While the automotive industry can sometimes get a bad rap for being a “dishonest” business, those working in the industry know that’s not true. However, regardless of how ethical your business is, ethics expert Chuck Gallagher says that inadvertently dishonest behavior is bound to occasionally occur.
Gallagher, founder and president of the Ethics Resource Group, an organization with a primary focus in ethics training and awareness for different businesses, has broken down the root cause of unethical behavior. Having worked with organizations such as Lockheed Martin, the FBI, W.R. Grace, the U.S. Navy, Barclays, and many more, he says that understanding the components of unethical behavior can help prevent it from happening in your own shop.
Gallagher offers his breakdown of what this kind of behavior entails and how to prevent it.
Business ethics is making the right choice based on all of the facts and circumstances that are available at the time. Some people argue that there is no such thing as business ethics because individuals make choices. But, functionally, that’s what it is. Most people would say, “Do the right thing.” That’s easy. But, what’s the right thing? And then the question comes down to, “What motivates a person to do something unethical?”
There are three components to unethical behavior: need, opportunity and rationalization. Here’s an example of the components: The insurance company has said to the shop owner, “If you want to be a continued recommended shop for X insurance, we’re going to tell you how much you get to charge.” This results in a need to be the recommended shop. The insurance company puts a squeeze on the shop by only paying a certain amount, but the shop owner needs to make a living. The owner can’t tell the landlord that the rent is going to have to be cut because they’re getting squeezed from the other end. The owner starts to feel this pressure of, “Oh my gosh, the people that are paying the bills are telling me how much they’re going to pay, but I don’t get to control my other expenses.”
The more pressure we feel, the greater the chance we’re going to make an unethical choice. In the meantime, they have to pay their bills, they’ve got to make a profit and they’ve got to make ends meet, which might mean they’re going to under deliver or participate in behavior, for example, that might not be the most ethical in the world, such as overestimating or using off-brand materials when you’ve promised original factory parts.
Need is always an emotional trigger. The three primary emotions that trigger need are going to be financial, relationship (for example, “I’m getting divorced so my other half might get half of my business” or DRP relationships), or health (for example, I own a successful shop, but I just got diagnosed with cancer).
The rationalization is, “Well, they’re putting the squeeze on me, therefore I have to do X. After all, everybody does it.” When you start to rationalize behavior, you begin to convince yourself that it’s OK. If you ask people, “How many of you would voluntarily choose to do something unethical?” Most people would say “No, I wouldn’t do that.”
But think about it this way: Most people, when driving on the highway, have exceeded the speed limit by 5–10 miles per hour. This is technically voluntarily breaking the law, but in our minds, we can justify this behavior, which makes it OK. That’s why unethical behavior is not always black or white.
If you are aware that this is how a decision is made—that there’s need, opportunity and rationalization at play—then you can better prevent unethical decision making in your shop. Do the following: Look out for signs of need, such as if an employee says their wife left them or they were diagnosed with an illness. If there is a need, it doesn’t mean that people will be bad, but it does mean that you need to be aware of removing opportunities for unethical behavior. As a business owner, there are plenty of ways to remove opportunities. For example, don’t let someone have responsibility for cash unless someone else is observing.
The more you talk about the significance of ethics and ethical behavior, the more your employees will understand that this is important. The more that takes place, the greater probability your employees are going to naturally do the right thing.
