Ethics, Accountability, and the Health of an Organization (Allegory of the Clan)

Let’s talk about workplace misconduct and the environments that either encourage or discourage ethical behavior and reporting. This applies to businesses, nonprofits, government organizations, and other institutions. The basic dynamics are often the same.

(Illustrative Only).
Sam encourages
young leaders to 
take ethics and their
roles seriously.
Being in charge comes
with greater responsibilities.
Even in business.

We-economics
Collective effort.

We’ve all worked in places that were a little unscrupulous. Eventually, many people move on. Organizations that tolerate unethical behavior often struggle to attract and retain their best people. I’ve seen this firsthand in human resources, where people in leadership positions can become so removed from day-to-day operations that they don’t see—or don’t want to see—what is happening.

Keep in mind that when an organization struggles to recruit or retain people, there is usually an underlying issue. It could involve pay, organizational culture, location, equipment, leadership, working conditions, or something else that makes the organization less attractive.

The same idea applies to the Allegory of the Clan we’ve been discussing. It is a philosophical, theoretical thought experiment designed for learning and understanding how corruption, hate, discrimination, and misconduct can become protected by people within a system. If wrongdoing is known for years and nobody acts, the problem becomes institutional. A single actor whose behavior is identified and corrected may represent a mistake. However, when multiple actors engage in similar misconduct over an extended period and those behaviors are repeatedly left uncorrected, the situation moves beyond an isolated mistake and begins to suggest intentionality or systemic dysfunction. That is an indication that meaningful changes and reforms may be necessary.

Ultimately, it comes down to organizational culture, which is shaped by values as well as the technical details of policies and procedures. Most people in organizations are probably trying to do the right thing, but there will always be some who don’t. That is why organizations need checks and balances, accountability, and safe ways to report misconduct. Maintaining the health and mission of an institution is more important than the benefits gained by individuals who misuse company or institutional resources—whether those resources are financial, social, ideological, or reputational.

If leadership continually protects wrongdoing instead of correcting it, trust declines. If you cannot correct misconduct, then you are effectively protecting it. You cannot simply get around that reality; it is part of what we observe in functioning organizational systems. Over time, the organization can lose its best employees, institutional knowledge, business relationships, and ultimately its competitiveness. These are called natural systems.

Those who knowingly allow misconduct to continue are neglecting the stakeholders who work for, participate in, donate to, invest in, or place their trust in an organization. At its root, this can reflect a dysfunctional lens through which ethics, corruption, and bias are viewed.

Those who challenge misconduct are standing up for organizational integrity. Leaders have a responsibility to make sure the organization actually follows its mission and ethical obligations. Some companies even conduct audits, hire devil’s advocates, or intentionally bring in people whose job is to identify weaknesses and challenge existing assumptions. That is not necessarily a bad idea. In the Allegory of the Clan, for example, a devil’s advocate who does not subscribe to hate or corruption could help uncover those problems.

However, identifying a problem is only the first step. The organization must be willing to correct legitimate problems if it is truly committed to its mission. If leadership is no longer committed to that mission—or does not genuinely believe in it—little or no meaningful correction will occur. The organization consequently becomes weaker. Its focus has changed and if it is willful and official that is ok but if it is through poor acting then it represents a corrosive influence. 

Policies and procedures matter, but they aren’t enough. The culture has to support them. If an organization creates or maintains policies that allow misconduct to continue, then the organization itself is enabling that misconduct. The formal rules and the unwritten “rules” are often different. In many cases, the unwritten rules provide a more accurate representation of how the organization actually operates.

Long-term success depends on whether leadership, policies, procedures, and culture genuinely support the organization’s stated mission. Bring unofficial more into alignment with official to create synergy and higher collective performance.

The good news is that the vast majority of people do the right thing. If you encounter workplace, institutional, or organizational misconduct, reporting it can serve the greater benefit of everyone else. If you experience retaliation, targeting, or a lack of reasonable corrective action, understand where those responses are coming from and make your decisions accordingly.

Those doing the right thing are not necessarily the silent ones. Often, they are the people who care enough about their organization and society to say something and stand behind it. Yes, there can be consequences for doing the right thing, but ultimately that is a personal choice. This is what defines a man/woman's soul and character. 

