In light of major scandals driven by ex-McKinsey employees (e.g. Jeff Skilling, Rajat Gupta and Anil Kumar) and consequent sharper focus on ethics by top consulting firms, lets continue our discussion about ethics and delve deeper into how to think about ethics, and what shapes ethics.

Ethics is required when the law is not written, not enforced or wrong

To think about ethics, let’s picture a bar chart running vertically. The entire bar represents all the actions you could undertake in your country. It is obviously a hypothetical bar since we could not list every action we could take. Yet, we know we can do countless things.

The bar chart goes from one all the way to the one billion things you could do. The bar is split into two parts. Twenty percent of the bar is dark blue and eighty percent of the bar is white.

Everything that is dark blue depicts every action you can undertake in your country that is covered by the legal system. Therefore, for the dark blue part there is a law that determines if what you are doing is legal or illegal.

Everything in the white section depicts actions not covered by laws in your country.

When we talk about ethics we are most of the time talking about the actions within the white space, where the laws have not been written to cover your actions. If there was a law telling you how to behave in a situation, would it be an ethical debate given the law instructed you what to do? In most cases it will not be.

However, the world is not perfect.

There are times when the law is wrong. For example, when black people were not allowed to attend universities in South Africa or parts of United States. There are laws like that, unjust laws, right now in parts of the world. Therefore, in situations where the law is wrong, ethics should dictate your actions.

That is one example where ethics does not just apply to the white space but also applies to the blue space.

There are other situations where ethics applies to the blue space as well.

Think of countries that have exceptional constitutions. Their constitutions are so amazing that other legal systems around the world quote from these country’s constitutions and higher court opinions. For example, South Africa’s constitutional court rulings are highly referenced internationally.

However, there are parts of that country that are lawless. Clearly the law is not enough if there is no enforcement. If there is no enforcement people will misbehave unless they are ethically bound to behave themselves. Therefore, there are two situations where we need to apply ethics to actions governed by law, when the laws are wrong and when the laws are not enforced.

To summarize, ethics is required when the law is not written, not enforced or wrong.

The application of ethical principles is inversely proportional to the correctness of the law, the reach of the law and the enforcement of the law. If there are no laws, or the law is weak, or the law is wrong, or the law cannot be enforced, you are reliant on your personal judgment to make decisions.

The question is, how good is your judgment.

If ethics is about judgment, what drives our judgement?

We established that ethics is about judgment. Now I will give you 4 situations and I will show you what drives our judgment.

Imagine it is 1940 and you are a brilliant engineering student in Germany – blue eyes, blond hair, handsome but a bit naive. All you know is what is told to you, and you just happened to be a member of the armed forces. You are sitting at a hip Berlin bar. You are in a situation where everyone thinks it is just fine to persecute the Jewish and Slavic nations. Not only is this the kind of group you belong to, it is also aligned with the law in your country.

Let’s take another situation. Let’s assume it is 1910 in Canada. You are going out with your buddies, upstanding gentlemen who don’t agree that women should have the right to vote. That is all you see in the press. That is what people talk about. That is accepted.

How do you break away from that, when it is the only thing you know to be right?

Some of you will say, “Well, we actually know that’s wrong”. However, the reality is, to a large degree, we are defined by our circumstances. It is easy to apply a higher ethical standard in hindsight. We can prove this.

In the first two examples I have presented scenarios that today, in hindsight, we know to be wrong. In the next two examples I will give you things that we don’t necessarily know to be wrong today.

Think about eating animals. Human beings consume millions of tons, may be tens of millions of tons, of animal carcasses every year. It is completely acceptable to do this. It is acceptable to make jokes about it. In a hundred years people may look back at us and think we were animals for doing this.

We think it is acceptable because the network we belong to thinks it is acceptable. If you belonged to a social network whereby your friends thought it was horrible and distasteful to eat animals, you would probably not do it.

If your reaction to this was, it is not so bad so I am going to do it, then remember this is how unethical behavior becomes acceptable. We justify it based on what we see as being commonplace.

ethics quote

Let’s look at another example. Something that I notice every single time I am in a group of people – sexist comments. It is remarkable how much we tolerate sexist comments on television and in social settings. In fact social settings reinforce this behavior. Comments like “you are acting like a girl”, “you throw like a girl” or “only girls do that” are basically accepted discriminatory banter.

