The Business Ethics Field of Study
The business ethics field of study has evolved through five distinct stages. These stages are before 1960, the 1960s, the 1970s, the 1980s, and the 1990s. It also continues to evolve in the twenty-first century. With each stage come new changes. In the last 30 years the ethics field of study, starting from the 1980s, has shown multiple changes. In 1980 business ethics was acknowledged as a field of study. A group of institutions with diverse interests promoted its study causing business ethics organizations to grow and include thousands of members.
The 1980s also brought forth the development of the Defense Industry Initiative (DII) on Business Ethics and Conduct. This Defense Industry Initiative includes six principles. These six principles are as follows: 1. Supports codes of conduct and their widespread distribution 2. Member companies are expected to provide ethics training for their employees as well as continuous support between training periods. 3. Defense contractors must create an open atmosphere in which employees feel comfortable reporting violations without fear of retribution. . Companies need to perform extensive internal audits and develop effective and voluntary disclosure plans. 5. DII insists that member companies preserve the integrity of the defense industry. 6. Member companies must adopt a philosophy of public accountability. Another change that occurred during the 1980s was the lift of many tariffs and trade barriers, and businesses merged and divested within an increasingly growing atmosphere.
The fourth distinctive stage of the business ethics field that brought change over the last 30 years is the stage 1990s. In the 1990s Congress approved the Federal Sentencing Guidelines for Organizations. This set the tone for organizational ethical compliance programs in the 1990s. The guidelines broke new ground by codifying into law incentives to reward organizations for taking action to prevent misconduct such as developing effective internal ethical and legal compliance programs.
Under the Federal Sentencing Guidelines for Organizations if a company lacks an effective ethical compliance program and its employees violate the law, they can incur severe penalties. The final change of the business ethics field that occurred in the last 30 years is from the twenty-first century. In 2002 Congress passed the Sarbanes-Oxley Act to try and improve ethical standards in business. This new act made securities fraud a criminal offense and stiffened penalties for corporate fraud. It also requires corporations to establish codes of ethics for financial reporting.
In 2004 there was an amendment to the Federal Sentencing Guidelines for Organizations that requires that a business’s governing authority be well informed about its ethics program with respect to content, implementation, and effectiveness. All of these changes from the last 30 years have institutionalized the need to discover and address ethical risks. The twenty-first century brought forth changes but also has challenges too. I think the biggest challenge to business ethics in the twenty-first century is the fact that not all business managers and executives have high ethical standards.
Fraud is something that happens quite frequently in this century and it’s very unfortunate. There seems to be an increasing number of businesses that need to improve their ethical standards and offer more training to prevent this. Business ethics is something that every company needs to take seriously and really enforce within their employees. It will not only contribute to loyalty and employee commitment, but it will also contribute to customer satisfaction and profit