Challenge what is wrong. Support what is right. Hire the best and brightest—not simply the most connected.

*The Allegory of the Clan is a philosphical theoretical thought experiment on how hate and corruption could potentially work within an institution. There is no right or wrong conclusion so take with a grain of salt as long as you thought about it. 

This study relates to the topic of ethics, 

Organizational Justice and Reporting Workplace Misconduct

• Organizational justice refers to the consistent application of workplace standards and employees’ confidence that reporting and investigative processes are fair and trustworthy. LRN identifies it as a critical factor in encouraging ethical behavior and reporting misconduct.
• Nearly 40% of employees surveyed reported witnessing misconduct or unethical behavior during the previous year. More than 80% of those employees reported what they observed, but nearly 20% did not, creating potential legal, reputational, and organizational risks.
• Organizational culture significantly influences reporting behavior. Employees in organizations with stronger ethical cultures reported misconduct at substantially higher rates—93% compared with 67% in organizations with weaker cultures.
• Fear of retaliation, lack of confidence that management will take action, and concerns about confidentiality were major reasons employees in weaker cultures chose not to report misconduct. Trust in leadership and fair processes therefore plays an important role in creating a speak-up culture.
• LRN recommends clearly communicating ethical standards, simplifying reporting procedures, training managers to listen and respond appropriately, increasing transparency, and regularly assessing employee perceptions of organizational culture. These practices can strengthen fairness, accountability, and ethical performance.

Miner, E. (2022, January 13). Why organizational justice and reporting workplace misconduct matters. LRN. https://lrn.com/blog/why-organizational-justice-and-reporting-workplace-misconduct-matters

Is it Easy to Cook on a Boat? Depends

 You think it's easy cooking on a boat? I guess if you're rich and your boat has a full-sized kitchen with everything you could possibly want, then yeah, it's probably pretty easy. But if you have a reasonable boat like the kind most average people have, with a little kitchenette, things get more difficult (The boat that took sweat and labor to get where it is at today.).

(Illustrative Only)

Cooking on a boat
has its own challenges.

Over the years, I've kind of narrowed things down to the necessities. I have a grill, an oven, an air fryer, and the basics, including a gas stove. So I can cook, but it takes a little effort. You have to move around, work in a smaller space, and basically learn how to do camp cooking. The air fryer isn't exactly camp cooking, but the rest of it is pretty close.

This morning, after going boogie boarding, I went back to the boat and started cooking. I made some homemade tortillas, along with these little corn pancakes. I had some grilled chicken left over from last night, and I'm going to make some homemade French fries. I'll also eat some salad and use up the rest of the cucumbers and chicken.

That's one of the tricks I've learned: double-cooking. I'll cook chicken for dinner, and then use the leftovers for something else the next day. Last night, I had grilled chicken with supper and grilled cucumbers. Today, that same chicken becomes chicken sandwiches with my homemade tortillas. I've got some potatoes, so I'll cut those up and make some really nice French fries, then finish off the rest of the cucumber and chicken.

So, it is possible to cook pretty well on a boat. You just have to be a little creative and make the most of the space you have.

The one thing I haven't figured out—and it doesn't really matter whether I'm in a full-sized kitchen or on a boat—is how the heck they make tortilla chips.

I can make a flour tortilla. I can make a corn tortilla. That part is pretty simple. But when you buy a package of tortilla chips, how do they get them to look and turn out like that? I'm not quite sure. I might have to research it. See below. 

My suspicion is that they're using some kind of corn mixture or batter, shaping it into chips, and then cooking it. But I don't know. I tried to do something similar, and instead of tortilla chips, I ended up with corn pancakes.

(It looks like they make the it just like I do except they bake a little and then fry. So I was thinking of that for the next batch but then found this and thought it was interesting. So we will see how the next one's turn out. How They Make Tortilla Chips)

That's fine, though. The corn pancakes were actually pretty darn good.

So I guess I invented something new to eat today: the corn pancake. It's mostly corn, with a little bit of flour, salt and some water. That's it. No milk, nothing fancy. And it actually turned out really well. Ok probably someone has done it before but for me it's new. 

