Saturday, April 21, 2012

Professional Values and Ethics

     Leaders in an organization set the example through mentoring, encouraging and teaching employees to represent the company with value based ethics. The relationship among professional values, ethics, and career success can impact a business by creating value from the top of the organization to the bottom. Organizational failure from greed and abuse can ruin a business and lose the faith of its workers, clients, and shareholders.
Values come from a person’s core beliefs. Morals, honesty, personal self worth, and virtue are qualities that make up the value of a person. This starts in childhood with the parents setting the example. This example becomes engrained in the child’s basic personality and carries with them the rest of their life. Ethics are based on right and wrong behavior and are the manifestation of outward beliefs. Ethics are the outward display of ones values. When values and ethics are applied in business, organizational leaders must look at personal and organizational values finding a connection between the two. Two organizations that demonstrated a strong value based ethics program were Unisys Corporation and Johnson and Johnson. These organizations answered an ethical dilemma in a productive manner by implementing ethical standards across organizational areas. The third comparison illustrates the unethical traits of Lincoln Savings and Loan that affected millions of people and part of the downfall for an entire industry.
Organizations That Implemented Strong Ethics
Unisys Corporation
     Unisys Corporation has a very strong ethics program. Unisys is a product of a merger between Sperry Univac and Burroughs Corporation in the early 1990s. The corporate officers promote strong ethical behavior by implementing and following strict guidelines. Employees are required to watch a video, which describes the ethics standards and shows several vignettes about possible ethical situations. Employees are required to take a test to validate they understand the information.
Unisys suspended from contract bidding
     In 1989, Unisys was suspended from bidding on Navy contracts for a four-month period according to a New York Times article published on Tuesday, July 25th. The suspension was given following a Federal investigation on bidding procedures. Two former employees pleaded guilty to charges of bribery and illegal political donations.
In the mid-1990’s, government contracts were suspected and fines levied at General Electric, General Dynamics, Sperry Corporation, Honeywell, McDonnell Douglas, Lockheed and Boeing for price gouging, fraud, and the use of classified documents according to a paper by Alison Fors at Brigham Young University. This was the era when companies were charging the government $659 for an ashtray, $640 for a toilet seat, and $400 for a claw hammer. Sperry created a 10-page booklet on ethics that employees had to certify they read the material.
Tylenol Scare of 1982
Johnson and Johnson Company
     Johnson and Johnson Company (J&J), which are known globally for pharmaceuticals and medical devices, showed professional integrity during the Tylenol scare in the early 1980s.  There were reported deaths of seven people who had taken Tylenol capsules, which were laced with cyanide in the fall of 1982. This resulted in a nationwide scare with over 200 copycat crimes and millions in lost sales for J&J.  Over one hundred million dollars in Tylenol products were recalled and J&J responded quickly to consumers through media outlets warning people to not use any product that contained Tylenol. J&J also offered to provide an exchange for Tylenol capsules that were already purchased to replace with the solid tablets. This shows that J&J were quick to perform the needed actions of recalling their products and offer something in the interim of an investigation until law enforcement was able to prove that this was not the fault of the pharmaceutical giant.
     This crime also brought changes to packaging laws pertaining to over the counter medicines. Capsules were removed and replaced with caplets and more strict labeling requirements were enforced. Other pharmaceutical companies quickly complied by changing their packaging on all medicinal products from pills, cough syrups, even eye drops to make them safer for consumers to use.
     J&J proved through solid values and ethics that public safety was their number one concern even though it meant short-term financial losses. This was a trade-off they chose and made a wise decision that resulted in the public regaining their trust and confidence in over the counter products.
Poor Ethics: The Savings and Loan Scandal
Lincoln Savings and Loan and Deregulation
     Terms such as unlawful risk taking, embezzlement, covering up, and defrauding investors are some of the words used to describe the Savings and Loan (S&L) scandal in the late 1980s. Charles Keating of Lincoln Savings and Loan and many subsidiaries were investigated for securities fraud. This started back in 1980 when the federal government phased restrictions on interest rates paid by S&Ls and moved to a free market model. Further deregulation occurred with phasing out interest rate ceilings and dropping the requirement of stockholders an S&L could have. This made it easier for entrepreneurs to open federally insured S&Ls. However, greed took over and the words values and ethics proved to have little meaning to those who were bringing in large amounts of income.
The End of Savings and Loans
     Insider trading, loans made that were in excess of what is allowed by regulations, high risk speculative trades, using the financial institution to fund personal vacations, gifts, clothing, art, and more corroded the industry. Consulting fees were paid to “friends” and “relatives” of the insider’s association of business or put on these companies payroll to get a piece of the commission. Eventually these S&Ls were put out of business. Charles Keating went to jail, and billions of dollars in government bailout were thrown on the backs of taxpayers, which estimators say will take 40 years to pay off completely.
     Every employee of a corporation must be ethical and promote sound business values. An employee who follows unethical behavior will eventually get caught and can haunt him or her for a lifetime. New employers will validate employment and learn of unethical behaviors at previous positions. Many people will move between companies and will have knowledge of people in the industry that display unethical behavior. Everyone likes doing business with people who display ethical behavior and promote sound business values. Business relationships are built upon truthful negotiations and fair business transactions.
     The impact of career success relies on individual’s values and ethics.  Some can have morals in caring for people, and others might have high morals in caring for the environment. No matter what the individual bases his or her values and ethics on, having sound morals with no ill intentions is crucial to success. With good values and good ethics a person can take his or her career to the highest level. 


Fors, A.; Gonzalez B.; Hawkins, E., McLaws, B. (2005). Brigham Young University Arthur W. Page Society. Retrieved September 2009 from
Frantz, D.  (1989, August 24). Murder Evidence in Tylenol Case Told: [Home Edition]. Los Angeles Times (pre-1997 Full text), p. 19.  Retrieved September 24, 2009, from Los Angeles Times. (Document ID: 66531521).
Hoffman, P. (2006, October 21). Define Your Position: Values, Ethics & Leadership. Retrieved September 17, 2009, from,-Ethics-and-Leadership&id=334934
New York Times. (1989). Company Earnings; Unisys Profits Plunged 67% in Second Quarter. The New York Times, published Tuesday, July 25, 1989.
Pontell, H. and Calavita, K. (2001). White-Collar Crime in the Savings and Loan Scandal. The ANNALS of the American Academy of Political and Social Science 1993; 525; 31. DOI: 10.1177/0002716293525001003.
Urbany, J., Reynolds, T., & Phillips, J. (2008). How to Make Values Count in Everyday Decisions. MIT Sloan Management Review, 49(4), 75-80.  Retrieved September 24, 2009, from ABI/INFORM Global. (Document ID: 1520405561).

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.