Thursday, July 5, 2007

Integrity – The Foundation of Leadership

In the post-Enron world of the early-21st century, integrity, and its cousin ethics, are words that get plenty of air time and even more lip-service. They’re tossed around carelessly, but the deeper, more difficult, dialogue on what integrity is and why it matters is critically absent. Your own definition of integrity may involve nuances different from the CEO across town. But, ultimately, the quality of integrity is based on strong values. It is the most-cited response to survey questions of what employees want in a boss. This top-ranking transcends generations and cultures. Universally, people want to work for someone they can trust.

Steelcase, the office equipment manufacturer, regularly conducts surveys of the worldwide office environment. In 1991, being honest, upright and ethical were very important to 87% of Canadians, and 72% of Japanese respondents. Jim Kouzes and Larry Posner, in Leadership is a Relationship, cite honesty as the most important supervisory trait in every study they have done since 1981. Over the years no fewer than eighty-seven percent of respondents listed honesty as number one.

Trustworthy

Integrity is the corollary to commander’s intent – the direction we receive from the boss. It is the trait that sends the message, “You can trust me to guide you in the right direction, and to watch out for you.” The reciprocal of trust is leadership in its most basic form. A leader says, “Here is what I want you to do, and I trust you to do it.” The follower says, “I will do it because I trust you to do the right thing.”

My formative leadership experiences were in the Marines. Those unfamiliar with the military will cite the captive employee aspect that mandates compliance by a subordinate. And yes, unfortunately there are examples of people in leadership positions in the military--and in the civilian sector--who rely on the power of their position to get the job done. Ultimately, the assigned task does get done, but usually, less effectively than in a situation in which the leader relies on positional power. The more-enlightened leader uses influence to accomplish the objective and acts with integrity. It is only the weak military leader who resorts to, “I am ordering you to do this.” Such comments are more often seen on television than in real life. The captive employee knows the rules and will comply with them. He respects the position occupied by the weak leader, but not the leader.

Consistent

People with integrity deliver on the commitments they make and accept. They do this by knowing not only their own capability and workload, but also, that of their team. They don’t over-commit. They are able to say no and explain why. When they do say yes, they get the job done. If they later find that they cannot get it done, they quickly get help and notify the appropriate people.

Non-negotiables

Too frequently, people look at the world in black and white. And that black and white is based on their values, skills, ability and experience. An activity or decision being evaluated is labeled either right or wrong--depending on the perspective of the one doing the evaluating. But, the reality is that leaders need to be comfortable with a wide gray area that allows individual action and flexibility for the subordinate.

When I coach leaders, one of the first exercises I ask them to work through is their “non-negotiables” list. This gets to one of the classic leadership conversations: Do you want those following you to follow a specified path to achieve the desired result, or do you want the desired result?

Integrity is about tangible actions for an intangible concept and is the foundational element of leadership. People do not want to follow a leader they cannot trust. If they are forced to follow that leader, they will do the bare minimum needed to get by.

Integrity dictates the same behavior, whether in public or in private. Consistency, delivering on commitments, and maintaining standards are all facets of integrity.

A bit of advice Marines often hear before going on liberty in port applies to integrity and ethical decision-making: would you want your mother to know what you are doing? For you the question may be, would you want this to be on the front page of USA Today?

Is Your Business Coach a Fraud?

Each day more and more people decide to enter the business coaching field. Spend a little time on the Internet and you’ll find articles, courses, and ebooks on how to be a business coach in a short time period.

I can’t be the only person that finds that ridiculous. I don’t understand how someone with no business experience can be a business coach.

I believe that you can learn a lot about business by reading and doing your own research- but just because you do that, it doesn’t make you qualified to teach. After all, how can you teach methods that you’ve never tried yourself?

If I read a book on space shuttles that doesn’t mean I can be an astronaut. Likewise,I can’t imagine a person who has never performed surgery giving lessons on how to perform heart transplants.

I recently interviewed coach Laurie Hayes (http://www.TheHBBSource.com) who offered some valuable advice for anyone who wants to obtain the services of a business coach.

“You always want to verify a coaches credentials. You want to ask for references and actually follow up on them and make sure that there is risk reversal in place when you enter into an agreement. When I say risk reversal, I mean make sure that there is a guarantee that if you don’t receive the agreed upon results even though you fulfill your obligations of the partnership that you’ll get your money back or maybe even just a prorated amount back for unused services if you decided to terminate the relationship midstream.”

Money chasers who read an article or a book and two days later decide that they are going to become a business coach compromise the integrity of the business coaching field.

If you want to be a business coach, go for it, but before you do make sure you have the necessary qualifications.

Professional Parasites and Amateur Professionals Considered

Have you ever met a well-dressed Buzz Word Blitzing Professional Parasite Practitioner? Well they are everywhere, they say all the right things and then you wonder if you can trust the slick well dressed person and their substantially high rates.

Recently in an article someone had pointed this out to me and a very good article indeed and in my business career let me tell you I have met tons of both Professional Parasites and also amateurs who had integrity and indeed were extremely professional and great to do business with. My favorite type of person to do business with is the true man of honor and character who dresses like a regular guy, calls an ace an ace and a spade a spade.

He knows something inside that he is honorable and capable, sometimes he might use a swear word now and again. BS walks with him. He does what he says he will do and does not care what others might say about him personally, or perhaps does but generally never says a word about it. He despises professional parasites, but never to their face, cordial completely unless they cross him. I guess he the guy with the regular hat and all the land and cattle. Not the 10-gallon Stetson, with extras on it and a line of malarkey a mile long.

