Why corporate life is bad

“Ethically good” companies live from good managers

Second interim report on the “Raiffeisen project” by the KAB-Sozialinstitut

“Internal constitution” and a practiced corporate culture are more decisive than the external economic conditions.

By Thomas Wallimann-Sasaki and Benigna Wäffler
What makes a company an “ethically good” company depends less on external conditions such as products, market environment or economic situation, but has more to do with the people who run the company. This conclusion for the business ethics project, which is carried out by the social institute with the co-financing of the Raiffeisen Jubilee Foundation, can be drawn after company visits and their preliminary evaluation.

Confirmed integrity model

In principle, the theoretical assumptions made by the former professor of business ethics at the University of St.Gallen, Peter Ulrich, and his employees as part of their “integrity management” approach are confirmed. Integrity is when (internal) attitudes and (external) actions go together. This basic connection was clearly noticeable in all the discussions that Benigna Wäffler and Thomas Wallimann had as part of their project. Not only was the personal commitment of these leaders expressed, but their values ​​were also repeatedly shown in the discussions as points of orientation. These inner attitudes could be combined well with concrete examples of everyday business life and summed up in the concise formula: People first!
In many ways it becomes apparent that doing business is there for people. At the same time, however, those responsible in the companies visited emphasize that this basic rule is not sufficient on its own. A company must always be run correctly and precisely, also according to business criteria. This means giving the accounting, the machines, the buildings, but also the business ideas the necessary professional attention. The corporate industry certainly also plays a role in this; However, our work shows that long-term thinking and an understanding of the company that goes far beyond (measurable) key figures is central to all of the companies included in our research. This can be seen, for example, in the fact that the success and failure of the financial year cannot be read solely and exclusively from measurable figures.

Communication must have first priority

The central role and importance of people in the companies visited is most evident in the emphasis on communication between management and employees. Appreciation of employees at all levels and their involvement in many - including everyday - business issues, but also taking family, health or personal situations seriously: Such personal attitudes are expressed in the way people talk to one another. We were able to credibly experience that this was not simply a matter of praying for management principles for the executives. Signs of trust in employees were the joint discussion and planning of business development, dealing with money or entrusting company keys.
It also became clear what can be read in theoretical work: The decisive starting variable for the ethical quality of a company is the role model set by the boss. From the analysis of our conversations, we can see that accounting can easily be delegated - talking and contact with employees never.

Origin of the values

To see what great importance the inner attitude of the leaders has, leads to the question: Where do these values ​​come from?
From the responses of the company executives, it quickly became clear that none of the people we spoke to had learned these values ​​in an ethics course! The reasons for the concrete behavior as a leader lie in the personal backgrounds and stories, in experiences in the parental home, in experiences both positive and negative at previous workplaces and also in religious convictions.

Written form and stock market

This also makes it understandable that many companies have not written down their values ​​- why should they, they are exemplified every day. Nonetheless, the advantages of written orientation values ​​also became apparent: They especially help new employees to understand what they are getting into and how the accents are set in a company. But if such guiding principles and ethical foundations are not given a "face" and have personalities who embody them vividly, they are - so our hypothesis - probably ineffective.
The fact that none of the companies visited is listed on the stock exchange may indicate that when they go public, companies are moving into a value orientation that more than contradicts the values ​​in these companies. One reason for this is that the stock market valuation is one-sided and often extremely short-term.

Value of Ethics Courses

These findings are definitely important for ethics lessons and ethics courses in management and business training. This, although the first reaction to our findings could lead to the fact that these courses do nothing after all. Numerous experiences in the current economic and social situation seem to confirm this. Nevertheless: "The child must not be thrown out with the bath" here!
With our current evaluation we come to the following conclusion: It is important to see that ethics courses alone (!) Do not produce ethically good companies! However, it should not be forgotten that dealing with ethical questions and addressing good, people-oriented corporate management represents a strengthening and promotion for all those who - wherever they come from - have a sense of and interest in this public and human-welfare-oriented entrepreneurship bring.

«Fair weather ethics»?

The interviews as part of the previous project are certainly not comprehensive. They are neither strictly representative of individual industries nor of different sizes of company. We also only spoke to the bosses. So is it a matter of "fair weather business ethics"?
Certainly, in one case or another, it cannot be ruled out that the company reality that we were told does not match the experience of all employees. Depending on the number of employees, this would be unrealistic - especially in large companies with several hundred employees.
We also saw that ethically good management can not only be lived in a good economic situation, but also lasts in economically difficult times. Several interlocutors have experienced such phases and successfully mastered them.
In the meantime, almost all of the planned visits have been completed. The results will now be evaluated in detail. The plan is to present these to the public at an event. The knowledge that we have gained from our discussions and from the basic ethics studies not only contain a message to entrepreneurs, but also to everyone entrusted with management tasks.

SI project "Business Ethics"

The project "Business Ethics: A Means to an End?" is a research and education project of the KAB-Sozialinstitut. Its aim is to develop the basics and implementation aids for a realistic and socially sustainable approach in companies that also contribute to entrepreneurial success. The project, which the social institute director Thomas Wallimann-Sasaki is working on together with the German and theology student Benigna Wäffler, is co-financed by the Raiffeisen Jubilee Foundation for the promotion of ethics in the economy.

More about the KAB Social Institute and the project