Management and Consulting Services

Ethics are not Needed to Make a Fraud Choice

10/1/2011

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In making a decision NOT to participate in fraudulent behavior, the choice seems resoundingly simple.

If you’ve seen “former” fraudsters give speeches, you’ve likely heard some of them describe the enormity of the issue, complexity of the situation, sophistication and/or difficulty of the choices they had to make in deciding to ultimately “do the deed.”  Some of the rationalizations I’ve heard included: “the environment made me do it”, or, “it can happen to you”, or, “he was such a forceful personality”, or, “anyone can be forced to do fraud”, or, “I was under a lot of earnings pressure” (when they didn’t even do their own departmental budget).

In my opinion, these messages bypass reality.  They represent rationalized excuses for a fraudster’s own inability to admit their poor choices, to deal with their weaknesses…as their choices were overly influenced by just plain-old personal greed, arrogance, narcissism, their distorted sense of entitlement…or perhaps all of the above.

I contend the two sides of doing fraud (or not), are painfully obvious.  The decision becomes a “right vs. wrong” choice.  A “perp” chooses to lie, cheat, steal, obfuscate the truth, book-cook, take kickbacks, bypass policy, blame others for their own illicit action…or not.  A Catholic writer I know of describes it more broadly this way, “Life is choices.”

Beyond the very simple reality of right vs. wrong, fraudsters end up many times talking about “ethics” and, “if I only would have had a mentor who could have been my ethical guide.”  You do not need an ethical mentor to tell you the difference between right and wrong

But if you want to talk about what choices “ethics” do assist in making, I have some information.  But full disclosure here…the following is NOT my thinking…I blatantly took these concepts from someone else.

Ethical choices are made in a “right vs. right” decision…where there is perceived “right” on both sides of an issue.  Here’s one example: You just hired a new writer for the magazine’s journalism staff.  That new writer then plagiarizes other source-authors in an important piece.  If you fire her, you uphold journalistic standards and keep the reputation of the magazine more intact.  If you don’t fire her, and give her another chance, you utilize a “teaching moment” to guide your rookie writer to appropriate and higher standards, and hopefully prevent a recurrence.

What do you do?

According to Rushworth Kidder (read some of his stuff—it’s good), this is a “right vs. right” dilemma, or choice.  The framework he has developed goes something like this:

In order for a behavior to be judged “ethical,” it must conform to all five of the following criteria…the behavior (or choice) must be:

  • Honest
  • Responsible
  • Respectful
  • Fair
  • Compassionate

If it’s not ALL FIVE, it’s not “ethical.”

Now, if you do happen to apply the framework to a “right vs. wrong” choice…you do end up at the same place.