Three Causes of Ethical Lapse in Today's

Business
by Jeff Van Duzer

Jeffrey B. Van Duzer (J.D., Yale) became Dean of the School of Business and Economics at
Seattle Pacific University in August of 2001 after twenty years of law practice at Davis
Wright Tremain in Seattle.

Most people I know in business truly desire to act ethically. I include

myself in this group. I have also observed, however, that most
(including myself) regularly fail to live up to even the standards we
choose to set for ourselves. Why is this so? While there are no
doubt a host of theological and philosophical answers to this
question, I would identify three pragmatic factors that have
contributed to my own ethical lapses over the years: "speed",
"spin," and "stuff."

SPEED Much has been written about the accelerating pace of

business. Margins are continually being squeezed and "efficiency"
has become a higher business priority than ever before. Since 1948,
per worker productivity in United States has more than doubled.
More and more is being accomplished in less and less time. Signs of
this are everywhere. From the telephone on the wall next to the
toilet in the hotel room ("making every minute count") to the
businessperson running to a meeting wearing a headset connected
to a wireless device ("multitasking"), visual reminders of our need
not to waste a moment abound.

When I first started in law practice in the early 1980s, we would

mail drafts of loan documents to the borrower's counsel. Since mail
delivery could take one to three days, there was no specific time by
which the drafts had to be completed. If the documents were not
finished by the end of the day they could be finished the next
morning and put in the noon mail.

With the advent of Federal Express, a good deal of this flexibility

disappeared. Now I knew that if I could place the documents in a
box in the basement of my building at the latest by 5:42 PM then
they "absolutely, positively" would be in the hands of the borrower's
attorney by 10:30 AM the next morning. Not only did I know this,
but my clients knew this as well. This led to substantial pressure to
complete documents within the designated day and often ended up
with late afternoon sessions where my secretary and I were sitting
on the floor frantically stuffing documents into the Federal Express
envelopes and racing to beat the courier van.
Then came the fax machine. Now I would regularly receive phone
calls from clients advising me that they had just faxed me a
document and requesting that I review it and get back to them
within a couple of hours. This made the flexibility afforded by the
old courier services seem like a luxury. Then came e-mail. The
transmission of documents was now virtually simultaneous with
their receipt. Instantaneous transmission came with the embedded
expectation that there would be near-instantaneous review and
response. Everything was going faster and faster. By the time I left
the law firm, several of my partners were experimenting with
"same-time" software that would allow them to work on a document
at the same time that their client, sitting in a remote location, could
watch the changes on his or her screen. This seems tantamount to
practicing law with someone sitting in your lap.

The problem with all of this speed is that as I squeezed more and
more into each minute, I was squeezing out time for reflection.
What I was losing was the opportunity to stand back and assess
whether what I was doing made sense, whether I was doing it in
the best possible way, and whether it was even good to be doing it.
Without time for reflection, ethical practices and integrity become
impossible. As Stephen Carter has written, ". . . we do not have
time to live according to our model of right and wrong, which
means, simply put, that we do not have time for lives of integrity"
(Integrity, 1996, p.29).

SPIN is a phrase I first heard in the context of politics. After two

politicians would debate, their aides would meet with the media and
try to replay the debate in a manner most favorable to their
candidate. This "spinning" of facts was widely accepted and
arguably amounted to nothing more than trying to "put the best
foot forward." As a lawyer, a significant portion of my job was to
"spin" facts for the benefit of my clients. Whether I was negotiating
a contract or presenting an argument to a judge, I would be
expected to highlight those facts most favorable to my client's
position while downplaying those aspects of the case that might
prove detrimental. Nor is "spin" confined to politics and law.
Obviously, sales, promotions, business negotiations and countless
other business activities are propelled along by spin. In and of itself,
I see nothing unethical about "spinning."

The problem is, however, that there is so much "spinning" going on

that is often difficult to know when to stop. I have found myself
routinely "spinning" right over the line.
I recall one incident when a prospective client contacted me to ask
about my experience with "reverse triangular mergers." In fact, I
had no experience with this particular type of merger although I
knew that there was no magic to the proposed structure, that I had
handled a number of other merger transactions, and that I had a
number of partners who had handled reverse triangular mergers. In
short, I was confident that I could do the job and was eager to get
the work. So, I went into "spin" mode. Rapidly I pointed out my
prior experience with mergers in general, highlighted my firm's
overall experience and sought to assure the prospective client that I
could indeed handle this project for him. He interrupted me in the
middle of the "spin" however and again specifically asked "have you
ever handled a reverse triangular merger?" I was so caught up in
"spin" mode that I simply answered "yes."

