[This article appeared in the first issue of the Kirkpatrick, Sprecker & Company, CPAs, Wichita, Kansas, Client Report dated January 1978.] 

 

Ethics: For the Individual and the Firm: It Helps to Take a Detached View

 

By Dwight D. Murphey

 

            I think we all know that detachment—the ability to stand back from what we are doing so that we can keep it (and ourselves) in perspective—is one of the hallmarks of a “professional.”  What I will emphasize in this article is that it is also essential for business and professional ethics.

            We admire the professionalism of a military officer who has kept control of himself sufficiently that he can give reasoned orders even during the hysteria and chaos of a battle, and we comment on how “seasoned” a basketball player is who can stand relaxed at the free throw line in the middle of ten thousand frenzied spectators.

            The reason we admire them is that by retaining their own identity and staying in possession of their faculties at times when others are often carried away, they have been able to remain in command of a situation.  They have been able to do this only by separating themselves, at least to a degree, from the absorbing pressures of that situation.  This has permitted them to retain their own center of gravity.

            The detachment of the professional gives him several advantages.  By not allowing himself to be totally absorbed in the particular, he becomes able to see his subject as an example of more general categories.  This means that he is able to “rationalize” it, to see it in terms of cause-and-effect in a more systematic and dispassionate way.  He is also able to bring a “body of knowledge” to bear upon it that has been developed by the entire professional community.  One of the main functions of education is to enable the educated man to see things in terms of just such a systematized body of knowledge and theory.

            I would like to underscore the importance of detachment in business ethics—first for the individual, and then for the firm.

            The individual’s ethical dilemmas.  In practice, the difficult thing about ethics isn’t usually in knowing what is ethical and what is not.  The main problem is a human one.  It arises out of the fact that all ethical decisions have to be made by individuals acting within a human setting.  In such a setting, the individual is often subject to two phenomena that can seriously affect his ethics.  One has to do with “absorption,” the other with “squeeze.”

            The absorption aspect comes about because people in most groups permit themselves to become so absorbed in their own situation, and in the attitudes and expectations of those around them, that they stop thinking in terms of making independent moral judgments.

            When this occurs—and it is pretty universal, human nature being what it is—the individual is encapsulated within a certain in-group, or what we might call an “ethical subculture.”  His behavior will be in keeping with the “common denominator” of that subculture.

            The submergence of the individual’s moral faculty into that of the group creates some real dangers.

            In the first place, the ethical conscientiousness of high-minded individuals is important if the group’s own ethical denominator is to stay at an acceptable level.

            Secondly, the individual should keep in mind that there are different strata of ethical judgment.  It may seem to someone who is a member of a certain group that a type of behavior is acceptable because, after all, “everybody’s doing it.”  But at some point that behavior may be judged by outsiders, who will judge it from the point of view of a broader community.  It is at such times that industries find long-standing practices challenged as anti-trust violations or as “unfair trade practices” or the like.  The standards followed within a group are not an infallible guide to the ethical judgments of the wider community.

            Thirdly, it is worth recognizing that there are important cultural and human factors that tend to bring down the ethical level of groups unless that level is sustained by other influences.  This subject can hardly be done justice in a short article, but a few observations will be sufficient to clarify what I mean.  We live in an age that is in many ways the most magnificent and beneficent mankind has ever known.  But it is also a secular age in which the pursuit of material values by an essentially non-aristocratic population results in a widespread “spoiled child” mentality and a general personal orientation on the part of many people toward cultivating the art of “getting on.”  The result is that in many situations the individual who seeks to act ethically finds himself surrounded by a type of individual I refer to as a “practical realist.”

            The “practical realist” is a doer.  For many purposes, this is good.  But he also has a thoroughly formulated point of view that tells him that in order to succeed it is all right, indeed even absolutely necessary, to “do what you have to do to get ahead.”  He will act on the lowest levels of the prevailing ethical denominator.  Since he doesn’t consider himself dishonest, he won’t generally operate below that level, however.

            Within the milieu of the “practical realist,” an individual with higher scruples is going to have a hard time.  This is the “squeeze” aspect I mentioned earlier.  He will not be given credit by his peers for his scruples, since to them those ideals will seem foolish and naïve.  He will also be seen as a standing rebuke and obstacle.  If he is to stay within such a setting, he will be called upon to make continuing moral compromises.

            I am not necessarily suggesting that the individual’s solution is to flee to a different setting.  For absolute ethical purity, religious thinkers for thousands of years have understood that the saint must withdraw from the world of men.  What I am pointing out is that the individual must, if he is to optimize his ethical behavior, usually make a conscious adaptation, taking his ethical stands where they are most important and effective.

            For the individual to make conscious ethical choices even though he finds himself among “practical realists,” he must maintain some measure of detachment.  If he doesn’t, his consciousness will be either absorbed or squeezed into the group’s.

            The firm’s ethical choices.  Organizations, including business and professional firms, should be aware of the “absorption” and “squeeze” phenomena that are occurring to their members.  By conscious organizational design, it is possible to mitigate the ethical dilemmas of the individual and to raise the ethical denominators of subgroups that make up part of the organization.

            By the clear and repeated promulgation of ethical policy, by training programs and by a consistency that avoids giving an impression that “lip service is one thing, but the real expectation is another,” it is possible for management to influence favorably the accepted denominator of behavior within the various peer-groups and sub-systems.  These efforts will have to be backed up by effective reporting procedures, and by disciplinary and reward systems.  In this way, the organization shows a continuing concern for the level of behavior and provides a livable setting within which the ethical individual can exist without being at a serious disadvantage.

            In all probability, management will not incorporate these ethical features into the structure of the organization unless it is sufficiently conscious, in an explicit or “detached” sense, of the need to do so.

            The anticipation of the ethical situation, with its recurrent human pressures and dilemmas, is something that both individuals and organizations ought to undertake.  It needs to be a recognized part of personal adjustment and management technique.