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Ethics & CSR

Project Managers are often charged with making decisions which have a profound impact not only on the organizations which engage them to manage projects, but on the communities around them. Project managers who work for organizations which have mature CSR policies can be guided by the ethics policies of their profession and by the organization's CSR policies, but what happens when we find ourselves in a situation where the organization performing the project has no CSR policies in place, or the policy in place is not supported by senior management in the organization? Project managers can find themselves in a very difficult situation. Do I meet my obligations to my customer/client/employer by executing the project as directed? How do I reconcile my duty to my client with my obligation to the community? These questions will cause the project manager a great deal of discomfort and might lead to consequences which will permanently damage your career, or worse.

Let me just say that I realize the officers of any organization are the folks who are ultimately responsible for ensuring the project manager of any project their organization undertakes is not put in a situation where they must reconcile their responsibility to the organization with responsibility to the community. The problem is that these situations are seldom black and white so it is difficult for someone to spot the conflict. Officers of a company can put project managers in conflict situations without being aware of the conflict, then it is up to the project manager to resolve the conflict, or at least alert senior management to the conflict. Project managers must first fully understand all the different policies, rules, regulations, standards, guidelines, and social issues which may impact their project.

Decisions on ethics should always be based on facts and not feelings or prejudices. This requires the project manager to look beyond the confines of the project to gather necessary facts. I would advise any project manager to acquaint themselves with the PMI® Code of Ethics and Professional Conduct before determining what ethics the specific project demands. This code provides general guidelines for ethical project management behaviour but does not provide industry or project specific guidance. The project manager should analyze the project and environment to determine further guidelines.

The first step is to acquaint ourselves with the organization's CSR policies, standards, and guidelines, when we are fortunate enough to have access to them. It's not enough to simply read them over and then put them in the bottom drawer of our desk, we have to understand how they affect the project we're managing. Analyze the policies against the requirements of the project. How will the policies effect how we perform the work? What safety measures do they call for? How are we being directed to identify and engage external stakeholders? Analyze your project to determine what effect the CSR policies, rules, and guidelines would have on the work. Constraints should be captured in the project's Charter and any deliverables should be captured in the Business Case for the project. Let's take the case of a company performing work in the gas & oil fields where the policy prohibits any lost time accidents. You may not know how this policy will impact on the work until all the work has been broken down and individual tasks identified, but capturing this constraint in the Project Charter will keep focus on safety as work is broken down and may influence your choice of approaches for the work. Deliverables will have a cost associated with them which must be accounted for. CSR policies may also produce project milestones such as an inspection, or a town hall meeting to review project progress. Identify these in your Project Charter also.

Now that you've ensured compliance with your organization's CSR policies it's time to check the work the project calls for against municipal, state or provincial, and federal codes, by-laws, and regulations. There may also be professional association guidelines that must be considered. These may also produce constraints, deliverables, and milestones. For example, if the wiring of a new building must be inspected by a municipal inspector, that inspection should be called out in your Project Charter. You won't want to specify every item covered by such a regulation but ones that feature prominently in your project should be covered in your charter.

Non-governmental agencies that represent community groups that would be affected by the project should be identified. These groups may already have announced their interest in your project through attendance at public discussions of your project. The group that handles media relations may already be aware of interested groups. Just because a group expresses an interest in your project, or a claim to be affected by it does not necessarily mean that you should consider them a stakeholder for your project. On the other hand if the group in question is recognized by your organization as a legitimate stakeholder, or by the relevant government as a legitimate stakeholder, you should be guided by them. Once you have identified these stakeholders you need to determine the way in which you will engage them. Engagement should include meetings with the groups, or their representatives at which you gather their requirements. Ensure that you clearly understand any expectations they have of your project. Look for conflicting expectations where there is more than one group involved. More than one project has run into trouble because of different stakeholder groups with conflicting goals.

A recent example was a Canadian mining company doing business in South America. The company engaged the local community in the project and were sure the locals were on board, mainly due to the jobs on offer and the project's ability to stimulate the local economy. It turned out that a neighbouring village had quite a different point of view. They were opposed to the project due to their perception of the negative impact the project would have on their community. This community demonstrated against the project, the 2 communities clashed resulting in injuries and the resultant chaos was blamed on the mining company. Ensure all the interested parties are engaged, seek out conflicts before hand, and resolve them.

