New York University Ethical Practices Paper

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Business Finance

New York University

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Analyze and assess the impact of Ethics on Project Management:

  • Read Gray & Larson pages 353 - 359.
  • Identify two external articles on Ethical Practices in Project Management.

Write a 2-3 page paper which accomplishes the following:

  • Summarizes the Gray & Larson material and synthesizes the information in the two external articles.
  • Draft your own personal ethical statement of practice in which you identify key characteristics of your ethical self.
  • Identify one area of focus in project management that can be more suspectible to ethical pressure and how you would address the situation.

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Chapter 10 Being an Effective Project Manager 353 Project managers need to adapt their communication pattern to that of the senior group. For example, one project manager recognized that top management had a tendency to use sports metaphors to describe business situations, so she framed a recent slip in schedule by admitting that “we lost five yards, but we still have two plays to make a first down.” Smart project managers learn the language of top management and use it to their advantage. Finally, a few project managers admit ignoring chains of command. If they are confident that top management will reject an important request and that what they want to do will benefit the project, they do it without asking permission. While acknowledging that this is very risky, they claim that bosses typically won’t argue with success. Leading by Example A highly visible, interactive management style is not only essential to building and sustaining cooperative relationships, it also allows project managers to utilize their most powerful leadership tool—their own behavior (Peters, 1988; Kouznes & Posner, 2012). Often, when faced with uncertainty, people look to others for cues as to how to respond and demonstrate a propensity to mimic the behavior of people they respect. A project manager’s behavior symbolizes how other people should work on the project. Through her behavior a project manager can influence how others act and respond to a variety of issues related to the project. (See Snapshot from Practice 10.3: Leading at the Edge for a dramatic example of this.) To be effective, project managers must “walk the talk” (see Figure 10.4). Six aspects of leading by example are discussed next. Priorities Actions speak louder than words. Subordinates and others discern project managers’ priorities by how they spend their time. If a project manager claims that this project is critical and then is perceived as devoting more time to other projects, then all his verbal reassurances are likely to fall on deaf ears. Conversely, a project manager who takes the time to observe a critical test instead of simply waiting for a report affirms FIGURE 10.4 Leading by Example Problem solving Standards of performance Leading by example Ethics Priorities Cooperation Urgency www.ebook3000.com 354 Chapter 10 Being an Effective Project Manager SNAPSHOT FROM PRACTICE 10.3 Leading at the Edge* In 1914, the intrepid explorer Ernest Shackleton embarked on the Endurance with his team of seamen and scientists, intent upon crossing the unexplored Antarctic continent. What happened in the two years between their departure and their ultimate incredible rescue has rarely been matched in the annals of survival: a ship crushed by expanding ice pack . . . a crew stranded on the floes of the frozen Weddell Sea . . . two perilous treks in open boats across a raging Southern Ocean . . . a team marooned on the wild, forlorn Elephant Island, stretched to the limits of human endurance. This adventure provided the basis for the book Leading at the Edge: Leadership Lessons from the Extraordinary Saga of Shackleton’s Antarctic Expedition written by Dennis Perkins. Perkins provides numerous incidents of how Shackleton’s personal example influenced the behavior of his beleaguered crew. For example, from the beginning of the Trans-Atlantic expedition to its end, Shackleton consistently encouraged behavior that emphasized caring and respect: After the destruction of the Endurance Shackleton heated hot milk for the crew and went from tent to tent with the “life giving” drink. After the sail to the island of South Georgia, when the exhausted crew had landed, Shackleton took the first watch, which he kept for three hours instead of the usual one. Crew members emulated the caring behaviors that Shackleton modeled. A good example of this occurred during one of the most dramatic moments in the Endurance saga. The food supply had dwindled to perilously low levels. Less than a week’s supply remained, and the tiny ration of seal steak usually served at breakfast was eliminated. The waste meat generally used to feed the dogs was inspected for edible scraps. Under these wretched conditions, and after a wet sleepless night, an argument broke out among some of the team members. Caught in the middle, one crew member (Greenstreet) spilled his tiny ration of powdered milk