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The Ethical Challenges in Managing Projects

Ralph L. Kliem, PMP

Let’s face it. One of the hardest jobs in the world has to be that of a project manager, simply because it is unique. In an age of specialization you are likely to be surrounded by people with a narrow disciplinary focus while you must have a broader perspective. For many years, you may have been one of those individuals but now you are in a new role, someone who has to step outside his or her comfort zone. Now that you are working from a different position, not necessarily higher, you require taking a different perspective. That’s what makes you unique in one way. There are other unique circumstances, too, that can contribute to ethical situations and transgressions.

Unique Circumstances

You work with different stakeholders, that is, a person or organization that has an interest, direct or indirect, in the outcome of your project. You may deal with executives or managers from your organization or even those outside of it. You may deal with vendors or suppliers as well as people spanning a wide spectrum, from security to marketing to information systems and finance. This unique set of circumstances can cause ethical situations and transgressions to occur quickly easily. For example, some executives may be more powerful than the customer and, thereby, pressure the team or yourself to put the customer’s interests aside even though it is the customer who is paying for the project. Unique circumstances may encourage team members to get too close with suppliers, thereby weakening or destroying objectivity and independence, as well as reining the charge of conflict of interest when agreements are made with one vendor or another.

Lack of Authority. Chances are that you have responsibility without commensurate authority. Unless you find yourself in a “projectized” environment (meaning you have functional command and control over people – a rare circumstance – you are responsible for a work statement for which you have little or no control over the resources. This situation is often the case in a matrix environment, whereby the project manager relies on functional management and the sponsor to garner the support, financial or in kind, to help you complete a project. Such pressure can lead to actions, such as mischarging, in order to move the project along rather than to adhere to established policies and procedures by following labor charging practices or management’s direction.

Limited Time.Another unique characteristic of a project is the pressure to achieve results in a relatively short period of time. You and your team have to deliver a product or service in a prescribed time period. In the contemporary environment, that is not an easy task. In an age of faster, better, cheaper, especially in the hi-tech arena, delays can be costly. You have to be quick and accurate from technical, cost, and schedule perspectives. Any delay can have negative impacts for your project and your company. This places immense pressure on you and your team. Since you are likely not to have command and control over resources, the ground has potentially been laid to cut corners which, in turn, can cause ethical situations and ethical transgressions to occur. For example, you or your team may decide to reduce the quality via a quick fix even though everyone knows of the long term consequences to the public.

Short-Term Project, Long-Term Consequences. Still another unique position of the project manager is that though your project is short term many of your decisions can have long term consequences. Whatever you and your team decide today will likely have an impact on the project some time after delivering the product or service to the customer. A decision to change scope or content of the product or service, even if it goes under change control, will likely have an impact throughout the supply chain at one time or another. For example, developing new drugs are a prime example where, despite rigorous testing, without even realizing it, a decision can lead to harmful effects, such as birth deformities. This unique circumstance can lead to ethical situations and transgressions because the pressure is to deliver by a certain date and within a certain cost. Some project managers can become so focused that they make a decision to meet immediate needs only to discover later on, usually from the customer or product manager, the negative side effects of a decision made during a project.

Temporary Relationships. Temporary relationships are another unique circumstance of a project manager. By its very nature, a project is temporary and what comes with that are the relationships. Team members come together hopefully with a common purpose, and once achieved they go back to their organizations or on to another project. Relationships, albeit sometimes an exception, are temporary both during and after a project. Because of that very impermanence, some team members may either feel that the consequences of their actions don’t matter, or they may just not care. Consequently, they may say or do something that can be an ethical transgression. It is similar to someone doing something in another neighborhood and then returning to their own, confident that they do not need to face the consequences. Some project team members can have that attitude, particularly in a matrix environment, predicated on the rationale that they can return to their home organization or go work on another project.

