A Conversation on Ethics and Professionalism in Construction

Background

The subject of business ethics has moved to center stage following the many, much-publicized scandals affecting major American corporations in recent years.  Firms such as Enron, WorldCom, Tyco, Arthur Andersen and others have gained notoriety as recent examples of unethical and illegal corporate behavior.  Construction firms have also been implicated in ethical lapses, which, while not receiving the same level of media attention, have served to reinforce long-standing public perceptions of corruption within the industry.  Recent news stories of price fixing among concrete producers in Indiana (http://www.usdoj.gov/atr/cases/f209800/209862.htm), bribery of public officials in Maryland (Baltimore Sun, November 19, 2005), and billing fraud in Missouri (St. Louis Business Journal, May 19, 2005), among others, fuel public perception that there is a crisis in construction ethics (ENR November 7, 2005). This perception was reiterated by the Fifth Annual Survey of Construction Industry Ethical Practices conducted by construction industry consultant FMI and the Construction Management Association of America (CMAA).  The findings of the survey which reported, among other things, that a large majority (84%) of the 270 respondents had seen or been involved in situations they felt were unethical within the preceding year (FMI, 2004).

The reaction to such perceptions of crisis is typically a reform movement to increase the number of checks and balances for detecting and dealing with ethical abuses.  The current movement includes an emphasis on increased professionalism in the construction industry through certification and licensing, and the adoption of codes of ethics for the industry as well as for individual construction firms.  Professional associations such as the American Institute of Constructors (AIC), the American Society of Professional Estimators (ASPE), and the Construction Management Association of America (CMAA) publicize codes of ethics for their members, and emphasize professional certification and adherence to a code of professional conduct for their disciplines (http://www.aicnet.org/about/code_of_ethics.asp, http://www.aspenational.com/1mission.html,

 http://cmaanet.org/ethics.php).

Codes of ethics, variously termed standard of professional conduct, standards of practice, codes of conduct, statements of values, and related terms, represent the moral values held by a group of people, and the acceptable behaviors that reflect those values.  In a symbiotic way, the moral values held by individuals in the group shape the standards of behavior the group holds, and enforcement of codes of ethics or standards of behavior in turn mold group values.  An example of a clear set of guiding principles for policy formation is set forth in the documents that established our government.   The Declaration of Independence and the Constitution list human dignity, freedom, justice, peace, and happiness as our core values, and assert that government is instituted to secure those values with the consent of the people.    Humans institute government and submit to live under law precisely because we are moral beings capable of distinguishing between right and wrong, and are naturally inclined to demand justification for wrong actions.  Government should "protect people from unwarranted assault, but it [should] seek to protect people … as a part of a larger mission to secure its members from all varieties of injustice that come within the practicable reach of the law" (Arkes, 1986, 206).  Thus, we acknowledge as Americans the duty of our government to protect the weak and helpless, and to institute law to obtain justice and determine the punishment due for wrongs committed by a guilty person against another, innocent person.  In a similar way, subsets of American society, such as professional societies or industry associations, can agree to establish policies by means of a code of ethics that outline the “laws” or standards of behavior under which the group will live, and the consequences for violation of those standards.  The standards bind both individual members of the profession and firms practicing the profession.

The standards of behavior that a group will accept as right are influenced by many factors, including in large part the daily actions and public statements of the group’s leaders.  At the level of the firm, management is the group leader.  Sole proprietors have direct control over the behavior of the “firm,” since the proprietor constitutes the entire organization.  When employees are added, the values and behavior of the firm’s founder continues to have a profound influence.  In small firms, these values can be communicated through direct contact, while in larger firms, written policies become necessary to transmit the values of the leadership to each employee.  Regardless of the size of the company, the behaviors modeled by the leadership and enforced through informal mechanisms by workers within the company help influence the “moral imagination” of the organization, or the basis on which ethical decisions are made on routine matters (McCullough, 1991).  Building on the foundation of the moral values each individual brings to the firm, as taught by family, community, school, religion, profession, and other human institutions, the behavior accepted or modeled by a firm’s leaders and set forth in company policy shapes the way the firm makes decisions and interprets as right and wrong the myriad occurrences in its daily existence.  Since no code of ethical practice can cover all situations, many issues that are not specifically mentioned in such corporate documents must be analyzed and interpreted on a case-by-case basis.  However, codes of ethics, in combination with strong moral leadership by management, can provide guidance and positive influence in such decision-making.

