Creating the Organization 373
the other hand, this maneuver means the entrepreneur-investor relationship is less than
completely honest.
Entrepreneurs face additional tests of their ethical character. The “finders keepers”
problem occurs when value is created through the collective efforts of many firms and
individuals, but the entrepreneur can appropriate all of the gain for the new venture.
Should the entrepreneur take all the gains, or should they be distributed among all the
deserving parties? For example, many people are credited with coinventing such com-
plex products as the Internet, television, or lasers. In the case of the Internet,
inventors/entrepreneurs share the credit, while in the case of the laser, contentious law-
suits were fought over decades for money and recognition.75
Sometimes the goals of the firm and of the entrepreneur diverge. If the entrepreneur
wants to live in high style and spend more than the business can afford, who is to say
no? There is often no control over the entrepreneur in this situation.
Finally, entrepreneurs occasionally have to decide whether to engage in unsavory
business practices, such as paying bribes, or to forgo business opportunities. In some
industries and cultures, such practices are commonplace. Refusing to pay the bribe sim-
ply means that someone else will pay it and will get the contract or sale. Should the
entrepreneur go along or refuse to deal?
These are difficult issues, and their resolution depends on the criterion used by the
decision maker. A utilitarian rule resolves the issue by asking, “Which choice produces
the most good for the most people?” An absolute rule decides the dilemma by consis-
tently applying a moral or religious code—which almost invariably forbids lying, cheat-
ing, stealing, and taking advantage of less powerful people. A relativist approach to
making these decisions looks at what others are doing in the same situation and goes
along with the crowd. To further complicate the ethics issues, it is not unusual to find
an entrepreneur using all three criteria at one time or another, depending on the situa-
tion.
One set of simple decision-making rules and practical advice has been offered by
Norman R. Augustine, former CEO and chairman of Lockheed Martin: “If you can
answer “yes” to all four questions, then whatever you do is probably ethical,” says
Augustine.^76
- Is it legal?
- If someone did this to you, would you think it was fair?
- Would you be content if this appeared on the front page of your hometown news-
paper?
- Would you like your mother to see you do this?
MOST SUCCESSFUL HUMAN RESOURCE PRACTICES
There are few rules for successful human resource practices because each company is dif-
ferent and human resource management is complex. Although standard practices and
guidelines are easy to come by, they offer little insight into how to make the venture’s
human resource management a source of sustainable competitive advantage.^77
