How has corporate ethics evolved? The subject has gained attention around the world in recent years, but it has been debated since antiquity. Businesspeople's greed was long viewed with suspicion, giving rise to the idea that business is amoral.
Since the mid-twentieth century, however, writers have warned of a decline in economic morality: more people breaking laws, misleading consumers, polluting, defrauding shareholders, manipulating accounts, failing to pay royalties, using child labor, or exposing employees to toxic substances.
The separation of business and ethics
Some writers argue that these opportunistic behaviors reflect a separation between ethics and business (Fernández, 1993).
Public attention to the issue increased on May 26, 2006, when a jury found Kenneth Lay, founder of Enron, guilty of conspiracy and fraud charges linked to hiding losses and overstating company profits.
The article says Lay's deception caused investors losses exceeding $1.2 billion. Enron's collapse became one of the most prominent corporate failures in the United States and was followed by other international business scandals.
Awareness of ethics in business
The business ethics movement is not simply a response to companies' damaged reputations. Renewed attention to ethics is also based on the argument that unethical conduct causes losses for organizations and markets.
The article cites López (2007) on the financial harm dishonest behavior can cause companies and Murray (2002) on the way corruption can discourage investment.
The 2019 Global Business Ethics Survey published by the Ethics & Compliance Initiative (ECI) surveyed more than 18,000 employees in 18 countries about misconduct they had observed at work.
The article reports that 30% of respondents had observed misconduct, 21% had seen behavior they considered abusive, intimidating, or likely to create a hostile workplace, and 75% said they reported the misconduct they observed.
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