Why is ethics important in management – Interview with Steven van Groningen

Ethics is and always has been debated, especially due to its subjective aspect. There are numerous laws that try to approach all aspects of ethics in various fields. But are they enough? Is there a field that is completely covered by the law when it comes to ethics?
What seems to be ethical to one’s business couldn’t be viewed the same by another. This is one of the reasons why ethics is hard to tackle in a business but also in our private lives.

After meeting him in class during the RO11 Ethics course, I discussed with Steven van Groningen, Adjunct Lecturer of Business Ethics at BISM about why it is an important area for managers. See what he has to say about his projects, the cultural differences he noticed during his 20 years living in Romania and where he gets the inspiration for the ethical debates he has in class. Last, but not least, Steven explains when is the best time for getting formal education as a manager.

 

When I met you in class, you told us about your professional and personal activity – a (soon to be former) bank CEO, member of the board in a few organizations and a sportsman, including running marathons. What me and my colleagues asked ourselves is when does he have the time to also teach? Why would you say you started teaching and why do you teach ethics?

It is indeed kind of busy and I try to do a lot of things at the same time. Some are project based, like the teaching, which I do once a year and throughout the year I’m always on the lookout for things for the course.

With sports it is the same – I pick an event and train for it and once it’s over I try to go down to a reasonable level of fitness. It’s the same with other hobbies, like photography or rowing. Sometimes I don’t do anything for months, then I have a project in that.

But to tell you how I ended up with the ethics story, I always had an interest in ethics and sustainability. I was in an advisory role for the business school (BISM) at that time and I was asked if I would like to get involved in teaching and I got on board. 

I try every year do have a project in a field where I consider myself incompetent – you go through something new and the process is interesting. You start not knowing anything and then you learn things through it. This is why I learnt to fly a helicopter (then didn’t do it at all) and had a blog for a while. I set myself a target to teach business ethics and I had to dig deeper in it – do research, think about ethics, find case studies. I invested a lot of time and then I kept doing it because I had already invested the time at the beginning and I enjoyed it.

You have been living in Romania for more than 20 years now. As someone who wasn’t born in the culture, how do you see the Romanian business world compared to other European ones? Where do we excel and where can we benefit from working harder?

Well, I don’t want to lecture anybody, but when I compare Romania to 20 years ago, I think Romania has come a long way in terms of entrepreneurship. Back then, it was considered dodgy to be an entrepreneur. I think there was a tremendous progress towards the respect for entrepreneurs, the risk that they take and what they do, what they produce. That is certainly a positive thing.

I think Romanians are creative, maybe not the best planners or the more structured, but I think they can do stuff last minute. Those are a few strong points.

Maybe not the best team players – I hear this joke that sounds like each Romanian beats each American individually, but each American team beats each Romanian team. There is also the lack of trust in society – the government seems to think that the people can’t be trusted with anything, which is why you have all these stamps and documents.

This is this piece of research that says that trust is not necessarily very high. It’s a pity, because if you want to do business, you’re usually better off trusting each other, yet not be naive.

And when something goes wrong there seems to be this focus on who has done it? Who needs to be blamed? Like we

need to find the person who did it and punish them and this is wrong. If something goes wrong in the organization, I have to know that something went wrong and how could this happen. Maybe the person who made the mistake was overworked, maybe their colleague was ill, maybe they were not instructed or the process wasn’t clear. So, if you look for guilt, you miss out on opportunities to make it better. And you start off with the premise that someone intended to do something wrong, which is generally not the case.

In the long run, this may result in lower salaries and in Romania, you want to be competitive, on the world level.

Like every company and every countries, there are strong and weak points. Sometimes you should better try dealing with your weak points. Sometimes you’re better off exploring your strong points. It makes sense that from now and then to ask yourself some questions.

Another cultural difference I see between Romania and other countries I saw in law school. I used to take my books with me, I never thought I need to know passages by heart and I was surprised when I heard from my Romanian colleagues that it is what was expected. It is important to understand which part of legislation is dealing with which issue. But it is also about the motivation, the analysis, interpretation. That’s the important thing. I don’t think that learning by heart is what we’re after. 

Why is ethics an important area to focus on for managers? And what should they pay extra attention to?

