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4/3/2006
01:12 PM
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The Fine Line Of Ethics: When Should It Be Crossed?

There's too much gray in ethics, you think? Defining that fine line between right and wrong troubles many executives. Just ask those at Morgan Stanley, the investment bank embroiled in a lawsuit involving business and IT executives who accepted gifts from a vendor.

There's too much gray in ethics, you think? Defining that fine line between right and wrong troubles many executives. Just ask those at Morgan Stanley, the investment bank embroiled in a lawsuit involving business and IT executives who accepted gifts from a vendor.Leigh Hafrey thinks about corporate ethics a lot. As a senior lecturer at MIT Sloan School of Management, the author of the recently published The Story of Success: Five Steps to Mastering Ethics in Business says the biggest challenge occurs when gifts masquerade as entertainment¸ especially when networking is involved, which is nearly always the situation.

Here's his advice: "Rules of thumb could or should include clear evidence both before and during the entertainment that business issues are on the table, at least in the form of shaping an acquaintance. If long-standing business friendships are involved and the event focuses on that friendship and the individuals' pleasure rather than a specific project, then the cost of the entertainment should be born by those individuals rather than the company."

On another ethical concern, executives promoting customers as vendors, Hafrey says: "When a company's IT department makes its own decisions on vendors, it is inappropriate for someone outside the department to encourage or order the use of a vendor. The outside figure may wish to draw the department's attention to a potential vendor, if that vendor represents a new or improved opportunity; but the connection should not constitute, nor be construed as, an enticement to or reward for a client relationship."

Sounds easy. But is it?

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