I'd definitely make those corn pancakes again for breakfast.

Hitting the Boogie Board Early in the AM

 This morning, I got up and went boogie boarding. I can actually surf, although I’m not a great surfer, and with the car I use, I often don’t have a lot of space for a surfboard. So, boogie boarding just makes a lot of sense.

(Illustrative Only)

I headed over to Ocean Beach this morning and thought, what better way to start the day? Have a cup of coffee, head to the beach while it’s still cool, find parking, and jump in the water. You can surf, swim, paddleboard, or, in my case, boogie board for about a half hour.

Head back to the boat and take a shower and get ready for the day. Already cooking my chicken salad before meeting a friend (headed over to a local brewery for an hour). 

I also noticed there are quite a few other boogie boarders out there, and it seems to be becoming more popular. A lot of them are using fins or flippers to help get out a little farther and catch waves. People used to look down on it but its a growing trend. 

I like boogie boarding because it’s quick and easy. It fits easily in the car, gets me in the water, and keeps me active. I don’t necessarily have to be great at everything. I just enjoy being out there, being active, and being in the water. And honestly, being in the water is better than not being in the water at all. 

What I have learned is that instead of debating on whether to do something and then end up not doing it just get up and go if it is something your thinking about. You don't have to go long but you did do it. Too many people I know don't leave their house much. I feel like that sometimes too but getting out into the water sets the rest of the day. Coffee, water, brewski, cooking and a friend....what more do you want?

US Retail Sales Decline in July-Up Over a Year-A Chance to Reflect on How we are

U.S. retail sales declined recently, and that seems to align with some other economic indicators. However, putting it into perspective, retail sales are still higher than they were a year ago, so that is not necessarily a bad thing. The direction and size of the decline, particularly when considered alongside other economic indicators, could become important, but we need to wait and see how the trend develops (Consumer sentiment appears down as well.)

As an individual indicator, the decline doesn't appear to be particularly negative. A decline is a decline, but it needs to be viewed in conjunction with other economic factors. Businesses will obviously be affected by changes in consumer spending, especially small businesses. If we want to bring our downtowns back, one way we can help is by supporting local businesses (Think about what is being said in terms of if you are being more reflective of your spending habits consider the lens of what helps your community the most. Its a personal choice.). 

If you feel inclined, go buy from your small-town businesses and give them more opportunities to grow. Be wise about where you're spending your money because your money determines what you value and what is rewarded in the market. It can help to support businesses where the money circulates locally increasing its long-tail value. While you might be spending less you can also spend it where it maximizes its outcome (The other day I bought my produce from the OB farmers market because it goes directly back to local farmers.)

U.S. Retail Sales Show Continued Year-Over-Year Growth but Decline in July

• U.S. retail and food services sales were an estimated $763.6 billion in July 2026.
• Sales decreased 0.6% from June 2026 after seasonal, holiday, and trading-day adjustments.
• Despite the monthly decline, sales increased 5.0% compared with July 2025.
• Total sales for May through July 2026 were 6.3% higher than the same period a year earlier.
• Retail sales are an important indicator of consumer spending and economic activity. The Census Bureau's advance estimates are also used by organizations such as the Bureau of Economic Analysis and Federal Reserve to assess economic trends.

U.S. Census Bureau. (2026, August 14). Advance monthly sales for retail and food services: July 2026. https://www.census.gov/retail/sales.html

UoM Survey of Consumers Indicates a Decline in Consumer Confidence But....

 Consumer sentiment declined and this in line with other mixed markers could indicate a market change but we will have to wait to see what that looks like (or doesn't.). The thing about metrics is that they are representations based on how they are designed and how the data is drawn. As representations they are open to interpretation and you will find economists with varying opinions.

University of Michigan Surveys of Consumers: A Key Measure of Consumer Confidence

• The University of Michigan Surveys of Consumers, established in 1946, measure consumer attitudes, expectations, and perceptions about the U.S. economy.
• The survey examines consumers’ views of personal finances, business conditions, and buying conditions, including expectations for inflation, unemployment, interest rates, and economic policy.
• Consumer expectations are economically important because optimism can encourage spending and borrowing, while uncertainty and pessimism can lead households to postpone purchases and increase savings.
• The survey is widely used by government agencies, financial institutions, businesses, and researchers and contributes to measures of leading economic indicators.
• The preliminary August 2026 results show consumer sentiment falling 7.6% from July to 51.0, while the Index of Consumer Expectations declined 8.7% to 50.6. Year-ahead inflation expectations also increased slightly from 4.2% to 4.3%.