That night I felt awful. I realized that I had lied to this new client.
One of the hardest things that I ever had to do in my practice was
to call this client back the next morning and admit that I had misled
him.

Spinning becomes a habit. In a culture that generally despises

weakness, it is an easy habit to cultivate. We focus on making
ourselves look better than we really are. We "cover" our mistakes,
inexperience, and weakness with spin. Within limits, this may be an
appropriate business activity. But like most habits, it is often
difficult to know how to hold it within limits.

STUFF The third, and probably most powerful adversary of ethical

business practices in our culture is our collective obsession with the
accumulation of "stuff." We are living at a time unprecedented in
history. Never before has a culture so rapidly exchanged free time
for more things. As noted above, our per hour productivity has
more than doubled since the end of World War II. What this means
is that if we were willing to live at the lifestyle prevalent at the end
of the War we could now take every other year off with pay!
Instead, we are rapidly expanding our working hours. Since 1969
the average American worker has added more than an additional
month's worth of work to each calendar year. This compulsion to
work is tied directly to our obsession with the accumulation of more
and more things, more and more wealth.

This obsession distorts our capacity to behave ethically in variety of

ways. For one, it tends to make us blind to people who are not like
us. As the economic gap between others and us grows, it becomes
harder and harder to "see" them. And unfortunately, quite often,
the people who are becoming invisible to us are the necessary and
proper objects of our ethical obligations.

Second, the accumulation of wealth tends to create a desire that it

cannot fulfill: the desire for "a little bit more." I once read the
results of a survey of individuals scattered across the socio-
economic spectrum ranging from the near homeless to senior
officers in Fortune 500 companies. These individuals were asked
two questions. First, "do you now make enough to be content?" All
up-and-down the economic spectrum, the answer was "no." Then
the participants were asked whether they would be content if they
could make just five percent more. All up-and-down the spectrum,
the answer was "yes." Just a little bit more.

One might guess that with larger and larger fortunes, the marginal
utility of each next dollar would decrease. In fact, my experience is
that the desire for enhanced accumulations tends to be stronger
among the wealthier. In the words of the ancient Hebrew
Scriptures, "Whoever loves money never has money enough;
whoever loves wealth is never satisfied with his income. This too is
meaningless."

Another ethics-defeating feature of wealth accumulation is the

capacity for money to become the measure of our individual worth.
Often we will ask "what's he worth?" by which we mean, "how much
money does he have?" Once our checkbook becomes closely
identified with our fundamental worth, the temptation to cut ethical
corners grows enormously.

STRATAGEMS Let me close by suggesting three strategies that

have been helpful to me in addressing the adverse effects of speed,
spin and stuff. First, with respect to speed, I have found it useful to
develop a discipline that insists upon one full day every week of
nonproductive, non-efficient activity. This is a day that is set aside
for leisure and reflection, to reaffirm that I am more than just the
work that I produce. In my faith tradition such a day is referred to
as a "Sabbath" but one need not participate in the religious aspects
of such a celebration to enjoy many of its associated benefits.

Second, with respect to spin, I have found it useful to enter into

relationships where I am regularly afforded the opportunity to
acknowledge my shortcomings and to recount in unflattering terms
my recent failures. By getting in the habit of sharing my failures
with friends, I am reminded that the care and love of others is not
dependent upon my ability to produce a constant stream of
successes. I need not "spin" the facts to secure acceptance or
affirmation.

Finally, with respect to "stuff" the most useful stratagem that I have
employed is the simplest. I have developed the habit of giving
money away regularly and frequently. I find that the act of giving
(rather than the amount of giving) is most helpful. Whenever I give
money away, I am, in effect, declaring that money does not define
my intrinsic worth.

We are at a time in history when business ethics is once again a

"hot" topic. In addition to learning macro-level lessons from Enron
and its progeny, we can also profitably use this time to assess our
own micro-level ethics and to begin to build strategies that will
enable us to resist the ethics-deflecting temptations of speed, spin
and stuff.