Bottom Line or Business Ethics – Which is more Important? Judith Samuelson’s article discusses – Chuck Gallagher Business Ethics Speaker comments…

July 21, 2012

There have been a flurry of articles lately about what and how business schools teach business ethics.  The most recent, an article written by Judith Samuelson on the HUFF Post Business section states the following:  “Research conducted by the Aspen Institute suggests that ethics IS taught in business schools, and, increasingly, with an eye to making it stick by embedding it in orientation programs, “learning journeys,” core course work and hands-on experience.”

It is in the first part of her article that I take exception.  As a business ethics speaker and author I see first hand what seems to be the norm for business ethics offerings in b-schools and it’s pathetic – at least that’s my opinion.  Samuelson goes on to say, “Business ethics goes by many names and the vast majority of schools in the Institute’s ranking of business schools require ethics or something that goes by the name of “social responsibility,” “social enterprise,” “social impact” or “leadership and values.””

REALLY?  Social responsibility?  Social enterprise?  Leadership and values?  Come on…you can call it what you want, but if you don’t teach beyond the theory of what is socially acceptable or how leadership intersects moral norms, you effectively have little more than just fluff!  Theoretical fluff…I would call it and that has little impact in the real world when faced with split second decisions that have an impact far beyond the moment.

One clue comes from the inside. Luigi Zingales, a titan of the academy of finance who teaches at the University of Chicago, argues that business education across the disciplines needs to move from a stance of “values neutrality” to one where students are exposed to the moral decisions that permeate the core of business. Zingales suggests we deliver “ethics” in accounting and finance rather than a course labeled Ethics, which is bound to turn off motivated students looking to get ahead.

Interesting paragraph by Samuelson.  Intriguing that Zingales wants to hide ethics in some other course because it turns off motivated students who want to get ahead.  I have an alternate suggestion…  Educate students with the course – “How to avoid an orange jumpsuit and handcuffs” – in other words make ethics real and alive.  What do the professors know about the real world of federal prison, how one turns to the dark side and what happens when that happens.  Pardon the bluntness, but perhaps students should be scared sh*tless and know the real world implications of their (sometimes misguided) desire to get ahead.

Samuelson shares: To the contrary — research also suggests that the big take away from b-school is the same one that permeates board rooms. Ethics are important, but earnings-per-share is the guiding principle. Remember the ethics handbook distributed to each employee at Enron? The more compelling and well compensated message went something like this: We exist to make money. “Profits,” aka “shareholder value,” is the most important metric. We all benefit when the stock price goes up — and employees who make it happen will receive the most. Damn the torpedoes; full speed ahead. EPS is the main meal. “Ethics” is desert.

Samuelson’s article approaches the education of business ethics in a focuses thought provoking way.  Nice article.  I, on the other hand, would love to share a good dose of reality into the minds of the students helping them connect the dots between choices and consequences.  Perhaps a semester of real world example where the students choose among a set of choices giving them an opportunity to see which one’s result in career destruction and arrest would have far more impact.  Maybe we should call it:  Career Destruction and Prison – the Ethics Course YOU Won’t Forget!

What do you think Judith?

Photo by Clay Bennett – see claybennett.com


Whatever Happened to the Criminal Justice System in the USA? Dan Frishberg’s Biz Radio Folly goes Unpunished and Dan’s still on the Radio… Go Figure!

July 20, 2012

It’s been a while…a long while since I turned my attention to Daniel ( Dan ) Frishberg – the radio personality who, with his partner Al Kaleta, caused many an investor to lose substantial funds in the failed Biz Radio debacle.  I received an email today from a defrocked investor in Dan Frishberg’s failed scheme asking “Whatever happened to the criminal justice system in the USA?  Dandy question, cause it seems that Dan Frishberg has effectively walked away with no criminal consequence to his very public investor fraud.   If you want to see background go to these wordpress posts on “The Money Man“.

In Dan Frishberg’s most recent report he states the following:

The key is to hold the right assets for enough time so that the investment can reap its full reward. It takes a lot confidence for an investor to believe that the company will not only be in business years from now but will continue to create an increasing amount of value several business cycles into the future. Successful investors are only able to hold on to stocks for the long term if they are able to create conviction with the proper due diligence, generate income, and protect their capital during uncertain times.

