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    Unethical practices – hall-mark of failed organisations


    Lies, bribes, deception and cover-ups are hall-marks of many failed organisations. Unethical behaviour at the leadership level leads to breakdown of trust with shareholders, government and the public – Rupert Murdoch’s News Corporation found this out the hard way when Internet and phone hacking by its employees hit the headlines last month.

    Conrad Black of Hollinger Intl., Bernard Ebbers of WorldCom, Dennis Kozlowski of Tyco, Sanjay Kumar of Computer Associates, John Rigas of Adelphia Communications, Richard Scrushy of HealthSouth and Sam Waksal of ImClone are recent examples of convicted executives.

    Developing personalities on strong ethical framework is crucial for organisations success. Telling truth is a foundation of ethical management. Islam teaches people to speak the truth at all times. Prophet Muhammad said:

    “There is no charity more beloved to God than speaking the truth.”

    Speaking truth is one of the pillars of ethical personality and it is applicable in business as it is in social life. However, people of all faiths can apply this principle as truth should be a universal principle.

    The Prophet advised:

    “Say what is true, although it may be bitter and displeasing to people.”

    Although speaking the truth will often put people in uncomfortable positions, the consequences of not telling the truth are far worse. Investors and customers of Enron found this out when it became clear that former Enron executives, including Kenneth Lay, Jeffrey Skilling and Andre Fastow, were involved in a massive accounting fraud. These executives not only lied about the financial situation of Enron, but they took advantage of the situation by selling their shares before the worst of the news reached the market. This scandal shred the £100-billion company to nothing overnight. Its share price fell from ninety dollars to a few cents. The Enron scandal also caused the dissolution of Arthur Andersen, which at the time was one of the world’s top accounting firms.

    People should never be conservative with the truth otherwise the impact will be felt by person’s family, colleagues, organization, customer and business partners. People should also not allow friendship or emotions to take better of them in the face of telling the truth. It is better to displease few people than to drag an organization into the courts.

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