Business

Business ethics: Yes, they exist

Corporate scandals notwithstanding, there is a body of study devoted to letting business people know what to do in sticky situations. Here is advice about how to handle some common scenarios.

By Robert Kazel — Posted Jan. 26, 2004

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Ethics certainly isn't an unfamiliar word to doctors, but it tends to come up more in the clinical sense than the business sense.

Business programs oriented toward doctors are offering business ethics courses in hopes of helping medical professionals solve problems the Hippocratic Oath doesn't cover. These tend to be the day-to-day situations that any business owner or manager would encounter and include possibilities that are less obvious than, say, don't play with the accounting numbers to make your bottom line look better than it really is.

One article isn't going to cover every situation, but we sought some expert advice on the sort of questions physicians bring up in business ethics classes.

Lee Hendrick, professor of business ethics at the University of Tennessee's Physician Executive MBA program in Knoxville, provided five scenarios.

Weighing in on how to handle them are Robert P. Lawry, a law professor and director of the Center of Professional Ethics at Case Western Reserve University, Cleveland, and Richard Coughlan, a professor of management specializing in business ethics, at the University of Richmond's Robins School of Business in Richmond, Va.

Their answers are excerpted from e-mail interviews with AMNews.

SCENARIO 1: Have merit, need pay

An employee of your practice is doing a superior job and deserves a pay raise. Your practice has a merit-based pay system. But the employee is already at the top of his or her pay scale. How can the employee be rewarded?

Lawry: The individual ought to work to have the system changed but work within it until change occurs. If there is a "top of the pay scale," then that's what it is. Of course, you could redefine the job and thus get out from under the burden, but the redefinition must be accurate -- otherwise you are just cheating. The best answer is to change the policy that requires such topping-off.

Coughlan: For this purpose, I have assumed the employee is not one of the doctors.

It seems to me that the most ethical thing to do would be to modify the compensation system. Many falsely believe that setting up a merit-based system is inherently "ethical" because it rewards those who do a better job. In truth, the morality of such a system has a whole lot more to do with how it is applied in practice. In too many organizations, managers ignore the bottom end of the scale when they are evaluating subordinates, reducing the impact of the merit-based system and leading to situations such as this one.

In my view, failing to reward the employee in some way would be unethical. This is really an issue of fairness. So, short of changing the system, I would look to offer one or more of the following: a new title, a wider set of responsibilities or perhaps tuition reimbursement for continuing education or graduate school.

SCENARIO 2: Against my religion

An employee says it's against his or her religion to use a certain e-mail product because the vendor that developed it offers employee benefits to the partners of its gay employees. How do you handle the situation?

Lawry: You want to be sensitive to deeply held religious beliefs, but this one seems to interfere both with the way you want to do business and with the way in which a belief can affect others with very different beliefs.

First, it will depend on how much freedom you want to give one working for you to use or not use a particular product. If it is important that there be uniformity, then you need to try to talk your employee out of her or his strange way of working out a belief about gays. We cannot and should not be making moral judgments generally about people we deal with in a business relationship that are not germane to the business. We never know enough to make these judgments, and they are unworkable anyway.

Coughlan: In many organizations, including mine, several e-mail products are used simultaneously. I'll assume that is not possible here.

While acknowledging the employee's concerns, I would politely indicate that the e-mail vendor had been chosen for a variety of reasons, and that I would be happy to share the employee's views with the appropriate decision-makers at the conclusion of the present contract. In the interim, I would let the employee know that he or she would need to utilize the existing system (or find some other suitable means for communicating with colleagues and relevant outside parties).

In ethics class, we discuss the complexities of resolving ethical dilemmas through rights-based approaches. This employee is, in essence, asking us to accommodate his or her perceived right to follow religious principles while at work. I would be willing to do that, within reason. But when those principles result in situations that cause business to suffer (as it might if the employee was not providing prompt responses to queries from co-workers or patients), limits must be established.

