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Ethics and Power: How to Strike the Right Balance

Power dynamics are inevitable--and essential--to a functioning organization. Here's how to make sure they're used for good and not evil.
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Your skill in understanding and playing organizational politics predicts multiple measures of your career success, according to author Gerald Ferris (Political Skill at Work) and other researchers. Streetline CEO and former SAP senior executive Zia Yusuf has also argued that business success requires both substantive knowledge and the ability to master organizational dynamics. Without the first, you can get stuff done--but it probably won't be the right stuff. Without the second, you will know what to do--but not be able to effectively implement that knowledge.

The importance of understanding and implementing power principles is why I have written three books on power dynamics inside companies and teach an oversubscribed elective course, "The Paths to Power," at Stanford. But in the books and in the class, I typically do not touch the subject of ethics. Power and influence techniques and the social science that forms their foundation are tools that can be used for good or evil. As a social scientist, I believe I need to primarily teach people principles and mostly leave to others, including parents and religious organizations, the instilling of values that guide how people use their knowledge.

What Gets Accomplished vs. How It's Accomplished

When I'm advising companies, the question often arises: "While we recognize that mastering power dynamics is essential for getting things done, how do we ensure that power skills are used ethically?" The answer is at once simple to describe and difficult to do: Ensure that the company's evaluation, reward, and promotion processes assess not only what people accomplish but also the means and behaviors they use to achieve their results.

General Electric has been justly famous for its 2 x 2 matrix for evaluating people. One dimension was performance level, which could be high or low. The other dimension was whether or not the person lived the company's values and culture and the way he or she behaved, with it possible for people to act in ways either consistent or inconsistent with GE's expectations and values. To be highly rated and a star, you needed to be a good performer who also adhered to the culture and values and accomplished your objectives without running roughshod over others. Getting good results through bad behavior was insufficient for career success, and by the same token, acting in accordance with company tenets, but not achieving good performance was also not the road to success.

While that all seems simple enough, implementing something like the GE system is actually hard. That's because companies often don't consciously know, haven't talked about, or come to any agreement on what their cultural and behavioral norms actually are. In the press of day-to-day business, culture and standards of conduct seem like ethereal topics for the future.

Choosing the Right Trade-Offs

Moreover, organizational life is invariably about making the right trade-offs, and few leaders have built social systems with enough clarity and strength to provide consistent direction. To take one common example, how does your company want to resolve the means-ends trade-off between, say, landing an order and the ethical considerations about the actions required to do so? For example, what happens when you're doing business in cultures where bribes are expected or selling software where there are temptations to promise to deliver an as-yet unbuilt (and possibly undesigned) product?

To quote the famous late New York city master builder Robert Moses, "if the ends don't justify the means, what does?" Moses ran roughshod over his opponents and also citizens who stood in the way of his building projects such as Lincoln Center or the 1964 World's Fair. But as an aide to Governor Nelson Rockefeller perceptively noted, politicians would shake their heads and criticize Moses's methods even as they were more than happy to take credit for what he had built--which is why he held enormous power in multiple positions in New York City and state for more than four decades.

Company cultures, about ethics or anything else, get created by the promotion, compensation, and evaluation choices made every day. Although there are clearly good and bad people, mostly the line between good and bad runs through each one of us. Therefore, the best and possibly only way to ensure the desired behavior is to be clear about norms and expectations and make every decision with the how, not just the what, firmly in mind.

IMAGE: chriscorrigan/Flickr
Last updated: Apr 29, 2013

JEFFREY PFEFFER | Columnist | Professor, Stanford's Graduate School of Business

Jeffrey Pfeffer†is the Thomas D. Dee II Professor of Organizational Behavior at Stanford University's Graduate School of Business, and a regular contributor to The Company Ethicist, a new blog about business ethics and leadership, published by Convercent.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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