AHHHH – another up-day on Wall Street after a disastrous sell off yesterday fueled by sub-prime concerns. Positive earnings reports from on-line retailer Amazon.com and Dow component Boeing softened the blow of some less than appetizing housing data.
We’ve seen housing data dribble out on the up and down side for a few months but one thing is for sure – those who dolled out all that cash to uncreditworthy borrowers have a lot to answer to. To their conscience, that is.
At the end of the day we have to face our “selves”. Who we were in any given moment, the decisions we made, the relationships we forged in the workplace, the business we did, and what we did to further our careers. Whether we are in corporate America or run our own business as entrepreneurs, we take our conscience with us and thus must be responsible for it’s state-of-mind, if you will.
In the years since the Sarbanes-Oxley Act of 2002 which established new accounting and corporate governance rules, talk of ethics and values have become more commonplace, although corporate blunders continue to be exposed. Take John Mackey, the embattled CEO of Whole Foods Market. His investors are calling on him to vacate the corner office since the revelation that he was fiddling, anonymously on internet stock-market forums. What was he thinking? Was he thinking, and if so – what was behind those thoughts?
Dissecting Mackey’s brain isn’t nearly as interesting as the psychology behind what makes people do such things. For that, I just came across a thought-provoking new report called The Psychology of Ethics in the Finance and Investment Industry, released by the Research Foundation of the CFA Institute, by psychology professor Thomas Oberlechner of Webster University in Vienna.
While the report targets analysis within the finance and investment industry, how Oberlechner defines ethical behavior applies to any business, but he pays special mind to the conditions under which we work and do business.
He speaks about the implications of social influence in the workplace saying, “social influence plays a particularly important role in organizations where hierarchical structures usually establish marked power differences and asymmetrical relationships.” He adds, it’s within the context of these hierarchies which, “gives rise to a broad spectrum of unethical strategies to influence others.”
No matter our working situation, hierarchies exist. We create them even if we work for ourselves as entrepreneurs. Doing business requires we interact with others on all sorts of levels. Ethical decision making falls upon us as individuals. But creating a working climate that lays a foundation of ethical behavior brings the values of the organization front and center. I think there’s a transparency and trust that becomes contagious. You can take that to the bank – but don’t take it to the sub-prime marketplace, you’ll be fish food in no time.
