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In an economic downturn, business ethics also decline

By Lauren | April 8, 2009

As the U.S. and world economies continue to struggle, unemployment climbs, stocks tumble and consumer prices rise, it’s a disheartening but predictable fact that ethical lapses in the workplace are probably going to get worse before they get better. A new report issued by Vangent, Inc. summarizes applied research by sociologists, criminologists and economists measuring how economic downturns affect behavior. Vangent concludes that “an increase in unethical and counterproductive employee behaviors during the current economic downturn seems inevitable.”

Somehow, this comes as no surprise.

People who have been laid off have to provide for themselves and their families somehow, and folks who haven’t lost their jobs are facing significantly more financial pressure than they did a year ago. And everyone is jittery – the economic news has gone back and forth between “depressing” and “abysmal” for months. Vangent predicts that employees and executives who might never have considered engaging in unethical conduct at work in better times will be much more prone to ethical lapses when the economy is in free fall. Frightened people make bad choices, and many of us are pretty scared right now.

Vangent advocates the use of pre-employment testing programs to assess prospective executives and employees so that only those with the highest levels of workplace ethics and integrity are hired. It’s a good idea, but not a panacea. For one thing, pre-employment testing doesn’t address the ethics of employees and executives who are already on board, and Vangent’s research suggests that those folks may be susceptible to ethical slipups now when they never would have been before. I also wonder what’s supposed to happen to people who can’t achieve A+ results on a pre-employment ethics test. They may not be saints, but they still have to eat. If they can’t find honest work, we’re all in trouble.

If every cloud has a silver lining, the “upside” of this economic downturn may be that it offers executives a sterling opportunity to lead by example. If mid-level executives and employees see their bosses adhering to high ethical standards, they’ll be more likely to do the same. This is a great time to dust off your company’s code of conduct, gather your employees together, and talk about the importance of ethics. The business that you save may be your own.

For more information about the Vangent report, go to www.vangent-hcm.com.

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Topics: Business Ethics, Corporate Governance, ethics, Personal Ethics, Professional Ethics | No Comments »