Business Ethics

In the 1920s, the progressive movement sought to provide citizens with a “living wage”, or income enough for education, recreation, health, and retirement

In the 1930s, the New Deal specifically blamed business for the country’s economic woes. Businesses were asked to work more closely with the government to raise family income

By the 1950s, the New Deal had evolved into the Fair Deal, defining such matters as civil rights an environmental responsibility as ethical issues that businesses had to address

The Rise of Social Issues in Business

- military-industrial complex: antibusiness attitude

- Growth of ecological problems

- Rise of consumerism -> J.F. Kennedy: Consumers' Bill of Rights: right to safety, to be informed, to choose, to be heard

- President Johnson's Great Society: Responsibility to provide economic stability, equality and social justice

Business Ethics as an Emerging Field

- Start to teach about corporate social responsibility (max. positiv impact on stakeholders, min. negative impact on stakeholders)

- Foreign Corrupt Practices Act (Jimmy Carter): Prohibits bribery in the US

- Business issues emerged: Bribery, deceptive advertising, price collusion, product safety, environment

Consolidation

- Business Ethics became a field of study

- The Stakeholder Theory (R. Edward Freeman): Create value for all stakeholders not only shareholders

- Defense Industry Initiative on Business Ethics and Conduct (DII): 6 principles

- Reagan/Bush era: More self-regulation, less regulation by government

1. Development and distribution of understandable, detailed codes of conduct.
2. Provision of ethics training and development of communication tools
3. creation of an open atmosphere (comfortable reporting of violations wihtout fear of retribution)
4. Internal audits and reportings
5. Preservation of the integrity of the defense industry
6. Adoption of a philosophy of public accountability

Institutionalization of Business Ethics

- Clinton: Still supports more self-regulation (prior Reagan/Bush)

- Federal Sentencing Guidelines for Organizations (FSGO) based on DII (1980s):

• Penalties if violation of the law
• Mitigation of penalties for business that strive to minimize misconduct and establish high ethical standards