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1993: William G. Neal - Ethical Conduct In The Business World: "A Trust To Be Kept"


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1993: William G. Neal - Ethical Conduct In The Business World: "A Trust To Be Kept"

W Neal

Dr. William G. Neal, son of Galen and Lois Neal, was born in Waverly, Iowa, and raised on the family farm in Shell Rock, Iowa, along with his two sisters. After graduating from high school, he attended the University of Northern Iowa (UNI), Cedar Falls, majoring in business. He was graduated in January 1971 with a Bachelor of Arts and in August 1974 with a Master of Arts from the University of Northern Iowa. As an undergraduate student at UNI, he was president of Pi Omega Pi (a business education honorary), president of Phi Beta Lambda (a professional business association), and selected as the "Outstanding Senior in Business." In 1971 he began teaching at Spencer (Iowa) High School and accepted a position the next year at Kirkwood Community College, Cedar Rapids, Iowa, where he taught from 1972-1974. While teaching at Kirkwood Community College, Dr. Neal was introduced to a colleague's roommate, Dianna Reynolds, an elementary teacher in the Cedar Rapids Community Schools. They were married in 1974. He accepted a one-year faculty position at the University of Northern Iowa for 1974-1975 while a faculty member was on a sabbatical leave. The following fall (1975) he began his doctoral studies at Virginia Polytechnic and State University (VPI), Blacksburg, and was graduated in 1977. He was one of two recipients in the State of Iowa to receive an EPDA fellowship. It was during these years at VPI when he and his wife were friendshipped by an LDS couple (another graduate student and his wife) from Ogden, Utah, and where they met their first of many pairs of missionaries. After completing his doctoral program, he accepted a position at Utah State University (USU) where he taught from 1977-1984, coordinating the communications program for the College of Business. He served as advisor to several student organizations, including local and state advisor for Phi Beta Lambda and was also a member of the national board of directors, serving as chairman during his term on the board. He received the "Advisor of the Year" and "Professor of the Year" awards from the College of Business as well as the faculty service award from the Associated Students at USU. Dianna completed her Master's degree at USU in 1980, and the Neals' first two children, Lindsey (1980) and Jennifer (1983), were born. William and Dianna were baptized in September 1, 1980, and sealed a year later in the Logan Temple. In 1984 he learned of a position at BYU-Hawaii; and having visited Hawaii several times, including summer teaching for the University of Hawaii, he accepted a position in the Business Division to develop the microcomputer-based curriculum in the division. Additional graduate work in information systems was completed at the University of Minnesota (1986) and Indiana University (1988). Erin (1985) and Megan (1990) also joined the family. Brother Neal's hobbies include playing the piano and teaching piano to these four daughters. He also enjoys traveling and watching BYU-H sports activities. His church positions have kept him busy and have included ward organist, choir accompanist, Elders Quorum counselor, ward and state financial clerk, stake clerk, bishop of the BYU-H Eighth Ward, and Blazer A teacher. He now serves as the second counselor in the BYU-H 1st Stake Presidency. He is currently a full professor and serves as the chairman for the School of Business


Introduction

A sales representative of a dealer in computers has a chance to close a multi-million dollar deal to sell to a customer over a two-year period. The machines for the first delivery are in the dealer's warehouse, but the remainder would have to be ordered from the manufacturer. The sales representative knows the manufacturer is having difficulty meeting the heavy demand for the model in question, making it unlikely that future deliveries will be made on time. He knows that any delay in providing the new computers would be costly to the customer. However, the dealer's printed order form states that computer deliveries are subject to availability from the manufacturer. Should the sales representative close the deal without advising the customer of the problem?

The editor of a large newspaper has recently promoted a new employee to head a special team of investigators to research an important story. He was selected for the job because of his superior knowledge about some unique aspects of the story, but the other team members under his direction have been expressing resentment about his promotion and are sabotaging the work of the team. The editor believes that it is unfair to deprive the new employee of this assignment, but quick completion of the story is vital to the success of the project. The other team members are irreplaceable. Should he remove the employee as head of the investigative team?