Hum…I read the words written and wonder!  You state, “It takes a lot confidence for an investor to believe that the company will not only be in business years from now but will continue to create an increasing amount of value several business cycles into the future.”  Yet, I wonder how the folks feel that listened to your advice on Biz Radio and your podcasts and YouTube and believed that you had a sustainable business model that would create an increasing amount of value to sustain them into the future.  Seems from all accounts that you and your cronies led folks into investing into nothing more than a Ponzi scheme and today they have lost.  But have you?

“Successful investors are only able to hold on to stocks for the long term if they are able to create conviction with the proper due diligence, generate income, and protect their capital during uncertain times.”  Dan those are your words.  Yet, you solicited investments that did not protect capital, generate income and were void of due diligence.  Shame on you…!  You survived, but what about those who trusted you?

I believe in Second Chances – in fact I wrote a book about it!  I know with every fiber of my being how you operate as (sadly) I was you at one time.  But there is one BIG DIFFERENCE.  I acknowledged my unethical actions, made restitution and changed my choices.  Seems accepting responsibility – which is the first step to recovery – is something that continues to allude you.  Isn’t it time – Dan Frishberg – to face the truth of your lies and deceptions – take responsibility – make restitution and then move forward with your life in an honest and ethical way.

You – Dan Frishberg – could be a leader in ethical business practice, sharing the truth of your folly and how unethical practice can be turned into societal good.  Sadly, Dan, it seems that you only know one thing – how to be a talking head on the radio.  Every choice has a consequence and the consequences of your choices are not over…cause karma’s a bitch.

If you have been defrauded by Dan Frishberg and Al Kaleta – feel free to share your experience so others can at least be warned!


Business Ethics education – moving beyond what’s illegal…how about focusing on choices and consequences!

July 19, 2012

For the past several days I’ve been noticing a series of articles about Business Ethics education and what should be taught.  Today I see Felix Salmon’s article: Business ethics need to move beyond what’s illegal where he says we should be more worried about unethical behavior in general rather than just teaching how to avoid criminal behavior.  I agree.  However, I would challenge Salmon in his belief that Business Ethics education even teaches about unethical criminal behavior.  From my experience speaking to a number of business schools as a business ethics speaker, I have found in polling students that the level of education related to business ethics centers around ethical theories rather than practical real life application – whether criminal or not.

Salmon shares the following: There are interesting ethical debates to be had as to where to draw the line: for instance, all those “free offers” which require you to hand over your credit-card details and then bill you regularly unless you cancel. They prey on cognitive limitations, I’d say, and are less ethical than companies which don’t do that. Should business-school professors tell their students that they should avoid implementing such schemes? I don’t know. But I do think that acting ethically, even if such actions are legal and don’t maximize profits, is something that many more business-school students should be encouraged to consider.

I find it interesting that Salmon’s example implies a certain judgment regarding the rightness or wrongness of certain actions.  For example, if I ask a group of people is it ethical to kill someone, the majority would say a resounding NO.  But, if your child were being attacked and in imminent life threatening danger, would it then be ethical to kill the perpetrator – I find the answer becomes a resounding YES.  So…ethics are based on the rightness or wrongness is certain situations.  Back to Salmon’s example.  Is it ethical to offer your free credit report with hidden language that you’ll be updated monthly automatically with a charge to your credit card?  Salmon seems to judge NO.  I say it is a function of the business you’re in.  If that is your business model and that of your competitor, then it would be challenging to find a lack of ethics in a model that works.  Sure…there are those who think such a model should be banned, but until it is…it is legal and ethical.  No different than selling spirits or cigarettes.  Both are bad for you and thereby potentially unethical to sell, but unethical – NO!

However, at the risk of getting off track from Salmon’s fine article…it would seem that the point of teaching more than just legal and illegal makes sense.  The question for me is – are we teaching legal and illegal and exposing the choices made have consequences that follow?  I don’t think so…at least not nearly enough.  Theories are fine, but practical application teaching is far more effective in my opinion.  For example, I was consulting with a fellow just a week ago who was convicted of conspiracy.  Here’s the simple truth, if a company (or people within the company) conduct unethical illegal acts and you don’t report it then you may be found guilty of conspiracy.  Seems to me to be more of a deterrent to unethical behavior if folks know the dire consequences that follow unethical and illegal behavior.

What are your thoughts?


Business Ethics as a Core Course in Business Schools? What a novel idea…or do you prefer an Orange Jumpsuit and Handcuffs?

July 18, 2012

What a novel idea is right…  It seems that what is OBVIOUS sometimes is missed by the masses.  Honesty, integrity, and ethics are – or should be – the core foundation for which we operate in life.  Yet, as Luigi Zingales points out in his article: “Business School should count ethics as a core course” it appears that all to often those who are at the top of the business food chain seem to forget the core of business fundamentals.

