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“The Volkswagen Group has always considered itself bound
by more than just legal and internal regulations. We also see
voluntary commitments and ethical principles as an integral
component of our corporate culture, providing a frame of
reference we can use to guide our decision-making.”
Despite a clear statement of ethics in their company literatu re, similar to
many that exist in other successful companies, something went terribly
wrong at Volkswagen Group.
Despite having clear public codes, why do leaders continue to breach
their own codes of conduct and ethics? The executive director of The
Ethics Centre, Dr Simon Longstaff, has proposed that significant
failures arise whenever “technical mastery is divorced from ethical
restraint”. His point is not one that can be met by rules – but by the
disposition of people to do what is right.
Often you will find psychology, biases and organisational theories
are at play. These are ‘bread and butter’ areas for the HR function.
HR has a role in filling the gap between the creation of rules-based
organisations and organisations regulated by the practical application
of core values and principles (with which the rules must accord). That
gap can be wide enough for companies to fall through.
Decisions about right and wrong can be difficult, but understanding
and articulating ethical theories can help your organisation’s leaders
develop better decision making. It’s important to know the theories
and how to apply them.
An example would be to test whether the VW leaders tried to use a
consequentialist framework to justify their decisions. Was their primary
motivation the need to optimise the outcomes of revenue or sales for the
company at any cost?
If, as an HR professional, you see this trend, you need to understand
that other theories can counteract this. A framework based on the
concept of duty would prompt you to ask questions such as “what are
my obligations, and what should I never do?”. Add to that, the virtue
framework and ask “what kind of person (or organisation) should I try
to be and how will my actions both shape and reveal my character?”.
Using theories like this can counter weak or warped arguments and
are good management tools to assist with decision making.
Psychological biases are the blinkers that can blind us all. They act
as if you’re wearing sunglasses and it’s grown dark. You can still see
but the perspective is not quite right, your vision is skewed and that can
lead to you missing something.
Did the leaders at V W think that it paid to ignore their own code
of ethics (motivational blindness)? Did they think that they were safe
by delegating the work to a third party to remove the onus (indirect
blindness)? Did they surround themselves with followers who merely
agreed with them and did not challenge their decisions and direction
Before you can call out biases, you need to be able to recognise them.
You need to point out that the sunglasses are still on.
Codes and rules are the ‘hardware’ around governance. However,
the quality of the ‘software’ is critical. How those rules are applied to
create a healthy climate, one where individuals can challenge the system
and each other without threat or compromise, is the key. Rules alone
will not keep individuals or companies safe.
Developing a strong ethical quotient with leaders is critical. That
enables them to know what is right and wrong. HR cannot merely
follow orders from above; it needs to point out strategies or decisions
that may have negative human resource or reputational repercussions
for the company.
HR leaders need moral courage to be a role model, to know how to
identify and deal with ethical issues, and how to educate others from a
moral perspective to ensu re they can do the same.
WRONG AT VW?
In her first column for HRM, business ethics expert Petrina Coventry explores the emissions
scandal at Volkswagen Group with lessons on how HR can be a moral compass.
“DID THE LEADERS AT VW SURROUND
THEMSELVES WITH FOLLOWERS WHO
MERELY AGREED WITH THEM AND DID
NOT CHALLENGE THEIR DECISIONS
20/01/2016 12:45 pm
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