Most authorities agree that there is room for improvement in business ethics. One of the most troubling questions posed in relation to business ethics is whether or not companies can become more ethical in the real world. The majority opinion on this issue suggests that the government, trade associations and individual companies can establish acceptable levels of ethical behavior.
The government can do this by legislating stricter regulations. But, the rules require application and when in many cases there is evidence of lack of application, even the ethical entrepreneur will tend to “pass something” without being caught. Greater regulation can help, but it surely cannot solve all business ethics problems.
Trade associations can, and often do, provide ethical guidelines for their members. These organizations within particular industries are in an excellent position to put pressure on members who stoop to questionable business practices. However, compliance and authority vary from association to association. Furthermore, precisely because trade associations exist for the benefit of their members, harsh measures can backfire.
Employees can more easily determine and adopt acceptable behavior when companies provide them with a “code of ethics.” These codes are perhaps the most effective way to promote ethical behavior. A code of ethics is a written guide to ethical and acceptable behavior that outlines policies, standards, and uniform penalties for violations. Because employees know what is expected of them and what will happen if they violate the rules, a code of ethics goes a long way toward promoting ethical behavior. However, the codes cannot cover all situations. Companies must also create an environment in which employees recognize the importance of complying with written code. Managers must provide direction by fostering communication, actively modeling and encouraging ethical decision making, as well as investing in training employees to make ethical decisions.
Sometimes even employees who want to act ethically can find it difficult to do so. Unethical practices can take root in an organization. Employees with high personal ethics can then take a controversial step called “whistle blowing.” Whistleblowing is informing the press or government officials about unethical practices in an organization. Whistleblowing could have warned of a disaster and prevented unnecessary deaths in the space shuttle Challenger disaster, for example. How could employees have known about life-threatening problems and let them go? Whistleblowing, on the other hand, can have serious repercussions for employees; Those who make waves sometimes lose their jobs.