What is HR's role in ethics?

By Dr Fiona Harris

Multiple pressures can lead to undesirable business behaviour, so what can HR do to ensure companies remain ethical?

Companies and staff today are experiencing an array of pressures that create conditions for potential ethical dilemmas and conflicts.

Economic pressure combined with increased internal and external competition mean that many people are striving to achieve more with fewer resources and reduced funding. Political upheaval and uncertainty are increasing anxieties around job security and staffing. The accelerating pace of technology advancements are changing skills requirements, interaction patterns and power dynamics. Social factors mean that workers struggle to manage a healthy lifestyle and work-life balance in the face of competing demands from career commitments, childcare responsibilities and overlapping care for elderly parents. Increasing globalisation requires greater cultural sensitivity in business activities and among international workforces. Legislative and ethical changes in areas such as data protection and privacy have created new responsibilities for organisations and staff, but upholding these responsibilities is coming under threat from risks such as hacking. Environmental pressures, including the need to respond to climate change, minimise pollution and waste and protect biodiversity, are often seen as conflicting with economic pressures and entrenched human behaviours.

Some of the reasons that have been identified for why ethical conflicts occur in marketing apply to business in general, such as inequalities between exchange partners, attempts to reduce competition and conflicting pressures resulting from attempting to satisfy a variety of stakeholder interests and performance demands. Hence the conditions are ripe for ethical problems arising in business more widely.

The spectrum of potential ethical issues that companies can confront is illustrated in the large variety of international cases that occur. Examples of cases of ethical issues in Murphy et al. (2017) book Ethics in Marketing: International Cases and Perspectives span a variety of global contexts and organisational roles and perspectives including: being asked to gain and share sensitive information by personal contacts; honesty and fairness in expense claims; gift giving in relation to supplier relations; dealing fairly with disadvantaged consumers in global marketing; sexual harassment; privacy and personal data; resolving conflicts of interest and divided loyalties; peer pressure in personal selling; consideration of a company’s values and ethical track record by potential job applicants; and the undermining of a company’s positioning and credibility by ethical malpractice.

While ethical issues arising in high profile companies such as Starbucks, Zara, Facebook and FIFA attract wide media attention, ethical issues can be just as potentially damaging in small- and medium-sized enterprises and non-profit organisations. In today’s connected, globalised business context all organisations can find themselves at risk of reputational damage and of having detrimental reports spread widely through social media channels to multiple audiences.

HR managers’ role in the ethical conduct within an organisation can feed in at various points:

• in the nurturing of an ethical organisational culture;
• in the recruitment of staff who will set the ethical tone of the organisation and uphold its values and ethical climate;
• in the resolution of ethical conflict when it occurs; and
• in dealing with the aftermath of an ethical conflict.

The first two of these can help to minimise the likelihood of ethical problems occurring in the first place. Ethical conflict, once it has arisen, presents a number of challenges; it can give rise to distortion of the facts to protect vested interests by the parties concerned, avoidance of involvement by witnesses for fear of reprisals or jeopardising their own relationships with one or more parties and abuse of power in the outcomes of the conflict. HR managers can help to ensure that organisations operate with due concern for fairness, integrity and justice both to reduce the likelihood of ethical conflicts arising and in dealing with them in the event that they do. Ethically unhealthy organisations will likely lose good staff and encourage a detrimental zero-sum mentality rather than a win-win one.

In handling ethical problems HR managers need to appreciate the complexities involved, avoid escalation of the issue and protect against the emotional and reputational impact that can result from them. It is also increasingly important for HR managers to develop a global perspective on ethical issues.

Moral maxims can provided some initial guidance to managers confronting an ethical dilemma on the spot. These include: the ‘Golden Rule’ (act as you would wish others to act toward you); the ‘Silver Rule’ (never knowingly do harm); the ‘professional ethic’ (act only as would be considered proper by an objective panel of your professional colleagues); the ‘TV/newspaper/social media test’ (ask whether you would feel comfortable explaining your action in some type of media); ‘When in doubt, don’t’ (question an action about which you feel uneasy); ‘Kid/mother/founder on your shoulder’ (ask whether you could explain your action to them); the ‘slippery slope’ (do not engage in ethically questionable actions that could set a precedent for subsequently engaging in even more questionable actions); ‘examining how results are achieved’ (consider the means rather than the ends of an action); and ‘ethics is others’ (always consider others when making decisions) (Murphy et al., 2017).

Furthermore, HR managers can benefit from refining their ethical reasoning skills and using systematic analysis to enhance their ethical judgement. Professors Patrick E. Murphy and Gene R. Laczniak, leading authorities on marketing ethics, devised a seven step process for systematic analysis of any ethical problem or situation by applying an ethical protocol for specification of an ethical issue and ethical reasoning to reach a confident ethical judgement. The process starts with cultivating ethical awareness and sensitivity (Step 1) and then proceeds to identifying the ethical issues or questions (Step 2), articulating the stakeholders in the decision (Step 3), selecting an ethical theory or standards (Step 4), specifying alternatives and ethical analysis (Step 5), making and justifying a decision (Step 6) and finally monitoring the decision’s outcomes (Step 7).

The seven step process can be applied to a range of cases and can help prepare HR managers to cope when they are called on to either intervene in or deal with the fall-out from serious ethical problems.

Fiona Harris is Senior Lecturer in Management in the Department for Strategy and Marketing at The Open University Business School. The book Ethics in Marketing, is published by Routledge (2017).

This article was originally published by HR Magazine. Read the original article.