|Black, white, gray. How thick is your gray line?
Enron, WorldCom and Tyco lost billions of dollars, not to mention the loss of public confidence to scandalous corporate behavior. And just as we thought we'd seen the worst in 2003, Parmalat stepped in to be dubbed "Europe's Enron". In after these last couple years of corporate scandals, even a mere whiff of scandal can send a company's stock swooning. If anything, this should give companies an economic incentive to conduct their business ethically.
Falling Ethical Standards
One is made to wonder what intractable causes have led to the pitifully low ethical level seen today. A recent study suggested that business students who are taught ethics, and are aware of ethical concepts, during school may return after a summer or a year on the job having forgotten many of the basic tenants of ethical behavior in business situations! Many students changed their attitudes to ethical issues while they experience the pressures of work life and feel that they have to "sell their souls" to make it in business. Whether its financial malfeasance or sexual impropriety, there is a worrying trend in this apparent drop in corporate ethics.
How can your company make sure that your employees are behaving ethically and while setting a good model for the new hires? This is a constant challenge, and a prominent answer is frequent training of employees at every level in ethical decision-making. Moreover, due to its paramount importance, such training should be given as much importance as any major investments.
And the High Stakes of Corporate Scandal
Scandals, whether financial, social, or environmental cost companies reputations as well as money. Arthur Anderson, one of the world leading accounting firms, basically vanished after the Enron scandal. Exxon Mobil was recently ordered to pay US$6.75bn in damages and interest in relation to the 1989 Exxon Valdez oil spill. The high stakes of unethical business practices exemplified in these few examples should be enough reason to get any firm thinking more about responsible behavior.