All things Business Ethics – Bidhan “Bobby” Parmar wins Best Dissertation Award 2011! Congratulations!

August 11, 2011

University of Virginia Darden School of Business Professor Bidhan “Bobby” Parmar has been selected as the winner of the Society for Business Ethics Best Dissertation Award 2011. His dissertation is entitled, “The Role of Ethics, Sensemaking and Discourse in Enacting Authority Relationships.”

Bobby ParmarAccording to the Society’s website, the purpose of the award is to recognize the dissertation that most clearly demonstrates the potential to contribute to substantial advances in business ethics research and practice.

Parmar’s dissertation, unlike traditional work in business ethics, examines ambiguity, language and social relationships as critical aspects of moral decision-making in organizations. His work demonstrates how an individual’s organizational role can shape his or her perception of and subsequent handling of ethical issues. Because organizations have a division of labor to produce goods and services, it can be very difficult to place responsibility for ethics failures. One key practical implication is to improve the kind of ethics training that managers and leaders receive. Instead of relying only on improving individual decision frameworks, Parmar’s work suggests that companies need to treat ethics failures like other system failures and create mechanisms to prevent those failures – by making clear how internal and external stakeholders will attribute responsibility for ethics failures.

Parmar will receive a plaque and a cash prize at the Society’s awards luncheon on 13 August in San Antonio, Texas, during the organization’s annual meeting.

Parmar is an Assistant Professor in Business Administration, having recently finished his MBA/PhD at Darden. His research interests focus on how managers make decisions and collaborate in uncertain and ambiguous environments to create value for stakeholders. His recent research examines the impact of authority on moral decision making in organizations. Parmar’s work has been published in Organization Science and the Journal of Business Ethics.

He teaches courses in Darden’s MBA programs, including First Year “Ethics,” “Leading Organizations” and a second year elective called “Collaboration.” Parmar is a fellow of the Business Roundtable Institute for Corporate Ethics, an organization housed at Darden, which brings together leaders from business and academia to fulfill its mission of embedding ethics into the everyday business decision-making and practice of organizations. He is also a fellow of Darden’s ethics research center, the Olsson Center for Applied Ethics at Darden. Prior to teaching at Darden, Parmar taught at the University of Virginia’s McIntire School of Commerce.


Business Ethics Question: Should Company’s track employees Social Media activity?

August 9, 2011

BUSINESS ETHICS 101 – Should an employer attempt to protect his/her company’s assets and/or reputation by monitoring their employees social networking practices?

With so much riding on corporate ethics, should an entrepreneur try to protect his or her company’s reputation from employees’ loose, careless and sometimes dangerous social networking practices?

The following news release from Kansas State University asks some challenging questions:

Monday, Aug. 1, 2011

GAME CHANGER: BUSINESS ETHICS EXPERT WEIGHS IN ON MONITORING ONLINE IDENTITY OF PROSPECTIVE, CURRENT EMPLOYEES

MANHATTAN — Should businesses monitor the social media activities of their employees? A Kansas State University business ethics expert says the practice can be a double-edge sword.

Such monitoring is available through companies like Social Intelligence, which provides businesses with archived data from social media sites for use in preventing online damage to their reputations. But the data also can be used to screen potential employees and to monitor the social media activities of current employees.

“I understand the need of a business to protect its reputation,” said Diane Swanson, professor of management and chair of a business ethics education initiative. “But in terms of employees’ rights, the practice coexists uneasily with the expectation of personal privacy.”

Use of Social Intelligence could create considerable changes in employee communication, Swanson said. Potentially, the practice could create a climate of fear and distrust. These effects could be detrimental to morale and hurt productivity.

To prevent such a situation, Swanson recommends that companies craft policies and provide expectations of employee’s online conduct. This would shift the emphasis from monitoring to creating shared understanding between employers and employees. Further steps would also be necessary.

