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Interview with Simon L Dolan on Building Ethical Organizations
August 2009
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By Dr. Nagendra V Chowdary
Prof. Simon L Dolan Professor of Human Resource Management and International Organizational Behaviour, Esade Business School. 
Every aspect of a business is being
ranked – Fortune 500, Most Admired
Companies, Most Innovative
Companies, Best Companies To Work
For, Highest Paid CEOs, Most
Influential Business Leaders, Best
Corporate Governance Practices, Best
Global Brands, etc. Why not ranking
for Business Ethics Practices?
(Although Transparency International’s
ratings serve a limited
purpose of assessing least corrupt
countries, and not companies).
It is coming. The problem with this
concept is the reliability of the tool. I
think that, in the very near future, we
will witness very interesting
innovations in this regard. I was
asked, for example, to set up a
methodology, training and
certification for companies that
adhere to the philosophy of
‘managing by values’. The demand
came from officials of the government
of costa rica. They have decided to
rate companies according to their
compliance with the concept of
managing by values. They wish to
develop in the same manner that we
are now doing with the international
standards organizations (iso). Iso was
developed when there was a real
concern for quality and safety. Now,
there is real concern for ethics, quality
of life and other emerging concepts.
So i think that the days are numbered
before we will see some innovations
in this matter. I am not sure that this
will translate into rankings or
perhaps another system; but
something will be used and
developed to provide the
stakeholders with information about the ethical profile of a company, its
senior and junior managers, and the
overall culture. Many have argued that during
demanding times (downturns, crises)
people tend to be highly unethical.
What is your assessment of business
ethics practices during a downturn?
What do you think the companies
should be really weary of?
I truly believe that the fundamental
value of ethics should not be
connected to economic cycles of
financial crisis. There are a few core
values that should stand out and stay
the same regardless of the market.
And when saying this, i do not think
that i am naďve. We see too many
examples of bending the rules,
cutting corners, getting closer to the
grey areas of the law, by ceos and
other senior officers due to the
tremendous pressure to show
financial results at the short term. It is
now clear, that those who engage in
unethical activities and the
companies that endorses such
behavior ends up as a losers. actually
they disappear. The reason is that
they lose their people, they lose their
clients, and surprisingly they even
lose their investors. There is a
growing field in management called
‘organizational pathology’. There, we
are trying to do post-mortem of
organizations that do not survive.
Without getting into details, i can say
that the common denominator for all
these organizations is not necessarily
the lack of demand for their products,
neither poor marketing or lack of
financial resources – it is the lack of
ability to mobilize their personnel in
changing dramatically their behavior
to respond to the crisis. People in the
organization resist changes because of
mistrust, because of poor ethics. By
contrast, organizations that run into
financial difficulties, but have been
trustful and ethical, get the full
support of their employees, clients
and suppliers, and the likelihood of resurging and succeeding is high.
Let’s see for example what will
happen with the giant generalmotors;
let’s see if gmwill survive? i claimthat
in addition to the quality of its
management it will depend a lot on
the trust displayed by its unions,
employees and other stakeholders. In
sum, when a company is ethical, the
level of trust is high… and the
company is better prepared to handle
a crisis. What about business ethics
practices amongst business schools?
Is it time to conceive and
conceptualize an ethical code for all
the business schools?
I can assure you that this is a key
concern for all business schools. The
problem is that there was such a
tremendous growth in the business
schools sector worldwide, that
interest is becoming so diversified as
to finding common core values in the
form of ethical code will be very
difficult, if not impossible. I therefore
see more individual school initiatives
in the future. One need to understand
that developing such a code and
practising it can result in somemoney
losses or even image losses in the
short term. This is the reason that
many business schools have
developed the attitude of wait and
see. Others, and they can be
numbered, are courageous enough to
develop such a code. What kind of leadership is required
during a downturn? Any best
practices that you suggest for leading
through a downturn?
steven jobs once said that the role of a
leader is to articulate a vision and
ensure that the followers believe in it.
During a downturn, you need to have
a plan (any plan), you need to
communicate the plan to the rest of
the stakeholders and ensure that you
have sufficient support to advance on
the project. You also need to be
courageous and decide on some
benchmarks to see if the plan seems to work, and in case it does not, you
need to steer in another direction and
do the same in terms of convincing
people to believe in you and in your
plans. It will be interesting to follow
the magic that obama has promised
the us citizens during his election
campaign. They believed in the
vision, he had articulated it very well.
But now he will most likely need to
change some of the promises/plans,
because reality will force him to do
so. Will he still be able to convince
large populations that he has a vision
and needs their support?
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