The Prime Directive For All Organizations Is “Protect & Enrich The Organization”

When Executives Go To Work They Leave Their Ethics At Home

By David Grace (

Humans Are Instinctively Driven to Anthropomorphize Non-human Things

Humans want to ascribe human personalities to buildings, mountains, storms, machines, countries (Uncle Sam, Mother Russia) even to the natural world itself (Mother Nature).

Knowing this, clever marketers create and promote fantasy beings to pretend to be their organizations— the big-headed “Jack” as the Owner of Jack In The Box restaurants.

Sometimes the flacks pick an actor to be the human face of the company e.g. the immensely likable Dennis Haysbert for Allstate Insurance.

Sometimes the human chosen to embody the organization is the CEO, e.g. Tim Cook for Apple and the Pope for the Catholic church.

An Organization’s Ethics Are Not Those Of It’s Executives

Why are people surprised when organizations do the wrong thing?

Because people assume that the men and women running the organization are decent people with good ethical values which values will be reflected in how they run the organization.

People fall for the scam that the organization actually operates according to the ethics, morals and values of the figurehead chosen to represent it.

It does not.

The moral values that humans actually apply to their on-the-job executive decisions are completely different from the ones they follow in their personal lives.

The overriding moral rule governing an organization’s business decisions has nothing to do with honesty, fairness, or doing right by customers, employees or the public.

At the office, the overriding moral rule in making business decisions that trumps any other moral consideration is: “Do Everything Possible To Protect & Enrich The Organization.”

There is no nice-guy Jack running Jack In The Box. Apple Corporation does not uniformly act in conformance with Tim Cook’s personal ethical code. The Catholic Church has spectacularly failed to follow the personal moral values of its Popes and bishops.

Organizations Strip Away Individual Values

As people aggregate into larger and larger groups the organization chips away their individual ethics and morals like sharp-sided rocks thrown into a tumbling bin. The employees that don’t smooth out are removed. Whistle blowers get fired.

People Are In An Organization To Do A Job, Not To Do Good

People are employed by an organization to do a job that has nothing to do with their personal ethics, religion or moral values. Executives believe that it is their job to make decisions that protect and enrich the organization in any way possible no matter how unethical and wrong their own personal morality may view those decisions.

Their personal ethics and the company’s ethics are two different things.

I Was Just Following Orders

Why do you think, time after time, the ordinary soldiers at the Nazi death camps shoved the Jews into the gas chambers with the bland excuse: “I was only following orders” which is the same thing as saying, “I was only doing my job.”

Executives believe that doing their best to benefit the organization is their job and that it always takes precedence over following their personal ethical code. Any executives who don’t believe that are soon looking for another job.

Proven True Again & Again

You disagree?

I cite:

  • Penn State covering up for Jerry Sandusky
  • USA Gymnastics covering up for Larry Nassar
  • USC covering up for Dr. George Tyndall
  • Wells Fargo choosing to ignore its fake accounts operation
  • PG & E covering up its fraudulent gas pipeline inspections
  • Merck covering up Vioxx side effects
  • VW cheating on emissions tests
  • The Catholic Church covering up pedophile priests.

The list goes on and on.

An Example How Human Ethics Are Scraped From Group Decisions

Here’s an example of how this works from my column Myths That Are Destroying America. Myth #4: Public Corporations Have Ethical Standards Just Like People Do

You’re the CEO of MegaPharma, Inc. a $50 Billion/year company.

You learn that your new “big” drug, Maximil, that’s in its final stages of human testing, has been discovered to cause total kidney failure in nine percent of the patients who take it for more than nine months.

You have halted the clinical trials and you have not submitted this new data to the FDA. You realize that you will not be able to get the Maximil past the FDA.

You’ve also learned that Maximil has an unexpected off-label use — it’s effective at treating malaria. The malaria treatment period is from three to twelve months and the kidney failure rate is estimated to fall to four percent over that a three-month time period, but, of course you haven’t tested the drug on the population that would be taking it for malaria. Africans might be more or less susceptible to kidney damage than the primarily white U.S. test group.

