Recent corporate scandals involving Volkswagen, General Motors Co. and other companies have put renewed focus on business ethics. Respondents to this week’s RBJ Daily Report Snap Poll gave mostly passing grades in the area of ethics.
A plurality gave business a grade of C for honesty and ethical conduct. This compares with 7 percent each at opposite ends of the spectrum: grades of A and F. In a 2009 Snap Poll that posed the same question, the results were similar, though 14 percent of participants gave business an A grade.
Last week, Volkswagen CEO Martin Winterkorn resigned in the wake of the company’s admission that hundreds of thousands of its diesel cars sold in the United States had a “defeat device”—software designed to cheat emissions tests. The week before, federal criminal charges were brought against GM for concealing an ignition-switch defect. According to prosecutors, GM has acknowledged 15 deaths, as well as a number of serious injuries, caused by the defective switch.
In addition, the former president of Peanut Corp. of America was sentenced to 28 years in prison for his role in selling contaminated peanut products that killed nine people and sickened hundreds more.
Meanwhile, in a case of alleged price gouging, Turing Pharmaceuticals hiked the price of a drug it had acquired from $13.50 to $750 a pill—an increase of more than 5,000 percent. Turing Pharmaceuticals has not been accused of legal wrongdoing, but after he initially defended the price hike, the firm’s CEO said he would reduce the increase.
Some think unethical behavior in business is commonplace. Nearly half of Snap Poll respondents—46 percent—said unethical behavior in business is more common now than it was in the past.
Others believe it is the exception. Since 2003, the Rochester Area Business Ethics Foundation has recognized local companies that exemplify high standards of ethical behavior with its Ethie Award.
The foundation presented its 2015 Ethie Awards to Nichols Construction Team and Heritage Christian Services Inc. at Geva Theatre Center on Monday night. The award recognizes businesses and organizations that do the right thing through strong ethical foundations, aspirations to high standards of business conduct and the multifaceted nature of ethics in our daily lives.
Roughly 440 readers participated in this week’s poll, conducted Sept. 28 and 29. More than 70 percent of respondents said their company has a compliance and ethics program.
In general, what grade would you give business for honesty and ethical conduct?
In your view, is unethical behavior in business less common or more common than it was in the past?
More common: 46%
Less common: 19%
Does your company have a compliance and ethics program?
For information on how the Snap Polls are conducted, click here.
Bad news sells. We hear more about the unethical businesses than we do about the thousands of business owners who follow the rules. If businesses are unethical, then they will lose customers and go out of business. Most cannot survive the distrust and bad publicity. So we must treat our customers ethically to maintain our customer base.
—Joel Stauring, Cunningham, Stauring & Associates Inc.
A few big businesses who are centered on greed and not ethics and morals tend to taint the reputations of hundreds of thousands businesses who are honest. Small- and mid-sized businesses run on documented credit, not cash, and they obey the rules; so do many large businesses. Our company strives to make a profit one transaction at a time by providing equipment and services our customers need, not through loopholes or shady practices.
—Bill Cox, CEO, Marktec Products Inc., Batavia
Sadly, look at the politicians—perhaps the most unethical people ever—yet they go unscathed and re-elected annually. Wouldn’t it be nice if just one was ethical as a start? I wonder where business gets the idea it is OK to be criminal?
When profit is the only measure that investors use to gauge the value of a company, then profit is king. Beside profit stands the queen—growth. Businessmen and women must produce both on a regular basis. Ethics and legality ride in the back seat; they are only trotted out when regulators or the general public notice that something is wrong. Food processors regularly change packaging sizes or reduce the volume of product in the package, gasoline prices are on a yo-yo string, cell phones are made with slave labor to reduce costs and boost profit. Companies routinely hire lawyers to evade taxes. And the beat goes on. I will grant that there are a few corporations that do better than the rest of the crowd. But they are few and usually privately held, where an individual owner is free to listen to his/her own heart. Corporate America fails the basic test of honesty.
—Wayne Donner, Rush
The treatment of its retirees gives Xerox a poor grade on honesty and business ethics. People who made the company a successful company have been cheated out of their well-earned retiree medical benefits after they had been retired for a number of years. Xerox has broken its promise to retirees!
Regarding “ethics,” unless a business is a cooperative, or perhaps a B Corp, it’s the old “WIIFM paradigm”—What’s In It For Me? We’ve seen way too often that profit is their lofty goal—above consumer safety, above the law, ad nauseum. What can we expect? I blame greed; I blame even the concept of the stock market; I blame the way our whole system is rigged.
—Marjorie Campaigne, Margie’s Green Home Consulting
My perception is unethical behavior is more the exception than the rule. Social media has played a large role with how fast “protests” and news can travel. Videos are shared quickly and viewed from anywhere, almost forcing businesses into more ethical behavior. Depending on how far one goes back, unethical behavior seemed commonplace, if not almost accepted.
(This week’s) Ethie Awards put on by the Rochester Area Business Ethics Foundation showed how much ethics added to the culture of successful companies. The four scholarship winners from area colleges told the audience how their research and studies showed that companies with strong ethics had more loyal customers and more loyal employees. Unfortunately it is the unethical companies that make the headlines with lawsuits for skirting regulations or bilking customers. The strong ethical companies are out there, and we all know some of them. Let’s start singing their praises so they make the headlines in a good way.