and shouted at the biologist (Clark). Alfred Lansing described what happened next: © Topham/The Image Works Greenstreet paused to get his breath, and in that instant his anger was spent and he suddenly fell silent. Everyone else in the tent became quiet, too, and looked at Greenstreet, shaggy-haired, bearded, and filthy with blubber soot, holding his empty mug in his hand and looking helplessly down into the snow that had thirstily soaked up his precious milk. The loss was so tragic he seemed almost on the point of weeping. Without speaking, Clark reached out and poured some milk into Greenstreet’s mug. Then Worsely, then Macklin, and Rickerson and Kerr, Orde-Lees, and finally Blackborrow. They finished in silence. * Adapted from Dennis N. T. Perkins, Leading at the Edge: Leadership Lessons from the Extraordinary Saga of Shackleton’s Antarctica Expedition (New York: AMACOM Press, 2000), pp. 94–95; and Alfred Lansing, Endurance: Shackleton’s Incredible Voyage (New York: Carroll & Graf, 1998), p. 127. the importance of the testers and their work. Likewise, the types of questions project managers pose communicate priorities. By repeatedly asking how specific issues relate to satisfying the customer, a project manager can reinforce the importance of customer satisfaction. Chapter 10 Being an Effective Project Manager 355 Urgency Through their actions project managers can convey a sense of urgency, which can permeate project activities. This urgency in part can be conveyed through stringent deadlines, frequent status report meetings, and aggressive solutions for expediting the project. The project manager uses these tools like a metronome to pick up the beat of the project. At the same time, such devices will be ineffective if there is not also a corresponding change in the project manager’s behavior. If they want others to work faster and solve problems quicker, then they need to work faster. They need to hasten the pace of their own behavior. They should accelerate the frequency of their interactions, talk and walk more quickly, get to work sooner, and leave work later. By simply increasing the pace of their daily interaction patterns, project managers can reinforce a sense of urgency in others. Problem Solving How project managers respond to problems sets the tone for how others tackle problems. If bad news is greeted by verbal attacks, then others will be reluctant to be forthcoming.5 If the project manager is more concerned with finding out who is to blame instead of how to prevent problems from happening again, then others will tend to cover their tracks and cast the blame elsewhere. If, on the other hand, project managers focus more on how they can turn a problem into an opportunity or what can be learned from a mistake, then others are more likely to adopt a more proactive approach to problem solving. Cooperation How project managers act toward outsiders influences how team members interact with outsiders. If a project manager makes disparaging remarks about the “idiots” in the marketing department, then this oftentimes becomes the shared view of the entire team. If project managers set the norm of treating outsiders with respect and being responsive to their needs, then others will more likely follow suit. Standards of Performance Veteran project managers recognize that if they want participants to exceed project expectations then they have to exceed others’ expectations of a good project manager. They establish a high standard for project performance through the quality of their daily interactions. They respond quickly to the needs of others, carefully prepare and run crisp meetings, stay on top of all the critical issues, facilitate effective problem solving, and stand firm on important matters. Ethics How others respond to ethical dilemmas that arise in the course of a project will be influenced by how the project manager has responded to similar dilemmas. In many cases, team members base their actions on how they think the project manager would respond. If project managers deliberately distort or withhold vital information from customers or top management, then they are signaling to others that this kind of behavior is acceptable. Project management invariably creates a variety of ethical dilemmas; this would be an appropriate time to delve into this topic in more detail. 5 This is the classic “kill the messenger” syndrome. This and other forces that contribute to distorting information can be found in Erik Larson and Jon King “The Systemic Distortion of Information: An On-going Management Challenge,” Organizational Dynamics, Winter 1996, pp. 49–62. www.ebook3000.com 356 Chapter 10 Being an Effective Project Manager 10.5 Ethics and Project Management LO 10-8 Understand the importance of building trust and acting in an ethical manner while working on a project. Questions of ethics have already arisen in previous chapters that discussed padding of cost and time estimations, exaggerating pay-offs of project proposals, and so forth. Ethical dilemmas involve situations where it is difficult to determine whether conduct is right or wrong. In a survey of project managers, 81 percent reported that they encounter ethical issues in