Your staff tells you that you can get the drug approved for sale in Africa based on the initial human tests already submitted to the FDA, none of which discovered the kidney failure problem. African sales of Maximil are projected to exceed $2 Billion per year.

Now, you as a human feel that it would be wrong to go ahead and sell a drug that’s likely going to kill four percent or more of the people who take it, but that’s not your call.

When the board meets on the 38th floor of the company’s headquarters in New York, you tell them about the problem with Maximil and you also tell them that you’ve found a way to gross $2 Billion per year by selling it in Africa as an anti-malaria drug, provided that you either conceal the kidney failure information or you bury it so deeply in so much gobbledygook language that most doctors never see it.

As you look down that big, oak table you think about telling them, “But it would be wrong to sell a drug that’s likely going to kill 4% of the people who take it. I recommend that we should cut our losses and move on.

Then you consider who’s sitting at that table.

These people are not your high-school civics teacher and kindly old Doc Johnson who used to give you your flu shots. They’re all heavy hitters. Each of them is on the board of directors of at least three other Fortune 500 companies — Ford, Walmart, Allstate, Procter & Gamble.

What do you think their reaction will be if you say, “Guys, we can make $2 Billion a year for the next five to ten years, almost all of it pure profit because it costs us next to nothing to actually make and ship the pills, but we shouldn’t do that because it would be morally wrong. We should just cancel Maximil, eat the half billion dollars we’ve already spent on it and move on”?

One of them might mumble something like, “Yes, Bill, we need to consider all these issues, but this kidney problem could be a statistical anomaly. After all, the trials were shut down before they were completed. And, as you said, that 9% figure was only after nine months of treatment. The 4% figure is only a projection, a guess, about what would happen for a three-month use. We don’t know for sure that it will be that high. It could be much less than that or even zero.”

Then another board member will add, “We’ve spent half a billion dollars developing Maximil and if we don’t pursue the alternative market that’s a dead loss. I wish we had the luxury of just writing it off but we have an obligation to our shareholders. I don’t think we can just throw away half billion dollars in costs and two billion dollars a year in revenue because of an untested theory that some tiny percentage of patients might have an adverse reaction.”

Then the board will look expectantly at you. You will have two choices.

You can say, “No, we shouldn’t ship Maximil, but if we do decide to go ahead we’ll need to make a full and prominent disclosure of the preliminary results from the uncompleted test to the licensing authorities and include prominent warnings to all potential patients, assuming that the authorities will allow its sale at all” or you can say, “I’ll have my staff begin working on the regulatory approvals for sales in the African market.”

Here’s what will happen: MegaPharma will ship the drug based on the trials that didn’t discover the kidney problem and the package insert will have a statement in fine print: “May cause kidney problems in certain patients. Notify your physician if you experience adverse kidney issues.”

You think I’m exaggerating? Take a look at Merck and its drug Vioxx.

The Rise And Fall of Vioxx

Vioxx (Rofecoxib) on Wikipedia

Organizations Are Not Human & They Have No Human Morality Or Values

Though run by humans, organizations are not human and they do not have human values or morals. Their managers believe that they have only one fundamental, moral obligation: To do whatever will help the organization survive and prosper.

Never expect any large organization to voluntarily do the right thing instead of the profitable thing or the self-protective thing. They aren’t in the right-thing business.

Directly or indirectly, large organizations are in the money and survival business and it’s every executive’s job, above all else, to do whatever will protect and enrich the company irrespective of their own personal moral code.

To quote Bob Sugar from the movie Jerry McGuire, “It’s not ‘show friends.’ It’s ‘show business.’”

Anyone who expects anything different from large organizations isn’t paying attention.

— David Grace (

To see a searchable list of all David Grace’s columns in chronological order, CLICK HERE

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