Introduction

Business ethics is supposedly an oxymoron. It does not sit well as a word among the many. Some believe that ethics is not vital for the business while others believe that it is. Whatever the definitions they are all vague.

There are rules governing business but they have to do with the law, not morality.

As the world turns away from the illusions of socialism, everybody who is anybody wants to make money by exploiting the weaknesses of their less commercially minded fellows. That's taken for granted but I can't see how "ethics", a set of guiding principles for judging the right or wrong of actions, gets into the jargon governing business practices.

More and more people are taking more than a vicarious interest in how companies treat their employees, and not just that, but the whole field of ethics, so that they can put their money where their values are.

In today’s demanding world of global expansion, corporate downsizings, increased government regulations and new technologies, people at all levels of an organization must make decisions quickly and perform with high levels of accuracy, efficiency and success. If their company’s core business processes are not grounded in sound values, such as integrity, respect, trust and fairness, these individuals are exposed to ethical vulnerabilities that lead to fraudulent, discriminatory, even illegal activities

In a recent survey of young, employed graduates, following comments were recorded about ethical behavior in organizations:

Executives are out of touch about ethical issues;

Organizational pressures as opposed to character flaws lead people to act unethically;

Whistle blowing is a professional hazard;

Staff-level employees often get explicit instructions from middle managers to do unethical or illegal things; Questionable behavior does not hurt; in fact, in some cases it seems to accelerate career advancement.

These findings are disturbing especially because North American companies spend nearly $100 billion a year to investigate and resolve the activities in question and to put mechanisms in place to ensure that problems do not recur. The good news is that many business leaders are studying the corporate culture and embracing the concept of the “business ethic process.” (Phillips 1996)

It is a popular belief that a business organization has one duty and that is to make a profit and that is where its sole concentration lies. Thirty years ago Milton Friedman, doyen of market economics, summed up this view by arguing that ``there is one and only one social responsibility of business--to use its resources and engage in activities designed to increase its profits.'

Even while ethics is taught in the business schools no set of principals exist. The first priority is the shareholders' long-term interests, but, within that constraint, they seek to meet whatever social or environmental goals the public expects of them. Yet, today the organizations feel there is more need for ethics than ever before.

Technological change and globalization is bringing companies into contact with other countries that do business by different rules. Pressures from internal and external forces are forcing the firms to treat their staff in ways that are different from traditional practices. With the communications revolution ethical issues has become part of every manager' s job. (Datamation 1984)

Companies realized that they had to conform to public values to survive. Shell, in 1995 suffered two blows to its reputation: one from its attempted disposal of the Brent Spar oil rig in the North Sea, and the other over the company's failure to oppose the Nigerian government's execution of Ken Saro-Wiwa, a human-rights activist in a part of Nigeria where Shell had extensive operations. Since then, Shell has rewritten its business principles, created an elaborate mechanism to implement them, and worked harder to improve its relations with NGOs. (Krantz, 1997)

There are two reasons why ethics are vital for the businesses. One is when bad behavior stirs up public debate legislation will arise that companies will find more irksome than self-restraint. The other is trust. A company that is not trusted by its employees, partners and customers will suffer. In an electronic world, where businesses are geographically far from their customers, a reputation for trust may become even more important.

Ultimately, though, companies may have to accept that virtue is sometimes its own reward. One of the eternal truths of morality has been that the bad do not always do badly and the good do not always do well. (Smolowe, 1997)