The chief executive officer of a manufacturing firm is approached about merging with a larger company. The terms offered by the buyer are very advantageous to the CEO. He would be kept on at higher pay by the acquiring company. The shareholders of the firm would also benefit, since their stock would be exchanged at substantially above the current market price. The CEO learns, however, that plans call for the closing of his company plant, which is the major employer in a small town. The firm has always taken its social responsibility seriously, but the CEO now wonders if he should balance the welfare of the employees who would be thrown out of work against the interests of the shareholders. Should the CEO recommend the offer to the shareholders?

These hypothetical examples give some idea of the ethical dilemmas that arise at all levels in the business world. The individuals in these cases are faced with ethical questions in their relations with customers, employees, and members of a larger society.

Sometimes, the ethically correct course of action is clear, and hopefully individuals in their work act accordingly. But the answers are often not simple. The dilemma is most commonly presented when ethical concerns come into conflict with the practical demands of business, often involving the trade-off between lowering one's personal values in exchange for increased organizational or personal profits (Laczniak and Murphy, 1991:261).

The sales representative, for example, might feel an obligation to tell the prospective customer about the anticipated delays in delivery but fears loss of the order to his company and a big commission to himself.

The editor, although realizing that removing the team leader is unfair, might still feel that he has no choice but to remove the new employee as head of the team in order to get the job done.

The CEO, by virtue of his position, may think he has responsibilities to constituencies other than the shareholders. Does he? If so, does the CEO have a right to favor his own interests over those of his employees when making this decision?

In little more than a decade, the field of business ethics has grown from the interest of a few philosophers into an interdisciplinary area of study that has found a secure niche in both the liberal arts and the standard business curricula. Credit for this development belongs to many individuals--both philosophers and scholars in the social sciences and business--who have succeeded in relating ethical theory to the various problems that arise in business. They have shown not only that the work place is a fruitful area for philosophical exploration but also that those who are in business and those who will be joining the work force can benefit from the results.

This topic affects each one of us, whether as a student (whatever the major and wherever we are from), as a faculty member, administrator, secretary, dancer at the PCC night show, parent, politician, or corporate executive. We all face ethical dilemmas, that is to say, situations where at least two hard choices are possible and where one must be selected. We have to make decisions affecting others based on our values. Or we may feel we have been a victim of an unethical decision and may have to weigh the pros and cons of contesting it.

Numerous news stories, often headline stories, feature individuals or corporations having difficulty making appropriate decisions. Shortly after selecting this topic the author found a lead story in the evening newspaper dealing with the bank overdrafts of U.S. congressmen and the nature of the subsequent review of these overdrafts by the Ethics Committee of the House. These acts constituted unethical conduct and may have been criminal as well. As a result of this scandal, some of the congressmen involved chose not to run again, others did and were not reelected.

The 1992 election campaigns were punctuated with many charges and countercharges of unethical conduct, including questions about family values and issues dealing with unfair campaign tactics. Newly elected president Bill Clinton has made it clear that he wants to be the "Ethics President." He signed orders implementing his ethics rules for senior administration appointees a few minutes after his inauguration. In fact, that announced position may have led to the withdrawal of both his first and second as nominees for attorney general, Zoe Baird and Kimba Wood.

This paper will present a few of the issues related to ethics in the business world for consideration:

What is the historical background of ethics in business?

Why is ethical decision making difficult?

What can be done to establish higher ethical standards?

Can business organizations be ethically correct and socially responsible and still prosper?

How is ethical conduct by Latter-day Saints in the business world a "trust to be kept"?

What is the historical background of ethics in business?

Throughout most of human history, business people have been held in rather low esteem. In the Far East, merchants and traders were despised by the elite but tolerated as necessary evils. In the early Western world, merchants and traders enjoyed a higher status, but still could not hope to amass the wealth and power of nobles.

