The implication of ethics in project management

Written by Vinay Kumar Meena

Abstract

Project management is an important discipline that plays a crucial role in the success of organizations. However, ethical considerations are often overlooked in the pursuit of achieving project objectives. This abstract explores the implications of ethics in project management and provides an overview of the ethical practices that are currently going on in the industry. The Project Management Institute (PMI) emphasizes the importance of ethical conduct in project management and provides guidelines for ethical behaviour. The PMI Code of Ethics and Professional Conduct outlines four key values that should be upheld by project managers: responsibility, respect, fairness, and honesty. The code also provides specific guidance on issues such as conflicts of interest, confidentiality, and stakeholder engagement. Despite these guidelines, ethical dilemmas are common in project management. For example, project managers may face pressure to cut corners or meet unrealistic deadlines, which can lead to ethical compromises. Other ethical dilemmas may arise when dealing with stakeholders who have conflicting interests or when making decisions that have potential negative impacts on the environment or society. To address these challenges, project managers must be equipped with the necessary knowledge and skills to identify and address ethical issues. This may involve creating a culture of ethics within the project team, engaging in ongoing ethical training, and seeking out guidance from relevant experts. This article will provide a holistic view of ethics in Project management, common ethical dilemmas in project management (proposed by PMI), and a decision-making framework to overcome these dilemmas.

Introduction

Figure 1: Core ethical characterctics,

Project management has been acknowledged as vital knowledge field of study considering the huge socio-economic impact of projects on our lives and society. However, Ethics is not a newly developed concept, it has evolved with time. Ethics guide us in the way of “how to do it best.” The decisions and actions of project managers and their teams can have significant impacts on stakeholders, the organization, and society. Core ethical values like honesty, fairness, transparency, and accountability are essential for ensuring that projects are delivered responsibly and sustainably.

What is ethics?

Some definitions of ethics to understand the essence of the word 'Ethics'.

• “Ethics refers to a systematic study of the norms and values that guide how humans should live their lives.” -by Joseph Desjardins

• “Ethics is the activity of understanding moral values, resolving moral issues, and justifying moral judgments. It is also the discipline or area of study resulting from the activity.” -by Roland Schinzinger and Mike W. Martin

• “Ethics is a branch of philosophy dealing with values that related to the nature of human conduct and values associated with that conduct.” -by David P. Twoney and Marianne M. Jennings

Each of the definitions mentioned above was created by considering particular ethical characteristics Figure 1. These characteristics make a set of values that could ensure that decisions have been taken with high standards. Throughout the Project, Project managers have to take many decisions, some are small and seldom noticed, and others obtrude. These decisions influence involved people, resources, and the environment. Moreover, sometimes these elements can create conflicts, posing difficulties and potential risks in the project. Ethical values are essential for learning professionalism and facilitating the process of management and development in project management.

Ethics in project management?

During the whole cycle of a project, project managers are put in difficult situations that can cause moral conundrums. They involve interacting with numerous stakeholders, taking on the responsibility without formal authority, and being under time constraints to produce outcomes. Project managers frequently work in various situations, and their actions might have long-term effects. In project teams, temporary relationships can make certain team members less concerned with the results of their actions. This dynamic realm makes ethics a difficult topic to address. Ethics in project management refers to the moral principles and standards that guide the behaviour and decision-making of project managers and their teams. Ethics plays an important role in project management because it ensures that the project is executed in an honest, transparent, and responsible manner that upholds the values of society, customers, and stakeholders. Ethics in project management refers to the moral principles and standards that guide the behaviour and decision-making of project managers and their teams.

Key factors affecting any project

The project's notion of ethics can be impacted by a variety of factors. Humans are impacted by circumstances that cross over into the work and non-work environments, which may alter how ethics are perceived and defined. In his book Ethics and Project Management, Ralph L. Kliem, categorized these factors into nine categories.

a) Peers: Peer pressure often comes either from the formal group or informal group of people, who has any relationship with the ongoing project.

b) Culture: project managers and team members must understand the cultural differences within their teams and organizations, communicate effectively, create an environment that values ethical behaviour, and help to deal with ethical dilemmas.

c) Power: Lord Action “Absolute power corrupts absolutely.” This factor has a strong influence on the means and outcomes of the project.

d) Competition: When competition is improperly handled, projects may experience dysfunctional decision-making and behaviour.

e) Reward: Decision-making and ethical behaviour are significantly influenced by positive and negative rewards. The team's propensity to adhere to excellent ethical behaviours will grow if the project manager rewards good ethical behaviour.

f) Experience: Experience performing an ethical transgression can be quite valuable, especially if it went undetected or was encouraged and involved no punishment.

g) Role expectations: Everyone has a role in a project. Each role is accompanied by expectations that may be set by other stakeholders or organizations. Despite their origins, expectations can have a significant impact on what a person should or should not do.

h) Structure: Since hierarchy will always exist in organizational management, it is crucial to include ethics in these structures by allowing for the evaluation of actions.

i) Management style: An organization's management style affects formal paperwork, business practices, and ethical decision-making and behavior throughout. Project managers and team dynamics can also have an impact on moral judgments, with groupthink occasionally resulting in unethical behavior.