“A company should provide full disclosure of its monitoring practices and the consequences employees would face if they violated stated policy and hurt the business’ reputation,” Swanson said.

Without such full disclosure, an individual employee would be operating without the benefit of knowing important rules of conduct. This could be construed as unfair, especially given the relative power of large organizations compared to that of lone individuals, Swanson said.

The approach is also necessary because of the lack of laws regarding companies like Social Intelligence. Data collected by Social Intelligence follows the Fair Credit Reporting Act. It also does not include basic demographic information. But the monitoring and screening can provide any message or tweet deemed worthy of mention. The approach could prove negative for businesses if valued employees are ousted or alienated in the process, Swanson said.

“If a business is worried about this, the best way to handle it proactively is for the expectations to be laid down when employees are hired,” Swanson said. “This should be followed by training sessions and discussions related to performance evaluations. That way, management can strive to head off problems and be part of the solution instead of being viewed as heavy-handed.”

Swanson suggests the loss of personal privacy in social media activities is emblematic of larger societal trends.

“We are getting used to what could be considered violations of our privacy from what has been happening with government practices and now on the corporate side,” Swanson said. “Such practices cause tension in a society where citizens traditionally value individualism and look to the law to protect the expectation of privacy.”

Because online surveillance appears to be proliferating, Swanson believes that ultimately public policy and the courts will establish more definitive guidelines.

“The problem is that technology outpaces the ability of the law and public policy to keep up,” she said.

Meanwhile caution should be exercised.

“The more people are aware of this practice, the more they will be empowered to make smart decisions,” Swanson said.

SO WHAT DO YOU THINK?  Monitor Social Media activity is ethical or unethical?

YOUR COMMENTS ARE WELCOME!


Colorado State University and the University of Northern Colorado Present Symposium on Business Ethics Aug. 11-12

July 27, 2011

News Release re: Ethics Education

FORT COLLINS – Colorado State University and the University of Northern Colorado will present the Daniels Fund Ethics Initiative Leadership Symposium on Business Ethics Aug. 11-12.

In a business era punctuated by new and serious ethical challenges, this two-day interactive symposium is geared toward providing relevant tools and practice for navigating ethical dilemmas that professionals may encounter. All sessions will take place at the Bohemian Auditorium inside Rockwell Hall West on the CSU campus.

A variety of noteworthy speakers and presenters have been selected to lead the symposium in the following areas:

• Corporate Governance and Business Ethics Case Study – Led by Eric M. Pillmore, senior advisor for corporate compliance, Deloitte Center for Corporate Compliance and the former vice president of corporate compliance, Tyco International, this interactive session will engage participants in a case study of Tyco International and offer recommendations on how to restore an ethical culture to a company.

• Social Responsibility and Business Ethics – Bryan Simpson, media relations director for New Belgium Brewing Co., will lead a discussion of the company’s efforts toward maintaining sustainability and social responsibility in their business operations. Thomas Dean, professor of entrepreneurship and sustainable enterprise and the Daniels Ethics Professor at Colorado State University, will facilitate an interactive exercise where participants will balance profit maximization and sustainable business choices.

• Applying Ethical Decision Making at Work – Using business-based ethical dilemmas, Linda Ferrell and O.C. Ferrell, both professors of marketing and Bill Daniels Professors of Ethics at the University of New Mexico, will guide participants toward making workable recommendations based on unique organizational roles and perspectives. The two also will provide a framework for definitions, examples and overall understanding of organizational ethical decision making.

• Ethical Decision Making Simulation – Barney Rosenberg, a veteran of three decades of leadership in business ethics and corporate compliance, will lead this session that asks participants to use the knowledge gained in the symposium as a mock board of directors is forced to navigate a complex business environment in the corporate fast lane. Rosenberg, vice president of ethics and business conduct for The Meggitt Group, is a former general counsel for Mattel Corporation and a former deputy general counsel for Pitney Bowes.