Perhaps it is no coincidence that Hermes was known as the Greek god of commerce and thieves.

These views of the merchant class, whatever their justification, had a stifling effect on economic growth. China, for example, in spite of its high civilization and scientific discoveries, remained a feudal state until the twentieth century, in large part because of that nation's low regard for commerce.

It wasn't until the Italian Renaissance that merchants became respectable and could aspire to great wealth and political power. When this new respectability of commercial ambitions spread throughout Europe, an economic explosion occurred, leading eventually to the industrial revolution.

This is not to say that the morality of merchants and traders had improved any. What it does say is that, whatever their morals, their role in the creation of wealth had been recognized and valued and their activities encouraged. In fact, the unprecedented wealth created by the industrial revolution inspired unsavory business practices of unprecedented magnitude. Charles Dickens chronicled the horrors of sweat shops, child labor and the practices of swindlers and Scrooge-like characters.

Here in the United States things deteriorated to the point that the term "robber baron" was revived from medieval times to refer to certain characters who ran their railroads, or other organizations, with little regard for the public good, employing stock manipulations, discriminatory rates and rebates, predatory pricing, conspiracy, price fixing, monopoly, and securing the best judges and legislators money could buy.

An outrageous example of these unethical dealings was the extremely hostile takeover of the Erie Railroad. Jay Gould bought control of the Erie by first buying the New York and New Jersey state legislatures, then put his friend Boss Tweed of Tamany Hall infamy on the board. While he milked the railroad for personal gain, he let the railroad deteriorate into a literal death trap and paid no dividends to shareholders. A group of English stockholders finally had enough. They hired Dan Stickles, a former Civil War general, to seize control of the Erie. Stickles, by the way, was as shady a character as Gould.

When Gould's power base suffered some setbacks, Stickles' point man called a board meeting without Gould's approval. The 300 Erie workers and 100 policemen Stickles provided to ensure order outnumbered Gould's own 80-man, heavily armed private security force. A majority of the board resigned and was replaced with Stickles' men. When a U.S. marshall attempted to serve notice that Gould had been ousted, Gould barricaded himself in his office. He finally yielded, but when he resigned, the stock soared, and he made about three million dollars on his shares (a lot of money one hundred years ago).

On the whole, railroad tycoons were no more corrupt than some other American businessmen; but as leaders of the nation's first and biggest industry, they were, unfortunately, the most visibly corrupt. Other outrageous examples could be given.

From this unsavory past, there has been a remarkable evolution to the present perception as to what is proper and acceptable conduct in the business world. For example, even without Title VII of the Civil Rights Act of 1964, employers who deserve to be called ethical by our present standards do not discriminate against employees on the basis of race, nationality, religion, sex, age, etc.

A name has been given to this perception. We call it, simply enough, business ethics, or more accurately, "ethical business conduct," without necessarily trying to define it. Perhaps a technical definition may not be terribly important. Nevertheless, while fully recognizing there is no universally accepted definition, the following definition is offered: Ethical business conduct is doing something that is not required by law, contract, or other obligation and which is a positive contribution to society. The ethics of an organization (person) is the set of ground rules by which the organization (person) operates and evaluates (Axline, 1990:87). The term is loosely used to describe a business that is merely law-abiding, but that makes the concept into nothing but a synonym. Also, if such an ethical act is done primarily for a profit motive, even if beneficial to society, it is technically outside of this definition, but it may not be a significant distinction with respect to what is discussed in this paper.

What has caused all the attention given to ethics in the business world?

