Published October 2003

Move to protect Oscar reminds us ethics matter

The Academy of Motion Picture Arts and Sciences recently sent its members a set of behavioral and ethical standards. Behavior in Hollywood has never been exactly main street’s: It is perhaps in the nature of artists to chafe against society’s constraints. Even in the “big studio” era the industry was better at covering up behavior than controlling it.

In this instance, the Academy is addressing behavior not because of some offended moral sense but in recognition of how fragile their product, the Oscar, really is. And, in a very real way, it is more about economics and markets than about morals.

The Oscar isn’t fragile in the physical sense. It is made of cast metal and can probably take its share of being knocked around. But its real value is in the esteem it enjoys, and that is a very fragile thing.

There are parallels to business management. Although an arts award like the Oscar doesn’t have a market value measured by its price — it is given away, not sold, by the Academy — its value still can be affected by flaws in production and distribution, just as can the ordinary, everyday products of any business. And those flaws do not always have to be in the product itself. A product’s value — whether measured in price or esteem — is also determined by the ethics and behavior that make up the character of the organization behind it.

In some ways, the parallels to business may be uncomfortably close. It was really an unwanted intrusion of “free-market system” behavior that prompted the Academy’s move on the ethics front. The letter addressed to its members noted that “... an unfortunate series of manipulative and excessive Academy Awards ‘campaigns’ has encouraged a public perception that perhaps an Oscar can be bought, rather than won by hard work and talent.”

An absolutely free market, devoid of regulation, will establish a price for everything, even the behavior of participants. That is one of the reasons we regulate them, for we recognize that market efficiency assumes certain behavioral standards, like fairness. The way people behave in markets affects fairness, so such things as bribes and intimidation, for example, are forbidden.

The Academy, too, has a similar interest in the behavior of market participants, even though the “price” of the product is zero. The market for Oscar’s esteem would not be fair or efficient if market participants didn’t conform to some standards of behavior.

So, after discovering that “...the organization had never really articulated the ethical ground rules by which it expects the Awards competition to be conducted,” the Academy has now set out its standards. They are worth reading by business managers because the behavior involved is outside the usual stuff of ethics codes.

The new ethics standards, for example, ask voting members to “voluntarily curtail their freedom of written and electronic speech during the Awards season” and, specifically, keep their views out of newspapers, television interviews and advertisements that Oscar contenders might dream up.

The Academy saves its special loathing, though, for the Hollywood party. It advises members that “...the Oscar-season ‘parties’ that in fact are heavy-handed lobbying occasions have become one of the most distasteful aspects of the Awards process.” It then poses a series of questions for potential partygoers — asking such things as “is a studio or production company footing the bill?” (“Yes” answers “indicate treacherous ethical waters.”)

It remains to be seen whether the Academy’s efforts will be successful, even though there are some sanctions involved, including expulsion. There is a “herding cats” aspect to controlling Hollywood behavior that will undoubtedly influence the outcome.

From a management standpoint, though, what is important is both its recognition that unethical behavior has the capacity to devaluate its product, and its taking action to change that behavior.

Business can learn something from all this. Most important, the ethics and behavior standards we set up have to reach beyond the “no lying, no stealing, etc.” core concepts. They are necessary, but in most cases, not sufficient to ensure an unflawed product. There was no lying or even lying around cited in the Academy’s ethical standards.

Every business is a participant in some market where behavior doesn’t have to be flagrantly immoral to be an ethics problem. Perhaps your salesperson never lies, for example, but if he or she romances a buyer to get a contract, or uses influence to get a client’s loutish child into a prep school, your product, and your business, will eventually suffer. “Maybe not today, maybe not tomorrow, but soon...”

In the wake of corporate and other scandals of recent times many companies adopted codes of ethics. That’s not enough. And the Academy deserves an Oscar for reminding us of this.

James McCusker, a Bothell economist, educator and small-business consultant, writes “Your Business” in The Herald each Sunday. He can be reached by sending e-mail to otisrep@aol.com.

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