The Stockholder – A Lesson for Business Ethics from Bioethics?

Business ethics – both stockholder and stakeholder theories – makes the same mistake as the one made by the traditional ethics of medicine. The traditional ethics of medicine was a teleological ethics predicated on the assumption that the goal of medicine was to prolong life and promote better health. But, as bioethicists have made plain, these are not the only or even the overriding goals of most patients. Most of us have goals and values that limit our desire for medical treatments. Similarly, the view of the stockholder in business ethics is that the stockholder has only one interest – profit. If stockholders have no other values or interests that would limit their desire for additional profit, their sole interest is in profit maximization. But investors are real people with interests and values that balance and limit their desire for profit. It would be an extremely odd individual who cared for nothing except more profit. And institutional investors are supposed to serve the interests of individual investors. Stockholders hold many stakes in the firms in which they invest. The conclusion that most stockholders have interests that would limit the pursuit of maximum profit has significant implications both for business ethics and for the management of for-profit corporations. Something like “informed consent for investors” is needed. Corporate managers, to the extent that they are to be agents of their stockholders, must not simply pursue profit maximization. They must ascertain the interests and values of their investors that limit the single-minded pursuit of profit.     

‘The Muncy–Vitell Consumer Ethics Scale: A Modification and Application’

This study compares college students with other adults in terms of the Muncy–Vitell (1992) consumer ethics scale. Further, the study updates the Muncy–Vitell consumer ethics scale with modifications that include rewording and the addition of new items. These new items can be grouped into three distinct categories – (1) downloading/buying counterfeit goods, (2) recycling/environmental awareness and (3) doing the right thing/doing good. The study also compares these two groups in terms of their attitude toward business. Results show that there is indeed a significant difference between these two groups in terms of ethical perceptions, but not in terms of the “recycling” items and the “doing good” items. There was also little difference between the groups in terms of their attitude toward business indicating that attitude toward business does not explain their different ethical perspectives.     

Constructing Good Decisions in Ethically Charged Situations: The Role of Dramatic Rehearsal

This paper develops a pragmatist approach to ethical business decision-making. It draws primarily on the work of John Dewey and applies his deliberative approach to ethics to the challenges of business practitioners. In particular the paper proposes the value of Dewey’s concept of dramatic rehearsal in emphasizing the task of “constructing the good” in ethical decision-making. The contribution of the paper is, first, to build on recent foundational work to bring American pragmatism into the mainstream business ethics literature; second, to offer a perspective that is accessible to practitioners and integrates ethics into their daily tasks; and third, to identify a number of related research imperatives – in particular the importance of focusing efforts on gaining a deeper understanding of the deliberative process itself.     

Environmental Respect: Ethics or Simply Business? A Study in the Small and Medium Enterprise (SME) Context

In recent years there have been ever-growing concerns regarding environmental decline, causing some companies to focus on the implementation of environmentally friendly supply, production and distribution systems. Such concern may stem either from the set of beliefs and values of the company’s management or from certain pressure exerted by the market – consumers and institutions – in the belief that an environmentally respectful management policy will contribute to the transmission of a positive image of the company and its products. Sometimes, however, ethics and market rules are not enough to deal with this situation and specific laws must be considered. This is the case when companies base their activity on the ‹ethics of self-interest’ concentrating their efforts on projecting an adequate image – e.g. environmental respect – rather than fundamentally behaving in environmentally respectful ways. This article, taking as reference the SME context, discusses the reasons for implementing environmentally friendly systems. Both ethics and business seem to be relevant and, therefore, a certain balance between market and interventionism seems to be necessary.     

The Moral Floor: A Philosophical Examination of the Connection Between Ethics and Business

