09/19/2007 10:07 pm ET | Updated May 25, 2011

Can a Business Have a Conscience?

The Harvard Business School Working Knowledge series has a track record of picking fascinating topics, even if I've occasionally accused them of over-analyzing the obvious. Not so in a current article.

Why We Aren't as Ethical as We Think We Are, by Tenbrunsel et al, is not only a terrific topic, but -- in my humble opinion -- it's treated very provocatively. It raises big issues well.

Here's HBSWK's abstract:

People commonly predict that they will behave more ethically in the future than they actually do. When evaluating past (un)ethical behavior, they also believe they behaved more ethically than they actually did. These misperceptions, both of prediction and of recollection, have important ramifications for the distinction between how ethical we think we are and how ethical we really are, as well as understanding how such misperceptions are perpetuated over time... Key concepts include:

• All individuals have an innate tendency to engage in self-deception around their own ethical behavior.
• Organizations worried about ethics violations should pay attention to understanding these psychological processes at the individual level rather than focus solely on the creation of formal training programs and education around ethics codes.

That second conclusion contrasts with the usual business approach to "ethics." Many corporate "ethics" initiatives amount either to probabilistic analyses or to brainwashing about political correctness.

Harvard Business School's own ethics program is, if I recall, built around analyzing three constituencies: business, the law, and society (the latter including prevailing norms and mores). The manager's job is to intelligently balance the response.

This approach doesn't distinguish between "ethics" and corporate strategy. If the overriding goal is the long-term survival and success of the company -- which it nearly always is (think "sustainable competitive advantage") -- then "balancing" is just another exercise in corporate optimization. The concept of a "conscience" in such models is a curiosity that seems to exist solely in others -- just another data point or constraint to be optimized.

Yet how can "ethics" be discussed absent a treatment of the formation of conscience?

It can't. To their credit, the authors suggest conscience is individually meaningful, and affected by emotional processes. They say the psychological angle may be heretical to some ethicists -- but I think the personal angle is even more heretical to most business thinkers, stuck in modes of alignment and processes, where "conscience" is an alien concept.

The article has meaning beyond ethics. Look at this pattern. People think they are more ethical than others; and they rewrite their past (and future) ethicality relative to current actions.

This is also a pattern not just of ethics, but of self-orientation.

A study asked faculty and students to rate how often they thought about the other group, and how often they thought the other group thought about them. Yup -- students and faculty alike thought mostly about themselves -- but students assumed that faculty were also absorbed by their thoughts of students. And faculty assumed that students were consumed by thoughts of faculty. Everyone projects their own levels of self-absorption on to others, no one noticing the true similarity -- self-absorption itself.

In its low-grade form, this is human nature. In extremis, it is narcissism. Another extreme form is encountered in alcoholics. In both cases, the individual projects an over-inflated sense of one's own importance on to others. (For narcissists, the projection is always positive -- for alcoholics, it's an oscillating sine wave of positivity and self-revulsion).

Narcissists and alcoholics -- I suspect -- aren't high on ethical behavior charts either.

Which suggests the ability to get out of oneself and to see things as they are are prerequisites both for accurate observation of the outside world, and for ethical behavior.

Which suggests that strategy and ethics actually share something -- an innate focus on the Other. Self-centered strategies, those built around optimizing selfishness, are ultimately self-destroying; good strategies are intimately bound up with markets, customers, employees, suppliers. Ditto for ethics; an ethics built solely on corporate success is an oxymoron. Ethics require us to be intimately bound up with others.

Hmmm... strategic and ethical analyses share an external view... both have a psychological is about people as people, not just as objects of behavioral vectors...

This is not your normal business writing. Kudos to HBSWK, and to the authors.