Just about every major comedy show in the United States has made some off-hand sexist comments. Some thrive on it and their ratings are directly proportional to this behavior.

One of the most popular shows in United States, “How I Met Your Mother”, actually has a scene whereby the main antagonist, Barney Stinson, talks about how he may have sold a woman into slavery. That show went on to have one of the highest ratings in prime time television for United States. It was a joke, obviously, but the fact is we find those things funny.

This happens right now. We think it is acceptable to belittle half of the human race. So why do we do that?

We do it because everyone else is doing it.

The social group you belong to shapes your ethics

In conclusion, the social group you belong to (your friends, the people from whom you seek acceptance, the people you spend time trying to impress, the people with whom you socialize, engage with, build relationships with etc.) shapes your values, or lack thereof.

The social network you choose to belong to will determine how ethical or unethical you choose to be, want to be or even could be.

So ask yourself: “How do the groups I choose to belong to shape my career and my life?”. If you are not happy with an answer to this question, make the necessary changes.

QUESTION(S) OF THE DAY: Which behaviours or beliefs currently acceptable in Western culture will, in your opinion, not be socially acceptable 100 years from now? Please let us know in the comments.

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Image from Trey Ratcliff under cc.

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Comments

17 responses to Ethics is Shaped by Your Social Network

  1. Hi EHB,

    This is quite a powerful story. Thank you for sharing this.

    I recall being detained once at border control since the airport security thought I was too young to be a partner and was not Western European. They could have denied me entrance but they detained me.

    I spent 36 hours in detention and thereafter flew back home, had a shower, changed my visa and flew right back – without any sleep. In the space of 5 days I went from being detained to sitting with the Minister of Economy whom we where advising on plans to increase the country’s productivity. I was actually one of the lead partners on that study.

    That was a bizarre feeling.

    So I can completely relate to you. Yet, I never brought it up or discussed it. I may disagree with a law or the application of that law, but I respect a nation’s right to have those laws. I also believe that fighting every perceived slight and injustice is just too energy draining. Life is too short to worry about the little things. There are ways to change things and that is a focus.

    Probably like you, I had and have no ill feelings toward that country. In fact, it remains one of my favorite if not my favorite country.

    Over time, visas will most likely become a relic. However, in the meantime we should keep talking and understand the others’ point of view. There is no right answer. Just concerned people.

    Michael

  2. Hi Michael,

    Thank you for this post.

    While I was young, I wondered if visas were some kind of discrimination. In August 2012, I was financially broken. I had around 50 Euros in cash and my credit cards blocked (in addition to MBA loan). I had no full time job and was interviewing for consulting roles. I passed 3 rounds with a British consultancy – all from overseas. I was left with one final interview in London (the role was based in the Middle East). Since I hold an African citizenship, I needed a tourist visa. Although I had an invitation (all expenses paid from the company), my visa was denied because I had no funds in my own account. I lost the job opportunity and went through 2 more months of difficulty before finding a job back home.
    A couple of months ago, I become a European citizen. By the end of the month, I am going to present in front of a University Board in UK (feasibility study for a new school). This, I will not have to apply for a visa.
    It is going to be strange for me as I am the same person as before. Three years ago, I wasn’t welcome in UK and today I am “allowed” to enter UK and even work as I wish. When comparing myself to animals, a “bird” had more freedom than me in 2012.
    Of course, I understand the logic behind visas in modern societies, but it is still difficult to accept. I hope in the future no one will be forbidden access to any part of the world based on where he was born.

    Once again, thank you for raising such issues.

    EHB

  3. Hi Michael,
    I understand. You are quite right on that.

  4. Brian,

    Agreed. What I am trying to say is that even when consumers are mobilized we can get disastrous results. I don’t think we can assume that consumers naturally do the right things.

