In Search of Lost Integrity? – Integrity Management and Compliance

By Markus Pohlmann

In the last decade, the term “integrity” hit the up escalator in the corporate world. In the boardroom of both Daimler and Volkswagen, there have been chairs established for Integrity and Legal Affairs. Compliance seems to be the slogan of yesterday. Now, integrity in the corporate world commands the order of the day. Searching „integrity management“ on Google Scholar and you get over 14,000 entries, over 13,000 of which alone are dated since 2000. Most of them are not addressing the homonymic IT-solution.

Source: Integrity – Nick Youngson – Creative Commons 3 – CC BY-SA 3.0

It’s mirroring a newly emerging consulting business and fashion of management. It looks like corporation are not only striving for compliance with rules, but also for moral perfection.

„Integrity Management and/or Compliance“

A distinction has been made between „compliance“, which is achieved through controls and penalties, and the management of „integrity“, which is realized through the internalization of values and norms. At the same time, according to Paine’s seminal article in 1994, the moral competences of the employees would be expanded. Employees should be able to make ethically correct decisions, based on their independent value judgements, in tricky and questionable situations that are not covered by the code of conduct. Integrity management has thus succeeded the value management in the corporate world, without reacting to the problems already associated with this management mode.

The Latin word „Integritas“ in the meaning of the word alludes to honesty, purity, integrity, which means to stand by one‘s values and norms in words and deeds, so that one does not allow himself to be corrupted. For companies, it is about producing an internally guided employee who completes the rules and regulations by internalizing the underlying values and norms. This pious wish of the companies packs a punch. From a sociological perspective, the new reference to the ethically demanding concept of integrity as well as the recurrent reference to values surprises us for several reasons:

A Sociological View of the Concept of Integrity

(1) The assumption behind the concept of integrity that internal psychological conditions of employees can be deliberately induced seems to be either stubborn or a useful means to document the omnipotence of the management. The assumption seems immune to refutation. Practice shows again and again that downright value-related educational efforts are often ignored or trigger reactance, thus leading to opposite effects. The intervention of a good intention is always to be distinguished from what is learned unintentionally through socialization at the companies, e.g. how formal rules and educational efforts can be successfully circumvented. So the problem is not one of „education“ through the management, but one of socialization through the organization.

Source: Creative Commons – CC-by-sa 3.0/de – Daetz-Stiftung_Erwachsenenbildung

(2) And yet, it is forgotten that access to employees has its limits and it is likewise assumed that employees are obviously not able to develop integrity themselves. As with the notion that is repeatedly expressed in management literature, the attempt at „leading the staff to happiness“ seeks to co-opt employees in their personal value references, without seeing a transgression of limits. But this eliminates a separation that is often important to the staff: the separation of a limited inclusion of the person through the instrumental use of his labour, which leaves room for other values and moral attitudes.

(3) With the topic of integrity, the preventive measures once more focus on educating employees. Here too, with simultaneous thematization of culture, priority is again given to behavioral prevention – and not situational prevention. The idea is that if we make the staff morally perfect, we will master the deviations. The rather disappointing experiences of the Church, socialism and humanism are persistently ignored. The constellations at the companies themselves, such as the insider-dominated career systems, the endless working hours of the executives, the output-oriented performance indicators, etc., which are more often the reason for deviations from the rules, are therefore largely off the radar screen.

(4) Last but not least, anyone who works for companies, hospitals, universities, etc., knows that integrity is a scarce resource, because organizations are often unable to use them at all. Rather, they are constantly working to ensure the conformity of their staff with changing goals, values and standards, because even the social moral standards and laws change with the zeitgeist. To deal with this, adaptability and opportunism are an important resource. Morality is fickle, integrity is not. And which moral standards should be applied? Business models of companies that fully comply with the sometimes contradictory, culturally diverse and inconsistent social moral standards will barely exist. So, as an honest employee, can one still work for VW, Audi and Co., which keeps failing to do enough to prevent environmental pollution? Can we work for chocolate, tobacco or leather producers if we know that child labor is still at stake? Taking integrity seriously would lead to moral stumbling blocks that no company or organization can use.

Rather Compliance?

Source: Compliance CC BY-SA 3.0 Nick Youngson

Nevertheless, the orientation to social norms and laws is important. The more they are cultivated by the regulating democratic state with its regulations and through the long-term observation by civil society actors, in the calculus of the economy, all the better. No one could want the moralizing company. Who wants, for example, companies to choose their employees on the basis of the currently prevailing rules of social respect or disrespect, such as stop hiring smokers, drivers of cars with serious emission of exhausts, bad fathers, etc.? Maybe companies should stick to compliance more closely, gear them to prevention, and not burn their fingers on „good morals.“ The fast exchange of the newly hired, ambitious board member responsible for Integrity and Law at Volkswagen indicates for many observers as well that integrity and transparency was not really wanted to prevail.

 

Sources

Markus Pohlmann, Volker Helbig, Stefan Bär (2017): Ein neuer Geist des Kapitalismus? Selbstoptimierung und Burnout in den Wirtschaftsmedien, Österreichische Zeitschrift für Soziologie, Vol. 42, No. 1: 21-44.

Markus Pohlmann (2008): Management und Moral, in: Tobias Blank et al. (eds.): Integrierte Soziologie – Perspektiven zwischen Ökonomie und Soziologie, Praxis und Wissenschaft, München, Mering: Rainer Hampp Verlag.

Paine, L. S. (1994): „Managing for Organizational Integrity.“ Harvard Business Review 72, no. 2 (March–April 1994): 106–117.