[0:10]Today we are going to talk about ethics and governance in project management. Despite all the attention devoted to governance over recent decades, project failures continue to shake the field, suggesting that further investigation is necessary. The recurrence of project governance difficulties made me question the basics of what had hitherto taken to be unquestionable knowledge. As a result of the underlying cognitive unrest, a revision of the approaches to ethics in the project world led to the introduction of new concepts as the Small Sins Allowed, the Line of Impunity, and the Ethics Cube.
[1:12]The source of ethics can be found on the influences received from parental examples at home, socialization in school, religious teaching, and the legal system; all constituents of a complex construct of universals (the portion of ethics norms widely accepted), and local beliefs (principles confined to a particular culture). Universal beliefs are the portion of ethics norms widely accepted across boundaries, we can say, and sometimes also along the time, you know, during long time. Local beliefs are the principles confined to a particular culture or time.
[2:10]So, what happened? What I observe, I observed a detachment between business and ethics. And let me tell you what, relating the values of a particular group with the ethical baggage of its individuals was a challenging task even before the concept of “rules of the game” was introduced by Milton Friedman, which made it cumbersome. For sure, most of you have here about this, these are the rules of the game.
[2:55]Which usually are different of the rules of society. So which game we are playing, we need to be, uh, you know, clear about this. So, Milton Friedman, which by the way won the Nobel Prize in Economy some years after his, uh, this paper, postulated that in an ideal free market. There are no social values, no social responsibilities in any sense other than the shared values and responsibilities of individuals.
[3:36]He went further by saying that "there is one and only one social responsibility of business... increase its profits."
[3:52]So, with this in mind, it was said in 1970. I am going to tell you now about three different, uh, ways of thinking, three different groups of people, three different times perhaps. We are going to talk about two contrasting views, and in between those contrasting views, we have something that called, uh, unsatisfactory equilibrium. So, let's start with the first of the two contrasting views. This view says that people can do good but only at their own expense. This first view is shared by many managers. They believe that in order to win the respect of others it is necessary to have a moral imperative through ethical content embedded into corporate visions; in this case ethics is traded to obtain respect.
[5:12]Try to figure out what they are thinking about. They are thinking about gaining respect, gaining any kind of benefit by embedding some ethical content, you know, into the corporate vision. Others with the same view proposed that a company could benefit from adopting an ethical approach to management, and that competitive advantage leading to increased returns could come from the creation of this kind of intangible assets.
[5:54]Again, look, company could benefit from adopting an ethical approach. This view test the notion that ethics has a trading value related to financial procedures.
[6:18]Then we go to something that I call the Unsatisfactory Equilibrium. It addressed the confrontation between those who embraced a new set of public values and those who tried to disguise their business with them.
[7:00]There are two reasons for business to engage in ethical practices: a desire to do the right thing and a desire to convince stakeholders of being able to do the right thing.
[7:23]So, what you need to think about this? What is on our business? We want to do the right thing, or we try to convince stakeholders that we can do the right things. Public consciousness, attitudes, and opinions have evolved to a point where, in many instances, public values differ from those of the industry.
[7:55]I guess it is self-explain. I guess you already know about this. In the some industries the values are completely different from the values of the public. Many people talk about the values of the, you know, the party and the values of the public in general.
[8:34]So, I guess this is something that we saw in our everyday life. Let's talk now about the second contrasting view. This view says that conforming to social values is the moral imperative that legitimizes entrepreneurship. You can see the difference between the first view and the second one. Now we are talking to conforming to social values is the moral imperative that legitimizes entrepreneurship. So, entrepreneurship, you know, just to get money for the stakeholders or for the shareholders. So, entrepreneurship should be legitimizes according to the social values. Today it is recognized that social expectations may not be exclusively related to legal compliance and that meeting society's expectations for conscientious and proper behavior are the project ethical responsibilities.
