The members of the Institute of Management Accountants are committed to practicing their profession by the highest ethical standard. They are guided by the “Resolution of Ethical Conflict” policy which suggests a set, three step course of action in order to assist their professionals in identifying and resolving ethical conflict. This course of action, although prescribed to be secondary to the policies and procedures of the organization with which the professional is employed, does not appear to be arranged appropriately according to the communications perspective, which says whatever information or message is presented first is the most outstanding and therefore the most significant. I will discuss the purpose of each of these courses of action, as well as offer suggestions for ways in which they may be improved, and finally I will discuss how they could be better-arranged so to be more effective.
The first course of action asks its members to first present the issue in question to the members direct superior, with the exception of ethical conflict that involves ones superior. When this is the case, and the superior is involved, or suspected to be involved, the “Resolution of Ethical Conflict” suggests that the matter be offered up the ladder, advancing one rung at a time until an acceptable solution is able to be reached. When the immediate manager is not involved, the “Resolution of Ethical Conflict” policy states that the immediate manager be made aware of all attempts to communicate to authorities above his or her station. This first course of action also asserts that all communication of the issue be limited to authorities within the organization with the exception of behavior or dealings that are in blatant opposition to the law.
This first course of action suggests that no problem be addressed or handled independently. It does not ask that the employee first analyze the situation to determine its worth, or ask that its members attempt to examine the issue objectively to first clarify any other elements involved in the conflict before it is brought to a higher level. Issues must be brought immediately to a supervisor. Its language advises against seeking resolution through the use of outside sources or authorities. It even lacks any consideration to the person involved in initiating the complaint. This language advises against members communicating objections openly, but rather, suggests the members, when faced with potential ethical conflict, present their issue formally as ethical conflicts whether they have been decidedly so or not. I suspect that a policy of this nature might hamper ones desire or willingness to protest and make a formal complaint about the behavior of a colleague. As the initial and most dominant course of action, members may feel secondary or inferior to the company’s agenda and are therefore less willing or likely to comply with such policies out of fear that they may wrongly accuse a colleague or superior and cause undue damage to that person.
The second course of action given by the “Standards of Ethical Professional Practice” policy for resolving ethical conflict directs its members to the Institute of Management Accountants Ethics Counselor. Here, they are to “clarify relevant ethical issues…to obtain a better understanding of possible courses of action” (Institute of Management Accountants Inc., 1997-2008). This principle would then guide its members in finding the best route for resolution in the event of a suspected ethical conflict. It also provides for them confidentiality and the security of initiating conversation about the possibility of an existing issue without the fear of repercussions.
Determining whether a conflict does, in fact, exist and determining what the best course of action is in dealing with a conflict seems as if it would be better suited as the first course of action, and not the second. Before consuming a superior’s time with suspicions of or alleged unethical behavior having a professional and confidential resource to counsel the situation seems to be the more effective way to begin managing a conflict.
The third course of action says to, “consult your own attorney as to legal obligations and rights concerning the ethical conflict” (Institute of Management Accountants Inc., 1997-2008). The purpose of this is to give the member the opportunity to seek out legal counsel on their own in order to guide their effort beyond the initial report and ethics counseling. Knowing what their obligation is to the matter after reporting it is important, I imagine, for the company because I suspect legal counsel would likely advise the member to keep the matter private and recommend against any disclosure of information related to the incident or matter of ethical question. This would assist the company in dealing with the issue without additional and unneeded attention to the problem. This protects the company and can offer protection to the member that is reporting the conflict, but only after becoming involved.
This third course of action seems to be better-suited for a first course of action rather than the third when considering the member responsible for reporting the potential problem. An individual should always be advised to know his or her rights and responsibilities in a matter before engaging in any issue. This course should advisably be a natural step rather than directed course of action. A member should never be forced into dealing with a conflict without knowing first what it entails. The purpose of a personal lawyer in this situation would allow a member to remove him or herself and allow avoidance of or for a withdrawal from the conflict if that were indeed the preferred course of action for the member. This, I suspect, is why it is not the first course of action given by the Institute of Management Accountants, but the final one. A company or professional industry, for the sake of the company or industry, does not want behavior of questionable ethical standard to go unreported. This may jeopardize the reputation of accounting professionals as a whole. For the greater good, it is suggested that all suspicion of unethical conflict be reported first, and then a true course of action is offered second.
With all of this in mind, the second course of action should be placed at the top of the list because speaking with professional and confidential counsel, to determine first whether reporting the behavior is relevant at all, clarifies the initial problem or question. It can facilitate a separation of the persons or persons involved and keep the issue objective. The “Statement f Ethical Professional Practice” says itself, “you may encounter problems identifying unethical behavior” (Institute of Management Accountants Inc., 1997-2008). This suggests to me that the possibility of uncertainty with regard to ethical practice is high and questions are likely to exist with regard to ethics. I would personally prefer to inquire about the nature of a matter before submitting a formal statement about a colleague’s behavior to my superior. Based on the communications perspective principle, and to better-encourage a member to at least inquire about an issue when uncertain, and report it once clarity is reached, moving the second course of action to the top of the list may encourage members to offer more potential issues to the counselor versus less where larger problems could go unnoticed and potentially cause more damage.
Simply put, the first course of action ignores the needs of the employee involved in making such a complaint or accusation and puts the company and industry first by demanding to take the matter out of the hands of the employee and place them directly in the hands of someone of higher authority. Although this may benefit accounting professionals, as a whole, it also has the potential to deter members from initiating a report in the first place which can be damaging to that individual, and accounting professionals alike, or it may cause issues with employees bringing petty issues to management and therefore wasting time because they were not advised to first break the problem down to its fundamentals.
Human beings tend to be a bit apprehensive when it comes to conflict. We also tend to let our emotions and our own thoughts get in the way of objectively analyzing a situation to find the true value of conflicts, and as Cahn and Abigail (2007) state in Managing Conflict Through Communication, “our first response in a conflict situation is not necessarily the best one” (p. 73). The three courses of action do seek to facilitate the resolution of ethical conflict but it does not advise its members to manage the conflict before it is presented to a higher authority figure. In light of this, a company and/or professional industry may find it more effective to allow its members to gain clarity over a situation before demanding that they report to a superior.
References
Cahn, D., Abigail, R. (2007). Managing conflict through communication. Pearson Education, Inc.
Institute of Management Accountants Inc. (1997-2008). Statement of ethical professional practice. The association for accountants and financial professionals in business, Retrieved from http://classroom.ecollege.com/re/DotNextLaunch.asp?courseid=4139043
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