their work.6 These dilemmas range from being pressured to alter status reports, backdate signatures, compromising safety standards to accelerate progress, and approving shoddy work. The more recent work of Müller and colleagues suggests that the most common dilemma project managers face involves transparency issues related to project performance (Müller et al., 2013, 2014). For example, is it acceptable to falsely assure customers that everything is on track when in reality you are doing so to prevent them from panicking and making matters even worse? Project management is complicated work, and, as such, ethics invariably involve gray areas of judgment and interpretation. For example, it is difficult to distinguish deliberate falsification of estimates from genuine mistakes or the willful exaggeration of project payoffs from genuine optimism. It becomes problematic to determine whether unfulfilled promises were deliberate deception or an appropriate response to changing circumstances. To provide greater clarity to business ethics, many companies and professional groups publish a code of conduct. Cynics see these documents as simply window dressing, while advocates argue that they are important, albeit limited, first steps. In practice, personal ethics do not lie in formal statutes but at the intersection of one’s work, family, education, profession, religious beliefs, and daily interactions. Most project managers report that they rely on their own private sense of right and wrong— what one project manager called his “internal compass.” One common rule of thumb for testing whether a response is ethical is to ask, “Imagine that whatever you did was going to be reported on the front page of your local newspaper. How would you like that? Would you be comfortable?” Unfortunately, scandals at Enron, Worldcom, and Arthur Andersen have demonstrated the willingness of highly trained professionals to abdicate personal responsibility for illegal actions and to obey the directives of superiors (see Snapshot from Practice 10.4: The Collapse of Arthur Andersen). Top management and the culture of an organization play a decisive role in shaping members’ beliefs of what is right and wrong. Many organizations encourage ethical transgressions by creating a “win at all cost” mentality. The pressures to succeed obscure consideration of whether the ends justify the means. Other organizations place a premium on “fair play” and command a market position by virtue of being trustworthy and reliable.7 Many project managers claim that ethical behavior is its own reward. By following your own internal compass your behavior expresses your personal values. Others suggest that ethical behavior is doubly rewarding. You not only are able to fall asleep at night but you also develop a sound and admirable reputation. As will be explored in the next section, such a reputation is essential to establishing the trust necessary to exercise influence effectively. 6 While this survey is a bit old, our conversations with project managers suggest that the results hold true today (J. Cabanis, “A Question of Ethics: The Issues Project Managers Face and How They Resolve Them,” PM Network, December 1995, pp. 8–28). 7 For a more in-depth discussion of ethics, see: L. Trevino and K. Nelson, Managing Business Ethics: Straight Talk about How to Do It Right, 5th ed. (Hoboken, NJ: John Wiley & Sons, 2011). Chapter 10 Being an Effective Project Manager 357 SNAPSHOT FROM PRACTICE 10.4 The Collapse of Arthur Andersen* “Think straight and talk straight” was the principle on which Arthur E. Andersen built his accounting firm in the early 1900s. It was a phrase his mother taught him and became the firm’s motto. The commitment to integrity and a systematic, planned approach to work were instrumental in Arthur Andersen becoming one of the largest and best-known accounting firms in the world. According to the book, Inside Arthur Anderson by Susan Squires and colleagues: Working for Arthur Andersen was not for everyone. It could be a tough culture. It was much too hierarchical and top down for the more free spirited. Many people left after less than two years, believing the rewards did not warrant the demands that were made on them. Others learned to play by the rules and some even thrived. To remain in the firm, staff members were expected to work hard, respect authority of rank, and maintain a high level of conformity. In return they were rewarded with support, promotion, and the possibility of making partner. Those individuals who made a career with the firm grew old together, professionally and personally, and most had never worked anywhere else. To these survivors, Andersen was their second family, and they developed strong loyalties to the firm and its culture. (p. 133) On October 23, 2001, David Duncan told his Enron project team that they needed to start complying with Andersen’s new policy on handling audit documents. The policy had been instituted to make sure that the firm’s extraneous paperwork could not be used in court cases. Although the document retention policy required that papers supporting the firm’s opinions and audit be retained, it allowed a broad category of secondary documents