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Decision Making – Ethics Within Business
The BBRC’s annual ethics symposium was conducted by Dr. John Dienhart, the Frank Shrontz Chair for Business Ethics at Seattle University. He also carries the title of Director of the Northwest Ethics Network of the Albers School of Business at SU. Dienhart earned his PhD from the University of Illinois and has been teaching business ethics for over 20 years. The purpose of the Friday exercise was to provide an interactive ethics case before the Club and allow time for each table to discuss the various outcomes.
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Doug Cameron introduces Dr. Dienhart.
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Dienhart first set the stage by defining business ethics. He asked if it was an oxymoron. He maintained that it should be an effort to understand how business can serve all its stakeholders or constituencies in a multi-sectoral way.
Another oxymoron would be “deafening silence,” or “airline food,” or perhaps “unethical business.” In order for ethical business practices to flourish, “you need transparency in business. Corporate failures mean unethical business to the general public. New legislation is being passed now to set further parameters in which business must operate.”
Dienhart’s presentation showed a “Bell curve of business behavior – from awful to great – with ‘average’ being in the middle. Federal legislation – Sarbanes-Oxley – will put a burden on good companies without helping the issue of ethical behavior.”
He defined stakeholders as “any group or person that affects or is affected by business decisions. Personal relationships should be added to the list of stakeholders.” The kinds of stakeholders that are served include customers, owners, managers, employees, suppliers, leaders, communities, and even competitors.
Next came a discussion of the Ethical Decision-Making model. The model poses these questions:
- Who do I want to be?
Our character determines the choices we make. “I have a certain character because of the decisions I make.” Dienhart said there’s a “sense of freedom for changing course in order to conform to more ethical behavior.”
- What’s my role?
- Who are the stakeholders?
People push back in ways you couldn’t realize. What are their legitimate interests?
- What is the project?
Focus on the project, not on yourself; whatever requires your attention, requires your attention! The focus gets you out of yourself and makes you work with stakeholders. (If you don’t know how to be ethical, then you’ll begin fudging….going unethical)
- What decision best integrates my answers to questions 1-4?
Don’t balance them out.
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Tom Smith facilitates the breakout sessions.
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Tom Smith took on the role as facilitator and explained how each table should discuss the issue posed by Dr. Dienhart.”
The interactive case followed. Dr. Dienhart described the following scenario:
You are the President and CEO of Custom and Industrial Printing, Inc. Your company has 90 employees; is viewed by you, your family and the employees as a community; has $5 million a year in revenue; pays 80% of employees’ health insurance; and is in a ‘hard-core employment at-will state.’
In May of 2000, Al, a loyal, 5-year employee develops a case of full-blown AIDS. You try to work out a flexible schedule for Al, but he is too sick to work. You decide to keep Al on the payroll so he can keep his medical benefits.
In October of 2000, your health insurance carrier notifies you that your premiums will go up 300% if you keep Al on the payroll.
Decide the question: “Should the company keep Al on the payroll?”
After a spirited discussion among the tables, a consensus was called for. Sample responses to the question included:
- Screw the insurance company;
- Do the CPA thing – give Al a severance to cover medical costs;
- Create a severance package in a COBRA plan;
- FMLA, COBRA (18 months of coverage after severance), community resources, cover with disability insurance;
- If you can’t be on the payroll, you can’t work. Involve Al in discussions.
Dr. Dienhart led the discussion on how to approach the decision – the processes used to solve the problem. As he’d pointed out earlier, focus on the process rather than the outcome. In this particular case, which was based on a true case, all of the employees were brought together to determine what they would like to do on behalf of Al. After a complete discussion, they agreed to each pay more towards their own health insurance, the CEO took a cut in pay and no changes were required in the health plan. As it turned out, Al died six months later.
Members would agree: a fascinating topic is business ethics. The business of business ethics is creating value for business. Kudos to John Dienhart for his presentation and leading the club through a typical business ethics case. For his presentation, he received a certificate of his work with a donation of 240 doses of polio vaccine to assist Rotary’s effort to eradicate the disease by 2005. Thanks to Doug Cameron for his introduction.
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