This paper examines the philosophical basis for the argument that there is a connection between ethical behavior and profitability. Both sides of this argument – that good ethics is good business and that bad ethics is bad business – are explored. The possibility of a moral floor above which ethical behavior is not rewarded is considered, and an economic experiment testing such a proposition is discussed. Johnson & Johnson suffers a potentially devastating blow when some cyanide-laced Tylenol capsules cause several deaths. Johnson & Johnson voluntarily pulls Tylenol off the shelf, to universal acclaim. When Tylenol is returned to the marketplace, its share of the over-the-counter painkiller market becomes greater than it was before the tragedy. Arthur Andersen, the venerable accounting firm, is caught in the web surrounding the downfall of Enron, Inc. As Enron’s various sins are discovered, it is found that Arthur Andersen auditors had signed off on flawed audits and had shredded documents to cover themselves. Andersen is prosecuted for, and convicted of, obstructing justice (although the conviction is later overturned). Today the firm barely exists and has no resemblance to the Big Five accounting giant of 1999. These stories seem to indicate that ethical (or unethical) behavior leads to positive (or negative) financial results. But the philosophical arguments underpinning such statements are seldom subjected to proper analysis. They are perhaps wishful thinking, or perhaps based on examples such as the above without considering other examples that may reinforce a contrary position. This paper will explore the philosophical arguments and empirical evidence regarding these statements and state some research questions for exploration in this area. In particular we will propose the possibility that a moral floor exists above which firms that engage in ethical activities will not reap rewards, but below which firms that engage in unethical activities will be punished by actors in the economic marketplace. We will discuss an economic experiment to determine if such actors indeed form a moral floor.     

Ethical Structures and Processes of Corporations Operating in Australia,Canada, and Sweden: A Longitudinal and Cross-Cultural Study

Based on the ‘Partnership Model of Corporate Ethics’ (Wood, 2002), this study examines the ethical structures and processes that are put in place by organizations to enhance the ethical business behavior of staff. The study examines the use of these structures and processes amongst the top companies in the three countries of Australia, Canada, and Sweden over two time periods (2001–2002 and 2005–2006). Subsequently, a combined comparative and longitudinal approach is applied in the study, which we contend is a unique approach in the area of business ethics. The findings of the study indicate that corporations operating in Sweden have utilized ethical structures and processes differently than their Canadian and/or Australian counterparts, and that in each culture the way that companies fashion their approach to business ethics appears congruent with their national cultural values. There does, however, appear to be a convergence of views within the organizations of each culture, as the Swedish companies appear to have been more influenced in 2005–2006 by an Anglo-Saxon business paradigm than they have been in the past.     

Ethics Statements of Public Relations Firms: What Do They Say?

This study was designed to examine the prevalence of a code of ethics and to analyze its content among public relations agencies in the United States. Of the 1,562 public relations agencies reviewed, 605 (38.7%) provided an ethical statement. Among the ethical statements provided by these public relations agencies, ‹respect to clients,’ ‹service,’ ‹strategic,’ and ‹results’ were the values most frequently emphasized. On the other hand, ‹balance,’ ‹fairness,’ ‹honor,’ ‹social responsibility,’ and ‹independence’ were the least frequently mentioned in the ethical codes. Also, none of the sampled agencies included any sanctions regarding enforcement of their particular codes of ethics.     

Implementing an Organizational Ethics Program in an Academic Environment: The Challenges and Opportunities for the Duquesne University Schools of Business

This paper acknowledges the paucity of attention regarding the development of ethics programs within an academic environment and describes in a case study how the Duquesne University schools of business attempted to introduce, integrate and promote its own ethics program. The paper traces the business school’s attention to mission statements, curriculum development, ethics policy, program oversight and outcome assessment. Lessons learned are offered as suggestions for others seeking to develop and implement an ethics program in their school.     

Ethics in Information Technology and Software Use

The emerging concern about software piracy and illegal or unauthorized use of information technology and software has been evident in the media and open literature for the last few years. In the course of conducting their academic assignments, the authors began to compare observations from classroom experiences related to ethics in the use of software and information technology and systems. Qualitatively and anecdotally, it appeared that many if not most, students had misconceptions about what represented ethical and unethical behaviors in these realms. Clearly, one can argue that if college students are uncertain about what constitutes appropriate and inappropriate behavior then this uncertainty will be carried forward into their workplaces upon graduation. Furthermore, if their workplaces don't provide ethics training as a component of a new employee orientation program, one can project a potential for unintentional violations and infringements of copyrights and law in the field. This study was conducted among graduate and undergraduate students to gain insight into their attitudes, perceptions and understanding of some of the relevant ethics issues. A questionnaire of 11 statements was employed that described ubiquitous but most likely unethical (or surely dubious) behaviors in the prevailing business and academic environments. Each respondent was asked to evaluate each statement twice (once for “self” and once for “colleague”) on a five-option highly ethical (5) to neutral (3) to highly unethical (1) scale. The statements were worded such that lower instrument score was associated with higher ethical responses. The questionnaire's two-part structure was designed to solicit honest answers. The encouraging learning from this study was that the overall sample and its various sub-samples did not consider any of the eleven behaviors to be “ethical” or “highly ethical.” It was also encouraging to note that the overall sample and all sub-samples considered “highly unethical” those behaviors associated with personal privacy or property or outright theft. This indicated that moral judgment and probity prevail. The discouraging learning was that behaviors associated with the use of enterprise property were viewed as “neutral” i.e., neither “ethical” nor “unethical.” These findings suggested confusion and lack of clarity and definition around workplace deportment as it regards ethics in software and information technology use. The current study suggests that additional research needs to be conducted to define and clarify the issues, which in turn can form the basis for programs to rectify or at least ameliorate the situation.     

