Ethics in Hard Times

The Guardian had this interesting piece today on corporate ethics during economic downturns: Hard times turn spotlight on business ethics.

Most major U.S. companies have an ethics officer, but as investors survey the wreckage of a deepening financial crisis that has exposed behavior ranging from risky to downright illegal, one might ask “What were they doing?”

Laying the blame on ethics officers is probably unfair, but it is fair to ask, of the companies whose wounds seem self-inflicted, just what their ethics officers have been up to for the last few years, how much authority ethics officers were given within the organization, and how well-resourced ethics officers’ offices were.

Interestingly, the article discusses both the ethical failings that might have got companies into their current messes, and also the extent to which financial difficulties make unethical behaviour more likely. Talk about a vicious circle.

1 comment so far

  1. Anonymous on

    Meta-analytic data support the view that poor org. performance is in fact associated with corp. irresponsibility: http://www.freewebs.com/marcorlitzky/Papers/orlitzkyschmidtrynes2003os.pdfHowever, it’s a reinforcing cycle (negatively *and* positively, i.e., it may also work in the other direction)… High fin. performance is associated with higher responsibility and moral betterment: See paper linked above and B. Friedman’s (2005) book _The Moral Consequences of Economic Growth_. I think there are as many examples of this direction as examples illustrating the vicious circle highlighted by the Guardian article. Both dynamics, negative and positive, are supported by large-scale empirical analyses.


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