University of Michigan, Institute for Social Research. (2026). Surveys of Consumers. https://www.sca.isr.umich.edu/

Row Row Row Your Boat-Right Down Mission Bay! The Health Benefits of Rowing

I recently got back to San Diego this week, and one of the things I wanted to do was keep up with my rowing. One of these days, I'm going to buy a sculling shell—or maybe even build one—and keep it in Escanaba. For now, though, I mostly row here in San Diego where a club offers the shell to use.

(Illustrative Only)

I used to row in Louisville, Kentucky, and I may end up doing that again at some point. I'm certainly not the world's greatest rower, but I really enjoy it. It gets me out on the water early in the morning, and then I can move on with the rest of my day.

There's also a physical challenge to rowing that I appreciate. If you work online or spend a lot of time sitting at a computer in your office, it's easy to become a little lethargic. Rowing gets you moving and provides an excellent full-body workout. That's one reason people who row regularly tend to be in very good shape—it combines cardiovascular exercise with strength and muscle development throughout the body.

For me, I simply like doing things that are fun. If they also help me stay healthy and in shape, that's an added bonus.

I'm also a licensed fitness trainer and yoga instructor. If you're ever looking for a little help with fitness or flexibility, feel free to send me a message. I can provide some virtual guidance as a hobby. I donate a little away. 

Anyway, send me a message if you're interested. I also thought the article and video below were pretty interesting. I watch material like this because I'm always trying to improve my rowing and learn something new. No matter what activity I'm involved in, I enjoy continuing to learn and get a little better over time.

Rowing Technique

Producer Prices Unchanged in July 2026-What does the PPI indicate for the Economy?

The Producer Price Index (PPI) helps us understand the prices producers can receive for the products they sell. The metric covers domestic production across major economic sectors. Higher producer prices can eventually be passed on to consumers, creating inflationary pressure. A lower PPI generally indicates less inflationary pressure and can minimize the likelihood of additional interest rate increases.

A lower PPI can contribute to increased business profits, lower inflation, and potentially greater innovation through investment. Lower input costs and higher profit generally attract new investment. New investment and costs are interwoven into the economic and business environment. (Keep in mind the concept we are exploring in this blog regarding transaction costs and how the right environment can reduce the costs associated with innovation and inputs, making businesses more attractive for investment. In Theory...meaning take or leave it....either is ok. Businesses can cluster in different ways, either vertically, with a focus on specific types of businesses i.e., an industry-focused cluster within a larger city, and/or more organically, through clusters of diverse but co-complementary businesses that may be particularly beneficial for economic resilience of smaller communities.)

You can read about PPI and its impact on PPI and how it works. Producer Price Index (PPI) Explained: Comprehensive Guide & Analysis

Over the past few years.

Producer Prices Unchanged in July 2026, While Annual Wholesale Inflation Remains Elevated

• The Producer Price Index (PPI) for final demand was unchanged in July 2026 after declining 0.1% in June and increasing 0.5% in May.
• Despite no monthly increase, final-demand producer prices were 4.7% higher than a year earlier, indicating that inflationary pressures remain elevated at the producer level.

• 

  Source

  Final-demand services increased 0.2% in July, while construction prices rose 2.2%. These increases offset a 0.7% decline in final-demand goods.
• Energy prices provided significant downward pressure, with final-demand energy prices falling 3.1% and gasoline prices declining 5.7%. Food prices also decreased 0.9%.
• The broader measure excluding foods, energy, and trade services increased 0.4% in July and was up 4.7% over the previous 12 months, suggesting that underlying producer-price pressures remain persistent.

U.S. Bureau of Labor Statistics. (2026, August 13). Producer price indexes—July 2026. U.S. Department of Labor. https://www.bls.gov/news.release/ppi.nr0.htm