Business ethics became a major issue in the mid-1970s. There was a public outcry over Ford Motor Company's handling of the Pinto issue in 1973 when their gas tanks burst into flames, resulting in dozens of burn deaths. The Pinto was clearly an unsafe vehicle, yet the Ford company fought its removal from the nation's roads (Singer, 1993:1). Another concern resulted from a new awareness of U. S. corporate activities in other countries, stimulated by the leakage of the Union Carbide Plant in Bhopal, India (Trotter et al, 1989:440). The passage of the Foreign Corrupt Practices Act in 1977, prohibiting corporate bribery in foreign transactions, reflected a heightened concern about such activities.

The dominant issues in the 1970s were foreign bribery, employment discrimination, false advertising, safety, and consumer and environmental issues. In the 1980s occupational health and safety and abuses by corporate leadership and investors were added to the list.

Concerns about business ethics and corporate crime increased dramatically in the 1980s. Consider the following statistics which seem to show that Americans generally distrust business and business people (Robin and Reidenbach, 1989:4):

  • A Business Week/Harris poll indicated that white collar crime is thought to be very common (49%) or somewhat common (41%) and that 46% (most in any category) believe that the ethical standards of business executives are only fair.
  • A 1987 U. S. News and World Report survey reports that the majority of the American public believes that most business people regularly participate in ethical transgressions such as taking home office supplies, padding expenses accounts, and using small amounts of organizational funds for personal purposes.
  • A 1987 Time study suggests that 76% of the American public saw a lack of business ethics in business managers as contributing to the decline of U. S. moral standards.
  • A 1988 Touche Ross survey of the business community reported that the general feeling (even among business people) is that the problems concerning business ethics which have been portrayed in the media have not been overblown or exaggerated.

As the nation looks back on the more recent actions of some of its most influential political, corporate, and religious leaders of the 1980s, there is a collective sense of uneasiness that our national direction and purpose were lost during that decade. The Iran/Contra hearings and subsequent Oliver North and John Poindexter trials, the televangelist scandals, the Ivan Boeskey insider-trading scandal, and the Michael Milken conviction suggests that the national character was "wallowing in a moral morass." It is a startling statistic that more than 100 members of the Reagan administration had ethical or legal charges filed against them under the 1978 Ethics in Government Act ("Ethics: What's Wrong, 1987:14).

Indeed, one can be forgiven if his overall impression obtained from news reports of the decade is that ethical standards were virtually nonexistent and unethical behaviors rampant (Peterson et al, 1991:734).

Why is ethical decision making difficult?

Since the Code of Hammurabi, civilization has been trying for five thousand years to purge itself of the urge to cheat, and yet it still goes on. Why does it still go on? Perhaps there are at least five reasons.

First, we have become self-centered and self-indulgent, characterized by the term "the me-generation." People have traditionally received their values from family, school, and neighborhood, from religious institutions and from peers and popular culture such as music, the movies, and television. However, as mobility has increased and the community's influence has declined, people tend to become more inward, self-centered and self-indulgent. That is, as less of their validation comes from external sources, self-fulfillment and self-gratification are playing a greater role.

The sociologist Daniel Bell (1976:54) discerns a shift in American values "from the Protestant ethic to the psychedelic bazaar." The Protestant ethic and Puritan temper were based on "work, sobriety, frugality, sexual restraint, and a forbidding attitude toward life." They were the result of an agrarian, small-town way of life where clergymen held sway and a person was expected to "scrutinize himself and hold himself to account." In this context, a person got ahead by thrift, self-improvement, and industry, by avoiding the "temptations of the flesh" and by devoting himself to the "sanctity of work" and to other "higher pursuits."

In the last decade of 20th-century America, however, this ethic has been eroded by a hedonistic concept, that is, pleasure and play are paramount objectives. Autos, movies, radio, and television have eliminated rural isolation and created a common culture devoted to spending money and gaining material possessions. Items once considered luxuries, such as automobiles, televisions, air conditioners, and dishwashers, diffused down through the middle to the lower classes. People began to measure success not by saving and abstinence but by ostentatious living. Instant gratification of the impulses, rather than their suppression or postponement, became the norm.