Zingales, in his article, states: “Recent scandals at Barclays, JPMorgan Chase, Goldman Sachs and other banks might give the impression that the financial sector has some serious morality problems. Unfortunately, it’s worse than that: We are dealing with a drop in ethical standards throughout the business world, and our graduate schools are partly to blame.”

The problem – at one level – is academics seem to be more concerned with theory than practical application.  Again, Zingales shares the following:

Most business schools do offer ethics classes. Yet these classes are generally divided into two categories. Some simply illustrate ethical dilemmas without taking a position on how people are expected to act. It is as if students were presented with the pros and cons of racial segregation, leaving them to decide which side they wanted to take.

Others hide behind the concept of corporate social responsibility, suggesting that social obligations rest on firms, not on individuals. I say “hide” because a firm is nothing but an organized group of individuals. So before we talk about corporate social responsibility, we need to talk about individual social responsibility. If we do not recognize the latter, we cannot talk about the former.

I agree!  Ethics theory – while valuable – doesn’t go far enough to teach those who will face practical application what to do and when to do it when faced with pressure and temptation.  Theories are wonderful, but how many of us think about theory when faced with real life challenges in real time.

As a business ethics speaker, I was set up as the keynote speaker at a university in Canada.  My background was hidden from the faculty as the Dean of the Business School…wanted my presentation to impact both the student attendees as well as the faculty guests.  To that end, as we prepared to share dinner together before the presentation, one of the professors asked me a simple question – “What theory of ethics do you follow?”

That question caught me a bit off guard as my mind raced to formulate an appropriate answer.  Then it hit me…  The answer just flowed from my mouth – “The theory that keeps you out of federal prison!”

“Oh” responded the professor, and quickly he found company somewhere else.  Discomfort created by my response is just what needs to take place when teaching ethics.  We, all too often, make ethics some luke warm course to fill a curriculum and fail to teach the real world application of what happens when ethics fail.  Zingales says:

The way to teach these ethics is not to set up a separate class in which a typically low-ranking professor preaches to students who would rather be somewhere else. This approach, common at business schools, serves only to perpetuate the idea that ethics are only for those students who aren’t smart enough to avoid getting caught.

Rather, ethics should become an integral part of the so-called core classes – such as accounting, corporate finance, macroeconomics and microeconomics – that tend to be taught by the most respected professors. These teachers should make their students aware of the reputational (and often legal) costs of violating ethical norms in real business settings, as well as the broader social downsides of acting solely in one’s individual best interest.

So here’s the deal…if your business school isn’t committed to teaching practical ethics then you can’t expect graduates to apply ethics in practical day-to-day applications.  What is practical ethics – perhaps it’s ethics applied in such a manner that it keeps you out of an orange jumpsuit and handcuffs.

Your comments are welcome


Featured New Book, “Accounting Ethics… and the Near Collapse of the World’s Financial System,” – a Business Ethics book that is worth a read!

August 17, 2011

This new book manifests the importance of accounting ethics by looking at the role that some ethical failures played in recent scandals, particularly AIG’s role in bringing the world’s financial system to the brink of collapse. After establishing the vital importance of ethical accounting, the book goes on to give a thorough analysis of what ethical behavior means for accountants and shows them what can be done to embody that ideal.

Quote startPakaluk and Cheffers… have tackled every major ethics issue currently facing the accounting profession.Quote end

Sutton, Mass. (PRWEB) August 17, 2011

The fruit of a collaboration between a Harvard PhD and ethics specialist (Pakaluk) and a Harvard MBA and forensic accountant (Cheffers), “Accounting Ethics” is an entirely new treatment of the subject that reads like a detective story while imparting a deep understanding of professional ethics for accountants.

The book’s treatment of the role of accounting ethics failures in the financial crisis connects the dots between AIG’s first massive accounting ethics failures, dating back over 20 years, and AIG’s more recent accounting irregularities that—as Ben Bernanke and Timothy Geithner have stated—nearly brought the world’s financial system to its knees.

Pakaluk and Cheffers also examine accounting ethics issues associated with Enron, Worldcom, Lehman Brothers and more, paying particular attention to clashes between rules and principles, conflicting interests and the challenges facing corporate accountants, Big Four auditors (Ernst & Young, KPMG, PWC and Deloitte), the FASB, AICPA, and related regulatory bodies.

