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October 4, 2017

The Separation of Morality and Legality in I-G Cultures

Worldview Challenge Series
The Separation of Morality and Legality in I-G Cultures

Operating in a competitive Innocence-Guilt culture can shrink your organization’s moral focus to only the letter of the law – fertile ground for compromise. Do something about it before your organization’s lapses hit the news cycle.

This is part of an ongoing series on cultural challenges that organizations face. In this article we discuss a common problem in Innocence-Guilt (I-G) cultures.

The Separation of Morality & Legality

To build a competitive brand, businesses in an I-G environment must manage their appearance of corporate “innocence.” They want to be seen as ethical, trustworthy and wholesome. If you are around more than a few weeks in an I-G culture, you will likely discover that most decisions are made based on policies, standard operating procedures or ‘according to contract’. Government agencies and regulatory bodies tend to multiply these in the form of jurisprudence and legal precedents. Because of the value of maintaining innocence, companies generally attempt to adhere to the rules.

But what can happen in an Innocence-Guilt society, in the corporate world as well as government and education, is that over time the laws on the books begin to replace people’s individually-owned morality. As companies pursue being profitable, broader ownership of things like human rights, fiscal accountability and environmental conservation can be left behind. That’s seen especially where the law doesn’t specifically touch; places like ‘invisible’ choices on the quality of raw materials for manufacturing, the way we handle mistakes that could damage the corporate brand or deep in the structures of financial reporting.

The separation of morality and legality happens when companies only ask “Is this legal?” and stop asking “Is this moral?”

Instead of asking the moral question first, organizations start asking the legal question first. And eventually they don’t ask the moral question at all. Over time they start saying, “Well, if it’s legal, we can do it! As long as it makes us money, we’ll move forward.”

This is a dangerous path that lures many businesses into compromise in an I-G environment. It is a slippery slope that can lead to needless human suffering and destruction of the environment, as well as corporate scandals – something we have seen frequently in recent decades.

In The News

You may remember hearing about a disaster in Bangladesh in 2013, where a factory building collapsed and over a thousand workers died. The factory was a sweatshop, with horrible conditions and long hours. The owners had cut corners in many ways. GAP was one of the brands that had clothing sewn together there. The western clothing brands tried to say, “No, this is legal. We have a legal contract so we’re off the hook.” But the moral considerations of safety and how workers were treated were missing. And it left a black cloud over them from a PR standpoint when disaster struck.

When you look at what happened around the collapse of Enron in 2001, the scandal at WorldCom in 2002, and during the recession in 2008 on Wall Street – the collapse of Lehman Brothers, AIG and the others – researchers after the fact found lots of people doing things that were technically legal but morally unacceptable. And that got them into tough places where they eventually did illegal things as well.

Separating morality and legality leads to compromise; and if this goes unchecked you eventually lose both.

It Starts Early

Several decades ago, in the academic world, people started realizing that students graduating with business, marketing, and communication degrees from universities were not necessarily very ethical when they got into the workforce. So they said, “Maybe we should teach morality.” And Ethics classes were born.

But these classes have not done much good. You don’t end up with people internalizing ethical values when you teach morality by itself. There are books written about this. Over time both professors and students start to think of ethics as just the responsibility of the Ethics professor. In reality, every professor in an educational institution should be teaching and modelling good ethical principles and how they apply to decision-making.

Without this, you set the stage early for separation of morality and legality by teaching students to compartmentalize. If ethical considerations have not been internalized, it is an easy step to just keep them outsourced to the legal system later.

Medical and legal practitioners have a professional oath they commit themselves to upon graduation. Why can’t business school graduates also hold to a code of ethical practice? Thunderbird University in the USA is one of the few universities that has adopted this, calling it an “Oath of Honor.” Since 2004 other universities have also adopted the practice and are joining hands through the “Oath Project.”

The Movement to Bring Them Back Together

There is now a resurgence of a movement where the younger generation says “We don’t just care if it’s legal. We care if it’s moral and legal. We want those two to come back together.” Across the world the millennial generation has been much more vocal about this than previous generations.

We see this in the mining industries. Mining has a big impact on the environment and people’s health in the vicinity. There have been some good examples recently where several companies signed not just legal contracts, but also social contracts with the local population. They were not just interested in the mining rights and the legal side of it – but the moral side and social side of the story as well.

We have seen this come up frequently in relation to the plight of workers in different parts of the world. Earlier we mentioned the clothing industry, but there is also a big issue around the way workers are treated in the construction industry around the world.

There is also a major battle when it comes to bringing morality and legality back together again in the oil and gas sector. There have been many examples where it was legal to drill or explore, but it was ethically questionable. You can look at the Nigerian swamps and the exploration of oil there, how it led to exploitation of tribes and pollution of the environment. You can look at the oil spill in the Gulf of Mexico with Horizons and BP, and many other examples.

We need a path for corporate culture that brings morality and legality back together.

Morality in a Competitive World

Dave Logan, John King and Halee Fischer-Wright released a book a few years ago, called “Tribal Leadership”. From their research they documented the state of organizational cultures in the United States using a scale from one to five:

  • Level One was the worst – all-out war.
  • Level Two was where people are scheming and gaming the system and trying to get as much as possible.
  • Level Three is very competitive with everybody trying to prove they are the greatest and best on their own terms.
  • Only Level Four is where the ‘we’ starts to kick in, defined by ‘we are great as a team and we are going to be standing together.’
  • Level Five is where the ‘we’ gets translated into the bigger purpose of the society, industry, city, and village.

What they discovered in the study was that 75% of corporate America lives in the levels between one and three. The worst ones.

That means that inside most companies there is a very competitive environment where everyone is trying to outshine each other. Add the external pressure of a competitive marketplace and this is fertile ground for moral compromise, for legality and morality to be separated and lost.

As a leader, you have the beautiful but seemingly impossible task of trying to create a healthy culture: a culture that is innovative, where people trust each other, where ideas thrive, where people and teams come alive.

Bringing morality and legality back together can only be done by nurturing culture from the inside out. Not through policy and procedure only, but adding another bank to the river: leading your team and organization into a place of health through intentionally fostering a Third Cultural Space. That’s what we call a relational environment where teams find competitive advantage through constructive tensions rather than destructive ones, allowing your team to rediscover a foundation of innocence that empowers creativity and growth.

Contact us to learn more about creating a Third Cultural Space and strengthening your team.


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Last modified on Thursday, 05 October 2017 03:47

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