The shift from the ideal of the community to that of the individual means that the purpose in life for many people is to feel good rather than to do good or be good. For many, those good feelings come from the thrills and pleasures of sex, risk, drugs, and alcohol. Virtue which comes from treating others kindly or contributing to the common good no longer seems to be a highly-rated attribute, as it did when institutions like family, school, church, and neighborhood taught and promoted it.

When feeling good is a higher value than doing and being good, ethical motivation to do the right thing deteriorates and must be replaced by a constantly expanding set of laws, rules, and regulations. When people are driven in large numbers to pursue things like money and power rather than things that are good in the philosophical or spiritual sense, these laws, rules, and regulations will proliferate in an attempt to force conduct essential to a healthy society that would otherwise be voluntarily forthcoming because of high ethical standards.

Second, we're failing to provide the moral education in our homes, schools, and churches as we once did. In a book entitled Why Johnny Can't Tell Right from Wrong (1992), a takeoff on the title Why Johnny Can't Read, William Kilpatrick, a professor of education at Boston College, reports the unprecedented rates of teenage pregnancy, drug abuse, suicide, and violence and points out that school programs intended to deal with these problems have largely failed. According to Professor Kilpatrick, one of the principal reasons for failure is that schools have abandoned the moral teaching based on the Protestant ethic they used to provide.

Traditionally, our schools used literature, history, and other means to teach such values as honesty, respect, and moral courage. But beginning in the 1960s and 1970s, most public schools switched from character education to an untested model generally known as "decision-making," which is a method of describing dilemmas but without helping the student arrive at a right or wrong decision. Kilpatrick concludes that this teaching method does not lead to the instilling of values:

Another key teaching tool in the decision-making approach is the open-ended discussion of an ethical dilemma. Here is a commonly used example . . .

A man's wife is dying of a rare kind of cancer. A local druggist has developed a cure for this type of cancer but demands far more than the man can afford to pay. Later the husband breaks into the store and steals the drug. Should he have done that?

. . . this set of exercises might seem like a good way to sharpen a youngster's critical thinking skills or help him clarify his values. You will probably also note that they will make for a lively class period. On the other hand, if you are a parent with one or more children in school, these exercises might make you feel a little uneasy--although it might be difficult to say why; we have become rather used to this way of framing moral issues. One way to get at the source of the unease is to ask yourself how these exotic dilemmas would translate into matters of everyday conduct. For example, would the dilemma about the man stealing the drug help your youngster resist a temptation to steal change from your dresser?

. . . The virtues are not explained or discussed, no models of good behavior are provided, no reason is given why a boy or girl should want to be good in the first place. . . They come away with the impression that even the most basic values are matters of dispute. Morality, they are likely to infer, is something you talk about in class but not something you need to do anything about (pp. 20-22).

Third, we may feel tension between organizational requirements and individual conscience. Many Germans routinely operated the gas chambers in Nazi Germany apparently as unthinking robots carrying out the will of the government with no sense of personal responsibility for those acts. Other more common examples will quickly come to mind.

Fourth, there's plenty of evidence to show that we can often gain by unethical conduct. The robber barons built many of today's blue-chip companies in a corrupt manner and amassed personal fortunes that survived several generations. Even today, many individuals in the business world feel they gain the most through unethical conduct. There is the risk of getting caught and punished, of course, but they consider such risk-taking an essential part of successful business.

Philippe Kahn (Ratajski, 1991) shared a recent example of a more sophisticated scheme. In an interview with Inc. magazine, he related how he launched his software company, Borland International, in 1983 by setting up an elaborate scam to deceive an ad salesman. He wanted to stake everything on one full-page ad in Byte magazine but didn't have the money and knew the magazine wouldn't extend credit to a company without customers. So before the ad salesman arrived at his two-room office, Kahn hired extra people to make the company look busy and well capitalized. He prepared a bogus chart that represented a media plan in which Byte had been crossed off.

