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Entrepreneurship: Sometimes it's hard to do the right thing
Sunday, April 17, 2005

In business, we are continually confronted with: What is the right thing to do? After all, the decisions affect not only you but all the stakeholders.

Dan Marsula, Post-Gazette
Click illustration for larger image.
Ethics is a conundrum for many people. The core puzzle for philosophy is: In any given situation do the ends justify the means? For instance, many situations arise where it's easy to avoid embarrassment or achieve our goals, but you have to break the rules. If being ethical hasn't cost you something, I'm not too interested in your ideas on ethics because they haven't been tested.

But suppose sometimes the ends do justify the means, how far can we bend the rules? Can we break the rules when a greater good would result? For example, during World War II a gentile who is hiding a Jew answers the door and finds a Nazi SS officer asking if there are any Jews on the premises. Or a young boy is caught stealing a loaf of bread to feed his starving family. Are lying and stealing justifiable under these circumstances? Do the ends of survival justify abandoning the ethical imperative of honesty? Probably, but at what point do you draw the line? Does convenience, shame, embarrassment or simple greed justify inconsistency?

When you drill deeply into ethics it can become insoluble, or require so many exceptions to be practicable that you begin to doubt the usefulness of a single ethical system.

But day to day, how many of us have to deal with ethics on that complex a level? It is a commentary on our times that some of our brightest and most ambitious citizens can't make correct ethical decisions that seem to me as straightforward as the life or death decisions our young man and the compassionate gentile faced in their above situations.

It would be helpful for most people to choose an ethical course if our leaders always took the moral high ground. But, of course, government isn't guided by any set of absolute ethics; rather, it operates on what seems most practical at the time. It is a pragmatic value system.

The first time I lost admiration for the office of president, the president was Dwight D. Eisenhower, who ordinarily I would love -- a wonderful president, a wonderful man. But when spy-plane pilot Gary Powers was shot down over Russia and the question was put to President Eisenhower, "Did we have any spy planes overflying Russia?" He answered without hesitation: "Absolutely not." Later Khrushchev trots out Powers and his plane wreckage on television with a confession and apology. I would have preferred it if Eisenhower had said, "No comment." But, instead, he was caught red-handed lying to the people who elected him to office.

And Bill Clinton -- not his sexual shenanigans in the Oval Office, which I consider more of an issue between him and Hillary, but adulterous and so still unethical. What really bothered me was when I saw him saying categorically, "I've never had sex with that woman" (Monica Lewinsky) when he had. He flat out lied.

It seems to say it's OK to split hairs and lie when we feel the ends justify it. If you can abandon your ethics when it's inconvenient or embarrassing, I would say you've pretty much done away with the need for them. In the case of Eisenhower, caught red-handed, one wonders if a more candid response might have salvaged the Paris Summit; an early attempt at nuclear disarmament. Instead, the summit became a platform for Khrushchev to take the moral high ground, and he had the evidence to prove it.

A principal of the insider trading scandals of the 1980s who spent two years in federal prison gave a talk at Carnegie Mellon University and told students that ethical lapses are seductive. That is, we give up our principles in painless little slices. Each lapse doesn't seem so bad. It's only in retrospect that we see how slippery the slope really was.

Tugging us down that slope is greed, our insatiable desire for more money, more power, etc.

Someone said the reason time seems to accelerate as we age is that each year we are living out a smaller proportion of our total life span. I think something like that goes on with ethics. The more material wealth we have, the less we value it, and so the more we are driven to attain even more.

My theory is that the more you make, the greedier you become. Somehow, if you make $40,000 to $50,000 a year, you live a pretty satisfying life. And you obey the rules. But, if you make $100 million, the rules become part of the constraints placed on ordinary people -- they're not your problem.

You can't run a large public company without confronting frequent ethical dilemmas. Friends of mine had companies and chose ethical behavior. For instance, when John Godfrey and other insiders were running On-Line Systems, they made it a practice to sell stock when only good news was coming out. That way they knew that anyone who followed insider trading reports filed with the SEC would be sure to make a buck when they bought their stock. And that made John Godfrey and other executives all feel pretty good.

There is a simple test. When you are conflicted about the right thing to do, ask yourself: If your action were reported as a banner headline on the front page of the Post-Gazette, how would you feel? If you would feel good and have no remorse, chances are you are making the right ethical choice.

First published on April 17, 2005 at 12:00 am
Jack Roseman, who taught entrepreneurship for 13 years at Carnegie Mellon University, is director of The Roseman Institute, a subsidiary of Buchanan Ingersoll. Contact him via e-mail at rosemanj@rosemaninstitute.com.