I think it is important because if you don’t pay attention to it, things can go very wrong for the organization you work for. In the business environment we work together, we use resources, you transact with others, which are usually future promises. It’s all about people working together and those people that you work with have certain expectations about your behaviour and that of your company.

Of course, we try to put a lot of that in legislation and laws and regulations, but that’s not sufficient. So, your companies will be judged by the clients, regulators, next generation, people on the market place. 

Is it good, is it bad, is it sustainable or not, is it laudable or not? And you have to be aware of this because otherwise you might take decisions that you will later regret. I’m not talking about things that you knew are wrong, like illegal, but those that aren’t attuned to morals and values.

That is why everyone should have a moral roadmap and understand what people expect of you in terms of behaviour and it’s not so easy in the global village we live in today. Decisions that you took in one company can have an effect in other countries and it raises issues like outsourcing production – how are people paid, what are the working conditions, etc.

There is usually an ethical component to many decisions and as the world becomes more complicated, it is important in a business setting to take this into account to make sure you get the right decision or at least, that you won’t take decisions that later you’ll regret and look at the ethical aspects as well. 

Speaking of decisions you later regret, what is your take on the current cancel culture? What should company leaders do to avoid it?

I think cancelling people is a very strange concept – that means you use people as a means for your own ends. If you can use people to sustain your point of view, you sustain them and if not, you cancel them and that’s an odd thing. In a business environment that’s not how you deal with stakeholders – you cancel or ignore them.

There are stakeholders that you empathise with more than others, but at the moment when you don’t try to have a serious discussion with the other, things can go awfully wrong. I have seen it, it happened to me as well. You basically have a point of view in a certain debate and the other party refuses to discuss it with you and that is a form of cancellation. 

I see it in politics, where you have a point of view about something and the other party refuses the discussion – you are a banker or you are a foreigner, then go home. Margaret Thatcher said that when someone insults her personally, it is very uplifting for her because she sees that they have no arguments left. 

We don’t even take the time to discuss, we don’t take the time to ask how did you get to their opinion, we just cancel the person – no longer click or like and you go back to your cocoon. Then suddenly you’re very surprised and you just have to find somebody else to blame, in order for you to feel good again. 

What are your main sources of information when it comes to understanding more about business ethics?

I’m always on the lookout and it’s not so difficult these days if you read the media, but you must have some sort of external framework. I read a lot about of books about business ethics, sometimes I watch Harvard Youtube videos when I’m cycling.

For years I’ve been a subscriber of The Journal of Business Ethics, which is a professional academic publication.

And I’m somewhat curious now to see the obligations of the CEO, considering if there’s anything I can do at the formal level in terms of education. But up until that point, you see stuff happening, you see the questions that arise and try to apply a framework. I am an auto didact and use all the available resources out there.

Reading good literature is also quite healthy for businesspeople – you understand how characters think and why they act in a certain way. But I think that when you take a course, especially for MBA students, it is more fun to talk about real life examples rather than something from a textbook written in the USA.

If I’d have to recommend one book for managers to understand the basic of ethics, this would be The Ethics of Business, by Al Gini and Alexei Marcoux, because it is brief.

When would you recommend managers to study an MBA (or other formal education programs) and why?

When I was young, I was told it was the best time to learn. I thought this wasn’t the case as I was interested in everything except school and my studies.

Once you have a job or run a business, it gets incredibly hard to take time to learn things. It makes sense to study an MBA after you have some working experience, so you can better understand the concepts. I think you should never stop learning and investing in yourself. 

I think it’s always easy to postpone and say you’ll do it next year and so on. But look at today, so much is changing. It is now relatively use to learn new things if you take the time.

I was an athlete and participated in the Olympics and in that time, you spend 95% of the time training, in a safe environment and only 5% competing. But look at the business world now – when do we have a save environment? Even if you are sent to a training, you are expected to implement what you learnt directly.

Think about that – in the organization where you work, is there a safe environment where you can try stuff? Or does that not exist now? Once you have that work experience, you can use all opportunities to be exposed to stuff and learn stuff, even if it is for the experience of not knowing something. It’s a very healthy experience. 

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Steven van Groningen is Adjunct Lecturer of Business Ethics at Bucharest International School of Management and lecturer in our Executive MBA (starting every year in November).