When the salesman arrived, Kahn made sure the phones were ringing and people were scurrying around. While talking to the salesman, he casually maneuvered the chart so that the salesman could not miss it. The salesman did see it, noticed his magazine had been crossed off the list of possible media to carry the ad, and took the bait. He insisted he could get Borland International into his magazine. Kahn's rejoinder was that Byte wasn't the right magazine for him; that the media plan was done and there was no money left for another ad. Not surprisingly, the salesman offered Kahn good terms if he'd let him run the ad just once.

On the strength of that ad, Borland sold $150,000 worth of software, and a company was off the ground. Kahn has no regrets. Today he laughs about it.

Fifth, given the state of law enforcement, outright law breaking consistently proves to be a lucrative way of life. Criminals are not likely to get caught. If caught, they are not likely to be prosecuted. If prosecuted, they are often not convicted. If convicted, they are mostly not punished severely enough to deter them and others. When Milken completes his foreshortened prison term, he will still be a multi-millionaire many times over.

What can be done to establish higher ethical standards?

The best way to encourage moral growth, says Kilpatrick, is to return to the proven model of character education, with its emphasis on good example and good habits of behavior. He also explains what parents can do to encourage character formation in their own children. Among other things, he recommends that parents read to their children and provide them with good books that transmit moral values. I quote:

Stories have always been an important way of transmitting values and wisdom. They become all the more important in a society that, like ours, has experienced so much disruption in the family and in the community. The lessons contained in good stories are lessons the child might not otherwise get in a world of harried adults and fractured social institutions.

Becoming acquainted or reacquainted with these stories carries some benefits for adults also. You may find that these stories touch chords for you as well as for your child. My daughter, now grown, tells me that the items I read to her were some of the best parts of her childhood. They were important times for me as well. Those nights when I was reading from The Hobbit, The Chronicles of Narnia, from Bible stories and the Little House series not only brought us closer but also, I am convinced accounted for a good deal of my own moral and spiritual growth. They helped me remember any number of things I had conveniently stowed in the cold storage part of my soul (p. 29).

In his final chapter Kilpatrick includes an annotated guide to over 100 books for children and young adults. Of course, President Benson would want us to add the Book of Mormon stories to that list.

What are business organizations doing to improve their ethical practices? Firms spend a tremendous amount of time and money searching for ways to establish high ethical standards.

Ninety percent of Fortune 500 firms and nearly half of smaller firms have ethical codes of conduct which provide guidance to employees (Weisendanger, 1991:83). These documents issue guidelines and clarify company expectations of employee conduct in a variety of situations. Codes are considered to be the most effective way to encourage ethical conduct.

An international business ethics conference was held recently in Boston, which included representatives from colleges and universities as well as business and industry. Participating were delegates from throughout the United States, Asia, and Europe. Representatives from business and industry were frequently the "Ethics Officers" for their organizations. Employees in the company could seek their assistance if they felt an ethical infraction had occurred.

Gary Smith, a faculty member in the Brigham Young University--Hawaii School of Business, recently completed a manuscript entitledEthics: A Positive Approach in which he identified several topics including AIDS, ecology, child care, substance abuse, employee morale, employee health care programs, pricing, loss prevention, corporate giving, community service, and employment compensation to name a few. He learned that many organizations are striving to deal constructively with these issues. He gives several examples of how these "good" companies are doing are moving toward good corporate citizenship without differentiating between what is profit motivated, legally required, or just purely ethical:

Digital Equipment Corporation, a manufacturer of computers, instituted an AIDS awareness program for over 100,000 employees. According to the manager of their AIDS program, "the fight against AIDS will not be survival of the fittest. It will be survival of the best informed." Like other companies which have similar programs, Digital allows those with some form of AIDS to continue working as long as they can continue to perform on the job, just as they would allow workers with other medical problems. Digital also sponsors fund-raising to assist in AIDS research.

