, but alas those gains have all but disappeared, according to the data.

The ethical issues employees have observed were not merely stealing pens or paper clips.

The top three types of observed are: Conflicts of interest; putting one’s own interests above the organization; abusive or intimidating behavior; and lying to employees.

Six years ago, Sarbanes-Oxley was passed in response to scandals at Enron, Tyco and WorldCom, to name a few, to help fight corporate and accounting corruption and make it easier for employees to report misdeeds. But the act seems to have done little to curb unethical behavior. One provision was that companies put in whistleblower hotlines so individuals could rat out their colleagues and bosses. Alas, workers don’t appear to be falling all over themselves to report the bad guys.

There are several reasons why they’re keeping mum, and futility and fear are at the top of the list. About 54 percent of those polled said they figured corrective action would not be taken even if they reported the problem; and 36 percent feared retaliation. And it turned out the hotlines were rarely used by employees, only 3 percent of the time. Most wanted to talk to a live human being, preferably a supervisor, to report any misconduct.

Maybe it’s just human nature that keeps us from blowing the whistle.

"We have this idea that we should be tolerant of other and other peoples views. That we should never speak out and criticize when we see someone is doing something wrong," says James Otteson, professor of philosophy and economics at Yeshiva University. "People increasingly keep their mouths shut even if people are lying, dishonest, or stealing. People think, 'it’s not my place.'"

If it’s a minor ethical breach many people tend to brush it aside, says Francesca Gino, visiting assistant professor of organizational behavior at the Tepper School of Business at Carnegie Mellon.

Gino, who co-authored the study, "Slippery Slopes and Misconduct: The Effect of Gradual Degradation on the Failure To Notice Others' Unethical Behavior," believes unethical behavior is not always a product of intention. "When changes are very small we tend to fail to see them. As a result, we might engage in unethical behavior," she explains.

For example, she adds, if you take one piece of paper home today and another home the next day, no one will notice what you’re doing. Now, if you take home two packages of paper, that’s a warning sign.

MORE FROM CAREERS

Careers Section Front

Working without the admin holding your hand Readers' messy desks Finding work abroad not an easy job Your Career: Clutter expert rescues writer Quiz: Do you need to declutter? Your Career: Time is right to declutter Send us photos of your messy office Jobs that earn a surprising six-figures Utah is going to a 4-day workweek Stay healthy to avoid burning out at work Careers Section Front   Add Careers headlines to your news reader: