“The Ethical Executive” by Robert Hoyk and Paul Hersey is a practical guide exploring the often subtle and complex root causes of unethical behavior in the business world. Their approach is comprehensive, providing concrete examples and actionable insights to help individuals and organizations foster ethical decision-making.

Hoyk and Hersey start by emphasizing that unethical behavior in the corporate world is not always a result of malicious intent. Often, it stems from psychological and situational factors that create powerful pressures and rationalizations. The book categorizes these root causes into several groups, each discussed thoroughly in dedicated chapters.

Action: Understanding that unethical decisions often arise from unrecognized pressures, start each meeting by discussing potential ethical challenges.

Behavioral traps are decision-making pitfalls that lead to unethical actions. Hoyk and Hersey identify several specific traps:

This refers to the idea that small, seemingly inconsequential steps can lead to significant ethical breaches. As individuals make minor unethical choices, they gradually become comfortable with larger transgressions.

Example: A salesperson might initially exaggerate a product’s features slightly. Over time, this behavior escalates to more significant misrepresentations, ultimately leading to major ethical violations.

Action: Implement regular ethical audits where small, incremental deviations from ethical norms are identified and addressed promptly.

Drawing from the metaphor of a frog being boiled alive in slowly heated water, this syndrome describes how individuals fail to notice gradual changes that would be unacceptable if they occurred abruptly.

Example: Corporate culture may gradually become more cutthroat and competitive, pushing employees to compromise ethical standards to meet aggressive targets.

Action: Encourage open dialogue about changes in corporate culture and conduct regular surveys to monitor the ethical climate.

Social influences can strongly impact ethical behavior, often leading individuals astray. Hoyk and Hersey focus on the following:

In many organizations, the hierarchical structure can pressurize employees to follow unethical directives from superiors, fearing repercussions if they refuse.

Example: A junior accountant might be instructed by a senior executive to overlook certain discrepancies in financial statements to meet quarterly expectations.

Action: Create a whistleblower protection program that allows employees to report unethical behavior without fear of retaliation.

Especially in cohesive groups, there is a strong tendency to conform to the group’s decisions, leading to unethical consensus decisions even when individual members might have reservations.

Example: In a board meeting, a collective decision to approve a questionable business deal might go unchallenged due to the desire for unanimity.

Action: Promote a culture where dissent is valued. Introduce the role of a “devil’s advocate” in team meetings to ensure diverse viewpoints are considered.

Organizations often unintentionally create environments that foster unethical behavior through their policies and practices.

High-performance expectations can drive employees to cut corners and engage in unethical practices to meet targets.

Example: Sales teams might fabricate deals or misrepresent products to achieve unattainable sales quotas set by management.

Action: Set realistic performance goals and recognize ethical behavior as a cornerstone of employee evaluation and reward systems.

When resources are limited, competition for these resources can lead to unethical behaviors among employees vying for promotions, budgets, or recognition.

Example: Employees might sabotage each other’s work or take undue credit for team efforts in environments where resources are scarce.

Action: Foster a collaborative environment by ensuring transparency and fairness in the allocation of resources and rewards.

Human cognitive biases can impede ethical decision-making. Hoyk and Hersey identify and discuss these biases:

Individuals tend to overestimate their ethicality, believing that they are less likely to engage in unethical behavior compared to others.

Example: An executive might believe they are immune to corruption, leading them to ignore safeguards and fall into ethical lapses.

Action: Conduct training sessions to educate employees about common cognitive biases and how to recognize and mitigate them.

People can rationalize unethical behavior by distancing themselves from the consequences and victims of their actions.

Example: Executives might downplay the impact of pollution caused by their factories by arguing it is a necessary evil for economic growth.

Action: Implement procedures requiring decision-makers to consider and document the potential ethical impacts of their decisions.

Hoyk and Hersey offer a range of strategies to foster an ethical culture within organizations:

Leaders must demonstrate a genuine commitment to ethical behavior, setting the tone for the entire organization.

Example: CEOs should publicly commit to ethical principles, consistently communicate the importance of ethics, and model ethical behavior in their daily actions.

Action: Incorporate ethical leadership training into development programs for senior executives.

Regular training can reinforce the importance of ethics and provide employees with frameworks and tools to make ethical decisions.

Example: Companies might conduct workshops that use real-life case studies to explore ethical dilemmas and appropriate responses.

Action: Develop a comprehensive ethics training program that is mandatory for all employees and includes periodic refreshers.

Providing employees with decision-making models can help them navigate complex ethical issues more effectively.

Example: Introducing a model such as the “PLUS” Ethical Decision-Making Model, which includes considering policies, laws, universal values, and self.

Action: Train employees on how to use formal decision-making models and require their use in critical decision processes.

Having clear, well-articulated ethical policies helps ensure that employees understand the boundaries and expectations of the organization.

Example: Developing a detailed code of conduct that outlines acceptable and unacceptable behaviors, along with the repercussions for violations.

Action: Regularly review and update the code of conduct to reflect changes in laws, regulations, and societal norms, and ensure wide dissemination.

Encouraging and protecting whistleblowers is crucial for identifying and addressing unethical behavior promptly.

Example: Implementing anonymous reporting systems and ensuring thorough, unbiased investigations of reported issues.

Action: Promote the reporting system regularly and reassure employees through clear communication that reporting unethical behavior is safe and valued.

“The Ethical Executive” underlines the importance of understanding the multifaceted causes of unethical behavior. By addressing behavioral traps, social influences, organizational pressures, and psychological biases, individuals and organizations can create environments that promote ethical decision-making.

Final Action: Commit to an ongoing ethical culture improvement process that involves continuous learning, regular feedback, accountability, and adaptability to new ethical challenges.