“You get more cooperation with a smile and a gun than you do from a smile alone.” Al Capone
Fazendo a Coisa Certa Fraud
You • What moment in your life are you most proud of?
You • What moment in your life are you least proud of?
Why Ethics? • It’s the right thing to do • It’s the profitable thing to do!!! (Can you prove that?) Yes I Can!!!!
Who’s job is it to teach ethics? • Parents Or Educators?
What right does an accountant have to teach business ethics? • The accounting department is the conscience of a business • If the accountants for ZZZZ Best had done the right thing…………….. • If the accountants for Enron had done the right thing………………
Closer to home, • If the accountants for Parmalat had done the right thing………
Personal Bias • From the perspective of a religious person • From the perspective of one who teaches the mechanisms of profit • From the perspective of a grandparent
Why do we even need this? • What is right is right………… Não É?
Cultural Differences • Brasilian’s tend to put their group ahead of their society more than Americans do.
Gender Differences • Women take cheating by their husband different that men do. • Women tend to be more hurt much more if affection for the other party was involved • Men tend consider cheating is cheating.
Gender and Business Cheating • When it comes to Business cheating • 35% of men said that once they knew about fraud, they would report it • 25% of women said they would report it
Why wouldn’t you “Blow the Whistle”? • Men Women • It would alienate me from my colleagues 21% 26% • It is none of my business 49% 40% • It might jeopardize my job 13% 18% • Everybody’s doing it 30% 42%
In our DNA?? • Your Brain is pre-wired to survive • We are pre-wired to believe • But, once deceived by someone, we never believe that person again (our brains do not ever really forgive)
More on Genetics • Adopted children whose biological father had no criminal record have a 10.5% chance of having a criminal record • Adopted children whose biological father has a criminal record but whose adopted father does not, have a 11.5% chance of having a criminal record.
An adopted child whose biological and adoptive parent both have a criminal record have a 22% chance of having a criminal record. • The Ethical Executive pp 90-91
Reputation • In 2007 Cisco was charged with Brazilian tax fraud. Company said “it was not us- it was the middlemen.” • 44 of the arrests were Cisco people
You must always be on guard • You can lose a reputation that took 37 years to build in les than 37 seconds. And it will take more that 37 years to rebuild it. • Warren Buffett
The 4 % • 4 % of the population has no conscience • Luckily these people tend to be lazy and only interested in their own self • "The Sociopath Next Door” Martha Stout
The Master Emotion • Empathy empatia • To age 2 ½ empathy is mimicry • After 2 ½ the child realizes that others pain is different from theirs and this matures through our lives.
You Can Help Your Child • You can help your child by the way you discipline • “See how you made that person feel.” • “Veja como você fez essa pessoa sinta,” encourages empathy • “That was naughty.” “Que foi desobediente,” does not.
Plus, Goleman says, empathy is also shaped by watching how others respond to people in distress. • Michael Schulman says students are born with a sense of morality. The teacher can tell the student not to eat in the classroom and the student will obey and agree.
Innate Morality • If the teacher then says it’s ok to eat in the classroom, the student will eat and feel fine with that. • If the teacher tells the student it’s ok to push another student, the student will balk. • It seems we are born with a sense of morality, but not how to apply it.
Resources The Ethical Executive Robert Hoyk Paul Hersey
Ethical Traps • When involved in ethical situations, there are always consequences. • Ethics cause deposits and withdrawals to our self-esteem bank • And we want the income to be greater than the costs, but there are costs!
A Situation • On the way to school, Erin’s cell phone rang. Her best friend had just broken up with her boyfriend, and she asked Erin to skip the first class of the day to comfort her. Reluctantly, Erin agreed, and they met at the local coffee house. Erin, a top student, and senior class president, was promptly busted, which led to a three-day suspension and a request from the school principal that she step down from the position of class president because of her unethical behavior. On top of that, her parents pulled her cell phone for four weeks and grounded her for the same period of time.
Did Erin do the right thing? • Were there more deposits or withdrawals from Erin’s self-esteem?
Fraud in the business place • Your employees are 15 times more likely to steal from you than your customers • One out of five US Business closings are caused by employee theft
Requirements of the thief • We will be looking at business ethics from a moral standpoint. Before we start that, let’s look at it from an objective business point of view. • The thief generally has three requirements in order to steal
The First Requirements of the thief Unshareable problem • Could be gambling, sex, drugs • For men tends to be greed related • For women tends to be need related
2nd Requirement • A way to steal
The 3rd Requirement • Moral justification Has to live with themselves • it is a loan • I deserve because I do all the work • It is company policy ZZZZ Best
Moral at the top Enron's Code of Conduct So at Enron? At your company? Avoiding tax
Paul Hersey • Who he is • Institute for Situational Leadership • Paul
Dr. Hersey’s Book • The Ethical Executive • Describes 45 ethical “traps” that executives can fall into. Primary Traps Defensive Traps Personality Traps
Primary Traps • Obedience to authority • He (she) told me to do it • Small steps • Indirect responsibility • Faceless victims • Lost in the group • Competition
More Primary Goals • Conformity Pressure • Time Pressure • The seminary students • 67 students • low time pressure 63% offered to help • Intermediate time pressure 45% offered help • High time pressure 10% offered help
(Usually after we have been unethical) Anger (destroys empathy) Defensive Traps
Personality Traps • Psycholpathy • Low self-esteem • Need for closure
Lets Talk to the man • Paul
Ponzi Schemes • The demonstration • But they are more sophisticated than that • Ponzi 1 • Ponzi 2
What is your future • The view from the top • Enron code of conduct • Brasil • Parmalat • Cisco
Making Decisions • When your can’t decided which course of action is right, if you choose the one which is harder to do, you are probably right. • Quoted by Dr. Gaudiani • Ethics Address
Remember • 80% of our purchases are for status • Money can bring fear and envy, • only integrity can bring respect • Jon M. Huntsman
A thought that is uncomfortable • Maybe it is not about me
Your Children • “Children are a message we send to a time we will not see.”
You are the CEO and CFO of your family. • You set the moral climate. • Change now?
The Final Slide • Keep Moving Justice Forward- There is no Greater Task Also quoted by Dr. Gaudiani