By:

Gagan Sharma
Varun Koorichh
NK Panda
Tej Kumar MS
Agenda

2. Definitions
3. Recent research evidence business
scandals & ethical discernment.
4. Trends in ethics & KM
5. Speculations about the future…
 What is
this thing called
ethics?
The Dictionary Says

“A discipline
dealing with good and evil
and with moral duty.”
Deconstruct “ethics” for
Meaning
“A discipline  Without training or
certification.

dealing with  More often

good and evil between two
goods or two evils
and with
 Duty to self?
moral duty.” Family? Company?
Country?
New Technology Creates New
Ethical Dilemmas
 Cellular phones,
 Portable CD players
 Laptop computers
 www.
 Email
 Answering machines
 Word Processing
 Games
 E-tail: on-line shopping
 Networks
 Accessibility
 Open Source / Shareware
 Data Mining
 Overhearing chat
 Noise & “Free Music”
Spoofs
 24x7 Stress
 Pornography & Kids
 Spam
 Telephone solicitation
 No Secretaries!
 On company time?
 Identity theft
 Viruses
 Loss of Intellectual
Property
 Capitalist bias for
ownership?
 Privacy
KM Tools - More Neutral

 Portals
 Groupware  Hierarchies of
 Expert Locators knowledge and
 Taxonomies access created to
reinforce the
 After Action
“elites”
Reviews
& delineate
 Passwords
membership.
 Story Telling
Ethical Reasoning:
Recent Evidence from Corporate Business
Students

 Joseph Berardino of Arthur Andersen who

shredded
files regarding his client, Enron & Enron’s CEO
Ken Lay
3 Patterns
 (1) Bad Luck
 This was Lay’s initial defense – too bad!
 We see many (e.g. Welch, Condit at Boeing,
Qwest, & AOL-Time Warner) as unlucky.
 (2) Winner Take All Philosophy (zero-sum
game) –
 (3) Family Values> ethics
 Fastows of Enron trying to coordinate jail
time to nurture their young children
So what? & Now what?

 Recent events planting the seeds for

“some” institutionalization of checks
& balances (e.g. Sarbanes-Oxley)
and ethical training (federal
sentencing guidelines).
 Business schools & textbooks
scrambling: Managerial development
should include aspects of ethical
discernment and ethical decision-
making.
Initiation of New
Concept:CE0
 Does your company have a new
CEO?
Chief Ethics Officer
 Corporations can reduce their
culpability for crimes by having an
effective program to prevent and
detect violations of law.

 Ethics policies can reduce the

exposure of corporate officers and
Effective Ethics
Program:
1. Establish corporate standards &
procedures
(S & P).
3. Appoint at least one high level
individual to oversee compliance.
4. Require all to participate in training or
at least read about the S & P.
5. Implement monitoring & auditing
systems.
6. Enforce the standards – detect &
Legal Compliance

 The tip of iceberg:

Gestalt Principles – Help to
explain the phenomena –
anesthetized
Principles that Heighten
Awareness
Perception Principle- data is
clearly and sharply focused
vs. background state
Co-Existence Principle – data
that is opposite but counter-
balancing (heart vs. mind).
Realization Principle – data that
is intimately personally
perceived vs. present but
unrecognized (perhaps foggy)
data
Present Principle – Data that is
dealt with in the “here-an-
now” vs. past or future data.
Principles that Anesthetize
Perception
Blind-Faith Principle – uncritical
acceptance of another
person’s values
Shifting-Responsibility Principle-
Making another person
responsible for your behavior.
People-Pleasing Principle –
Continuous “buying into”
another person’s value
system in order to be
identified with that person.
Diversion Principle – The
“warding off” of the main
issue to a peripheral or
insignificant issue.
Criteria of Heightened
Ethical Awareness &
Discernment
Principles that Heighten
Awareness
Implications
Management
for the
Aspects of
Ethical Decision Making &
KM:
Perception Principle- data is
clearly and sharply focused Question Data – check/recheck
vs. background state

Co-Existence Principle – data Values Clarification

that is opposite but counter-
balancing (heart vs. mind).
Ask for implications
Realization Principle – data
that is intimately personally
perceived vs. present but Identify trends
unrecognized (perhaps
foggy) data Note: 1st is Six Sigma; Second
is McKinsey 7 S; final two
are SYSTEMS Thinking.
Present Principle – Data that is
dealt with in the “here-an-
now” vs. past or future
data.
Necessary but not
sufficient
 Need ethical discernment in decision
making, not just legal compliance.
 Need to create decision making
cultures that reduce anesthesia.
 Increase in globalization and virtual
nature of decision environments
increase both the amount and the
nature of ethical dilemmas.
KM lives in Virtual
World
Redundance of computers and
networks raises new issues and
increases complexity ->
 Copyright infringement
 Corporate assets for personal use:
email, Internet searches
 Privacy & use of data on individuals
 Extend company ethics to
vendors…?
A Gap

“There is often a gap between ethics in

the workplace and the sense of what
is right and wrong in the family or
with friends.”

At work vs at Home
What Causes the Gap?

