BUSINESS ETHICS

Business Ethics and its Effect on the Bottom Line

Abstract

The idea of business ethics in USA is becoming widely accepted as having a potential contribution to make towards improving industrial performance. It has long been accepted in America due to different reasons. What Business ethics can do for the bottom line depends on what is expected of it, and on whether the expectations are realistic. There are no good reasons for believing it to be either impossible or impossibly expensive.

Business Ethics and it's Effect on the Bottom Line

The Rise of Business Ethics

The idea of business ethics is becoming widely accepted in America as having a potential contribution to make towards improving industrial performance. It is now included in postgraduate courses in some business and management schools of USA. Business ethics — the systematic handling of values in business and industry — can and does provide clearly identifiable benefits. They are no more or less difficult to recognise than are those of most management systems, procedures or techniques. We sketch out below how that can be done. Our present purposes are:

(1) to attempt to explain why managers are now increasingly aware of the possibilities that can be realised by the systematic handling of values;

(2) to identify what can reasonably be expected from this;

(3) to offer firms and organisations some suggestions on various ways of developing programs in the area.

Business ethics is not a technique or set of techniques. It is not a new discovery, or even a new set of insights

(even though there are techniques and insights to be drawn upon). It is in every sense of the word a philosophy of management and industry, and a very practical one.

Business Ethics: Explaining the Rise

The reasons for major shifts in attitudes or opinion are notoriously difficult to identify with much certainty, but the features below seem to stand out more than others.

The New Entrepreneurs

In America we can point to the general shake-up in industrial values in the 1980s towards more individual enterprise, bringing with it some uncertainties about what rules ought to apply. This helps to explain why industry has been more receptive to the ideas in the last decade, but there has been a growing conviction that business ethics as a discipline has at last "come of age" in America (Graham, 1971) and, to a lesser extent, on the continent, where industrial attitudes have been very different from the other parts of the world.

Causes Célèbres

Frequent major events in industrial relations and financial services have led to a rapid growth in codes of practice, to much legislation, deregulation and reregulation. We suggest that the intensified activity in these areas is part of a search for new principles — and of a reassertion of older ones. We shall not review here the practices that have promoted so much ethical and legislative questioning. That has been done elsewhere in considerable detail (David, 1986).

A Growing Recognition of the Important of People

The growth of ...