PRACTICAL BUSINESS ETHICS:

Transcription

1 PRACTICAL BUSINESS ETHICS: Making Real-World Decisions Dr. Valerie P. Denney, MAPM, PMP Assistant Professor in Decision Sciences Embry-Riddle Aeronautical University Program Chair, MSPM and BSPM degrees February 21, 2017 PMI Metrolina Chapter Presentation PMI, PMP, and PMBOK are registered marks of the Project Management Institute, Inc. Unless otherwise noted, insert graphics are courtesy of Creative Commons

2 Agenda Why I Study Ethics? Icebreaker What does the PMI say? Some recent practical research Achieving a Competitive Advantage through Ethical Business Practices Understanding the Challenges of Business Ethics: Value and Success PMI Ethical Decision Making Framework Return to the Icebreaker Q&A 2

3 Why? Why do I study business ethics in a project environment?

4 Icebreaker What 5 words (or short phrases) come to mind when I say Business Ethics First, individually answer Discuss at your table Write each word on a separate sticky note Post up-front 3

5 Some Common Words Why Did They Do It? Decision Process Uncomfortable 4

6 What Does the PMI Say About Ethics? PMI Code of Conduct Responsibility Respect Fairness Honesty The definition of what is right is complex and subject to interpretation. PMI Philosophy: Professional Responsibility Do the right thing even when it is not favorable. Cooperate fully. Seek to problem solve 6

7 For Example* You are midway through managing a project with a sponsor-approved budget of $800,000. You calculate your project to run $140,000 under. If you underrun that much, your team will not get the bonus, based on hours billed. What should you do? A. Add extra features to the project scope that takes advantage of the available budget, and increase customer satisfaction. B. Maintain current project activities, and bill for the original amount. C. Ask the sponsor to approve additional features, given the available budget. D. Meet with the project sponsor to inform him of your findings. *Example derived from Crowe, A. (2016). The PMP Exam: How to Pass on Your First Try. 7

8 A.Add extra features to the project scope that takes advantage of the available budget, and increase customer satisfaction. NOPE- You are supposed to conform to the scope, not increase it. *Example derived from Crowe, A. (2016). The PMP Exam: How to Pass on Your First Try. 8

9 B. Maintain current project activities, and bill for the original amount. NOPE- Come on. Think! *Example derived from Crowe, A. (2016). The PMP Exam: How to Pass on Your First Try. 9

10 C. Ask the sponsor to approve additional features, given the available budget. NOPE- PMI says do not gold plate the scope by adding more than was originally planned. *Example derived from Crowe, A. (2016). The PMP Exam: How to Pass on Your First Try. 10

11 D. Meet with the project sponsor to inform him of your findings. PMI says this is the right answer. You go to the sponsor since he approved the budget (stakeholder). The person paying should know as soon as possible. *Example derived from Crowe, A. (2016). The PMP Exam: How to Pass on Your First Try. 11

12 This is Easy Stuff, Right?. Make no mistake, this CAN be hard I can read it and understand it, but Sometimes it is hard to know what is right Sometimes it is hard to hold ground when pressured 12

13 The Grey Zone??? 12

14 Some Background: Many Theories about Ethics Conduct based ethics: Consequentialism - Focused on results - Good is defined independently of right - Greatest benefit Most business ethics is based on ethics of conduct, rather than ethics of character Denney- Practical Business Ethics- Metrolina PMI Feb 21, 2017 Deontology - Cost benefit analysis - Logical rational arguments to produce benefit 13

15 Achieving a Competitive Advantage through Ethical Business Practices Purpose What elements of the business culture and competitive environment affected decision-making? How do stakeholders define ethics? Qualitative case study How and What Five months of data with thousands of data points Concern for biasing results with the word ethics Context: Cultural Transformation Trigger event was near death experience Changed from dysfunctional from accountable 15

16 Key Business Behaviors that Influence Decision Making LEADERSHIP EXCELLENCE Engaged Accessible Credible Trustworthy Stable Able to Relate Teamwork Quality Customer importance of stakeholders Accountability Respect for individuals Denney, V. (in press). Achieving a competitive advantage through ethical business practices: An ethnographical case study. Journal of Organizational Culture, Communication, and Conflict (JOCCC). 16

17 Ethical Values and Culture Ability to voice opinions through transparent and open communication Moral fortitude RIGHT????????????? Ethics Integrity Dignity Respect Honesty Transparency Knowing where the boundaries are Beyond the practices of law Something we take for granted A habit Leadership emphasized doing what is morally right above all else Denney, V. (in press). Achieving a competitive advantage through ethical business practices: An ethnographical case study. Journal of Organizational Culture, Communication, and Conflict (JOCCC). 17

18 Understanding the Challenges of Business Ethics in Relation to Business Value and Success Purpose How do experienced business professionals define the term business value? Is business ethics part of the value-chain? How and What Qualitative case study Written responses to open ended questions Concern for biasing results with the word ethics 18

19 The Questions What is of value to your organization? Provide the rationale for how you know these are valued by your organization. If there is a priority, provide it. Provide a definition of value if that helps your explanation. What values could be improved? 19

20 Value-Focused Categories Value category % Respondents Data Sources Total References Ethics 100% Finance 100% Compliance Quality Time Business Assets Longevity 67% % % % % % identified ethics or finance as a business value Denney, V. & Marion, J. (2017). Understanding the challenged of business ethics in relation to business value and success. Manuscript submitted for publication. 20

21 Key Ethics Code and Synonyms 67% 60% 60% 53% 40% 33% 33% 13% Denney, V. & Marion, J. (2017). Understanding the challenged of business ethics in relation to business value and success. Manuscript submitted for publication. 21

22 Focus on Stakeholders is Part of Value Denney, V. & Marion, J. (2017). Understanding the challenged of business ethics in relation to business value and success. Manuscript submitted for publication. Stakeholder % Respondents Customer 87% Employee 73% Business 60% Supplier 60% Competitors 33% Self 33% Other 22 13%

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24 PMI Ethical Decision-Making Framework Assessment Alternatives Analysis Application Action Make sure you have all the facts about the ethical dilemma Consider your choices Identify your candidate decision and test its validity Apply ethical principles to your candidate decision Make a decision PMI (R) Ethical Decision-Making Framework ( 23

25 Returning to the Icebreaker What 5 words (or short phrases) come to mind when I say Business Ethics 24

26 For further information Connect with me on LinkedIn Contact me at Embry-Riddle Aeronautical University For information about the Embry-Riddle PMI GAC-approved MS Project Management curriculum, see For more insight, read Soltes, E. Why they do it: Inside the mind of the white collar criminal. (2016). New York, NY: Public Affairs 25

27 Questions? So many questions, so few answers