by Maxwell Pinto

Created on: June 15, 2010   Last Updated: June 16, 2010

Ethics is concerned with "doing the right thing" but moral standards differ between individuals depending upon their upbringing, traditions, religion, social and economic situations, and so on. Hence, the existence of gray areas. Therefore, state the “moral” problem in a simple manner and review feedback so that an acceptable decision can be made with minimal overall harm/loss—i.e., we are concerned with “Pareto optimality,” which is related to the net balance of benefits over harm for society as a whole. 

Economic theory is concerned with the efficient utilization of resources to satisfy consumer wants and to maximize profit and satisfaction. Pareto optimality exists at the point where it is impossible to make any given individual better off without harming another given individual. Although most businessmen believe that profits and cash flow are very important, there has been a move toward the recognition of social responsibility.

The blind pursuit of profit has resulted in bribes, environmental problems, injured workers, unsafe products, closed plants, and so on—this is unethical. Many business schools emphasize the philosophical, rather than the practical aspect of ethics. We need a practical approach to the solution of ethical problems.

I believe that "ethics" should be a part of all management courses. Yes, there are grey areas depending on different perspectives, but there are also areas of "black" and "white". There is more to ethics than drafting and implementing codes of ethics for others to observe. Leaders should lead by example and refrain from adopting an approach which conflicts with ethical interests. Therefore, leaders should respect and care for all stakeholders: owners, employees, customers, suppliers, the community, etc., rather than only stockholders. 

Ethical leadership calls for morals, fairness, caring, sharing, no false promises or unreasonable demands on others, etc. Is “ethical leadership” an oxymoron? Making false promises and unreasonable demands on employees and others, preventing participative management, talking about the "green" approach as a public relations exercise, rather than adopting a "green" approach, is unacceptable. Ethics is conscience-based, knowledge-based and attitude-based, and not suited to some individuals, who, by their very nature, have consistently demonstrated selfishness and greed.

Can any ethics training program prevent Bernie Madoff, Vincent

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