Lance Armstrong’s interview with Oprah Winfrey this week reinforced his driving objective of “win at all costs”. However, the question that Oprah never directly asked during her provocative discussion was whether he ever thought he had really won when accepting the trophies after so intentionally and consistently cheating. There was not a single Tour de France race that he actually won clean. The details are not relevant to this blog. Nor is my intention to underestimate or disrespect the courage it takes to fight cancer and return to a level of athletic commitment and ability even to qualify for an event such as the Tour de France. Rather, the lesson from Lance Armstrong for organizational ethics lies in the danger of intentionally integrating unethical behavior into strategy and operations. Unethical behavior has become a business model not just an occasional crisis.

Amidst the seemingly endless headlines of one-off ethics scandals over the past year, a dangerous trend toward more strategic, embedded unethical behavior in all sectors of organizations remains underemphasized. Examples abound: investment banks repeatedly engaging in egregiously conflict of interest-ridden deals; pharmaceutical company sales forces chronically bribing; oil and mining companies pursuing long-term business activities irrespective of the local human rights violations; on-going sales of unhealthy foods in school vending machines; incomplete or overly outsourced supply chain supervision; and even non-profit organizations justifying regular bribery in order to deliver services.

Many organizational leaders in these cases calculate that the cost of doing business with unethical practices is net positive. They are wrong. They believe that the profit or other benefit to the organization exceeds any cost of the unethical behavior. Bribery-dependent sales revenue may exceed the non-bribery option even including regulatory penalties and negative media fallout in the cost of sales. Doing deals with conflicts of interest may net greater profits even while jeopardizing client loyalty and again risking negative media attention. Sometimes the motive is competition (Lance Armstrong again). Sometimes the aim is simply increasing profits or other benefits to the organization internally. Nonetheless, whatever the quantitative result or the goal, the leadership of these organizations both intentionally disregards on-going unethical behavior and intentionally integrates unethical behavior into medium- and long-term strategy.

The purpose of this blog is not to point fingers but rather to apply the fundamental Lance Armstrong query to organizations: can they really win unethically? They cannot.  “Winning” through a business model that intentionally integrates unethical behavior is not winning, irrespective of the financial or other quantitative calculation. It is cheating and in some cases violating the law. The short- and long-term destruction of reputation alone incurs costs of all kinds from impact on recruiting and retention to customer perception to regulatory risk (including the ill will of regulators who will be less accommodating for an isolated issue with an organization regularly engaging in unethical behavior). This approach tarnishes leaders’ reputations whether or not they are directly involved, especially when it is clear they are, or should be, aware. And there usually are measurable quantitative hits: the fines; the lost deals, customer purchases, or donations to a non-profit; the rape victims; the number of deaths in a fire in Bangladesh; the youth obesity statistics. The often insidious consequences of this integrated failure of ethics far outweigh those of even a major one-off ethical crisis for the company, the management, the board, and all stakeholders including the public. The impact grows over time.

Finally, a recurring theme of this blog and the focus of my own research is contagion of unethical behavior. The unethical business model deliberately catalyses contagion of both the initial unethical conduct and the expected and unexpected consequences. Proper ethics oversight and strategy should aim to contain contagion of unethical behavior not systematize organizational doping.

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