Key ethical values in project management

ethical values are essential to the success of any project. By upholding ethical values, project managers can build trust, maintain positive relationships with stakeholders, and achieve project goals in a responsible and sustainable way. Here are some of the key ethical values in project management:

a) Honesty and transparency: Project managers should be truthful and open about project status, risks, and challenges. They should not deceive or mislead stakeholders in any way.

b) Respect for stakeholders : Project managers should respect the needs and interests of stakeholders, including customers, employees, vendors, and the community. They should avoid conflicts of interest and ensure that all stakeholders are treated fairly.

c) Confidentiality: Project managers should protect sensitive information and not disclose it to unauthorized parties. They should also ensure that all team members understand the importance of confidentiality.

d) Compliance with laws and regulations : Project managers should ensure that the project complies with all applicable laws, regulations, and industry standards. They should also avoid engaging in any illegal or unethical activities.

e) Responsibility and accountability: Project managers should take responsibility for the project's outcomes and be accountable for their actions. They should also ensure that team members are accountable for their work and behaviour.

f) Social responsibility: Project managers should be aware of the impact that the project may have on the environment and society. They should take steps to minimize negative impacts and maximize positive ones.

g) Professionalism: Project managers should always behave in a professional manner. They should demonstrate competence, respect, and integrity in their interactions with team members and stakeholders.

Benefits of ethics in project management

Ethics is an important aspect of project management as it lays down the foundation for good governance and helps to build trust among stakeholders. Also, it is crucial for ensuring that projects are conducted professionally, sustainably, and in the best interests of all stakeholders. Ethical practices help to build trust and confidence, mitigate risks, and uphold social responsibility. Below are some of the key reasons why ethics are important in project management:

a) Upholding professional standards: Project managers are expected to uphold the highest standards of professionalism while delivering a project. This means conducting oneself ethically and adhering to ethical codes of conduct set by professional bodies.

b) Stakeholder confidence: Ethical practices help to build trust and confidence among stakeholders, including project sponsors, team members, customers, and end-users. A project manager who conducts themselves ethically is more likely to be trusted and respected, which can lead to greater project success.

c) Risk management: Unethical behaviour can expose a project to a range of risks, including legal action, financial loss, and reputational damage. By adhering to ethical principles, project managers can minimize the risk of these negative outcomes.

d) Sustainable outcomes: Ethics also help to ensure that project outcomes are sustainable and that they benefit all stakeholders, including those who may be affected by the project but are not direct beneficiaries.

e) Corporate social responsibility : Ethical behaviour in project management helps organizations to fulfil their social responsibility by ensuring that projects are undertaken with consideration for their impact on the environment and society.

Ethical dilemmas in project management

Figure 2: Common problems with ethics,

Ethical Dilemmas in project management can be complex and challenging. Although ethical dilemmas can be diverse, they can generally be categorized into two main groups: hard and soft ethics issues. Hard ethical issues (fig 1) are usually more apparent and can result in legal and financial consequences when violated. On the other hand, soft ethical issues can also lead to legal and financial consequences, but they are often difficult to anticipate and address proactively. These issues can arise when project managers are faced with difficult choices that challenge their moral principles and values. Project managers must be aware of these dilemmas and make ethical decisions that prioritize the interests of stakeholders, maintain the integrity of the project, and uphold moral principles and values. Here are some major ethical dilemmas that project managers may encounter  :

a) Conflicts of interest: Project managers may face situations where their personal interests or relationships conflict with the interests of the project or stakeholders. For example, a project manager may have a financial interest in a vendor or supplier that they select for the project, creating a conflict of interest.

b) Stakeholder interests : Project managers must balance the interests of various stakeholders, including customers, team members, and shareholders. This can be difficult when stakeholders have competing interests, making it challenging to satisfy everyone.

c) Resource allocation: Project managers may need to make decisions about how to allocate limited resources, such as time, money, and personnel. This can be challenging when resources are scarce or when stakeholders have conflicting demands.

d) Ethical sourcing: Project managers must ensure that all vendors and suppliers they work with are ethically and socially responsible. This can be challenging when suppliers are located in countries with weak labour laws or have a history of unethical practices.

e) Project scope: Project managers may face pressure to deliver projects on time and within budget, which can lead to scope creep or cutting corners. This can compromise the quality of the project and lead to ethical issues.

f) Communication: Project managers must communicate effectively with stakeholders, team members, and customers. This can be challenging when communication is ambiguous or when information is withheld, leading to mistrust and ethical concerns.

g) Confidentiality: Project managers must protect confidential information, such as trade secrets and personal data. This can be challenging when stakeholders request access to sensitive information or when team members share information without authorization.