Substance abuse in the work place is a major problem throughout the world. "All told, illegal drugs are costing America $70 billion to $75 billion a year in lost productivity." (A publication of Hoffman-LaRouce, Inc., Corporate Initiatives for a Drug Free Workplace). Alfred Borelli, director of consulting services at Matrix Motivational Systems says, "Alcohol and drugs combined are doing $200 billion annually in damage to business."

Drug testing presents complex ethical and legal issues for corporations. Are employees' right to privacy violated when they are tested for drugs? May employers have a drug testing program in which they will test pre-employment, or "for cause," or at random?

At Merck & Co. employees are referred for treatment if they test positive, and once the rehabilitation has been completed they are tested periodically. All job applicants are also tested and if they test positive, they may reapply after one year.

At Ben and Jerry's Homemade Ice Cream, Inc., located in Vermont, if supervisors suspect a problem, they may refer employees to counseling or employees may refer themselves. Under a blind billing system, employees can obtain help and have the services billed to the company without the company knowing who is using the service. The company pays 100 percent of the cost of counseling and rehabilitation.

Wal-Mart has set up recycling centers in the parking lots of each of its stores, making it easy for customers to contribute to the recycling collectors. Wal-Mart was also the first retailer to call for more environmentally friendly products from its suppliers, and they place tags on products to indicate environmental improvements in packaging or products by manufacturers.

Stride Rite Corporation in 1989 instituted an Intergenerational Day Care Center. While Stride Rite had already had a program in childcare for nearly 20 years, the prospects of including elder care had not been a part of their program. Probably one of the greatest benefits of the intergenerational center is that the two generations cannot only gain from one another, but can give to one another as well.

Can businesses be ethically correct, socially responsible and still prosper?

In a survey conducted by the national accounting firm Touche-Ross in 1988, 63 percent of corporate executives believed that high ethical standards strengthened, rather than weakened, a firm's competitive position.

 

McDonald's has been among the leading corporations in providing opportunities to blacks. Nearly one-fourth of its 120,000 plus employees are African-Americans. Their advancement is another tradition with McDonald's; African-Americans comprise nearly 20 percent of management positions and over 13 percent of senior management positions. In addition, over 500 of McDonald's 11,000 plus franchise units are black-owned. Could these figures account for why, during the Los Angeles riots in the spring of 1992, no McDonald's units were burned or ransacked?

Here's another example: Empire Southwest, a distributor of Caterpillar equipment in Phoenix, was going nowhere in the Mexican market because it refused to pay the bribes that have been an accepted business practice there, at least before the Foreign Corrupt Practices Act of 1977. Jack Whiteman, Empire's CEO, says their anti-bribe position actually raised his firm's stature in Mexico. Over those years, word spread among Mexican mining companies, farmers, and contractors that this American firm dared to buck the system. They were so eager to do business with Empire that they successfully lobbied their government to enable Empire to open two Mexican dealerships.

Empire chose to forgo sure profits to maintain its integrity. In the short term, that decision was costly. In the long run, Empire not only established itself as an honest company but made money besides.

Paradoxically, companies that focus on values instead of profits often end up enhancing their profit picture as a result (Kelly, 1989:18). UCLA professor, Bill Ouichi, observes that "among the fastest-growing, most profitable major American firms, profits are regarded not as an end in itself nor as the method of keeping score in the competitive process. Rather, profits are the reward to the firm as it continues to provide true value to its customers, to help its employees to grow, and to behave responsibly as a corporate citizen."

How is ethical conduct by Latter-day Saints in the business world a "trust to be kept"?

As members of the church, we have been frequently counseled about our relationships with others: our sources include the Ten Commandments, the Sermon on the Mount, our Thirteen Articles of Faith, and the words of our modern-day prophets.

