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http://ssrn.com/abstract=920625
 
 

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Integrity: A Positive Model that Incorporates the Normative Phenomena of Morality, Ethics and Legality


Werner Erhard


Independent

Michael C. Jensen


Harvard Business School; Social Science Electronic Publishing (SSEP), Inc.; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Steve Zaffron


Landmark Worldwide LLC; Vanto Group

March 23, 2009

Harvard Business School NOM Working Paper No. 06-11
Barbados Group Working Paper No. 06-03
Simon School Working Paper No. FR 08-05

Abstract:     
We present a positive model of integrity that, as we distinguish and define integrity, provides powerful access to increased performance for individuals, groups, organizations, and societies. Our model reveals the causal link between integrity and increased performance, quality of life, and value-creation for all entities, and provides access to that causal link. Integrity is thus a factor of production as important as knowledge and technology, yet its major role in productivity and performance has been largely hidden or unnoticed, or even ignored by economists and others.

The philosophical discourse, and common usage as reflected in dictionary definitions, leave an overlap and confusion among the four phenomena of integrity, morality, ethics, and legality. This overlap and confusion confound the four phenomena so that the efficacy and potential power of each is seriously diminished.

In this new model, we distinguish all four phenomena - integrity, morality, ethics, and legality - as existing within two separate realms. Integrity exists in a positive realm devoid of normative content. Integrity is thus not about good or bad, or right or wrong, or what should or should not be. Morality, ethics and legality exist in a normative realm of virtues (that is, they are about good and bad, right and wrong, or what should or should not be). Furthermore, within their respective realms, each of the four phenomena is distinguished as belonging to a distinct and separate domain, and the definition of each as a term is made clear, unambiguous, and non-overlapping.

We distinguish the domain of integrity as the objective state or condition of an object, system, person, group, or organizational entity, and, consistent with the first two of the three definitions in Webster's dictionary, define integrity as a state or condition of being whole, complete, unbroken, unimpaired, sound, perfect condition.

We assert that integrity (the condition of being whole and complete) is a necessary condition for workability, and that the resultant level of workability determines the available opportunity for performance. Hence, the way we treat integrity in our model provides an unambiguous and actionable access to the opportunity for superior performance, no matter how one defines performance.

For an individual we distinguish integrity as a matter of that person's word being whole and complete. For a group or organizational entity we define integrity as that group's or organization's word being whole and complete. A group's or organization's word consists of what is said between the people in that group or organization, and what is said by or on behalf of the group or organization. In that context, we define integrity for an individual, group, or organization as: honoring one's word.

Oversimplifying somewhat, honoring your word, as we define it, means you either keep your word, or as soon as you know that you will not, you say that you will not be keeping your word to those who were counting on your word and clean up any mess you caused by not keeping your word. By keeping your word we mean doing what you said you would do and by the time you said you would do it.

Honoring your word is also the route to creating whole and complete social and working relationships. In addition, it provides an actionable pathway to earning the trust of others.

We demonstrate that the application of cost-benefit analysis to honoring your word guarantees that you will be untrustworthy. And that, with one exception, you will not be a person of integrity, thereby reducing both the workability of your life and your opportunity for performance. The one exception to this form of being out of integrity is, if when giving your word you have announced that you will apply cost-benefit analysis to honoring your word. In this case you have maintained your integrity, but you have also announced that you are an unmitigated opportunist. The virtually automatic application of cost-benefit analysis to one's integrity (an inherent tendency in most of us) lies at the heart of much out-of-integrity and untrustworthy behavior in modern life.

Regarding the relationship between integrity, and the three virtue phenomena of morality, ethics and legality, this new model: 1) encompasses all four terms in one consistent theory, 2) makes clear and unambiguous the moral compasses potentially available in each of the three virtue phenomena, and 3) by revealing the relationship between honoring the standards of the three virtue phenomena and performance (including being complete as a person and the quality of life), raises the likelihood that the now clear moral compasses can actually shape human behavior. This all falls out primarily from the unique treatment of integrity in our model as a purely positive phenomenon, independent of normative value judgments.

In summary, we show that defining integrity as honoring one's word (as we have defined honoring one's word): 1) provides an unambiguous and actionable access to the opportunity for superior performance and competitive advantage at both the individual and organizational level, and 2) empowers the three virtue phenomena of morality, ethics and legality.

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Note: This document, while still incomplete, is the most detailed of our various pieces on Integrity. It is 124 pages.

See the following papers for more details on our work on integrity:

"Integrity: Without It Nothing Works" (5 pages) an interview of Michael Jensen by Karen Christensen on the topic of integrity available at http://ssrn.com/abstract=1511274)

A shorter abridged version of the full paper is: “Integrity: A Positive Model that Incorporates the Normative Phenomena of Morality, Ethics and Legality -- Abridged” (39 pages, available at http://ssrn.com/abstract=1542759)

For a full one-day workshop on integrity see: “A New Model of Integrity: The Missing Factor Of Production (PDF file of Keynote and PowerPoint Slides)” (152 pages) available at http://ssrn.com/abstract=1559827)

Number of Pages in PDF File: 125

Keywords: integrity, trust, values, ethics, corporate fraud, trustworthy, economic cost benefit analysis

JEL Classification: M00

working papers series


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Date posted: September 8, 2006 ; Last revised: June 11, 2013

Suggested Citation

Erhard, Werner and Jensen, Michael C. and Zaffron, Steve, Integrity: A Positive Model that Incorporates the Normative Phenomena of Morality, Ethics and Legality (March 23, 2009). Harvard Business School NOM Working Paper No. 06-11; Barbados Group Working Paper No. 06-03; Simon School Working Paper No. FR 08-05. Available at SSRN: http://ssrn.com/abstract=920625 or http://dx.doi.org/10.2139/ssrn.920625

Contact Information

Werner Erhard
Independent
HOME PAGE: http://www.wernererhard.net
Michael C. Jensen (Contact Author)
Harvard Business School ( email )
Soldiers Field
Negotiations, Organizations & Markets
Boston, MA 02163
United States
617-510-3363 (Phone)
305-675-3166 (Fax)
HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=ovr&facId=6484
Social Science Electronic Publishing (SSEP), Inc. ( email )
7858 Sanderling Road
Sarasota, FL 34242
United States
617-510-3363 (Phone)
305 675-3166 (Fax)
HOME PAGE: http://ssrn.com/author=9

National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
European Corporate Governance Institute (ECGI) ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Steve Zaffron
Landmark Worldwide LLC
353 Sacramento St.
Suite 200
San Francisco, CA 94111
United States
Vanto Group ( email )
353 Sacramento Street
Suite 200
San Francisco, CA 94111
United States
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