This Leadership Symposium on Business Ethics is made possible through the support and leadership of the Daniels Fund, reflecting the interest in ethical business practices of Bill Daniels, its namesake. The Daniels Fund Ethics Initiative sponsors business ethics studies and research at seven U.S. universities, including Colorado State University and the University of Northern Colorado.

Individual cost to attend the symposium is $450, which includes breakfast, luncheon and evening networking event meals. To register for the conference or to learn more, visit http://transition.biz.colostate.edu/RSVP/2011LeadershipSymposium.aspx


Business Ethics: It is really about more than avoiding prison! Is there a little Bernie Madoff in each of US? A Guest Blog by Corey Richardson

July 24, 2011

A “Man of The Age” financier is surrounded by mystery and adoring members of the moneyed elite hungry for some of his wondrous returns. This paragon of the business class with The Midas Touch accepts only a few choice clients who seem to wither in his presence as they deliver their accumulated wealth into his magical hands – no questions asked. The returns are beyond belief, and for very good reasons. Unbeknownst to all, this wizard of the market is juggling fraudulent accounts to pay for his lavish lifestyle. The only trading is from their hands to his. The ruse comes tumbling down and the entire nation is stunned.

The scoundrel portrayed above is Charles Dickens’ character, Mr. Merdle of Little Dorrit, first published in 1857. Dickens foretold the Madoff scandal verbatim in his quintessential corruption tale, but this iniquitous business leader is an age-old archetype, and we, like Dickens, find it easy to vilify him due to the magnitude of his crimes; No stealing a crust of bread for this villain. At its polar opposite, take the “common criminal,” the savage monster seen today in T.V. cop shows, the local news, and innumerable B-movies. This standard is bloodthirsty, drug- crazed, and has a soul as black as night.

Dickens’ work is also replete with such characters.  The beauty of these caricatures is that we cannot find ourselves in either. They conveniently represent “other.” All the while we can sit comfortably in our living rooms with our sense of moral rage because we do not bilk venerable charitable funds and we do not cook meth in our kitchen. Yet, it can be argued that if we truly strive for a better world, then we need to go well beyond the knee-jerk reactions of these scenarios, and find ourselves in the moral conundrums.

Stricter regulations of the financial sector and more accountability, gun control legislation, sensible criminal sentencing laws, affordable drug rehab, etc., are important factors, but are only part of the solution. Even focusing on improvements to education and social services, which have been shown to be extremely important in crime prevention within certain groups, is still only a small part. To thoroughly understand what drives people as different as Kenneth Lay or a Gov. “Blago,” as well as a gun-totting inner-city kid with a pocket full of dope, we must understand root causes of criminal behavior, thus pointing the way for our next generation of leaders- and evaluate ourselves in our own business affairs.

“What causes criminal activity, and. who are these people who commit crimes against our society, such as … ” taking items from work, “fudging” on taxes, paying for non-business activity with a business account, inflating an insurance claim, switching labels at a store, producing unsafe products, “padding” a bill, or any number of violations of legislated standards for personal gain committed by everyday people.

Due to perception, universally known within psychology as the fundamental attribution error, these crimes are given little thought by those who commit them.   Joe Citizen justifies and minimizes these activities as “bending” the rules. And this is where we see the attribution error in effect: we tend to overestimate the role of personal factors and underestimate the “influence of situations in others, and we overestimate the situational factor and underestimate the personal factor in our own circumstances. It is the age-old “We judge others on their actions, and we judge ourselves on our intent.” Or I’m bending the rules, and he is breaking the law.

This phenomenon is not unique to the middle and upper socioeconomic strata, and equally applies to the poor. A drug dealer feels that his activities, though illegal, are still a legitimate means to earn a livable wage within his community.  The same could be said of any accountant or lawyer who “tweak’s” the system to make a little money. So, getting a television set off the back of a truck in the ghetto looks much like another’s decision to not claim income on a second job. It is all about perspective.