Consequence of ethical Failure

a) Tarnished reputation: Some stakeholders may have low regard for the project manager, the project, or the company if ethical violations are not addressed. People will then lose confidence in managers' ability to deliver what was promised, making it difficult for managers to secure the support needed to finish the project.

b) Tarnished credibility: Credibility is crucial, and this goes beyond the project managers. As the project's representatives, team members must keep their credibility with other stakeholders. Project management with little to no trust will inevitably produce subpar results.

c) Hindered careers: if an ethical situation or transgression goes unaddressed people may perceive project managers as weak, lacking ethical character, or simply being negligent about something that should have been halted.

d) Legal consequences: If the project manager, as a participant or a witness, is aware of an ethical circumstance or transgression and does nothing to correct it, he or she may face legal consequences. Allowing ethical situations or transgressions is, in many ways, a failure in due diligence, due care, and, most importantly, leadership; project managers are accountable for the general performance of the team.

Ethical decision-making framework

Figure 3: Decision-making hierarchy,

A project manager's sensitivity to ethical issues and a precise approach to examining the ethical aspects are necessary for making morally sound decisions. Having a method of making ethical decisions is crucial in the age of globalization, where cultures, values, and beliefs are perpetually clashing. The framework should direct our analysis of the issue, inspire us to seek new information and viewpoints, and assist us in reaching morally sound decisions. Regular use of the framework results in habit formation, which promotes moral behaviour and moral leadership.

The framework for ethical decision-making should broadly follow the steps outlined below:

a. Identify the Ethical Issue

b. Analyse the facts

c. Evaluate Alternative Options

d. Make a Decision

e. Implementation

f. Reflect on the Outcome

While making decisions, the decision-making hierarchy Figure 3 can help guide individuals and organizations through the complex process of making ethical decisions by providing a step-by-step process that can be used to evaluate and weigh different ethical considerations. This hierarchy can help ensure that important ethical factors are considered and evaluated and that the decision-making process is transparent and consistent.

To show the application this decision making the volkswagon scandel case is considered

Identify the Ethical Issue: In this case, Volkswagen deliberately installed a faulty device in their diesel cars to deceive the pollution test in laboratory conditions. The senior managers were well aware of this device even after that they rewarded the people involved for their work. This case involved the ethical issues of No compliance with their promise and lack of responsibility and accountability for their work.

Analyse the facts: In 2015, Volkswagen was caught cheating on emissions tests in their diesel vehicles. The scandal involved the use of illegal software that could detect when the car was being tested under laboratory conditions and reduce emissions to meet legal standards but would produce higher emissions in normal driving conditions. As a result, VW stocks lost 40% of their value in a few days. Also, faces some serious repercussions like dealing with several lawsuits and paying high penalties to the governments of different countries, its reputation was tarnished and to compensate the customer VW had to call all their vehicle back to the factory for correction.

Evaluate Alternative Options: The management board of VW took several measures to reconcile this matter apologizing to the customers, resettlement of lawsuit, started providing competitive warranties for their new vehicles and committing to producing environment-friendly vehicles.

Make a Decision: VW management board decided to fire the involved employees and managers, restructure the company and establish a lean organizational structure that allows for direct connection with senior management, resulting in fewer errors.

Implementation: Volkswagen agreed to settle its lawsuits with different countries based on their environmental laws and pay over $20 billion in settlements and fines in the US alone. VW recalled all the affected vehicles and offered buyback at no cost incurred upon customers. In order to improve its relations with stakeholders, VW also acknowledges the importance to increase the transparency and oversight of the organization, which also involved some cultural changes and decision-making behaviour of the company. Also, announced the plan to produce 80 models of electric cars by 2025 and spend $62 billion to advance battery technologies.

Reflect on the Outcome: Volkswagen acknowledged that a corporate culture that valued profits over moral conduct was to blame for the emissions scandal. Since then, the company has implemented cultural changes to encourage moral decision-making as well as openness and integrity across the board. As a result of the ethical reorganization, VW was able to recover from the crisis and expand sales in emerging nations, allowing it to enter a new market in those nations.

By following these ethical principles, project managers can build trust and credibility with stakeholders and help to ensure that projects are carried out in a responsible, sustainable, and ethical manner.

Conclusion

In summary, ethics is a critical component of project management that should be given serious consideration. By upholding ethical values and best practices, project managers can ensure that their projects are successful, sustainable, and socially responsible.

Annotated bibliography

• Ralph L. Kliem, Ethics and Project Management [2012] ©Published by Taylor & Francis Group: This book talked about Ethics which plays an important role in project management, but all too often, its importance is overlooked. This benign neglect can result in serious consequences for individuals and organizations.