I think there are a number of companies that are highly ethical, but I think they are still in the minority, especially among publicly traded companies. With increasing transparency, Internet-based awareness, and increased demand for integrity by consumers, I expect to see this changing for the better over time.
—R.P. Siegel, freelance journalist
It is sad that attitudes are changing in this country more toward “whatever I can get away with.” This corresponds closely with the removal of God from our culture. But, I think there are more ethical people than is apparent in our workforce. Most highly ethical people don’t go around bragging about it, while it is easy to spot the unethical people by the decisions they make. Unethical companies are also easy to spot. They are the ones that have data breaches, unethical contracting, questionable pricing, etc. issues in the news and nobody gets fired or steps down. That is a clear sign that the lack of ethics starts at the top.
—John Midolo, managing partner, RCM Strategies LLC
I don’t think you should lump big corporations and what they do in the same category as small businesses. Small businesses don’t have the hierarchy of organization that a big corporation has. Big corporations can hide their unethical behavior until routed out. Then the public finds out that the CEO has changed once or twice and the CEO that is current takes the blame. CEOs make exorbitant amounts of money, and they don’t know the nitty gritty of what is going on in all aspects of their business. Small business owners know what is going on in their business, working alongside their employees. Unethical behavior can be easily found out and corrected. A small business that is unethical won’t be in business very long.
—Jennifer Apetz, Ferrel’s Garage
The Rochester Area Business Ethics Foundation not only sponsors the annual Ethie Awards program, which celebrated four new members to our Honor Roll Monday night, but also provides a variety of educational and informational resources to help companies improve their ethical culture. Visit our website at Rochesterbusinessethics.com.
—Alan Ziegler, president, RABEF
When I got my degree in Industrial Management from Georgia Tech in 1970, there was one required class on the service orientation of business. That was something that I supported and was amazed to hear the students sitting near me make jokes about that and talk about how much money they were going to make. I also recall a party my folks put on in the early 1960s where they had me tend bar, which allowed me to hear the conversations of the businessmen guests. One told of the events taking place at Libby Owens Ford glass company, where they were firing executives just prior to them becoming vested in the retirement plan. Maybe these events helped me decide to focus on service as my career has been in the cooperative natural foods world and personal and organizational growth work.
—Jim DeLuca, Abundance Cooperative Market
It’s ironic that many voices on the “right” constantly complain about “government regulations” being so burdensome and overbearing that business can’t function properly, when in fact the very same voices make sure the regulators are underfunded. When corporations cheat and lie usually it’s because they think they can get away with it. Although this sounds cynical, most corporations do the right thing but like any group there’s always a few bad apples who get all the attention. If those charged with monitoring business had the proper funding, maybe we could catch or deter those ethically challenged to do the right thing. I think Pope Francis said it several times: “We should strive to do what is best for the ‘Greater Good,’ not what is best for myself or the corporation.”
It is not reasonable—or good reporting—to ask people to assign one grade to all businesses in the world as if they are a uniform entity.
—Juli Klie, Veritor
Why limit this question to just business? Throughout humankind’s existence, man has shown the depths of depravity to the kindheartedness of a Mother Teresa. Most organizations are composed of a cross-section of people, and as such reflect the same attributes as people. That’s why virtually all organizations, businesses, governments, religions, etc. exhibit unethical behavior, amoral and even evil behavior at times. Some would say it is just the nature of man. I just hope that the good people outnumber the bad.
—Keith B. Robinson, Diamond Packaging
“Business.” VW’s dishonesty has about as much to do with the ethics and honesty of “business” as Lance Armstrong’s or A-Rod’s ethics and honesty has to do with the ethics and honesty of athletes. The company lied. The company cheated. Punish VW fittingly. Punish the next company worse for not learning the lesson of VW. Do not paint “business” with one brush any more than you would paint all people who ride bicycles and throw a baseball with one brush.
In the order of responses, I do not believe ethics are any worse, just blown up and detected more today! Same goes for the second question. With the literally trillions of dollars in business transaction today, I am amazed the business ethics are as high as they are, considering we are now in a “global economy” that makes tracking and enforcement a virtual “nightmare!”
—J.A. DePaolis, Penfield
In this day and age, the customer is king, since the economy is essentially stagnant and you must fight to win business. The two cases you mention drew huge headlines but are not representative of the marketplace. What VW did was bad for sure. What was and is worse, however, is what the EPA and government regulators continue to do to “snuff out” certain fuels and industries. We needed the EPA in 1970 when smog was a real health problem. But the problem is now solved. Cars, water and power plants are now “clean,” and EPA is overreaching. That’s a bureaucracy that needs to be eliminated! Today there are too many agencies, laws and regulations that have outlived their usefulness. The reforms we need now are eliminating outdated, outmoded cumbersome programs and laws to unshackle U.S. and N.Y. business.
—George Thomas, Ogden
Barons of old took advantage of business because they were unethical in an era where scams were new, and people didn’t know what to watch out for; now with added regulations—the barons are the ones in high power who can break/bend the rules because the public does not understand the intricate coding and laws.
—John Costello, RBJ
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