While not a “gotcha” book designed to point fingers, Pakaluk and Cheffers, in their third book on accounting ethics, have tackled every major ethics issue currently facing the accounting profession, including well established traditions such as independence, codifications of conduct, professional foundations and whether or not accounting ethics can be taught. The authors support their insistence on the importance of accounting ethics using historical, philosophical, and sociological research.

This book’s attractive presentation of deep philosophical thought– that will enlighten even the most experienced accountant—using a fast moving who-dun-it style, will keep practicing professionals and students alike glued to the pages.

“If you never could have imagined a textbook in accounting that through large sections reads like a detective novel, well, one has been created, courtesy of the once unimaginable professional and ethical breakdowns in a slew of major companies: Enron, AIG, and others. … The clear expositions and well-argued principles set forth in this suspenseful book give intellectual grounding to a profession that utterly relies on courageous honesty and integrity, as exemplified in this book’s opening pages. That is what accounting brings to the market, and without it the practice is empty of value.”

—Michael Novak, Ambassador, Templeton Prize winner and author of The Spirit of Democratic Capitalism

“If you are familiar with Understanding Accounting Ethics, either the second edition or the original, also written by Pakaluk and Cheffers, you will immediately see the same passion for ethics evident in their latest book. Smart accountants will make it an essential part of their personal ‘business bookshelf,’ while the smartest accountants will actually take it off the shelf and read its chapters periodically.”

—Jonathan Hamilton, Accounting News Report

About the Authors:

Michael Pakaluk, Ph.D., is a professor of philosophy and currently is the Chairman of the philosophy department at Ave Maria University in Naples, Florida. He has written extensively on ancient ethics and morality. Dr. Pakaluk’s expertise in accounting ethics, in conjunction with his position as Senior Research Analyst and Public Policy Consultant with the Ives Group, Inc., led to an invitation to present a seminar on accounting professionalism and IFRS convergence for the Financial Accounting Standards Board (FASB) in 2009.

Mark Cheffers, C.P.A., A.B.V., is the Founder and CEO of Ives Group, Inc., an independent research provider focused on developing web based due diligence and market intelligence tools. Its subscribers include many of the most prestigious professional service firms, educational institutions and regulatory bodies in the world. A former PWC auditor, forensic accountant and ligation consultant, Cheffers has delivered numerous seminars and written extensively on accounting malpractice, ethics, and financial reporting matters.

Product Information:

Accounting Ethics…And the Near Collapse of the World’s Financial System
By: Michael Pakaluk and Mark Cheffers
ISBN: 9780976528036, 424 pages, $75.00

Order Through the Allen David Press Website:

On Amazon:

Or contact sales representative, Mr. Thomas Hardy:
Tom(dot)Hardy(at)AllenDavidPress(dot)com


Ethics in writing – Interesting article published in the Chronicle of Higher Education!

August 14, 2011

Universities Get Advice on How to Avoid Ghostwriting Scandals in Research Articles

By Paul Basken

Universities have been struggling for years with the problem of researchers who let industry-financed ghostwriters draft biased summaries of their work for publication in medical journals.

They’re now getting some blunt advice on how to stop it, including from perhaps the most qualified experts: the ghostwriters themselves.

In a pair of articles published Tuesday by PLoS Medicine, two professional medical writers outlined changes that both universities and the journals could make. One suggestion, offered by Linda Logdberg, now contrite about her role in ghostwriting, is straightforward. The universities, she points out, could simply provide their researchers with their own professional writers.

“My recommendation is to take out the middleman,” said Ms. Logdberg, a biologist once associated with Columbia University who now teaches science to public-school students in Georgia.

In the other PLoS Medicine article, Alastair Matheson, a professional medical writer who works from both Britain and Canada, suggests that the scientific journals adopt new guidelines to more strictly identify the contributions of their authors.

Ms. Logdberg and Mr. Matheson are offering their ideas at a time of still-mounting legal and political pressure on both universities and the journals to crack down on ghostwriting. Just last month, a University of Pennsylvania psychiatry professor filed a complaint with federal investigators accusing his department chairman and four colleagues of publishing under their names an article that was ghostwritten by employees of a pharmaceutical company and that made unsupported claims for one of its best-selling drugs.

The allegations by Jay D. Amsterdam, a professor of psychiatry at Penn, were promoted by the Project on Government Oversight, an advocacy group, as grounds for the university’s president, Amy Gutmann, to be removed by the Obama administration as chair of the Presidential Commission for the Study of Bioethical Issues.