    Michael

  5. Hi Michael,
    It is not that consumers are powerless, and that they can not effect change. Nor is it a choice between strong and weak. It is that power is a relative quantity. We as consumers have tremendous leverage, and can drive whole industries out of existence. However, that power has to be concentrated and channeled effectively to be of any use. This has to be done in the face of forces that seek to diffuse that power at every turn. My point, though, is that consumers do not operate in a vacuum. There are other entities at work here that have to be accounted for.

  6. Thanks Brian,

    All great points. The thing to think about is the following:

    You cannot have it both ways. We cannot say consumers have the power to only push through the great and noble things but we are too weak to fight companies on evil things.

    Either we are strong or weak, not both, or we can conclude consumers are responsible for both the good or bad things based on what we prioritize. Maybe, we need to prioritize differently?

    Michael

  7. Michael,
    You are right about this:
    “In a consumer economy companies act this way because consumers allow them to act this way.”
    However, companies also are quite adept at manipulating consumer sentiment in their favor and regulatory bodies are susceptible to being captured by those they regulate. How long did it take to finally pierce the PR cloud that the tobacco companies created regarding cigarettes? How many Goldman Sachs employees now work for the SEC, Treasury Dept., and the US Federal Reserve Bank? The same could be said for the Nuclear Regulatory Commission here in the US when it comes to shutting down aging nuclear power plants.
    Companies take advantage of the relative disorganization and low information tolerance of the consumer all the time. I would not be surprised if some of your consulting colleagues have helped companies craft PR strategies to sway consumer sentiment their way on topics. Plus, when consumers organize, it is increasingly viewed with suspicion and indifference by governmental officials and agencies.
    We as consumers wield power, but concentrating it to the point where it makes a difference against corporate and government interests that actively try and prevent that from happening is a different story altogether.

  8. Hi Vladan,

    Yes, homophobia and sexism are definitely headed for a very steep decline. Imagine a world where everyone cared enough to vote?

    Michael

  9. Nathan,

    I agree with you on this. I think we are still in the very early stages of being environmentally conscious. This will become more mainstream over time. Though, hopefully, it is implemented in a less judgmental and insincere manner.

    Michael

  10. Brian,

    You are 100% right. Yet, there is more here.

    In a consumer economy companies act this way because consumers allow them to act this way. Right now, investors will reward a company more for its profits than the means it used to generate the profits. In other words, this happens because we allow it to happen.

    Vote in tough regulators and this will change.

    Michael

  11. Hi Femi,

    Thanks for the great comment. The anecdote about the medical story is a good example of sometimes knowing when it is not appropriate to share. I believe consultants need to act in the same way, wrt to naming clients.

    I like the idea of listening to the small voices. I will remember that. Good advice.

    Michael

  12. Great article and very interesting comments!

    In my opinion the mindset around inefficiencies and waste will probably be heavily scrutinized in the nearby future. Both on a small scale as personal consumer and on a larger scale as corporations, governments and countries. As natural resources are becoming scarcer and scarcer it is for example painful to see that 1/3 of our annual food production is still being wasted (http://www.un.org/apps/news/story.asp?NewsID=45816#.VNnIXyzz7Ig). I believe this links to the responsibility we have not only towards the people around us, but also towards the generations still to come.

    Related to Brian’s final anecdote on Ford, if they would have measured all the value they create or destroy and costs in the equation, the right choice would have been much more obvious! And indeed we should not wait until the government steps in to force us to put those hidden costs in.

  13. Hmm, this will raise a few eyebrows but I feel like this whole post about ethics, morals, judgement, behaviours, or beliefs, these beliefs deserve some mention. Single parenthood will not be socially acceptable as the economic incentive structure and unstable generations of single parent raised kids lead a movement towards more stable family cohabitation social structures. As a corollary to that, kids raised in LGBT households will also eventually gravitate back to the heterosexual household as LGBT households adopting kids will find out a – kids have minds and genes of their own, b- very hard to produce generations of offspring with two females or two males even if there are lots of cryogenic biological material to go around.

  14. Piggybacking on Brian’s post, I think we will see a move away from solely maximizing shareholder value as a company’s number one goal.

