You can either follow the link to the rest of the interview or just read below.
Would your business behavior pass these three ethical tests?
You might also consider another popular rationale; namely, comparing the government (an abstract, faceless entity) to you and your employees (real people with real needs). If you play out that particular rationale to its end, you might also tell yourself that the government will undoubtedly waste much of your hard-earned money while you need to deal with the real-life issues of trying to keep your business going and putting food on your table and those of your employees and their families. And, in the end, what are the chances that anyone will ever know what you’ve done?
This is where the “kid test” comes into play, Scott explains. He suggests asking yourself if the “everyone else does it” rationale (comparable to “all my friends are doing it”) is one you’d accept from your children when discussing, for example, anything from drug use to cyber bullying. Furthermore, is it acceptable for your children to do something they know is wrong simply because they won’t get caught?
Parents play an enormous role in helping to shape their children into the adults they will become. Similarly, says Scott, “managers and business executives have a hand in making the world what it is, and have earned the ability to make choices for themselves and for others. We owe it to our shareholders and employees to earn a profit, but we also owe it to these individuals—and to our families and ourselves—to act ethically. As decision-makers, we need to decide which is more important at any given time.”
The Power Test: Do you Convince or Coerce?
Your accountant is skeptical about your plans to hide your cash earnings. She tells you that her involvement in such an endeavor would make her feel uncomfortable. How should you respond to her concerns?
Business decisions that involve convincing another individual of your point of view are complex, especially when they involve those who depend on you, and the job you provide, as their means of support.
When attempting to convince others of your point of view, the ethical approach is to present your argument in a persuasive manner without robbing others of their ability to decide for themselves, says Scott. “If you need to manipulate or coerce someone into going along with your plan or achieving your goal, you should rethink that plan,” he cautions.
Most people understand and accept that the workplace is not a democracy, and that subordinates must take directives from above. But Scott is careful to distinguish between telling an employee that there will be consequences if a project isn’t finished by day’s end and threatening termination if that employee fails to go along with what he or she feels is unethical. “When you strip people of their capacity to reason for themselves or act upon what they have reasoned to be the best choice, you’re denying them their dignity and are therefore acting unethically,” he explains.
The Happiness Test: Will your Decision Provide Long-Term Happiness or Just a Temporary Fix?
Whether hiding cash income or cutting corners to reduce costs, the money saved could move you one step closer to that purchase you’ve been hoping to make. But will that purchase really make you happy?
“Happiness is a tricky thing,” says Scott, who explains that we often don’t know what makes us happy, except from experience. Money is the most obvious example. We tend to think that money and the material goods it allows us to buy will bring happiness, only to find that happiness based on material possessions tends to be fleeting; as soon as we get “product A” we tend to want the next and better “product B.”
Conversely, Scott notes that, “making the ethical decision has the potential to bring happiness that is lasting rather than fleeting.” He points out that Socrates, for example, would assert that what makes us happy is also what makes us better people. “We become better, and thus happier, people when we’re guided by higher desires, such as those for justice and moderation,” he says. “For example, everyone gets hungry, but we don’t need to eat ourselves into a coma as though everyday were Thanksgiving. In this case, moderation is a higher desire, which guides the base desire of hunger.”
The Bottom Line
Few would argue that ethics in the business world is a top-down proposition; the behavior modeled by those in positions of power sets the standard for the entire company. Fortunately, there are numerous examples of employers who make highly ethical choices in the interest of their employees, customers and business, even to their own personal detriment. And those who behave ethically do ultimately reap the bottom-line benefits, says Scott, who explains that colleagues, customers and shareholders take notice of ethical business practices and reward them accordingly.
Nonetheless, it would be naïve to think that everyone can, or even should, always act as ethicists would have us act. “It would be unethical to let your business fail because you don’t want to do what’s necessary to keep it going,” says Scott. “But you shouldn’t behave badly simply because it’s easier than making the ethical decision, or because you’re too motivated or self-interested to say no to a decision you know is wrong.”
The bottom line, says Scott, is that decisions are never made in a vacuum. “Every decision we make has a ripple effect, affecting everyone involved. The key is to learn from our mistakes, and to determine how we can make better decisions the next time around.”
Laura Bruck did the interview. She is a Cleveland-based freelance writer who specializes in manufacturing, medical and emergency response topics.
Causes Kyle Scott Supports
North Carolina History Project , American Political Science Association