As we address the problem of the business class, we can facilitate the much-needed change in perspective with some cold, hard facts. Business leaders do not need to be as extraordinarily crooked as Madoff to affect a, huge societal burden. Study after-study demonstrates that “white collar” or corporate crimes, as well as middle-class crimes, ranging from tax evasion, insurance fraud, price fixing, inventory “shrinkage” (what a euphemism!), etc., weigh much more heavily than the number one Index crime, conventional property crime. Index crimes are known also as “street crimes.” They are highly visible crimes, easy to categorize and count, and are overwhelmingly committed by the poor. White collar crimes, by contrast, are difficult to detect and rarely prosecuted. Still, the economic yearly cost with respect to property crimes of the corporate America are approximately twenty times greater than conventional property crimes of index offenses, or a difference of $200 billion to $10 billion annually.

Having completed a fully accredited MBA program via a distance-based education format, I need to share that – this accomplishment – was done from an 8′ by II’ prison cell.  I was an inmate and like most “on the inside,” I readily justified my criminal acts, which occurred within my professional life, as did the drug dealer or the burglar.  So, as I approached my Business Ethics coursework, I did it with the secure knowledge that I committed a crime. This perspective, and the belief that my professors would judge my answers too with this in mind, gave me a keen eye in studying ethical queries in business.

I believe that when most students answer questions related to ethical foundations or detail their understanding of their own personal values, they do it from a perspective that they themselves could not possibly commit a crime. Such activities, such as smoking pot in the college dorm or not claiming wages from a summer job paid “under the table,” are simply not considered as crimes, which they are. Again the attribution error: “My (illegal) acts are not illegal, and certainly not unethical.

Everybody does it. It is no big deal.” And so forth. To cultivate a true ethical North in business, we must broaden our perspectives, and when an ethical dilemma arises, we can perceive it as such. No different from operations management or strategic planning. An appreciation of multiple perspectives — proffers a grand wealth of insight that will carry our next generation of leaders.

As a convict, my daily life is a direct result of criminal acts related to my work. In my studies, I can clearly see the untold millions that are affected by one unsafe product, but I can also appreciate how one man can justify criminal acts as a bad business decision, rather than a pathological act for profit with no respect for the law. To open the eyes of CEOs early in their training to the easy comparisons between corporate crime and “street” crimes, as well as offer tangible proof of the enormous societal burden of white-collar crime, would be of immeasurable value. In teaching business ethics, we must go well beyond the bland terms and definitions and the prosaic personal litanies of “What I value in the world.” We must make the coursework truly applicable and create managers and business leaders who intuitively understand how ethics within Corporate America are just as important, if not more so, as profit margins and supply chains.

Clearly, when I understand myself, I can understand Bernie Madoff or Kenneth Lay.  I believe the same could be said of us all. The equation is simple: Unbridled Financial Gain plus Opportunity, then Add the Likelihood of Detection and Fear of Prosecution. Embracing the truth of unlawful acts in our everyday lives, be it business or personal, is much harder to do than to merely vilify in a fanciful Dickensian way the corporate or government leader who betrays our trust, or even the dope dealer of the inner cities. But it will help to create leaders who view all of their work and life through a lens of principled behavior. We must begin to see the situational nature of all criminals acts, and therein lies the beginning of meaningful solutions. It is not enough to alter the number of opportunities to steal or the severity of the requisite penalties, but to go further by changing what stealing looks like by different people, changing the perceptions of illegal gains, and infusing the intrinsic value of ethical behavior.

When we see that all of us have a little of Bernie Madoff in us, only then can we begin to view our world more clearly and begin to make authentically ethical decisions as we lead our companies and organizations. We may even make significant changes in our personal lives.

Business Ethics: It is really is about more than avoiding prison.