Indeed, "A Trust to be Kept," part of my title for this presentation, is taken from the following teachings of one such prophet, David O. McKay (1962, 379):

Every man and every woman is given a trust to be kept. 'To be trusted is a greater compliment than to be loved.' It is not alone in commando raids or on the fields of battle that courage may be manifested. It is needed in the day-by-day battle of life. Not physical courage only, but moral courage!

The moral courage to which he refers is the ability to be ethical in our behavior and to make good decisions when presented with an ethical dilemma.

John Welch, an educational missionary at BYU-Hawaii, when speaking to its business students suggested:

What does the Lord expect of his people? He expects us to advertise our membership in the church, to enhance the reputation of the church, and to save our own souls, by not cheating, by not misrepresenting the facts, by not cutting corners, by not delaying deliveries or payments for our own advantage, by not loafing on the job, and by not overcharging our clients or customers. . . Some may choose to call that ethical conduct. It can also be called just being a good Latter-day Saint.

University President Alton Wade at a devotional on January 7, 1993, referred to BYU-Hawaii as "an institution of prophetic destiny." He quoted some of the words President McKay uttered at the ground breaking for the Church College of Hawaii (the BYU-H predecessor) on February 12, 1955. During his address President McKay stated: "One man said, 'The world needs men who cannot be bought or sold, men who will scorn to violate truth, genuine gold.'"

President McKay stressed honesty in speech as well as in actions. "It means to avoid telling half truths as well as untruths. It means that we are honest in our dealings--our buying as well as our selling. . . . It means that we will be honest in our dealings with the Lord" (McKay, 1962:455).

President McKay also stated on another occasion:

In probably no more effective way can the truth be witnessed before men than for every Latter-day Saint to maintain and foster the confidence of all men everywhere. Now, in order to do that we must be honest in all things. If we are contractors and agree to put certain materials into a building, let us use that material. If we agree to the stipulations of a contract, let us live up to what we agree. Such things may be considered only "details," but they are the "details" by which the men with whom we deal will judge our actions (Middlemiss, 1967:140).

In the same vein, President Hinckley declared in his charge at the 1986 BYU-Hawaii inauguration of President Wade:

We charge you and your associates to cultivate within the students the qualities of character, industry, and integrity, which will make of them men and women better prepared to make a more significant and meaningful contribution to their families and to society. . . It is the responsibility of this institution, given by the Church, which gives so much of its treasure to this purpose, to train those who come here, to think with intellectual integrity, to act with moral responsibility, to stand as examples of men and women possessed of a great sense of service to their fellowmen.

The Leaven in the Lump

Should we worry or give up if we see ourselves in a small minority in meeting this challenge? Not at all. The Apostle Paul said:

Know ye not that a little leaven leaventh the whole lump? Purge out therefore, the old leaven, that ye may be a new lump, as ye are unleavened. (I Corinthians 5:6-7)

Pages of history glitter with the accounts of loyal men who, in the face of difficulties and even death, have "kept that which was committed to their trust"--Daniel before the godless rulers of Babylon, Joseph of Egypt tempted by the wiles of Potiphar's wife, Peter and John before the Sanhedrin, Paul in chains before King Agrippa, Joseph Smith imprisoned, silencing the blasphemous guards--these and ten thousand other righteous leaders illustrate how to keep the treasures committed to our trust, all the while showing the stamina so often required to keep that sacred charge (McKay, 1962:379).

Who else but Latter-day Saints ought to be the leaven in the business world lump? What others are better prepared to be the light to the uncertain feet? Who will lead the way to a society that is ethical in the classic sense, if the Latter-day Saints fail to do so? And who has a higher duty to inculcate these righteous principles to the students than the administration, the faculty, and the staff of this institution with its prophetic destiny?

Therefore, our responsibility as Latter-day Saints is to stand fast to our values and to have the strength and courage to sustain those principles. In keeping with the words of David O. McKay, ethical conduct is not something we just talk about, it is a "trust to be kept."


William G. Neal
Box 1956 BYU-Hawai’i
Laie, HI 96762
nealw@byuh.edu

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