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3/30/12 B. : How Do You Measure Ethics? B. THE MAGAZINE O F THE O PUS C O LLEGE O F BUSINESS FALL 2008 : VO LUME 6 : ISSUE 1 A BO U T : C O N T A C T : A RC H I V E FEA TURED A RTICLES Q&A with Bill Browning: Follow Nature's Lead Trend Spotting: Health Care Reform in 2 009 - Don't Look to Washington Rise Up The Next Econom y The Value of an M.B.A. How Do You Measure Ethics? A Fondness for Words and Num bers It's in His Blood The Bottom Line: I Hav e an M.B.A. How Do You Measure Ethics? Se
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  3/30/12B. : How Do You Measure Ethics?1/3www.stthomas.edu/bmag/2008/Fall/MeasureEthics.html B.  THE MAGAZINE OF THEOPUS COLLEGE OF BUSINESSFALL 2008 : VOLUME 6 : ISSUE 1 ABOUT:CONTACT:ARCHIVE FEATURED ARTICLESNEWS & EVENTS Q&A with Bill Browning: Follow Nature'sLeadTrend Spotting: Health Care Reform in 2009- Don't Look to WashingtonRise UpThe Next Economy The Value of an M.B.A.How Do You Measure Ethics? A Fondness for Words and NumbersIt's in His BloodThe Bottom Line: I Have an M.B.A.Entrepreneur gives St. Thomas $10 millionto support business ethicsRon Fowler ’66, Greg Hennes ’85 among winners at Entrepreneur Awards Ceremony Center for Family Enterprise hostsconference on family business issuesIn Memoriam: Professor Emeritus Dr. RawlieSullivanNew director of John M. Morrison Center forEntrepreneurship, new faculty Two MBA students receive scholarshipsHonors for Opus College of BusinessPrograms, Faculty and Students How Do You Measure Ethics? Self-Assessment and Improvement Process brings a quantitative approach to an(allegedly) qualitative subject T. Dean Maines The past two decades have seen an increased interest in defining ethical businesspractices. But how, exactly, does one define an ethical business practice and, more tothe point, how does one measure ethical behavior? Rightly or wrongly,some would arguethat a quantitative approach to measuring ethical behavior in a corporate entity issomehow alien to ethics and moral deliberation. Yet the SAIP Institute has developed aprocess – the Self-Assessment and Improvement Process – that seeks not only tosupport continuous improvement in areas of corporate social responsibility and businessethics, but also to quantitatively assess this most qualitative subject. Measurement and moral reasoning Jeremy Bentham, arguable the father of utilitarianism,held that one had to measure theamount of pleasure and pain that would result from an act in order to determine whetherthe deed was morally right or wrong. He identified seven variables in this quantitativeassessment, including the intensity and the duration of the pleasure and pain producedby the action, and the number of people who experienced each sensation. According toBentham, an act was morally praiseworthy if the net outcome of this measurement fellon the side of pleasure; otherwise, it was morally wrong.Many ethicists have raised objections to Bentham’s theory. But Bentham reminds us thatmoral reasoning usually entails some kind of assessment. Before we perform an action,we try to predict the act’s likely outcomes and assess how well it conforms to certainenduring moral standards (telling the truth, keeping promises, honoring human dignity,and so forth). We also attempt to measure our moral character – we scrutinize ourinclinations and motives, all of which shape how we think about our moralresponsibilities. And when we are at our best, our reasoning places extra weight onothers’ claims and concerns. This prevents us from being unduly influenced by our own  3/30/12B. : How Do You Measure Ethics?2/3www.stthomas.edu/bmag/2008/Fall/MeasureEthics.html interests and increases the likelihood of ethical behavior.The measurements we typically make in our personal moral deliberations are more akinto those of a competitive diving judge than a timekeeper at a track meet. However, theabove reflections suggest that assessment and measurement may be more closelyconnected to ethics than skeptics would allow. Institutionalizing moral values through measurement That said, it is possible to develop refined quantitative tools that can help businessleaders address ethical challenges within their organization. And one of the biggestchallenges facing them today is the development of a culture that promotes ethicalconduct.This new emphasis on culture is due in part to the 2004 federal sentencing guidelines fororganizations that call upon companies to develop cultures that encourage employees tobehave ethically, as well as comply with the law. It also is partly attributable to theinfluence of total quality management, which taught companies that it is more cost-effective to avoid product and service defects than to correct them after the fact.Extended to corporate ethics, this lesson underscores the need for firms to preventethical lapses. A culture that reinforces ethical conduct safeguards against morallyproblematic decisions and deeds.Ken Goodpaster, holder of the Opus College of Business’ Koch Endowed Chair inBusiness Ethics, has identified three tasks leaders must undertake to create such aculture. First, leaders must orient their companies toward important moral values, suchas respect for others, trustworthiness, transparency and fairness. Second, they mustembed those values within the organization’s processes and practices. Finally, leadersmust make those values an enduring part of the firm’s identity. These tasks comprisethe moral agenda of leadership.The SAIP assists with the second task, that of institutionalizing moral aspirations withinprocesses and practices. Patterned after the process pioneered by the Malcolm BaldrigeNational Quality Program, the SAIP enables business leaders to develop a thorough,data-based understanding of the processes that shape their company’s performanceon ethical issues. The SAIP assesses these processes using multiple criteria, includingevidence of effectiveness, consistent application and continuous, systematicimprovement. A set of performance benchmarks enables the organization to assign anumeric value to these processes. Higher scores on this scale reflect a greater degree of maturity. And the more mature a process is, the more likely it is to repeatedly producedesired outcomes. Measuring corporate character Just as our personal habits predispose us to behave in particular ways, an organization’sprocesses predispose it to certain patterns of behavior. Virtues are those habits whichincline us to behave in morally commendable ways, and our moral character is simplythe unique constellation of virtues (and vices) we have developed during our lifetime.The total score from a SAIP application can be understood as a measure of organizational moral character. It numerically suggests the likelihood that a company’sprocesses will consistently generate morally sound actions and behaviors. UnlikeBentham’s measurement process, the SAIP attempts to provide a measure of the sourcefrom which an organization’s decisions and actions issue. Such measurement can aid theformation of a firm’s moral character by helping leaders assess the trajectory of itsdevelopment over time.The SAIP’s focus on moral character places it within a venerable tradition of ethicalreflection extending from Aristotle to such contemporary philosophers as AlasdairMacIntyre. St. Thomas Aquinas, after whom our university is named, is a major figure  3/30/12B. : How Do You Measure Ethics?3/3www.stthomas.edu/bmag/2008/Fall/MeasureEthics.html © 2012 University of St. Thomas · Minnesota · Opus College of Business Schulze Hall 200 · 1000 LaSalle Avenue · Minneapolis, Minnesota 55403 · USA1-651-962-4200 · cob@stthomas.edu within this tradition. We can hope that he is pleased to see such work undertaken at auniversity under his patronage. T. Dean Maines is president of the SAIP Institute at the Opus College of Business. PRINT:EMAIL TO A FRIEND  Alumni · Maps & Directions · Giving   Jobs at UST · EEO Statement · DirectoriesRSS Feeds
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