SCENARIO 3: To tell or not to tell

The practice owner tells you that one of the employees is slated to be laid off because of financial problems, but you are not to tell anyone because of the uproar it would cause among the other employees. Then you learn the practice owner is planning to spend a lot of money on braces for his daughter's teeth and a new carpet for his home. Do you keep the secret?

Lawry: The answer depends on the nature of the communication to begin with. Not everything a person discloses to another is a legitimate "confidence" that needs to be respected.

If it is a professional confidence, then there are usually exceptions built into the rule. If the person simply seems to expect confidentiality, and you haven't promised it, then you are free to do what you think is right.

I may not understand the hypothetical, but it looks like the person who is the practice owner is the one who is also making these expenditures -- leaving the reader with the impression that the firing is not truly about money. Then it would depend on facts we don't have before us, like what have you got to do with the issue in the first place?

If the person to be fired is suddenly making a lot of expenditures without realizing he or she may be out of a job soon, then you may want to ask the practice owner to disclose or you will, so the debt isn't too great when the termination occurs.

Coughlan: For me, the information about the existence and nature of the owner's upcoming expenditures is irrelevant to the decision about whether to tell the employee he or she is about to be laid off. For those who believe that the nature of the expenditures justifies sharing this information, I'd ask whether they'd say the same thing if the owner was instead donating the money to charity or using it to care for a family member who was ill. In my view, the bottom line is that the money belongs to the owner, and he or she is free to spend it any way he likes. Therefore, I would keep the secret as the owner asked me to do.

For me, this is an issue of employee loyalty, which involves obligations to those who employ us. The request from the owner to keep this information confidential seems reasonable. So does the justification the owner provides (avoiding an uproar in advance of the announcement). Therefore, I would fulfill my obligation and remain quiet.

I don't mean to suggest that employees ought to blindly follow instructions from those above them in the hierarchy. They certainly shouldn't when those requests involve illegal or unethical actions, though that is not the case here. Rather, I believe they should carefully consider their obligations to the firm and the potential consequences of not following those instructions.

SCENARIO 4: Time stealers

One of the employees has been using a computer printer for printing out personal letters -- a printer you are responsible for. What do you do?

Lawry: [This] is simply about an internal rule. It should be applied evenhandedly to all. Speak to the employee first, but a rule is a rule. Of course, the rule itself should be revisited to make sure it is both fair and reasonable, and is being applied fairly too.

Coughlan: My reaction depends largely on the employee's productivity and the culture of the practice. Also, I am assuming that the employee is printing a relatively low volume of letters.

If this is a productive employee, I would do almost nothing beyond a brief conversation to uncover the general nature of the content of the letters. (Legal issues might arise if the content was suggestive or offensive.) Assuming the content was not offensive, I would simply encourage the employee to keep personal use of the printer during work hours to a minimum, so as to not delay the print jobs of others who might be sharing the printer.

As noted above, the culture of the practice (reflected in the shared values of the employees) plays a major role in a decision like this. I would be striving to create a culture of professionalism and mutual respect, in which employees are treated like adults. These days, many employees spend 50 or 60 hours a week at work. That sometimes requires outside tasks, like writing personal letters, to be conducted in the office. So long as productivity remains high, I would not be so concerned about relatively petty actions.

SCENARIO 5: Refer, at a loss

Your managed care contract allows you to refer 2% of patients to cardiologists for specialized care. You want to refer a higher proportion, but your income would suffer. What should you do?

Lawry: The answer is clear. As a doctor, you must do what is in the patient's best interest. If that hurts you economically, well, that is one of the ethical facts of life for a true professional. On the other hand, such systems seem to me to be wrong-headed and unjust. They ought to be changed.

Coughlan: I'll assume "wanting to refer" means I believe these individuals either require or could benefit from a visit to a specialist. If that's the case, I owe it to these patients to offer the referral, even if it means my income would suffer. Of course, I would look to renegotiate the contract soon.

In this case, I've utilized a duty-based approach rather than a consequence-based approach. I believe the latter is inappropriate when a patient's medical condition requires a visit to a specialist. In other words, the well-being of the patient must take precedence over my income in situations such as these.

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