Behavioral ethics vs. Ethics of compliance – Responsible Journal

Since 2010, and especially since 2015, there has been a boom in compliance programs to prevent inappropriate behavior. In many cases, these programs are constituted only as a kind of legal shield, against article 31 bis of the Penal Code. In these cases, it is very likely that its effectiveness will be very limited and its impact on the ethical culture of the company, minimal, at best.

In other cases, the compliance program is also based on a focus on integrity and on the conviction of certain values ​​about how things should be done in the company. This approach obviously takes into account the ethical dimension of the company’s activity. What happens is that it can “sin” with an excessive focus on normative ethics, and its effectiveness can thus be compromised.

The ethics of behaviorbehavioral ethics”) seeks precisely to understand why employees, managers, etc. they come to make unethical decisions and what affects this decision-making process. At the end of the day, what counts are the decisions that people make, within the company, and that affect themselves, the company, the interest groups, and of course, the reputation and the culture of the organization.

The normative ethics has been (and is) an important element in the revitalization of the ethical culture in the company, let’s not doubt it, what happens is that the ethical dimension of the culture is very dynamic, and often the normative ethics , by itself, is not able to keep “the rhythm”. There is another explanation for the apparent ineffectiveness of normative ethics, and of course, of the so-called “compliance ethics”: both are seen as a threat! But a threat to whom? For the culture of the company, for the way of doing things to which the company is used. Indeed, two levels must be differentiated when speaking of culture: the formal (what is communicated, what is “said” to be done) and the informal (what is “said internally”, what is actually done). It is clear that if in this informal culture, to be “successful” it is necessary to “break” certain norms, or incur in certain types of “anomalous” behavior, at the moment in which more norms are tried to be established in the organization (for example, through a code of ethics or a program of “compliance”), there will be a conflict, a resistance, since the “usual suspects” will see their usual way of proceeding threatened. As the reader will already know, it is also naive to think that this conflict is going to resolve itself, or that time will resolve it, or, even worse, that what is needed to resolve it are more rules.

These aspects have been addressed in the literature on business ethics in recent decades.[1]. Let us highlight, for example, the “barrel” or “apples” approach. What is preferable, spending time identifying possible bad apples in the organization or keeping the barrels in perfect condition so that as many apples as possible stay in perfect condition? Perhaps both, because it may be that each approach separately is necessary, but not sufficient. People do not always make “rational” decisions, which is why behavioral ethics is based, among other issues, on aspects of psychology, criminology, the distinction between “system 1” and “system 2” that it proposed Nobel laureate Daniel Kahneman[2]about how we make decisions.

From this point of view of behavioral ethics, it is important, first of all, to be aware that certain ethical biases exist, just as there are cognitive biases. In the case of business ethics, one of the main ones is “rationalization” or “moral justification”, the nemesis of normative ethics, we could say. This phenomenon is a self-defense mechanism against incorrect behavior, and it manifests itself in different ways: denying responsibility or damage (“no big deal”), invoking false loyalty (“I did it for the company”), abusing of a calculation of positive and negative profits (“well, the final result was positive”), or even accepting or “normalizing” this type of behavior (“everyone does it”).

Faced with these rationalizations, there is no other remedy than to resort to techniques typical of behavioral ethics, which seeks more than to standardize, but to understand behavior (and influence it, why not). To do this, among other things, the following practices can be carried out:

  • Promote and establish transparency mechanisms (remember the myth of Gyges[3]) which is usually a good neutralizer of incorrect behaviors.
  • Design different training, more based on practical examples and workshops with real cases of the organization, than on the classic normative approach (which should not be discarded either).
  • Use internal examples and cases of good practice.
  • Incorporate indicators related to the ethical dimension in the incentives.

On the other hand, it is necessary to find a balance between the promotion and visibility of these positive catalysts, with the prevention of negative catalysts. Among the latter we can mention the following practices that should be avoided or reviewed, at least:

  • Rethink goal setting, since this is usually one of the main inducers, in some cases, of incorrect behavior (achieving the goal no matter how).
  • Identify “blind spots”, that is, situations where a situation with an ethical dimension may be taking place that remains invisible directly or indirectly.
  • Avoid an evaluation based “only” on results.
  • Prevent possible “slippery slopes”, in which a small unethical behavior leads to another, and so on, leading to a situation that can no longer be controlled.
  • Control that actions whose ethical evaluation is doubtful are not delegated (either internally or even externally), to make it appear that everything is being exhaustively fulfilled.

The management of ethics in organizations is a complex problem, due to the numerous edges, connections, interrelationships and nuances that it entails. It is a process that is not necessarily linear, in which the personal and temporal dimensions must be included, as in any aspect of the organization’s culture. For such management to be effective, it is essential that it adapt to the situation of each company and each institution and that it be understood as a “living” process.

Bibliography:

Camacho Ibáñez, Javier and Villas Olmeda, Monica (2022). Manual of applied ethics in artificial intelligence. Anaya Multimedia, Madrid.

Trevino, LK, Weaver, GR, & Reynolds, SJ (2006). Behavioral ethics in organizations: A review. In Journal of Management (Vol. 32, Issue 6, pp. 951–990). https://doi.org/10.1177/0149206306294258

[1] (Trevino, 2006)

[2] Nobel Prize in Economics in 2002, precisely for having integrated aspects of psychological research into economic science, especially with regard to human judgment and decision making.

[3] Camacho Ibáñez, Javier and Villas Olmeda, Mónica (2022), p.110

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Behavioral ethics vs. Ethics of compliance – Responsible Journal