Why a Code of Ethics for Construction Companies?

The rationale for creating a code of ethics for a construction company was examined at a day-long seminar held at Southern Illinois University Edwardsville in December 2005.  Presentations throughout the day gave participants an overview of ethics in society, ethics in public contracting, a discussion of the FMI/CMAA Survey of Ethical Practices, a comparison of the engineering profession with the emerging professional status of constructor, and a discussion of creation of a minimum national code of ethics.  The participants then used roundtable discussions to discuss whether and how to create a code of ethics for their respective construction organizations.

The first roundtable question was to examine the rationale for a construction company code of ethics.  The discussions yielded 27 separate reasons for adopting a code of ethics (Table 1), and showed a range of motivations.

Table 1.

Twenty three of the 27 responses (85%) could be categorized as positive motivations, including:

1.        Provide Guidance to Employees (8)

2.        Benefit the Company (11)

3.        Benefit the Industry (3)

4.        Benefit to Self (1)

The remaining three motivations contained negative connotations, including:

1.        Required by Policy or Law (2)

2.        Response to Scandal (1)

3.        [To] Discipline Employees (1)

The majority of responses indicated that the primary motivation for codes of ethics is to benefit the company and the construction industry, and that the means for doing so is guidance and training of individual employees.  The very low incidence of responses involving discipline for bad behavior or avoidance of scandal seemed to indicate that the participants had positive feelings about their fellow employees and the values held by their respective companies, and trusted that employees of their firms would respond positively to clear guidance on what constitutes ethical behavior.  This reflects a world view that individuals are rational beings who act to maximize their self-interest, or utility, and can be depended upon to respond rationally and to behave in predictable ways when positive or negative incentives are offered.  In this view, if individuals are made aware of the positive consequences of ethical behavior, they will respond without undue coercion or threats of disciplinary action.  If management values ethical behavior and rewards employees for making good choices, a rational person would respond by acting in ways that conform to the behavioral standards of the organization.  From a broader, market perspective, if an industry as a whole values, rewards, and promotes ethical behavior, firms who exhibit those values might expect to be rewarded with a larger share of the market.  Similarly, the market could be counted on to drive unethical firms out of business.

However, there is another world view that holds that the market will not guarantee social equity or “fairness,” a concept mentioned in several responses, including “level the playing field,” “increase competition,” and “protocol for fairness.”  These responses indicate skepticism that the market alone will protect their firms from unethical competitors.  Market imperfections may justify the intervention of a higher authority, either management (at the level of the firm), a professional society (at the level of industry), or government (at the level of the state).  Within organizations that value order and equity over individual freedom, members may be willing to employ a mix of the coercive power of the organization (disciplinary actions or termination), incentives for “good” behaviors (awards and citations), and repeated promotion of organizational values (ethics training) in order to obtain desired behaviors.

Etzioni (1996) suggests that a dynamic balancing of individual freedom and social order can occur when there is a "thick social order," or core group of shared values.  These values meld a group of individuals into collective action, without coercive interference, and perhaps without even the conscious intention of the group itself.  According to Etzioni, the social order in a "good society" is aligned with the moral commitments of its members (Etzioni, 1996, 12), so that good behaviors are apt to occur more often and with little need for intervention.  Development of thick social order occurs gradually by means of education and reinforcement of values by leaders in the group rather than through increased regulation and laws (in a society) or enforcement of codes of conduct (in an organization).  Organizations who try to operate under this philosophy are constantly juggling the mix of individual freedom and "law and order," often overcorrecting or acting inconsistently, but ultimately held together with a set of shared values.  The implication for the construction industry would be that ethical behaviors can be increased by creating a sense of shared values articulated by trade organizations and professional associations, reiterated and enforced at the more local level of the firm, and ultimately, held by the individual members.

What Values?