Corey Richardson Biography:

Corey John Richardson is a former clinician, who holds a Master’s Degree in PA Studies from the University of Nebraska’s College of Medicine (Omaha) and a Bachelor’s Degree in Health Science/PA Certificate from the University of Florida’s College of Health Related Professions (Gainesville). He holds an MBA from Salve Regina University’s Graduate Business School (Newport, RI) and has completed doctoral health science coursework with a focus on prison healthcare at Spalding University (Louisville, KY). Mr. Richardson’s work has been incorporated into criminology courses at the University of Cincinnati and has been included in CURE’s congressional file on correctional healthcare in support of HR 3710. He has performed medico-legal consulting and has legal experience assisting prisoners in various civil and criminal actions. As a pro se litigant, he won a precedent-setting case on appeal against the Kentucky DOC and its Abuse of Power (published at Richardson v. Rees, 283 S.W. 3d, 257). He has also worked as a facilitator in numerous psychotherapeutic and rehabilitative programs.

Mr. Richardson has written widely about prison issues and sobriety for publications such as Spotlight on Recovery, Cell Door Magazine (the official publication of the National Death Row Assistance Network), T’he Kentuckiana News, Perspectives (the official journal of the Association for Humanistic Psychology), The Grapevine (Alcoholics Anonymous’ international publication), The Long Term View: A journal of informed opinion (Massachusetts School of Law at Andover), OUTlooks (Canada’s GLBT magazine), and others. Several of his essays have been published in the book Voices Through The Wall and he won 1st Prize in the Ford Foundation’s 2OO9 national writing competition Think Outside the Cell, published in Love lives here, too. (2010)

Mr. Richardson maintains his writing at coreyrichardson.blogspot.com and may be reached at coreyjohnrichardson@gmail.com. In 2001, he was convicted of crimes related to practicing medicine without a license and served 122 months in the Kentucky Department of Corrections; his supervising physician was given a probated sentence. Mr. Richardson has 13 years of continuous sobriety on July 14, 2011.

Read the rest of this entry »


Former Wachovia Financial Advisor – Lazaro E. Salado – Pleads guilty to Bank Fraud – what was his motivation?

July 13, 2011

Since every choice has a consequence – the consequences of Lazaro Salado’s fraud will be significant and impactful.  The prison sentence that he will receive will be life changing and the restitution that follows may be impossible.  But at a deeper level the question might be what motivated his behavior?

Former Wachovia financial advisor, Lazaro E. Salado, 42, of Palmetto Bay, Florida, pled guilty to a Criminal Information charging him with one count of bank fraud for stealing client funds.

According to the Criminal Information, Salado was a financial advisor at Wachovia in Miami, Florida, responsible for assisting clients in investments and financial planning. From February 2004 to May 2009, Salado stole more than $1.45 million from five of his clients at Wachovia by causing checks to be issued on client accounts, without the knowledge or authorization of these clients, for payment to a bank account controlled by Salado. Salado concealed the fraud by providing false and fraudulent statement to clients and also by transferring money between client accounts through unauthorized wire transfers.

As part of the plea agreement announced in court today, Salado agreed to make mandatory restitution of $1,457,309 to Wachovia (now Wells Fargo).

Sentencing is scheduled for September 14, 2011 before U.S. District Judge Marcia G. Cooke. Salado faces a maximum statutory sentence of up to 30 years in prison, a fine of up to $1,000,000, and restitution.

QUESTIONS: 

In any fraud there are three components that come together:  (1) Need; (2) Opportunity and (3) Rationalization.  While it might seem obvious that Salado had a need for money (since that is what he stole) – the bigger question might be – FOR WHAT?  Did his lifestyle reflect the use of the stolen money?  Should have it been noticeable by his co-workers?

He had opportunity through Wachovia – yet the question looms – where did the internal controls fail that allowed Salado to embezzle such large sums of money?  Surely the systems were in place to detect activity like this that took place over 5 years.

Lastly, wonder what was in Salado’s mind that allowed him to rationalize his behavior?

If you know Lazaro Salado and/or have any insight into these or other questions that may arise feel free to comment.

