Ethics can be defined as the beliefs, practices and actions that have developed over the course of a society’s or community’s history which express what is widely considered to be proper, principled and decent behavior or attributes. In a business context, ethics refers to the principled manner that a company or organization treats its: staff and employees, customers and clients, suppliers, communities in which the company is located or does business in, investors or owners, and last but not least, competitors. Accordingly, a company that practices good business ethics will most likely treat all relevant parties with respect and integrity.
In his November 5, 2013 article entitled “Bankers Awaken” for the Huffington Post, investment banker Tarun Sakhrani discusses the decision by investment bank Goldman Sachs to not only encourage but require that its junior analysts refrain from coming to work on the weekends, decrease the number of days they work late into the night, and take all their vacation days (Sakhrani, 2013). Sakhrani explains why seemingly non-newsworthy story is getting so much media attention. According to Sakhrani, while the “Monday to Friday, 9-5” work schedule might be common in other industries, it is almost unheard of in investment banking (Sakhrani, 2013). In Sakhrani’s experience while there are many reasons for this such as tradition, competition, and even the unambiguous manipulation of newer workers by veterans and management, he is not sure which, if any, of the explanations is the most accurate. The most important point, for Sakhrani is that junior analysts sacrifice enormous amounts of their non-work time to do work. More importantly, top management knows this and expects it. Naturally, this has led to a range of social problems for the junior analysts ranging from broken relationships to poor health. Accordingly, Goldman Sachs’ decision to change their policy is both ground-breaking, for an industry where it is a fundamentally accepted practice, and shocking, because it may potentially put Goldman Sachs at risk of losing their industry leading position.
In writing the article, Sakhrani takes an unambiguously critical view of the investment banking industry’s working practices. While he does not specifically mention it, Sakhrani suggests that simple forcing junior analysts to sacrifice their private lives and work long hours because that was as it was always done, or because of the unspoken threat that if you do not work the hours, someone else will as well as permanently take your position, is ethically questionable. This is more so because, management knows that more often than not working the extra hours does not provide the company with any significantly increased benefits. To be sure, if good business ethics is to treat your staff with respect and integrity, the tone of Sakhrani’s article is that the investment banking industry is without ethics, at least in terms of work-life balancing.
For a personal perspective, Sakhrani’s tone is correct. While it might be reasonable that junior analysts need to work overtime if there was pressing work to be done or if it would be beneficial in the experience and expertise that they could acquire, but as Sakhrani points out, doing it for now reason at all is ethically questionable. This is even more true wen management knows that putting the extra time in has the potential, if not in fact, adversely affect the lives of the young men and women just starting out.
Ethics, as mentioned, are an expression of what society has deemed proper and principled behavior. While there are no laws that require it, failure to do so can often lead to social consequences. For business, being ethical is extremely important because success is often derived from relations with people; either the people that choose to work for a company or the customers that buy its products or services. The investment banking industry has an ethical problem in how it manages the work-life balance of its young junior analysts. Goldman Sachs understood this and has made changes to resolve the problem. If other banks will follow Goldman’s lead it a question. Sakhrani, however, thinks that it will be a long time before others learn the lesson.
References
Sakhrani. T. (2013, Nov. 05). .Bankers awaken Retrieved from http://www.huffingtonpost.com/tarun-sakhrani/banker-awaken_b_4208723.html