Varying Environments. Another unique circumstance of the project manager is that they often work in different environments. Some project managers have experience in project management in both business and technical environments. Project management is one of those skills that lends itself to doing just that. The challenge is that what is permissible or acceptable in one environment, may not necessarily be so in another, even within the same organization. Variables such as tone at the top, managerial style, way of doing business, etc. can vary from one field to another. While this versatility enables you to adapt, you can sometimes misinterpret or miscalculate circumstances that can result in an inadvertent ethical transgression. An example may be managing a project outside the US and then managing one in the US. What is acceptable for doing business in one country may not necessarily be so in another. Laws and cultural behavior often conflict between two countries, leading to an ethical transgression in one but not in the other. The bottom line is that project managers find themselves in circumstances that can, even in the most subtle ways, cause ethical situations and transgressions to arise. The challenge is to be aware of those circumstances and to determine the most appropriate ways to deal with such occurrences.

Of course, the general business environment does not help matters either. Often there are circumstances beyond the control of project managers but which are not unique to the project environment. These include, but are not limited to, rapidly changing conditions related to the market; domestic and international laws and regulations; political conditions; exchange rates; technology; consumer behavior; capital availability; stock market performance; and general economic conditions, e.g., inflation or deflation. Such circumstances can lay the groundwork for ethical situations and transgressions. For example, a rapid change in political conditions may lead members of a global project to start spreading negative rumors about a member of a certain nationality working on their team. Or, currency fluctuations can lead to budgetary belt tightening for some projects without a corresponding slimming of scope, thereby laying the groundwork for mischarging, or delivering a product that fails to meet standards but the fact will not surface until long after the project ends.

In these circumstances, coupled with a contemporary general business environment that seems lax from an ethics perspective, the opportunity for ethical situations and transgressions does not seem too farfetched. Surveys have pointed out the general laxity that exists in American culture. Several surveys by the Ethics Resource Center of the Society for Human Resource Management indicate that the following ethical transgressions (used in the context of infractions, from most to least as percentage of responses) by colleagues are lying to supervisors; falsifying records; alcohol and drug abuse; stealing or theft; and gift receipt, caused primarily by considerable pressure to achieve financial or business objectives. 1Another survey, this one by the Ethics Officer Association, revealed that close to 50 percent of the respondents noted that they had done something illegal or unethical in their organizations. 2 An interesting note is that in a survey by a British sociologist on America it is noted that 76 percent of employees saw illegal or unethical while at work.3

When considering the special and general circumstances discussed above, it is quite clear that project environment is a potential hot bed for unethical behavior. Project managers must deal with a plethora of ethical issues, and at any given time and place can find themselves dealing with an ethical situation or transgression related to a particular topic. ♦


1O. C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 6th ed. (Boston: Houghton Mifflin Company, 2006), 13.

2. Ibid.

3Stephen M. R. Covey, The SPEED of Trust: The One Thing That Changes Everything. (New York: Free Press, 2006), 11.

Read more IT Performance Improvement

This article is an excerpt from the forthcoming book:

Ethics and Project Management

Written for project managers who may encounter ethical dilemmas, this book considers typical and atypical ethical issues that may occur in each phase of the project life cycle. Exploring the consequences of those issues and challenges on project performance, it examines the contents of the Project Management Institute’s code of ethics. The text covers key laws and regulations and explains how to: balance the right level of control, promote progress of projects, and ensure lapses in ethical behavior are not encouraged or permitted.

About the Author

Ralph L. Kliem, PMP is founder and president of LeanPM, LLC and has over 30 years of combined experience in the private and public sectors as a project manager and internal auditor. He has authored more than 15 books with major publishers and over 300 articles for leading business and information technology magazines.

He is a frequent speaker at PMI chapters and other events. He has developed and delivered project management courses for Cascadia Community College and Bellevue College. He also delivers seminars and workshops for corporate clients through Key Consulting, Inc., and the Business Productivity Center, Inc. throughout the United States, Canada, and the Caribbean. He is an Instructor at City University of Seattle and a former adjunct faculty member with Seattle Pacific University.