The Impact of Ethics Education on Reporting Behavior

We examine the impact of an ethics education program on reporting behavior using two groups of students: fourth year Masters of Accounting students who just completed a newly instituted ethics education program, and fifth year students in the same program who did not receive the ethics program. In an experiment providing both the opportunity and motivation to misreport for more money, we design two social condition treatments – anonymity and public disclosure – to examine whether or to what extent ethical values are internalized by students. We find that when participants are anonymous, misreporting rates are nearly the same regardless of ethics program participation. However, when their reporting behavior is made public to the cohort, participants who completed the ethics program misreported at significantly lower rates than those who did not receive the ethics program. The results suggest that ethics education does not necessarily result in internalized ethical values, but it can impact ethical behavior.     

The State of Business Ethics in Israel: A Light Unto the Nations?

Whether the nation of Israel has become a “light unto the nations” in terms of ethical behavior among its business community remains in doubt. To examine the current state of business ethics in Israel, the study examines the following: (1) the extent of business ethics education in Israel; (2) the existence of formal corporate ethics program elements based on an annual survey of over 50 large Israeli corporations conducted over 5 years (2006–2010); and (3) perceptions of the state of business ethics based on interviews conducted with 22 senior Israeli corporate executives. In general, and particularly as a young country, Israel might be considered to have made great improvements in the state of business ethics over the years. In terms of business ethics education, the vast majority of universities and colleges offer at least an elective course in business ethics. In terms of formal business ethics program elements, many large companies now have a code of ethics, and over time continue to add additional elements. Most respondents believed they worked in ethical firms. Despite these developments, however, there appears to be significant room for improvement, particularly in terms of issues like: nepotism/favoritism; discrimination; confidentiality; treatment of customers; advertising; competitive intelligence; whistle-blowing; worker health and safety; and the protection of the environment. When compared with the U.S. or Europe, most believed that Israeli firms and their agents were not as ethical in business. A number of reasons were suggested that might be affecting the state of business ethics in Israel. A series of recommendations were also provided on how firms can better encourage an ethical corporate culture. The paper concludes with its limitations.     

The Codes of Ethics of S&P/MIB Italian Companies: An Investigation of Their Contents and the Main Factors that Influence Their Adoption

This article introduces and discusses the initial results of a survey focused on the contents, role and effectiveness of company codes of ethics. The article examines the contents of the codes of ethics of companies operating in the private sector in Italy, quoted on the Italian Stock Exchange (Standard&Poor/Mib-Milano Indice Borsa). The purpose of this investigation was to identify any correlations between sector characteristics and the contents of the codes of ethics, which would enable us to map out the main principles followed in writing the companies’ codes of ethics. The analysis was conducted in order to ascertain whether there were common factors deriving from the shared ethical questions faced by the companies operating in the same sector of activity. As the first step, the 40 companies were subdivided into three main economic categories – Industrial, Financial and Service. Then the contents of each code of ethics were evaluated and classified in accordance with different criteria. The main categories of classification were based on – general principles, social values, rules of conduct, relationships with third parties, implementation and sanctions. The next objective was to investigate whether these characteristics were due to the regulation of the sector of reference, the existence of sector benchmarks for best practice, or simply companies’ voluntary stance on ethical issues. The main conclusions were that the codes of ethics of the Italian companies that we analysed do not seem to show relevant differences traceable to sector of activity, and their adoption is affected by several reasons other than intentionally ethical considerations.     