Push to Make Authors Liable

Others are suggesting even harsher tactics. PLoS Medicine published an article last week by two Canadian law experts, Simon Stern and Trudo Lemmens of the University of Toronto, who suggested pursuing legal action against researchers who allow their names to be placed on articles they didn’t actually write.

Legal action would be justified because medical-journal articles attesting to the safety or efficacy of a drug or a medical device are often cited as authoritative in court cases, wrote Mr. Stern, an assistant professor of law, and Mr. Lemmens, an associate professor of law and medicine.

Researchers at a series of major American universities, including Brown, Emory, Harvard, Stanford, Tufts, and Yale, have faced allegations in recent years that they’ve signed their names to medical-journal articles written by others.

Such ghostwriting incidents have included companies promoting medications like Avandia, a diabetes drug, and Vioxx, an arthritis drug, both of which were later found to be associated with elevated risks of heart attack.

The Association of American Medical Colleges has been urging its members to crack down on researchers who allow their names to be placed on articles they didn’t actually write. In a 2008 report, it listed ghostwriting among a series of evolving practices through which companies try to influence medical professionals, and it suggested that academic medical centers forbid it entirely.

But Mr. Matheson, in his article in PLoS Medicine, said ghostwriting continues, in part because medical journals don’t have clear-enough policies to prevent it. He suggested that the International Committee of Medical Journal Editors, which represents the leading research publications, revise its authorship guidelines so that those who prepare the initial draft of a scientific report, including those working on behalf of a company, are listed as full authors.

A spokesman for the ICMJE, as the editors’ group is known, said it would consider Mr. Matheson’s suggestions as part of an overall policy review now under way. However, said the spokesman, Michael Berkwits, a physician and an editor at Annals of Internal Medicine, “no ICMJE guidance or standards can fully prevent scientific misconduct or replace the need for critical appraisal by readers of scientific work and its provenance.”

Another group of experts, writing last month in the scientific journal Society, made a similar suggestion. The group—Jonathan Leo, a professor of neuroanatomy and associate dean of students at Lincoln Memorial University, in Tennessee; Jeffrey R. Lacasse, an assistant professor of social work at Arizona State University; and Andrea N. Cimino, a graduate student in social work at Arizona State—also suggested that all authors be required to sign a statement pledging that no ghostwriters were involved in their work.

Shifting the Burden to Universities

Ms. Logdberg, meanwhile, suggests that universities simply take away the incentive for ghostwriting. Researchers often need help writing up their findings, and if they had that help available to them on campus, they’d be far less eager to accept offers from companies, she said.

Universities, however, aren’t likely to embrace the idea, said Carrie D. Wolinetz, associate vice president for federal relations at the Association of American Universities. Universities already are struggling to cover operating costs from the share of money allocated to them from federal research grants, and they couldn’t now be expected to also pay for a new layer of staff writers, Ms. Wolinetz said. “Universities simply couldn’t afford this,” she said.

Universities nevertheless are taking the matter seriously, Ms. Wolinetz said. Many have toughened their policies governing financial conflicts in recent years, she said, and they’re expecting even stricter regulations soon from the National Institutes of Health, the nation’s leading provider of money for academic medical research.

Ms. Logdberg, though, suggests the problem may have some roots in university culture itself. She said she drifted into professional ghostwriting after initially working at a company where she wrote summaries of medical journal articles in layman’s language for customers such as lawyers and nutritionists. The work slowly grew objectionable to her as some larger companies with public-relations staff later rewrote her material in favor of their products, she said.

“I started out in a place that I thought was quite academically defensible,” Ms. Logdberg said. “The immorality to me is not the ghostwriters. It’s the physicians or the authors: me drafting something and having someone else sign his name. I’m not the one morally culpable there, to me at least. It’s the person who goes ahead and does that without giving me credit.”

She mentioned in the PLoS Medicine article that she left her last academic position after being told she was “unacceptably insubordinate” for expressing a reluctance to write anything that someone else later claims as his own. In the interview, she identified the incident as occurring at Helen Hayes Hospital, north of New York City, where doctors are supplied by Columbia University. She left that academic environment, she said, after a doctor asked her to write a grant application that he planned to submit to the National Institutes of Health without her name on it.

Although the expectation seemed standard in the academic culture that surrounded her, Ms. Logdberg said she could not accept it. “I don’t want to write even a memo and have someone else sign their name to it,” she said.

QUESTION: Do you think that it is o.k. to have your idea written by a ghost writer and claim credit for authorship?

YOUR COMMENTS ARE WELCOME!


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.

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