Minding the Gap: 4 Issues in Exposing and Managing Ethical Risks as a Multinational

By Doug Jondle, Center for Ethical Business Cultures

Research conducted by the CEBC reveals the existence of a gap in the perception of organizational business ethics between executives, managers and non-managerial employees in businesses from around the world. The data was collected through Kenexa’s WorkTrends™ survey representing more than 40,000 respondents from six countries (Brazil, China, Germany, India, United Kingdom, and United States) over four years (2007-2010).

The results show the existence of a “gap” where senior executives’ ratings of their organizations’ ethics were significantly higher than ratings provided by managers and employees, and managers’ ratings fell in between the executives’ and employees’ ratings. Significant differences between hierarchical levels were found in Brazil, the U.S. and Germany, while differences were not significant in the U.K., China and India.

The main findings of this study are:

1. Executives provide more positive assessment of ethics in their organizations then both non-managerial employees and mid-level managers, resulting in an ethical perception gap.
2. Organizational development and training interventions need to incorporate more in-depth appraisals following survey-based assessments, involving qualitative interviews to determine specific reasons for discrepancies and to adjust intervention plans.
3. Country differences indicate that a “one size fits all” ethics and compliance program may not be effective in sustaining organizational-wide ethical culture.
4. When organizational practices and leaders’ actions diverge from espoused values and stated ethical principles, over time employees’ commitment and level of trust in their organization drops, while cynicism about the rhetoric, coming from the executive suite, tends to increase.

What are implications of this study for you as a senior leader of your organization? First, the question to ask is not whether the gap exists, but what is its magnitude? Second, knowing the size of the gap, what strategies will help to close it? Finally, knowing that you will never eliminate the gap, how can you manage for the repercussions of its existence?

For more information on the research, contact Doug Jondle at djjondle@cebcglobal.org.