Not long ago newspapers reported that a CEO had have been charged in a criminal complaint with fraudulently backdating stock options along with the awarding of options to nonexistent employees for future transfer to himself and his friends.

Of this incident Robert Reich reported that “SEC commissioner, Paul Atkins, argued in a recent speech that companies that manipulate the timing of their executive options may not be guilty of violating the securities laws because they end up saving their companies money. Atkins further conceded that back-dating executive stock options, or timing them so they can be exercised just before the company issues a positive quarterly earnings report that raises share values, does create a windfall for executives. But precisely because of this windfall, he said, companies are able to compensate their executives more cheaply. They can issue fewer stock options or provide lower salaries. So by timing stock options this way, companies end up saving money, and investors pocket the savings. Extending this logic, Atkins’ argument would seem to make back-dating completely legal, as long as a company disclosed to its shareholders what it was doing.”

In this era of corporate scandals, it has also been pointed out that a number of the executives involved, including Enron, were graduates of some of the nation’s most prestigious MBA programs, who now seem to be falling over themselves to introduce compulsory courses on business ethics as a result. Yet, Corporate America is not the only one who attempts to have the end justify the means.

Kerri Dunn, a Claremont McKenna College psychology professor, defaced her car in March 2004 by slashing its tires, breaking its windows and spray painting ethnic slurs on the doors and hood the same day she gave a lecture on racial tolerance.

Dunn’s goal was to raise awareness that racism exists on a campus that had recently seen a number of hate crimes perpetrated on its students. The vandalism had the expected effect. Classes were cancelled while thousands of students rallied around the elimination of “ignorance.” Afterward Dunn filed a police report and insurance claims to cover the damage to her car, and until witnesses came forward, no one on the campus knew they were victims of an elaborate hate crime hoax.

Claremont College suspended Dunn as part of their efforts to distance themselves from the embarrassment. Dunn was charged with filing a false police report and two felony counts of insurance fraud. She was later sentenced to one year in prison and a $20,000 fine.

Social Psychologist Lee Ross of Stanford University has said:

“Sometimes people invent [or distort] facts because they believe that the conclusion it would lead people to is true, so they convince themselves that, in some deep way, they’re not really lying or they’re not really being dishonest because the message they’re conveying is one that’s true.”

After all the ends justify the means and it’s the thinking behind most of today’s conventional management style. We need profit, because that is what business is for. More profit is bound to be better than less. So whatever leads to more profit or the accomplishment of a specific objective—unless it is specifically forbidden—surely must be a good business practice.

Most of us see ourselves as basically moral people but the prospect of massive rewards, coupled with the idea that there maybe no actual rule that says such actions are completely wrong, may go a long way in helping us justify what we do.

“Perhaps”, as blogger Carmine Coyote suggests, “the best way to prevent—or, at least, severely limit—corporate wrongdoing in the future is to spend enough time telling the stories and reflecting on the flawed thinking that brought smart people down to the level of common criminals. After all, a good story sticks in the mind, where rules are forgotten faster than they can be written down. And, for the record, the ends have never, and will never, justify the means in a civilized society, whatever smart ideas are produced to weasel a way around that fact.”