Now that you have a thorough understanding of the obligations your project has to the funding organization, governments, and external stakeholders you can examine them for any conflicts. In the absence of any CSR policy from your organization, this job becomes easier as there should be no reconciliation necessary between the external stakeholders (providing you have already taken care of this step). Capturing the constraints, deliverables, and milestones that the external stakeholder requirements impose on the project in the Project Charter and reviewing the charter with your sponsors is the next step. You should strive to forecast the effects of constraints, deliverables, and milestones as accurately as possible and in monetary terms where possible. Deliverables and the costs associated with them also belong in the business case. Approval of the charter and the business case means you have a green light to proceed with a project whose plans will satisfy all the stakeholders you have identified.

Your project sponsors may balk at the additional requirements and expense if the organization has no CSR policy, or the policy is not well supported. The push back may be due to a belief that the CSR policy can be followed without implementing the additional requirements, or by altering the requirements so that they become less expensive. You owe it to your sponsor to thoroughly investigate any suggestions they may have that reduce costs. It may be that their alternative solution is one you overlooked and just as effective as yours in delivering the goals and objectives of external stakeholders. You may also receive the push back in the form of a flat "no" to your plans. If you find the alternative solution ineffective, or the sponsor refuses to approve your plans, you have a dilemma.

Now you must decide whether to accept the sponsor's approach to CSR or not. The choice will always be a difficult one but remember this, there will always be other projects to manage and walking away from the project that you believe is unethical will ultimately be easier to live with than your nagging conscience. You may also be avoiding legal repercussions that would interfere with your career more than losing your current position would. Try not to leave your employer/client/customer under any worse circumstances than necessary. Remember that they are just as convinced that their position is morally correct so don't make this personal. State the reasons you believe doing the project the way you propose is the only approach that you are comfortable with. Make sure that all project artefacts are available to the next project manager. Leave the door open for a return, if the sponsor (or their boss) should have a change of heart.

Behaving ethically can be difficult and painful at times, but can also be rewarding. Take the building of the Sampoong Department Store in Seoul, South Korea, for example. In 1987 the Sampoong Group hired the Woosung Construction Company to build a 4 story office building in Seoul. Woosung constructed the foundation at which point the customer (Sampoong Group) approached them with a change request: they wanted to use the building as a department store. This change required the elimination of structurally important columns to accommodate escalators in the center of the store. Woosung judged the elimination of these support columns to be a violation of their quality standards. In other words, accommodating this customer change was something that violated their ethics. The Sampoong Group fired Woosung and completed the building themselves, finishing in 1989. In 1995 the building collapsed killing 501 people and injuring 937. Of course, Woosung (and presumably, that project manager) were right in their decision. Woosung is still completing projects successfully today. The chairman of Sampoong Group's board was tried and convicted of criminal negligence and received a 10.5 year sentence. The Sampoong Group was forced to pay close to $350M USD in damages. Their assets were subsequently purchased and they no longer exist as a corporate entity.

The Sampoong Department Store collapse is an extreme example of ethical and unethical behaviour. I have simplified the facts here and defined the players in black and white terms. The case was much more complex, involving bribery, addition of a 5th floor, and a blatant lack of concern for the safety. The point I'm trying to make here is that when you are on solid ground (and Woosung was) you must behave ethically, even if this means losing a customer, or a job. Just remember that often the short term pain will be more than offset by long term gain. The memory of the Sampoong Department Store collapse is alive and well today through television programs like Destroyed in Seconds. As long as people remember that event, they will also remember Woosung's ethical behaviour.

The example I've given here is extreme and immediately relevant to the construction industry but other industries will present project managers with ethical questions that can be just as challenging. The oil & gas discovery industry is one example: the Gulf Oil Spill did not rival the Sampoong Department Store collapse in terms of loss of life, but dwarfs it in financial costs: $20B USD vs. $350M USD. The pharmaceutical industry can also provide ethical questions that have a profound effect. Older project managers will recall the Thalidomide disaster. We don't think of the software industry as holding the power of life or death, but think of the importance of 911. With the advent of digital switching, features such as 911 are managed by software. Software also has applications in the medical field so managers of software development projects cannot escape facing ethical issues. Whether the project holds the potential of causing the death of hundreds of people or will simply affect the way a customer makes a purchase from a web site, corporate social responsibilities should be considered and it is the project manager's job to ensure they are.