September, 2007
Inspection News and Views from the American Society of Home Inspectors

Does Ethics Pay?


 A popular presenter returns     

“Interesting,” “highly relevant,” “right on.”

That’s how ASHI members described Deborah H. Long’s past presentations. And, she’s coming back. She will be presenting again at this year’s training conference. Here’s a sample of what you can expect when she takes on the tough topic of valuing ethics in today’s competitive business climate.

Does Ethics Pay?

On occasion when I provide workshops on ethical decision-making skills, participants ask me, “Will I get what I want if I’m ethical?”

That’s a tough question. ”It really depends on what you want,” I usually respond. “If what you want is a faster, sportier car or a bigger, more ostentatious home — then no, probably being ethical won’t help you obtain those material goods.” On the other hand, I also observe, being ethical allows you to look at yourself in the mirror as well as to sleep better at night.

This is not a satisfactory answer for a number of my students. I realize that some of my students think that if all they get out of being ethical is a better night’s sleep, they might find it more appealing to fall asleep in front of their big-screen TVs in their 10,000-square-foot mansion. A recent movie — The Insider — also made it painfully clear that being ethical can be very costly in terms of personal and professional consequences.

In order to create a more compelling argument for being ethical, I decided to find out if being ethical pays off in more tangible ways. Guess what I found out?? Unethical behavior costs.

Example #1:
Discriminating against employees based on race cost Texaco $176 million.

Example #2:
Overstating profits to investors cost Mercury
Finance $2.2 billion in stock losses virtually overnight.

Example #3:
ADM paid $100 million in criminal fines — the largest in history — for price-fixing.

Example #4:
A Genentech CEO lost his job for trying to obtain a $2 million loan as part of a business deal.

Example #5:
Sexual harassment charges cost a W.R. Grace CEO his job.

That’s the bad news. Here’s the good news: Ethical behavior pays.

Example #1: In a 1994 study, researchers found that 26 percent of potential investors review the social responsibility of a company before investing. Corporate values and ethics matter.

Example #2:
A 1995 study indicated that companies that invest in their employees are more profitable than ones that don’t invest. For example, Motorola estimated that it earned $30 for every $1 invested in training employees.

Example #3:
A Vanderbilt University study demonstrated that low-polluting companies enjoyed better financial performance than high-polluting competitors in eight out of ten cases.

Example #4:
A 1997 report found that 76 percent of consumers were likely to switch to brands associated with a good cause.

Example #5:
A 1994 study indicated that 75 percent of consumers avoid or refuse to buy from certain business. The first reason was poor service, but the second reason was the company’s business practices.

These examples and studies indicate that greedy, ruthless behavior is not the most profitable. The evidence clearly demonstrates that good ethics show up on the bottom line. While being ethical can be challenging, it can do more personal, professional, and financial good for you than just give you a sound night’s sleep.

Deborah H. Long is a licensed real estate instructor in over a dozen states. She teaches licensing courses as well as specialty programs on ethics, investment fundamentals, home/community design issues, cultural diversity, brokerage management and Internet research skills for real estate agents, appraisers, surveyors, interior designers and architects, state regulators, engineers and other licensed professionals.

She completed her doctorate in educational leadership in 1994. Her research on the effect of ethics instruction on the ethical reasoning of real estate practitioners received national media and industry attention. She has three other college degrees.

For information regarding seminars and other workshops, please contact her: Deborah Long, DREI, Ed.D., 123 Woodleaf Drive, Chapel Hill, NC  27516; Phone: 919-968-3742; Fax: 866/788-3942;