5 Factors:
Peer Pressure
Conflict Avoidance
Market Factors
Speed
Environments
1. Peer Pressure

 Peer pressures at work tend to

create conforming behaviors, less
freedom / liberty than at home. No
data on how working from home may
change this (or not).
2. Competition

 Paradoxically, competition generates

conflict avoidance.
 Competitive pressures both within
and outside work environments tend
to create behaviors that avoid open
conflict (little dialogue around
values).
 Lack of fully collaborative electronic
communications serves to further
limit such dialogue.
3. Market Forces

 Market pressures at work tend to

create cultures of action (not
reflection, a key ingredient in ethical
discernment).
4. Speed

 Increase in speed of transactions and

decrease in personal interactions
moves accountability from persons
to systems (making accountability
more ambiguous).
5. Environments

 Organizational environments create

internal organizational dynamics.
These organizing mechanisms
respond to the relative variability
and instability of the corporation’s
environment.
Organizing Mechanisms
derive from environmental
factors
^
|
V
A Networks Virtual
Organizations
R
I
A
B
I
L Markets Hierarchies
I
T
Y

|
o ---- ---- ---- INSTABILITY>
-----
----------------------------------
Assumptions:

 Virtual forms will proliferate due to

increasing levels of complexity and
variability in environments.
 Therefore, managing across geographic
and organizational boundaries will be
critical.
 Therefore, knowledge management
strategies are also critical.
 The temporary, dynamic nature of
virtual organizations poses unique
ethical issues.
Unique Ethical Issues in
Virtual & Network
Situations
 Enron created virtual companies to
absorb loses while the parent company
(a trading company, not an energy
company) appeared profitable and
growing.
 Telecom companies (WorldCom, Global
Crossing) booked assets to both
partners in swap deals creating virtual
trade winners and no losers in a zero
sum game.
Prospective Ethical Issues
in Virtual Organizations
 A virtual enterprise is created for a specific market
opportunity. After the goal is completed, some partners
create a new virtual organization with competencies
acquired from the joint project. Is that ethical?

 Is it ethical that one firm works at the same time in two

virtual organizations if each of the partners are
competitors?

 Who is the responsible / accountable party in a virtual

partnership if there is no single legal entity?

 Virtual firms can allocate projects to lower cost

countries with unregulated working conditions - Off-
shoring is essential virtual.

.
The Other Side of the
Coin:
 Virtual organizations actually offer
opportunities for a more ethical,
more equitable society and
corporate environment.
e.g. BLOGs - RSS aka XML
 And, virtual organizations are more
democratic – always a good thing.
Virtual = Team = Ethical
Values
 Virtual organizations offer community,
excellence, integrity, respect for the
individual
 Lead to > character, profile, and a
positive climate and culture for the
company.
 Distance is irrelevant therefore a new
kind of collaboration is possible. Time is
compressed and memory is
electronically available.
More Benefits
 Because everybody can “speak” at the same time in
asynchronous computer meetings, fewer ideas are forgotten
and more ideas are born. The participants do not have to
follow the meeting permanently without having the time to
form their opinion.

 In computer-supported meetings there is no dominance of

team members due to position or other qualities. There is no
monopolizing of a discussion by certain team members
because of their position, their character or other reasons.

 Teams with communication–supporting systems recognize

errors, problems and dead ends in ideas more quickly.

 Teams with information supporting system have more

information at their disposal than teams without such
systems. Therefore, they can make better decisions.
Ethics Needed Now
More Than Ever
 Pro or Con the growth in virtual
organizations, it is clear that they are
responses to increased complexity.

 Times of increased complexity and

cultural diversity challenge our moral
compass and see us seeking our
ethical bearings.
Different Ethical
Orientations
“Me” “Us”
Moral Development
Values Clarification
Rokeach Kohlberg / Rest’s Model
One’s Own Values Situational Values
Virtue Ethics (Aristotle) “Act” Utilitarianism
(Hobbes)

Trends:
“Shoulds” Competing Values
Normative Of Multiple
Kantian Categorical Imperative; Obligations /
Hobbesian Rule Utilitarianism Competing Duties
Light of Day to org & society
Comparison of Four
Theories
Theory Motivation Criteria Focus Strategy

Kantianism Dutifulness Rules Individual Recruiting

BEI (Rest)

Act Consequence Actions Group Corporate

Utilitarianism Decision
Process
Rule Consequence Rules Group Corporate
Utilitarianism / Duty Decision
Rules
Social Rights Rules Individual Corporate
Contract Leadership
Rest’s Model

Moral Sensitivity

Moral Judgment

Moral Action

Moral Motivation
Future?

 Ethical Foundations of Post-Industrial

Society aka the Knowledge Society.
 Drucker (1993) identified the new
aspects of economy, polity and
society of the Post-Industrial
Knowledge Era. No one has yet
identified the ethical foundations.
 In the meantime, in all the confusion,
we will think the same as the
students: first me and my family.
Resources:
 Randy Cohen: The Good, The Bad & The
Difference {ethicist from NY Times}
 Ethicomp – a Journal of research on ethical
issues affecting computerized functions and
communications.
 Marianne M. Jennings, A Business Tale
 Michael J. Quinn, 2004. Ethics for the Information
Age, Boston: Pearson: Addison/Wesley
 Wheeler & Sillanpaa, The Stakeholder
Corporation, 1997.
 http://www.aicpa.org/sarbanes/index.asp
newsletter “Ethically Speaking”
Thank You For Your
Patience