A Time for Ethics: Tough Times Test Core Principles

During the past two years, the global economy has been challenged to its limits. During this period I have noticed a marked difference in the reactions of people and business to the drastic changes our economy has experienced.

By Tom Seymour

During the past two years, the global economy has been challenged to its limits. During this period I have noticed a marked difference in the reactions of people and business to the drastic changes our economy has experienced. Some of the noted changes are disquieting.

In 1981, Peter Drucker raised provocative questions regarding the level of business ethics in his book, The Ecological Vision: Reflection on the American Condition. In his book, Drucker feared that executives could say they were meeting their social responsibilities as business leaders - protecting jobs and generating wealth - while engaging in practices that were plainly objectionable.

"Ethics for them," Drucker wrote, "is a cost-benefit calculation...and that means that the rulers are exempt from the demands of ethics."

It is hard to imagine that Bernie Madoff somehow rationalized that the end justified the means. But we all know managers who've tried to rationalize an unscrupulous act by claiming that it served some greater good.

For Drucker, the best way for a business to create an ethical environment is for its people to take his "mirror test". When you look in the mirror in the morning, what type of person do you want to see? Drucker called this test the "Prudence Test".

He described the test by saying that "the test does not spell out what the 'right' behavior is," instead it "assumes that what is wrong behavior is clear enough, and if it is 'questionable,' it should be avoided."

You might find it odd that I chose ethics as the topic of this article. I did so as I see an increasing development of a disturbing trend. Times are tough and as most entities struggle to meet the expectations of shareholders, customers and their community, I see opportunity for the lines of ethical behavior to become a bit more blurred. At times we may be encouraged to push the limits of the 'right' behavior for a seemingly noble cause. We may feel the urge to justify our behavior as it "helps a customer solve a problem" or it "helps bolster the bottom line." In the end, we will only set a new standard of business ethics for the next generation.

At what point do we exchange principles for profit? The answer to this question should not depend on our financial gain. Doing so, would completely undermine the very concept of ethics and principles in the first place. The answer to this question remains in Drucker's Prudence Test. If it is questionable, don't do it. We, as a country, will emerge from this economic event as strong as ever and must remain true to the principles that got us here.

WW

About the Author: Tom Seymour is Vice President of Sales and Marketing for the Gorman-Rupp Company, a Mansfield, Ohio-based company that designs, manufactures and sells pumps, engineered packages, controls and related equipment for the water and wastewater industry, among other industries. He currently serves as a member of the WWEMA Board of Directors.

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