Article (April-2018)

Articles

Changing workplace dynamics bringing businesses at ethical crossroads

Suvro Raychaudhuri

Designation : -   Assistant Vice President, Human Resources

Organization : -  Parkway Healthcare India Private Limited, Hyderabad

01-Apr-2018

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BM Do you see a radical upward shift in doing business with ethical values in present scenario?
SR With increasing complexity of stakeholders involved in business, and a convergence of consumers using different products/services arising out of different businesses, it is imperative on business to move towards higher accountability and responsibility about ethics. Social media as a platform (in addition to different acts, regulations and laws already existing) has rendered higher visibility and transparency not just towards outcome of business, but also the 'intent' that drives that outcome. There has therefore been a radical upward shift in doing business with ethical values, on lines of the original essence of ethics, which is 'primum non nocere' or 'do no harm'.
BM Is there a perception building around that business profits can only be accumulated with unethical practices? If yes, how organisations can counter this?
SR The subject of ethics has different schools providing different perspectives, but fundamentally converging to the general principle that sustainable ways of running business can only be attained through ethical practices. Practically speaking, there is the Utilitarian School of ethics which states that an action is justified if it is for the 'overall good' (collaterally implying that the action may result in non - good for a few) - the definition of primum non nocere therefore is slightly diluted in this context. Business profits of an organisation depends on quite a few factors apart from just efficiency in operations and effective cost - management, and there are multiple cases which prove that organisations that have increased shareholder and stakeholder value have accumulated profits with ethical practices in general.
Organisations operating in different industries are governed by multiple rules, practices and regulations to keep focus on ethics as they run business and generate profits (this includes various sections under Companies Act, Industrial Acts, the industry - specific ones like RERA in real - estate, NABH Ethics Committees in hospitals, etc). I would like to believe that it is more of indeed a perception that business profits can only be accumulated with unethical practices, as most organisations in India tend to act ethically most of the times.
However, like all other perception - management tools under the subject of organisational behaviour, if there is indeed a growing trend on that perception, the best that organisations can do is to manage impression through demonstrated acts of authenticity and proactive calls on incidents that verge on the boundary - line of ethics, going above and beyond the rules and regulations.
BM What is the role of HR in instilling business ethics in employees?
SR The requirement of building strength and allowing empowerment in the Human Resources function arises out of the primary need to maintain a function focused on governance and controls, independent and neutral of the line - management. The role of HR in instilling business ethics is significant. It is not about having a slide or two on ethics in a presentation during the induction program, but to ensure that scenarios, situations and cases are discussed through fact - telling and story - telling continuously during every employee life - cycle event run by HR.
Many of my co-panelists in interviews have asked me to ask less scenario - based questions during a short span of the interview - time as they believe that employees are going to anyway project themselves as ethical, and it takes a longer time to probe answers that come out of simple questions (and derails technical - interviewing time) - my point to that is, it is important nonetheless to ask those questions to let the candidates know that we delve on the subject of ethics in the organisation as much as we do on techno - functional competencies, even of those questions are not used to exactly 'assess' candidate suitability for the role in just during those few minutes of an interview. HR has a role to play in instilling assurance and safety for employees who tread the line of ethics, considering practical situations where nature-of-business areas on ethics conflict with personal - integrity areas on the same.
BM Should HR act as employees champion or custodian of employer's business interest in times of ethical crisis?
SR It would be utopia to believe that employee championship and employer's business interests are not at cross - roads, and that they are seamlessly integrated without areas of conflict! Let us look at a few cases here:
  • The Government Liaison official (employee) was asked to get a no - objection certificate from Government authorities on the site, that allows production to start earlier, even though there may be risks associated with the site.
  • A doctor was asked to refer a patient to be an inpatient - one involving complex procedure that generates higher revenues, where the doctor believed the ailment could be simply treated through an out - patient diagnostic and treatment.
  • An architect was asked to set up an 'innovation lab' to show case offshore delivery capabilities that did not exist.
  • A finance - employee was asked to include numbers that show higher bottom - line numbers (through non - provisioning of critical cost components), as a run-up to a possible investment/acquisition.
Since the function had been created to be responsible for making decisions that affect employees' lives at work, it is important that HR practitioners understand sensitivities arising out of the cases above in managing human beings, rather than business interests solely.
Trybou et al refers to "organisational identification" as a perception of belonging to an organisation and a kind-of group-identity that leads to going that extra mile for the organisation. Whereas this is a great identity to maintain, it typically conflicts with personal and more importantly, professional identity and values (in this case, the HR professional identity and values). In fact, Ashforth et al (2008, P 338, quoted from secondary sources) states that "…organisational identification can foster behaviours detrimental to the long - term interests of the organisation…" itself, and can also be detrimental to society in general. 
Research by Umphress et al show that organisational culture demonstrated at these critical ethical junctures can encourage unethical behaviour. Beer et al in a 2015 study find that HR practitioners have a slightly stronger identification with the organisation than their own profession. This may have been an outcome of misinterpretation of the HR Business partnership concept!
BM What are the challenges for HR fighting unethical practices in organisations?
SR The first challenge is to wean the profession out of sole - inclination towards organisational identification (which is almost like a 'group think' syndrome), and move towards professional identification. The second challenge for the profession is to keep operating in a structure that requires reporting into the line (except possibly the CHRO and CEO link at the top). The third challenge has been of too many conferences and seminars that have focused on business' expectations of HR, rather than the other way around.
BM What is the way forward for HR in performing as strategic business partner in unethical business organisations?
SR Strategy has an element of timing and surprise, and that of sustainability. In that context, it is best that organisations understood a critical truth - that it is important to empower an HR person to talk about the dissatisfaction expressed by, and the risks associated with having any employee cross the line, be it the doctor, the architect, the Government liaison official or for that matter the HR person himself/herself; this is in much longer and sustainable business interest than an incident or two, and that is what strategic partnership is about. In a herd in the animal kingdom, there are some groups of animals who are neither hunters, alpha - males or the ones who run around. There are some in the herd who are not neo-cortically trained, but limbically responsive to certain silent dangers, when the herd crosses over the "line". These groups form a function, and they render tremendous strategic value to the entire herd.