39. The Truth in Business Ethics

You know what I think about business ethics? It’s the topic of today’s episode and is in three parts. In relation to business ethics, the term ‘ordinary decency’ refers to the moral standing of an organization where honesty and fairness, a refraining from coercion and physical violence, and a respect for the law are its guiding principles. The cornerstone of this principle is honesty and honesty is built on truth.

Part 1: Is Lying Every Justified?

Is there ever a moral justification for lying? No, there isn’t. I’m often criticized for being too black-and-white in my perceptions, but I cannot think of any instance when lying is justified. Even when my wife asks, “how do I look in this dress?” I’m compelled to tell the truth. If I think it isn’t flattering, I will tactfully tell her so, feeling that although she might not like hearing it, she would appreciate an honest answer. It is a matter of trust.

In business, as in one’s personal life, honesty–the truth–is sacred. To lie to an employer or an employee is to deny him or her the truth, even if the lie is told for the person’s benefit. For example, a manager who tells an employee he’s being let go due to cutbacks, when he’s really being fired for poor performance, is being disrespectful to the employee by not telling him the truth behind his termination. Although he may sincerely be trying to guard the employee’s feelings, the manager fails to provide the employee with knowledge that could potentially prevent this situation from happening in the future.

Because telling the truth can be unpleasant, we sometimes resort to telling a “white lie”. An example of this would be the employee who is asked to comment on a sales presentation his employer is going to provide to the board of directors. The employee, trying to be polite, tells his boss all is a-okay when the yellow letters against the slide’s red background is distracting and hard on the eyes. The employee’s white lie may make the employer feel better, but may not prevent his embarrassment in front of the company’s board.

So, if lying is wrong in one instance, it is wrong in any instance. Lying, regardless of one’s good intentions, is really nothing more than a betrayal of trust between one person and another. Lying for any reason is a violation of the business ethics principle of ordinary decency. A person who lies, even to protect the feelings of another, is still a liar. If the lie is discovered, the person may never regain the trust of the other.

Part 2: Truth versus Reality

In the book, If Aristotle Ran General Motors, author Tom Morris writes, “Truth is just that mapping of reality that corresponds to the way things are.” I find this a very interesting concept and am in total agreement. Mr. Morris is basically saying that truth equals reality. Therefore, truth would be an absolute representation of fact. In this sense, truth gives meaning to and allows for the understanding of the object being considered. This statement is also consistent with correspondence theories, which attribute an existence to objects whether or not those objects are being perceived or even thought about. This means truth is independent of and may conflict with perception.

In simplest terms, and in a physical sense, if I have a red ball, the fact that I’m colorblind and see its color as something other than red, doesn’t change the fact that the ball is red. The truth lies in the ball’s actual color, red, versus my perception of the ball’s color. Therefore, truth gives meaning to the knowledge one possesses of the ball’s actual color. Otherwise, my perception of the color of the ball would be reality.

The “perception is reality” or “what is true for you may not be true for me” philosophy actually denies truth and is the basic attitude of relativism, specifically the doctrine known as truth relativism. Truth relativism rejects the idea of universal truths and, instead, endorses that truth is only relative to the circumstances to which it is applied. For example, to properly understand the Holocaust, one must consider the beliefs and actions of the German government in a historical or cultural context. In this manner, depending on one’s point-of-view, the senseless killing of thousands of Jews could be considered justified and therefore a true action.

In the work environment, relativism would likely foster an environment of anything goes. Because almost any action can be justified based on one’s perception of a situation, relativism undermines morality. If I believe it is wrong to lie, I just as easily could believe that lying is right, no matter what the circumstances.

Consider the area of negotiation. If the rightness of a person’s bargaining position is relative to that individual’s perception of rightness, then it only follows that everyone at the bargaining table is right. The contradiction in this situation is evident when the goal of negotiation is to reach an agreement. If all positions are equally right, they are just as well equally wrong. How could agreement be reached?

The relativist premise, what’s true for you may not be true for me, in the work environment, infuses subjectivity into every aspect of business operations. Since this philosophy doesn’t recognize anything as absolute, nothing can be considered true. If there is no universal truth, there is no reality.

Part 3: The Application to Business Ethics

Most people involved in business, from the CEO of a large corporation to the assembly line worker, will eventually face an ethical dilemma. Although the breadth of responsibility for some business members is much broader than others, all have a responsibility to stakeholders. Because everyone within the business entity can potentially impact the business stakeholders, everyone should fully understand and practice sound business ethics all the time.

Consider the Firestone tire recall of 2000. This was a recall of over 14.5 million tires at a cost of more than 3 billion dollars. The tires had been manufactured at a plant in Decatur, IL, and had defects that resulted in tread separations and rollover accidents. The ethical dilemma for business leadership in this case would be between profit loss and consumer safety. To initiate a recall the tire manufacturer would probably consider the cost of the recall versus the cost of litigation. The lesser of the two would determine the company’s course of action. On the surface, this doesn’t sound very ethical, but from a practical standpoint, it may be. For a tire, there is an acceptable rate of defect and if the harm caused by these defects is within that range, it’s considered ethical to refrain from a product recall. This doesn’t mean the company keeps the information secret or initiates a cover-up. It simply doesn’t undertake what it considers is an unnecessary action. In this respect, one can easily understand the manager’s ethical dilemma and why it’s important to understand and practice sound business ethics. But what of the employee on the assembly line?

The Firestone employee at the Decatur, IL, plant is engaged in the actual manufacture of the tire. Perhaps this employee has been working the job for several months when he discovers that he has been performing a function incorrectly. This inadvertent mistake resulted in a tire defect that could lead to a tread separation. Should the employee inform management of his error and place his job at risk or should he keep quiet, simply make the process correction, and eliminate the error.

I guess the real question here is at what point does an omission become a lie? A lie is not in the words or the lack of words, it’s in the intention of the deceiver; the intent is to elicit a specific outcome. Is an omission only a lie when there is an expectation of a truthful answer to a question, where the answer was deliberately used to cover-up the truth? I don’t think so. If the intent of omitting the truth is to deceive, then it is no different than a spoken lie.

But how the employee responds would likely depend on how well the company has encouraged its employees to behave ethically. Incorporation of ethics into the business culture will ensure personnel at all levels make the right decision when faced with ethical dilemmas.

The Firestone employee who brings his error to the attention of his employer has resolved his ethical dilemma with the right choice. How the employer responds to this information represents his own ethical dilemma and is an indication of the company’s commitment to to the business ethics principle of ordinary decency.

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