Ethical Houston

  In our article entitled “The Difference Between the Moral and the Ethical” we considered some of the ethical challenges for an individual working in an organization.  Even though there is not always a clear cut distinction between the ethical and the unethical, it tends to be less challenging since the issues that a person faces are more concrete, definable individually definable. 

However, the larger the organization, the more opportunities there are for missteps and unintended consequences.  The decision matrix becomes larger and complex.  And in some organizations the tendencies exist to see the organization itself and its continued survival as the primary goal.   Setting that concern aside for a later discussion, we know that within organizations there are constituent stakeholder groups that must be considered when making decisions.  Some of these include:

1. Shareholders
2. Management
3. Workers
4. Customers
5. Suppliers
6. The public
7. Governmental entities

Each of these constituent groups has a stake in the future of the organization.  Depending on the power of a constituency, decisions concerning one group will affect the others stake and subsequent outcomes.  And due to the inevitable imbalance in power of each group, decisions will impact possible ethical, moral, legal and responsible behaviors. 

Not only are these of concern when considering ethical behaviors, but organizations (particularly large entities) have to grapple with issues of disclosure whether in annual and quarterly reports or with the media. 

We don’t have to go far to see the consequences of these perplexing situations.  Examples abound:

1. Making sub-prime loans to unqualified people with the idea of fulfilling home ownership as the American dream for everyone.
2. The bundling of these loans into packages that were rated AAA even though they were not.
3. Giving brokers and investment persons huge bonuses for putting together complicated derivative concepts that very few people understood. 
4. Bailing out banks and institutions that were “too big to fail”

And as we know there has been much second guessing and finger pointing at all concerned.  To name just a few:

1. Congress for making it possible for unqualified parties to buy a home.
2. Congress for allowing banks and other financial institutions to get so large and complex that bailouts became inevitable.
3. The institutions for not having the discipline to monitor their programs and insure that they were sound.
4. Individuals who took the deals that later made them lose everything they had.

We could go right down the line with the blame game as each constituent group bought into the shell game.  Whether we consider the events leading up to the fall to be unethical, irresponsible or just stupid, much of our economy bought into it.  And now as we try to work our way out of the situation, it seems that we are going back to the same old behaviors and prescriptions.  We’re told that the consumer is the one that will get us out of the mess by buying more instead of trying to bolster our infrastructure and focus on education, paying off debt and saving for retirement.  We continue to witness the increased economic power of countries like China and the oil producing nations and talk a lot about energy independence, our national debt and the unabated orgy of spending for goods that most people don’t need, but feel they have to have.  We’re like an addict who knows the outcome of his addiction but can’t seem to have the discipline to change. 

So, are we doomed to this never ending cycle of “exuberant optimism”, catastrophe, renewal, and back to social amnesia?  Whether it’s the prophets of the Bible or modern day prophet’s, history would indicate that this is our human condition.  Rational philosophy and liberal theology tend to imply that humanity is evolving and that humanity’s dark side will be conquered by reason.  Sociologist Kimball Young states,

 “the only way in which collective conflicts, as well as individual conflicts, can be successfully and hygienically solved is by securing a redirection of behavior toward a more feasible environmental objective.  This can be accomplished most successfully by the rational reconditioning of attitudes on a higher neuro-psychic or intellectual symbolic plane to the facts of science, preferably through a free discussion with a minimum of propaganda.”

 On the other hand, theologian Reinhold Niebuhr sees the issue quite differently. 

  “What is lacking among all these moralists, whether religious or rational, is an understanding of the brutal character of the behavior of all human collectives, and power of self-interest and collective egoism in all inter-group relations.”  He goes on to say, “The relations between groups must therefore always be predominantly political rather than ethical, that is, they will be determined by the proposition of power which each group possesses…”.   “Whatever increase in social intelligence and moral goodwill may be achieved in human history, may serve to mitigate the brutalities of social conflicts, but they cannot abolish the conflict itself.”  

 With this in mind we will now move to how power and conflict have been and can be used to bring about change.