Still the best policy?

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Each time you are honest and conduct yourself with honesty; a success force will drive you toward greater success. Each time you lie, even with a little white lie, there are strong forces pushing you toward failure.” –Joseph Sugarman

It’s a report that came out (sadly) over the Thanksgiving holiday – the Los Angeles-based Josephson Institute’s 2008 “report card” survey of 29,760 high school students entitled “Ethics of American Youth.” The group’s study revealed what it called “entrenched habits of dishonesty in today’s young people” – something that doesn’t bode well for the future when these kids grow up to become politicians and parents, cops and corporate executives, journalists and generals, according to Michael Josephson, the institute’s president.

In several categories, the cards seem highly stacked against honesty. Take “stealing” for example: more than one in three boys (35 percent) and one-fourth of the girls (26 percent) — a total of 30 percent overall — admitted stealing from a store within the past year. In 2006 the overall theft rate was 28 percent (32 percent males, 23 percent females). About 23 percent said they stole something from a parent or other relative in the past year (the same as 2006) and 20 percent confessed they stole something from a friend. The group found boys were nearly twice as likely to steal from a friend as girls (26 percent to 14 percent).

Then there’s lying. More than two of five (42 percent) said that they sometimes lie to save money. Again, the male-female difference was significant: 49 percent of the males, 36 percent of the females. In 2006, 39 percent said they lied to save money (47 percent males, 31 percent females). It’s not surprising, therefore, that cheating in school continues to be rampant and it’s getting worse. A substantial majority of the kids in this study (64 percent) said they cheated on a test during the past year (38 percent did so two or more times), up from 60 percent and 35 percent in 2006. There were no gender differences on the issue of cheating on exams, the institute noted.

Of course, you’ve got to take some of this with a big dose of salt – after all, these ARE high school kids taking an ethics survey. Who wouldn’t put down all kinds of nonsense just for fun? Funny thing is, the institute’s researchers asked questions about that very same activity – lying on surveys – and found that more than one in four (26 percent) confessed they lied on at least one or two questions on the survey.

Despite these high levels of dishonesty, noted the institute, these same kids reported a high self-image when it comes to ethics – with 93 percent saying they were satisfied with their personal ethics and character and 77 percent noting that “when it comes to doing what is right, I am better than most people I know.” Hoo boy, we’re in trouble.

Professor Jerry Osteryoung from the college of business at Florida State University has some thoughts on the honesty question – especially as to how it impacts the business community. I think we can all relate to this concern over ethics, as we’ve watched over the past few months how bald-faced fraud in mortgages, credit default swaps, etc., led to an economic implosion in this country of ours. Professor Osteryoung, as usual, has some thoughts on the subject, which I will let him share today. Professor, the floor is yours:

“The thing that disturbed me the most about the Enron Corporation travesty is the magnitude and the scope of the dishonesty. It is incredulous to realize the number of people who knew, or should have known, that their actions were not correct and probably illegal. Yet the majority of these ethical issues were never seriously considered.

Dishonesty in corporations hits the front page, but it is prevalent in all of society. I think that dishonesty in our society is tolerated and in many ways encouraged. Just look at how many times the legal system gives people a chance to change before they have to go to jail.

Sometimes in my classes at various universities, I ask the students how they would respond if they got back $20 more than was due them from a restaurant cashier. Unfortunately, the majority of students say they would keep the $20. They rationalize that the restaurant makes millions of dollars and will not miss the $20. After I get over the shock of their reaction, I have a very long talk with them about ethics and honesty.

Can I change their view of honesty? Maybe or maybe not, but what I can do is make them aware of the ethical considerations. I think many people get themselves into problems because they just do not realize that there are ethical dimensions to their decisions.

Here is what I tell my students and entrepreneurs to ask themselves if they are getting into an ethical quagmire:

• What would your mother say about this action?

• How would you feel if your action appeared on the front page of the Tallahassee Democrat newspaper?

• Is it illegal?

If you have the ‘uh-oh’ feeling about your action from these questions, then you are in an ethical dilemma. I believe that just being aware of an ethical issue will help you to better analyze and deal with the situation.

The top 1% of all salesmen were interviewed and asked to identify the most important attribute for their success? Was it:

• Their character

• Their wit

• Their products/services,

• Their motivation, or

• Their honesty

Without question, the most important attribute to this top group of salesmen was honesty. They clearly understood that, for customers to have a relationship with them, the customer needed to trust them. This trust is only earned through consistently honest relations. Most people want to have relationships with only honest people. Just ask someone whether he or she would prefer to get a 10% discount on a product dealing with a dishonest business or to pay the normal price to an honest company?

I believe that honesty is one of the most important considerations in being an entrepreneur. Employees, customers, and vendors cannot trust you if you are dishonest. We have been jaded by so much dishonesty in our public lives (e.g., President Clinton and President Nixon) that sometimes we learn to tolerate dishonesty and sometimes to even expect it.

Honesty is the virtue you should most desire for your company. Now, is being honest easy? No! But honesty still brings tremendous dividends in business.”

As always, you can reach Professor Osteryoung by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.

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