Corporate ethics statements: Current status and future prospects

This paper reports on a study of large U.S. based corporations concerning the status of formal ethics statements. Almost all responding firms (91%) have promulgated a formal code of ethics while one-half have published values statements and about one-third have a corporate credo. Analysis of these statements concentrated on to whom they are communicated; whether codes of ethics contain information pertinent to the industry, include sanctions for violations and provide specific guidance regarding gifts. Conclusions and implications for managers and researchers are drawn.Patrick E. Murphy is Professor and Chairman of the Department of Marketing at the University of Notre Dame. He is coauthor (with G. R. Laczniak) ofEthical Marketing Decisions: The Higher Road, Allyn & Bacon, 1993. His research interests focus on ethical and public policy issues facing marketing and business. He serves on the editorial review boards of several marketing and ethics journals.     

Does Ethics Statement of a Public Relations Firm Make a Difference? Yes it Does!!

Attempting to determine solutions for unethical practices in the field, this research was designed to assess the effectiveness of public relations firms’ ethics statements in decreasing the incidence of malpractice. This study revealed an encouraging finding that practitioners working in firms with ethical parameters were significantly more likely to engage in ethical practices. Moreover, educating public relations practitioners about the content of ethics statement could positively influence their ethical practices. At the same time, this study’s findings suggest further questions for consideration in future scholarship and in the application of ethics statements to practice within the field.     

Lord Acton and Employment Doctrines: Absolute Power and the Spread of At-Will Employment

This study analyzes the at-will employment doctrine using a tool that encompasses the complementarity of results-based utilitarian ethics, rule-based duty ethics, and virtue-based character ethics. The paper begins with a discussion of the importance of the problem followed by its evolution and current status. After describing the method of analysis, the central section evaluates the employment at-will doctrine, and is informed by Lord Acton’s dictum, “power tends to corrupt, and absolute power corrupts absolutely.” The conclusion explores the implications of the findings. This is a revised version of a paper presented at the World Ethics Forum, Oxford University, Oxford, UK April 9–12, 2006.     

Socratic Questions and Aristotelian Answers: A Virtue-Based Approach to Business Ethics

To teach that being ethical requires knowing foundational ethical principles – or, as Socrates claimed, airtight definitions of ethical terms – is to invite cynicism among students, for students discover that no such principles can be found. Aristotle differs from Socrates in claiming that ethics is about virtues primarily, and that one can be virtuous without having the sort of knowledge that characterizes mathematics or natural science. Aristotle is able to demonstrate that ethics and self-interest may overlap, that ethics is largely compatible with common sense, and that Aristotle’s virtuous person can make ethical decisions rationally. Case studies can help students improve their ethical perception and keep their values from being overwhelmed by corporate culture. Edwin M. Hartman is the Peter Schoernfeld Visiting Faculty Fellow at the Stern School of New York University. He has degrees from Haverford, Oxford, and Wharton, and a PhD from Princeton. Hartman’s most recent book is Organizational Ethics and the Good Life (Oxford).     

‘Consumer Ethics: The Role of Acculturation in U.S. Immigrant Populations’

This study examines the role of acculturation in shaping consumers’ views of ethics. Specifically, it examines the relationships between the desire to keep one’s original culture, the desire to adopt the host culture, and the four dimensions of the Muncy and Vitell (Journal of Business Research Ethics 24(4), 297, 1992) consumer ethics scale. Using two separate immigrant populations – one of former Middle-Eastern residents now living in the U.S. and the other of Asian immigrants in the U.S. – results indicate that those who want to keep their original culture are less tolerant of unethical consumer activities, while those who are more willing to adopt the host culture are more tolerant of these same consumer activities. Furthermore, the immigrants in both studies who are more tolerant of unethical consumer activities are those who are generally somewhat younger and with less formal education. The relationship between gender and consumer ethics was not significant.     

Shadow of Virtue: On a Painful if not Principled Compromise Inherent in Business Ethics

From a certain philosophical perspective, one that is at least as old as Plato but which is addressed also by Aristotle and Kant, business ethics – to the extent that it is marketed as form of enlightened self-interest – constitutes a Thrasymachean compromise: to argue that it is to our advantage to conduct business ethically, perhaps even advantageous to the bottom-line, comes curiously close to endorsing what Plato called the ‹shadow of virtue’ – i.e., of becoming temperate for the sake of ill-temperance. And yet it also seems true that moralistic campaigns to achieve the impossible, e.g., pursuing justice for its own sake or eradicating egoism, often “detract from attaining really important things.” This essay explores the need, in business ethics as well as elsewhere, to make – what Dewey and Niebuhr considered to be – painful if not principled philosophical compromises in order to secure is a society in which there would be “enough justice to avoid complete disaster.”