Doing The Right Thing

When it comes to ethical violations, almost everybody has a candidate for blame: permissive society, greed, even bad parenting. But James Hoopes, Distinguished Professor of History at Babson College in Babson Park, Mass., has an unusual culprit. He believes that certain ideas about how to be a good manager can actually contribute to ethical breakdowns. Hoopes is the author of False Prophets (Perseus Books, 2003), a book that explores the history of ideas in management.

Because he teaches at a business school, Hoopes says, he's seen many of these ideas put into practice, and he's seen the results. "I've been managed by walking about and managed by objectives," he says. "I have a lot of firsthand experience working with people who are using various management devices and ideas to manage people. I've also been a department chairman and administrator or manager myself, so I feel like I know the territory pretty well."

In False Prophets, Hoopes details the essential management ideas that have passed through the business world, from Frederick Taylor to Elton Mayo to Peter Drucker. He acknowledges the valuable ideas these thinkers have contributed to business. But, to the extent that these thinkers and others attempted to make the workplace more "democratic" by suggesting that managers should obscure or avoid the use of top-down power, Hoopes argues, they have often contributed to unethical behavior.

"To make corporate life palatable to Americans, some of the gurus have unrealistically minimized the amount of power it takes to manage, whereas others have claimed management power can be made morally legitimate," he writes. "Either way, they have contradicted, often with the best of intentions, the traditional democratic attitude toward power, which is to reluctantly admit its necessity, suspect it of bad intentions, and try to fence it in."

Hoopes believes that Enron is a fine example of what happens when leaders attempt to lead by inspiring others—without using their power to safeguard the bottom line as well. "After the Enron story broke, television news programs ran file footage of [former CEO Ken] Lay sermonizing like a teaching elder on the 'core of values' in the heart of every 'leader,'" Hoopes writes. "But the subordinates who have come forward so far have reported that Lay, unlike [Jeffrey] Skilling, was a hands-off manager who lacked the accounting know-how to arrange Enron's complex deals. Lay probably truly, not hypocritically, believed he could run the company by telling others what a good person he was. It will be a long time before we know the whole Enron story, but the gurus' notion of management by moral authority should not be let off the hook until we do."

Hoopes says that while the ethical failures that have received the most press have been those involved with cooking the books and duping the stockholders, it's important to remember that for a manager, a key area of ethics is doing the right thing in regard to direct reports. He suggests that managers, rather than focusing on setting an example and leading by their moral authority, should simply exercise the power they've been given—but they should make sure that they do so with a dose of humility. "The managers I see whom I'm impressed by—and who are effective—worry a great deal about whether or not they're doing the right thing," he says. —H.D.