In order to create an organization with a “thick social order,” there must be agreement on the shared values.   National attitude surveys are one medium for identifying and plumbing the depth of our shared values as a nation.  Yankelovich (in Aaron, et al. (eds.), 1994, 23) cites freedom, equality before the law, equality of opportunity, fairness, achievement, patriotism, democracy, the belief in American "exceptionalism," caring beyond the self, religion, and luck as some core American values that remain have unchanged over time.  A second set of values, including among others concepts of duty, responsibility, sacrifice, pleasure, health, and women's rights, he views as having significantly changed since the 1950s. 

When asked what shared values they would wish to communicate to members of their organization through a code of ethics, the seminar participants developed a list of 37 values (Table 2).  Interestingly, “American ethics” was mentioned, reflecting the idea that our societal values may be different from those of other cultures in the global community.  Several values were mentioned by multiple respondents:  honesty and integrity were each named 7 times, fair or fairness 5 times, trust or trustworthiness 4 times, while quality, excellence, respect and “lead by example” were each mentioned 3 times.  Other qualities such as commitment, morality, competence, and safety each were mentioned twice.

Many responses seemed to indicate the desired qualities of individuals in the organization (self-respect, competent, honest).  Others reflected the desired relationships within the organization (teamwork, fairness, family-oriented, common goal, loyalty).  Still others painted the desired image of the organization in the public’s eye (customer centered, quality, part of community, best value, experience, professionalism, competency, consistency, reputation, high standards).  A small number of responses expressed emotions associated with the organization (passionate, caring, sensitivity, fairness) while one expressed the desired outcome of these values (successful).

Table 2.

How Should Employees Behave?

Having explored the necessity for codes of ethics and what values should be evidenced by such a code, the group began the difficult task of deciding what a code of ethics should include.  Several categories were suggested for discussion, but the one that drew the most response was Employee Conduct at Work.  Table 3 lists the categories that the respondents selected to be included in a construction company code of ethics.

Table 3

The participants lacked sufficient time to elaborate on the rules and enforcement mechanisms that would be included under these headings.  Guidelines for writing a company code of ethics were provided for follow-up work after the seminar was completed.  Sources include articles such as “Ten Tips for Creating an Effective Code of Conduct,” found online at the Ethics Resource Center (http://www.ethics.org), a non-profit organization based in Washington, D.C. Reading codes from established professional societies such as the American Society of Civil Engineers (www.asce.org) and the National Society of Professional Engineers (www.nspe.org) can be useful in articulating desired behaviors to be included in a company code of professional conduct.  Other resources include the Center for Business Ethics (http://ecampus.bentley.edu/dept/cbe), and the Society for Human Resource Management Information Center (http://www.shrm.org).

Conclusions

The results of a one day seminar on ethics in the construction industry indicated that among the participants, the primary motivation for having a company code of ethics was for guidance of employees who are trying to do the right thing.  Punishment of wrong-doers was a minority response.  Comments throughout the seminar indicated that the participants were seeking clear guidance on how to establish the limits of ethical behavior and to distinguish between competitive and unethical behavior.  The nature of the responses indicated that most participants are confident that given appropriate guidance, people in their organizations can make good ethical decisions.  Construction trade organizations and professional societies should provide clear leadership and effective guidance on ethical decision making to create a sense of shared values, and a culture of ethical decision-making in construction firms.

References

Aaron, H., T. Mann, and T. Taylor, eds. (1994). "Values and public policy."  The Brookings Institution, Washington, D.C., 209 p.

Arkes, H. (1986). "First things: an inquiry into the first principles of morals and justice." Princeton University Press, Princeton, New Jersey, 426 p.

American Society of Civil Engineers (2000). “Standards of Professional Conduct for Civil Engineers.” ASCE Press, Reston, Virginia. 18 p.

Etzioni, A. (1996). "The new golden rule: community and morality in a democratic society." Basic Books, New York, New York, 305 p.

FMI (2004).  “Survey of construction industry ethical practices.” FMI Corporation, Raleigh, North Carolina, 17 p.

McCollough, T. (1991). "The moral imagination and public life: raising the ethical question." Chatham House Publishers, Chatham, New Jersey, 166 p.