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Telling right from wrong starts at the top

By Susan Samuelson, Special to CNN
  • Companies need to have ethics conversations that extend beyond publishing a vision statement, Susan Samuelson says
  • Managers can give examples and make suggestions about real-life responses to ethical quandaries
  • Don't just punish bad behavior, but spotlight good ethical decision making in the workplace

Editor's note: Susan Samuelson is a professor of business law and faculty director of the Executive MBA Program, Boston University School of Management. She is the author of "Business Law and the Legal Environment."

(CNN) -- Managers say they want their employees to behave ethically. Yet corporate scandals occur with all the regularity of the seasons. If it's not cooking the books, it's fixing prices or selling tainted products. And these are just the scandals that make the news. Trust me, there is a lot of lower level wrongdoing going on, too. So say my executive students.

Where do people learn about ethics anyway? An undergraduate student once said in dead seriousness, "My father told me that the great thing about a partnership is that it is much easier to cheat on your taxes." That stunning confession led to a discussion about what other rules of the road the students had learned from their parents. The short answer: Not much. Mostly the students hadn't really talked with their parents. If their families had dinner together, which was rare, they watched TV. "All my parents ever asked about was my grades. They didn't really care how I got them as long as they were good."

If not from their parents, then where do people learn about ethics? Some of the executives whom I teach had ethics training as children -- usually from a religious institution. But most of them said that they had never thought about ethics before. Sure, their company had a vision statement, but that was some high-faluting language that meant nothing on a day-to-day basis. By and large, they had never had an ethics discussion at work that dealt with the kinds of issues they faced on a day-to-day basis. Nothing, zipola, nada.

To make matters worse, much of the bad behavior they saw at the office did not come from colleagues, instead it was perpetrated by their bosses -- the very people who ought to be setting a good example. This bad behavior ranged from things so trivial that it is hard to imagine why they bothered, to the profoundly disturbing. For example:

It is difficult to do the right thing if all you hear at work is your boss telling you to do the opposite.
--Susan Samuelson

• A salesman's territory covered rural areas where most restaurants were fast food chains. He did not have to provide receipts for any meal under $25. It is hard to spend $25 on a meal at McDonald's, so he regularly submitted expense reports for $10 meals. That is, until his boss insisted that he charge the company at least $20. That's what the other salespeople were doing and they would look bad (might even be caught) if someone regularly submitted a bill for less. Is it worth it to risk your job over a $20 expense report?

• Then there was the salesman who got a big promotion. The first week in his new role, he got an angry call from a good customer asking why the special consultant had not yet arrived. Upon further investigation, he learned from his boss that this consultant was a prostitute who was supplied to the good customer every two weeks. When the salesman suggested that he felt uncomfortable with this arrangement, the boss said, no worries, he would make the arrangements himself.

• An employee working at a bank was told to target new immigrants for credit card offers because they could not understand the terms.

• An accountant discovered that a good client had been overbilled for years. Her boss directed her not to tell the client, but to change billing practices on future bills.

• When a top contributor sexually harassed another team member, the team manager was ordered to "calm her down" and make sure she did not report the incident.

As we know, nature abhors a vacuum. In the absence of ethics training, managers develop their own guideline which is typically very simple -- "First and foremost, I will take care of my family." Translation: "I will do whatever it takes to keep my job and maximize my income."

Don't misunderstand -- most of my students are good people who try hard and want to do what is right. They engage in ethics discussions with a great deal of commitment and insight, even relief. But it is difficult to do the right thing if all you hear at work is your boss telling you to do the opposite.

What can managers do to promote ethical decisions in the workplace? Behaving ethically yourselves is a good start. Have ethics discussions with employees. Give examples, make suggestions as to how employees should handle these incidents. Explicitly, publicly reward ethical behavior, punish the opposite. Make it clear that ethical behavior is more important than good results. If that is not true at your company, then don't be surprised when you're dealing with a painful and public scandal.