  15. The sad part about the necessity of teaching ethics is that we have accepted ( and continue to teach) the idea that the conduct of business is amoral. How many times have any of us heard the phrase “Nothing personal, just business.” as a cover for all sorts of behavior? The fact that this phrase was popularized by the Godfather movies should tell us that we should rethink the assertion that morals and business are separate. They are not. Business is personal and having a moral compass is critical to doing good business. An example of using morals as a competitive advantage is how Henry Ford was able to attract better employees because he paid them more and gave the better working conditions. Ford is also a good example of what can go wrong when morals and ethics leave the proverbial building. The Ford Pinto had a design flaw which caused the gas tanks to rupture and explode when hit from behind. Ford did nothing to fix the problem. Why? They ran a cost benefit analysis on the situation and found that the cost of paying the settlements from the lawsuits was less than the cost of fixing the design flaw. Companies still do this to this day.

  16. Hi Michael,

    I like as you have kept a strong focus on sustaining the ethics tempo within the FC community. It’s an important conversation that we must continue to have.

    To speak more to this post: I agree with the “show me your friends and I will tell you the sort of human that you are” theory that underpins your post. I think one way to really appreciate the effect of social groups on behavior is to look at how children pick their acts. It is well established in literature that, children mirror their environment and this explains why a child raised by a stammerer would most likely stammer. In fact, I started to stammer as a kid because my elder sister struggled with speech! Clearly, our behaviors are conditioned by what we know or perceive to not be wrong.

    To support your thesis on the linkage between our ethical bent and our social network, I would like to refer to Clay Christensen’s book — How Will You Measure Your Life. In the book, Clay noted an important goal that most people never set: no one wants to go to jail but no one sets it as a goal, yet they make resolutions every January 1! Clay told the story of Jeff Skilling, one of his former HBS classmates. Clay believed that, Jeff was a good guy at HBS but that, something went wrong in Jeff’s life as he moved on beyond HBS. I can’t remember the exact details but I am sure Clay believes Jeff’s circle of Enron associates influenced him otherwise. And this should alert all of us that, if we reckon ourselves to be “good” today, then, we must be deliberate about remaining “good” and one easy way achieve this, is to curate our circle of influence.

    Here is one short story: while in medical school in Nigeria, we had a case in my ethics and medical jurisprudence class. A medical doctor (probably in the 1970s) had a habit of sharing with his wife, details of cases he saw during the day. This would seem right i.e. as a way for a couple to bond over dinner and for a hardworking physician to de-stress. In exchange, I assume the wife would also share interesting stories from her own day at work. Someday, the physician’s neighbor (a female) stopped by at the clinic and as usual, the physician, “harmlessly,” told his wife what transpired at the clinic. Unfortunately, the physician’s wife and the neighbor got into a small fight, a few days hence, and the physician’s wife, in a fit of emotion, referred to the neighbor’s medical condition! Of course, the neighbor took it up and the medical council revoked the physician’s license. This case has stayed with me since medical school and I learnt an important lesson from it: whoever was not at an event/meeting was probably not intended to know what happened at the event/meeting. Of course that is an overstatement but you can see my point. I remembered this case recently and I asked myself, “how many priests/physicians/attorneys/management consultants continue to share with their significant others/close friends, details of their members/clients?” We don’t have to wait for our “wives” to have arguments and for our “licenses” to be revoked, before we adjust our attitudes. What is wrong is wrong! No amount of rationalization can make it right.

    To speak to your prompt “Which behaviors or beliefs currently acceptable in Western culture will, in your opinion, not be socially acceptable 100 years from now? ” Here is my take: It is a difficult one but I would wager that, throughout history (Nazi regime, slave trade, segregation, apartheid etc.), there have ALWAYS been voices of “dissent” in society, often “small” voices. To know what might stick out as a sore thumb 100 years hence, I think we should listen to today’s “small” voices of “dissent”. Voices that call for change. Voices that continue to challenge today’s culture and beliefs. Those voices that we easily dismiss as unrealistic. Each of us should consider to hold our lives to scrutiny, in the light of these “small” voices. It will help to further enrich our individual humanities.

    Thanks once again, Michael.

    Femi

  17. 1. Homophobia in mainstream sports like football, american football, basketball to name a few. Sports described as manly.

    2. Not participating in any kind of political elections.

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