to be destroyed. The team reacted with © Stephen J. Carrera/AP Photo stunned silence to Duncan’s directive. Then everyone got up and began racing to do what they had been told to do. No one asked Duncan to explain further. None asked whether what they were doing was wrong. No one questioned whether what he or she were doing might be illegal. Andersen’s Houston staff just reacted, following orders without question. On November 9, 2001, the day after the Securities Exchange Commission (SEC) issued a subpoena to Andersen, the shredding stopped. More than one ton of documents had been destroyed and 30,000 e-mails and Enron-related computer files erased. According to Andersen’s legal defense team, the shredding was business as usual. The lawyers claimed that the shredding was standard practice for eliminating unnecessary files. To the SEC, it appeared to be the start of a deep coverup operation. Subsequently one of the most respected accounting firms in the world closed its doors. * Susan E. Squires, Cynthia J. Smith, Lorna McDougall, and William R. Yeak, Inside Arthur Andersen: Shifting Values, Unexpected Consequences (Upper Saddle River, NJ: Prentice Hall, 2004). 10.6 Building Trust: The Key to Exercising Influence The significance of trust can be discerned by its absence. Imagine how different a working relationship is when you distrust the other party as opposed to trusting them. Here is what one line manager had to say about how he reacted to a project manager he did not trust: Whenever Jim approached me about something, I found myself trying to read between the lines to figure what was really going on. When he made a request, my initial reaction was “no” until he proved it. www.ebook3000.com 358 Chapter 10 Being an Effective Project Manager Conversely, trust is the “lubricant” that maintains smooth and efficient interactions. For example, here is what a functional manager had to say about how he dealt with a project manager he trusted: If Sally said she needed something, no questions were asked. I knew it was important or she wouldn’t have asked. Likewise, if I needed something, I know she would come through for me if she could. Trust is an elusive concept. It is hard to nail down in precise terms why some project managers are trusted and others are not. One popular way to understand trust is to see it as a function of character and competence. Character focuses on personal motives (i.e., does he or she want to do the right thing?), while competence focuses on skills necessary to realize motives (i.e., does he or she know the right things to do?). Stephen Covey resurrected the significance of character in the leadership literature in his best-selling Seven Habits of Highly Effective People. Covey criticized popular management literature as focusing too much on shallow human relations skills and manipulative techniques, which he labeled the personality ethic. He argues that at the core of highly effective people is a character ethic that is deeply rooted in personal values and principles such as dignity, service, fairness, the pursuit of truth, and respect. One of the distinguishing traits of character is consistency. When people are guided by a core set of principles, they are naturally more predictable because their actions are consistent with these principles. Another feature of character is openness. When people have a clear sense of who they are and what they value, they are more receptive to others. This trait provides them with the capacity to empathize and the talent to build consensus among divergent people. Finally, another quality of character is a sense of purpose. Managers with character are driven not only by personal ambitions but also for the common good. Their primary concern is what is best for their organization and the project, not what is best for themselves. This willingness to subordinate personal interests to a higher purpose garners the respect, loyalty, and trust of others. The significance of character is summarized by the comments made by two team members about two very different project managers. At first everyone liked Joe and was excited about the project. But after a while, people became suspicious of his motives. He had a tendency to say different things to different people. People began to feel manipulated. He spent too much time with top management. People began to believe that he was only looking out for himself. It was HIS project. When the project began to slip he jumped ship and left us holding the bag. I’ll never work for that guy again. My first impression of Jack was nothing special. He had a quiet, unassuming management style. Over time I learned to respect his judgment and his ability to get people to work together. When you went to him with a problem or a request, he always listened carefully. If he couldn’t do what you wanted him to do, he would take the time to explain why. When disagreements arose he always thought of what was best for the project. He treated everyone by the same rules; no one got special treatment. I’d jump at the opportunity to work on a project with him again. Character alone will not engender trust. We must also have confidence in the competency of individuals