YOUR COMMENTS ARE WELCOME!


Buusiness Ethics and Fraud Prevention Speaker Chuck Gallagher addresses FBI Conference

July 11, 2011

CHOICES: Negative Consequences – Positive Results

Chuck Gallagher Shares the Impact of Choices

at a Time when Ethical Choices seem to be missing from Business Culture

 CHARLOTTE, NC.  July 7, 2011.  From Prison to Promise, Chuck Gallagher’s presentation:  CHOICES: Negative Consequences – Positive Results –  exposes the power of choice and the negative consequences or positive results that can follow.   Selected to present to the 2011 FBI CPA Conference in Denver, Colorado, this annual FBI conference generally focuses on economic and other white-collar crimes.  Recognizing the importance of ethics and their practical application, Gallagher, as a speaker, is a natural fit for this national conference as he shares from experience how a life can change and the course of history can be altered by one unethical choice. In today’s environment, with so many lives turned “topsy turvy,” CHOICES  – provides a meaningful and practical framework for understanding how an otherwise ethical person can make unethical and potentially illegal choices.  CHOICES –  exposes the impact of unethical choices and the power that ethical choices can have.  As a business ethics and fraud prevention speaker, Gallagher’s presentations provides a foundation for business ethics training that goes beyond case studies and focuses on real life issues.

Chuck Gallagher, author of the new book Second Chances, has lived through it and he has come out a better man, husband, and father.  As a nationally recognized CPA, Gallagher lost it all when he made unethical choices by creating a Ponzi scheme and defrauding his clients and it all began with one bad decision.  He chronicles his fall from a wonderful life of success into the inside of a prison cell and how he managed to take the steps to rebuild his life to one full of meaning, purpose, and promise.

Shortly before his sixth month in prison, Gallagher asked himself, “Where from here?” This ultimately becomes his personal call to action upon which this book is premised. Gallagher states, “You may make a mistake, but YOU ARE NOT A MISTAKE.” So what’s next? What do you do next? How will you put one foot in front of the other to manifest the power over the choices you make now and in the future?

Gallagher’s presentations offer nuts and bolts information relevant to anyone from Main St. to Wall St. It packs hard-hitting, no-nonsense tools that the audience member can actually manifest into the power of ‘choice intelligence’. Through his transparent heart felt presentations, Gallagher says to the his audience, “Take what I’ve learned and apply it in your life and you will transform your destiny.  Explore every God-given opportunity and, in the process, you’ll develop a higher level of consciousness through better choices and a higher purpose. Honor your life, make wise choices, you will make a difference in your own life, the lives of others, and in society.”

Today, Gallagher is COO of a national company and speaks internationally on business ethics – choices and consequences. Chuck openly and candidly shares the lessons his roller coaster ride in life has taught him.  Described as “creative..,” “insightful…,” “captivating…,” and a person that “connects the dots” between behavior, choices, and success, Chuck Gallagher provides his clients, readers, and audiences with what they need to turn concepts into actions and actions into results

Chuck’s presentations drive home the very real issues involved in businesses today.  One unethical errant choice and the media fallout can have an immediate impact on business results.  For information about Gallagher’s ethics presentation contact Chuck at chuck@chuckgallagher.com ,call him at 828.244.1400 or visit his website:  http://chuckgallagher.com.


Great Article from Chris MacDonald – ‘Doing the right thing:’ A brief guide to the jargon | CanadianBusiness.com

July 8, 2011

‘Doing the right thing:’ A brief guide to the jargon | CanadianBusiness.com.

This is an excellent article from Chris MacDonald published in Canadian Business.  As a business ethics speaker, I often find that my audience and even at times my clients become confused between the terms: Business Ethics; Corporate Social Responsibility; Sustainability and the Triple Bottom Line.

Chris does a great job in summarizing those for the reader and I’m pleased to feature his article here so others might benefit.