Managers, for example, are urged to weigh the consumer’s interest in healthier products against their obligation to provide shareholders with the healthiest possible dividend. And lawyers are now being encouraged to weigh an opposing party’s right not to be viciously cross-examined against their own client’s right to the most vigorous possible defense. When ethics and interest do not conflict, business ethicists have a point too. Certainly, there is ethical value in doing the right thing because it is right, not just because it serves one’s interest.
Soft law influences corporate behavior, not through legal sanctions, but through awareness campaigns and boycotts . Sometimes, cultural diversity dilemmas manifest themselves in marketing decisions. Developed countries usually have strict regulations against dangerous substances such as tobacco. As change in customer preferences and health laws generated a decline in cigarette consumption in developed economies, tobacco companies shifted their attention and marketing dollars to emerging markets with different regulatory standards. In domestic business environments, national laws and traditions establish a shared ethical framework on what businesses can and cannot do. A French company operating in France knows that it must comply with well-established labor, environmental and governance rules backed by reliable enforcement mechanisms.
In 1991 it started the Business Ethics Quarterly with Patricia Werhane as Editor. Even when business ethicists try to be practical, however, much of what they recommend is not particularly useful to managers. In business, as in law, ethicists are increasingly asking individual practitioners to modify their commitments to their traditional principals in order to satisfy the competing interests of nonprincipals.
Those documents revealed that there were doubts the war could be won while thousands of young Americans continued to die fighting. The dilemma for the Washington Post’s then CEO centered on her having to choose between exposing the truth based on freedom of speech—which was the mission and foundation of the newspaper—or staying silent and suppressing the classified information. She chose, with the support of and pressure from her editorial staff, to release the classified documents to the public. A result was enflamed widespread public protests from American youth and others. President Johnson was pressured to resign, Secretary of State McNamara later apologized, and the war eventually ended with U.S. troops withdrawing. So, universalist ethical principles may present difficulties when used in complex situations, but such principles can also save lives, protect the integrity of a nation, and stop meaningless destruction.
Ethics is the systematic study of the generally-held morality of a society aimed at determining the rules which ought to govern human behavior, the rules that a society ought to enforce, and the virtues worth developing in human life. It is thus partially conservative and partially radical, and at different periods in different societies one or the other of these aspects is dominant. In the United States in the 1860s, the American Civil War was in part a response to the moral condemnation of the institution of slavery as existing in the Southern states of the Union. By analogy, business ethics as an academic field is the systematic study of the morality existing in business—the business practices, the values, the presuppositions and so on actually existing. In general, for instance, the field has defended private property but it has been critical of the exploitation by multinationals of workers in less-developed countries and of bribery and corruption as practiced by business. Many people engaged in business activity, including accountants and lawyers, are professionals.
SOX provisions are aimed at improving auditor independence and accuracy of financial reports as well as addressing analyst conflicts of interest. The Sarbanes-Oxley Act was passed in the USA to restore investor confidence in corporate financial behaviour and reporting. As a result of SOX, officers and directors are held liable for accounting misreporting and malfeasance in both criminal and civil courts. Ponzi schemes are named after Charles ponzi, who in the 1920s paid returns to investors using money from new investors rather than firm profits.
Answers to questions about the means of corporate governance often mirror answers to question about the ends of corporate governance. Often the best way to ensure that a firm is managed in the interests of a certain party P is to give P control. Conversely, justifications for why the firm should be managed in the interests of P sometimes appeal P’s rights to control it. Questions in business ethics are important and relevant to everyone.
The view that someone should do something about the world’s problems seems true to many people. Not only is there an opportunity to increase social welfare by alleviating suffering, suffering people may also have a right to assistance. The controversial issue is who should do something to help, and how much they should do. Thus can you see the cat woman with broom answer defenders of the above argument focus most of their attention on establishing that firms have these duties, against those who say that these duties are properly assigned to states or individuals. O’Neill and Wettstein argue that firms are “agents of justice”, much like states and individuals, and have duties to aid the needy .