Integrity in Business: Definition and Issues

Integrity in Business: Definition and Issues

3 CONCEPTS
The concepts of integrity, morality and ethics might seem similar, but not they're not the same. Jensen (2009) explains the 3 concepts as follows:

INTEGRITY: A state or condition of being whole, complete, unbroken, unimpaired, sound or in perfect condition.
ETHICS: In a given group, ethics is agreed upon standards of what is desirable and undesirable, of right and wrong conduct, of what is considered by that group as good and bad behaviour of a person or entity that is a member of the group, and may include defined bases for discipline, including exclusion.
MORALITY: In a given society, in a given era of that society, morality is the generally-accepted standards of what is desirable and undesirable; of right and wrong conduct, and what is considered by that society as good or bad behaviour of a person, group or entity.

INTEGRITY
Jensen states that integrity is defined as 'our model to honouring our word'. It is purely a positive proposition which has nothing to do with 'good vs bad'. On the contrary, morality and ethics are normative concepts that relate to desirable vs undesirable behaviour and therefore deal with matters of good & bad or right & wrong. Integrity can be achieved and maintained in two ways:
- By keeping your word
- As soon as one knows that one cannot keep its word, all parties involved need to be informed.

INTEGRITY IN BUSINESS
Out-of-integrity behaviour harms workability and therefore limits the performance of a person, group or entity. This is why integrity is of great importance for business and organizations. It means that entities need to ensure that they honour their word, both internally (i.e. between members/workers) and externally (i.e. involved stakeholders). This includes being transparent and honourable, meaning that nothing is hidden; no deception; no untruths; no violation of rights, duties and values. The author states that integrity is the first step in materializing trust which is a concept upon which our global financial system heavily relies. This immediately stresses why entities should acknowledge the importance of integrity.

MISCONCEPTIONS ABOUT INTEGRITY
In today's world, integrity is still often misinterpreted. The main misconceptions and issues causing this are:

INTEGRITY IS A VIRTUE: This results in integrity being easily sacrificed when an entity must do so to succeed. In reality, integrity should be seen as a necessary condition for performance that is vital in order to succeed.
UNAWARENESS OF CONSEQUENCES OF BEING-OUT-OF-INTEGRITY: People focus on the reason (i.e. the rationalization for not keeping their word) that result in being-out-of-integrity. However, people tend to underestimate or even ignore the consequences for their out-of-integrity behaviour.
INTEGRITY IS ONLY ABOUT KEEPING ONE'S WORD: This excludes admitting that one sometimes cannot keep his word, which is inevitable. Therefore integrity also includes being honest in times when one cannot keep his word.
PERCEPTION THAT NOT-KEEPING-YOUR-WORD IS A THREAT: This leads to the short term gain of hiding, which is out-of-integrity behaviour. Since it is inevitable that keeping your word is impossible in some cases, it is important to perceive not-keeping-your-word as a challengethat simply has to be dealt with rather than a threat that needs to be avoided.
NOT DOING A COST/BENEFIT ANALYSIS ON GIVING ONE'S WORD: This causes irresponsible behaviour in which one underestimates what it will take to keep their word.
DOING A COST/BENEFIT ANALYSIS ON HONOURING ONE'S WORD: Treating integrity as a matter of cost/benefit analysis guarantees that one will not be a person of integrity since it implies that one only honours its word when the costs exceed the benefits.

Source: Jensen, M.C. "Integrity: Without It Nothing Works" 2009 Harvard Research Papers No. 10-042

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Saskia Constantinou
Journalist, Cyprus

Leadership and Integrity – Does your Management Have Integrity?

I believe one of the most important principles of leadership and one of the top attributes of a great leader is integrity. It's ideally a concept of consistency of actions, of values, methods, measures, principles, expectations and outcomes. It also means telling the truth even if the truth is ugly.

In Cyprus, we have many internationally renowned musicians and pedagogues coming to give concerts and I'm happy to interview them. Many teach at universities and music colleges around the world, and I often ask "What do you say to the student you know is not going to 'make it' as a performing musician?" It's a really difficult question as the college needs the students for financial survival, but what about the integrity of the teacher?

With maybe one exception, all have replied "We don't tell anyone they won't make it, but try to guide them into more realistic expectations."

So, Dwight D Eisenhower's comment is still very apt and true - "The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football filed, in an army, or in an office."

A business which runs with strong, ethical management teams enhances its ability to attract not only investors and customers, but also talented professionals who want to create a culture that values integrity. Why is it then clearly not at the top of the agenda of so many companies?

If it is merely populist words and not something leaders display through specific behavioural actions then integrity is lacking. Employees want to see the most visible members of the organisation leading through actions. They have to hold the highest moral compass and be accountable.

3 tips for leaders and managers looking to develop and even more importantly, display their integrity are:

Be honest and treat people well. Be quick to praise the contributions of your staff.
Treat everyone in the same way, regardless of their standing in the organisation. The cleaning staff are as important as the most dynamic salesperson.
Check how others view you – talk to your employees about what they think you do well and what you can do better. Your employees will not view it as a vulnerability but as a strength.