before we really trust them (Kanter, 1979). We all know wellintended managers whom we like but do not trust because they have a history of coming up short on their promises. Although we may befriend these managers, we don’t like to work with or for them. Competence is reflected at a number of different levels. First, there is task-related knowledge and skills reflected in the ability to answer questions, solve technical Chapter 10 Being an Effective Project Manager 359 problems, and excel in certain kinds of work. Second, there is competence at an interpersonal level demonstrated in being able to listen effectively, communicate clearly, resolve arguments, provide encouragement, and so forth. Finally, there is organizational competence. This includes being able to run effective meetings, set meaningful objectives, reduce inefficiencies, and build a social network. Too often there is a tendency for young engineers and other professionals to place too much value on task or technical competence. They underestimate the significance of organizational skills. Veteran professionals, on the other hand, recognize the importance of management and place a greater value on organizational and interpersonal skills. One problem new project managers experience is that it takes time to establish a sense of character and competency. Character and competency are often demonstrated when they are tested, such as when a tough call has to be made or when difficult problems have to be solved. Veteran project managers have the advantage of reputation and an established track record of success. Although endorsements from credible sponsors can help a young project manager create a favorable first impression, ultimately he or she will have to demonstrate character and competence during the course of dealings with others in order to gain their trust. So far this chapter has addressed the importance of building a network of relationships to complete the project based on trust and reciprocity. The next section examines the nature of project management work and the personal qualities needed to excel at it. 10.7 Qualities of an Effective Project Manager LO 10-9 Identify the qualities of an effective project manager. Project management is, at first glance, a misleading discipline in that there is an inherent logic to the process. There is a natural progression from formulating a project scope statement, to creating a WBS, developing a network, adding resources, finalizing a plan, and reaching milestones. However, when it comes to actually implementing and completing projects, this logic can quickly disappear. Project managers often encounter a much messier world, filled with inconsistencies and paradoxes. Effective project managers have to be able to deal with the contradictory nature of their work. Some of those contradictions are listed here: ∙ Innovate and maintain stability. Project managers have to put out fires, restore order, and get the project back on track. At the same time they need to be innovative and develop new, better ways of doing things. Innovations unravel stable routines and spark new disturbances that have to be dealt with. ∙ See the big picture while getting your hands dirty. Project managers have to see the big picture and how their project fits within the larger strategy of their firm. There are also times when they must get deeply involved in project work and technology. If they don’t worry about the details, who will? ∙ Encourage individuals but stress the team. Project managers have to motivate, cajole, and entice individual performers while at the same time maintaining teamwork. They have to be careful that they are considered fair and consistent in their treatment of team members while at the same time treating each member as a special individual. ∙ Hands-off/Hands-on. Project managers have to intervene, resolve stalemates, solve technical problems, and insist on different approaches. At the same time they have to recognize when it is appropriate to sit on the sidelines and let other people figure out what to do. www.ebook3000.com
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Running head: IMPACT OF ETHICS ON PROJECT MANAGEMENT

Impact of Ethics on Project Management
Student’s Name
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IMPACT OF ETHICS ON PROJECT MANAGEMENT

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The effectiveness of project management strategies depends on the manager’s
commitment to ethical workplace values. Gray & Larson (2013) posit that workplace ethics are
founded on instrumental values, which include excellence, integrity, respect, and service.
Additionally, management roles in organizations are designed as workplace performance
standards. Thus, managers are assigned responsibilities of teaching and facilitating the
implementation of ethical values in the workplace (Gray & Larson, 2013). Managers, therefore,
are expected to base their decisions on instrumental values when addressing ethical dilemmas
and should not deviate from the ethical values of their organization when dealing with
employees, customers, and shareholders. However, the ...


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