If you are ever in the presence of an amateur who runs their business like a professional you will know that hand shake and their word means something. And every time you are screwed over by a professional parasite, you will know it too. Consider all this in 2006.

Business Ethics: Top 7 Tips To Demonstrate Your Daily Work Ethics

With today's environment of 24/7 technology, less people doing more work, the demand for almost what appear to be instantaneous decisions, demonstrating daily high work ethics is a challenge for every business owner to employee. The question is how do you demonstrate your daily work ethics? These 7 steps should assist you to strengthen your own work ethics and provide greater self-satisfaction.

1. Assess your beliefs
This step is really several combined into one if you don't have a purpose in life, values and vision statements. Define your beliefs as you carry out your purpose, vision and values. Are those beliefs consistent and in alignment with those statements?

2. Look to your goals
Do you have written goals that you continually striving to achieve? Without goals, why would we work less alone be concerned about our work quality?

3. Ask for feedback
Seeking feedback from mentors, peers as well as bosses helps us to know if we are on target. Sometimes due to our filters of experience what we see is not what others see.

4. Hone your skills
Becoming the best at what you do is a good thing. Seeking continuous improvement will demonstrate that you are truly committed to a delivering a high level of work ethics.

5. Determine your standards
What are the work standards that define your work ethics? Do you go along with others and settle for mediocrity or are you comfortable striving for more because you know you can do it.

6. Model your beliefs through your behaviors
Are you daily behaviors demonstrating a high level of work ethics? If no one is looking, do you act the same way or do you change because it's okay since no one is looking and can report my behaviors.

7. Reflect each and every day
Before you fall asleep or head off for work, take a few minutes for reflection of today's actions or what may be facing you during the next 8 hours. Ask yourself: Can I be better? If so, How? If not, Why?

If you truly want to stand out in the crowd and demonstrate your work ethics, then begin to realize that work ethics are yours to control. Worrying about others is usually out of your control. If you continually demonstrate a high level of work ethics, you know that you did the best that you could do and will sleep well tonight and every future night. Let others worry about those who chose not to engage in a high degree of work ethics. For it is to be, it is truly up to me.

Multinationals: Why Don't They "Just Do It?"

Business Ethics: Worth a thought?

The corporate world today faces rising ethical dilemmas in every day operations. Ethical issues, often confused with corporate scandals, are not necessarily as dramatic as that. Every department of every organization face moral and ethical dilemmas in their day to day functioning, and often enough corporations get away with unethical or immoral behaviour. Of course, reasons vary. Arguably, organizations cannot afford the risk of not investing their time or resources in developing a comprehensive approach to corporate ethics. This report looks at two multinational organizations, Unilever and Nike Inc. and draws a comparison on their discriminatory practices in the various countries or culture they operate in. Both the firms are identified with unethical behaviour, and although the circumstances and the firm’s ways of handling these issues are different, little seems to have changed.

Unilever Issue: Fair is Lovely!!

An Anglo-Dutch company, Unilever owns many of the world's consumer product brands in foods, beverages, cleaning agents and personal care products. Unilever employs more than 247,000 people and had a worldwide revenue of US$51.4 billion in 2004. (Unilever 2006). In India however the firm runs under its operations under the name of Hindustan lever. The company has a range of ‘home and personal care’ products in the Indian market. One of the most successful brands of the company is ‘Fair & Lovely’. The company websites claims to be using a patented technology for this fariness cream. The website claims ‘Fair & Lovely’ to be formulated with optimum levels of UV sunscreens and Niacinamide, which acts safely and gently with the natural renewal process of the skin, making complexion fairer over a period of six weeks.

A number of ethical concerns are however related to the product. Apart from the ill effects on the skin, as claimed by some doctors, the advertising and marketing of the product has been doing more harm than good for the society. Its frequently-aired ads typically show a depressed woman with few prospects, gaining a brighter future by having a boyfriend or attaining a job after becoming markedly fairer (emphasized by several silhouettes of her face lined up dark to light). On its Web site the company calls its product, "the miracle worker," which is "proven to deliver one to three shades of change." (Unilever 2006). To many it may seem or sound strange for all this to happen in a country where the majority of the people have a dark complexion of skin colour with variations in brownness. Ironically enough though, people from all walks of life, be it a would-be-mother in law, or a young or an old male, everyone seems to have a fascination for lighter skin. Women from all socio-economic backgrounds go to unbelievable lengths to become just a little whiter.

Although the advertising done by Unilever for ‘Fair & Lovely’ is not illegal but it certainly remains objectionable. In an era which is dawned by corporate scandals, such as Enron and the Australian Wheat Board (AWB), Unilever has been successfully running this product in over 38 countries. Ironically most of these countries are under-developed/ developing country, who can do away with such practices. In India, a country with a huge social and cultural divide, high unemployment and illiteracy levels, Unilever successfully deceives and manipulates people through its exaggerated claims. Even if the claims were to be true, and such a product was to make skin lighter, the company looks to gain market share and increase profitability by creating a mindset where lighter skin is superior to a darker complexion. In reality people are buying products that will cause more harm than good. The demand for such "skincare" products is part of an India-wide trend of women wanting to lighten their complexions in the belief that lighter is better. This desire has a long history, a hangover from India's colonial past fuelled by contemporary global perceptions of beauty that give prominence to western marketing and fashion styles. The advertisements shown fail miserably at all levels of advertising ethics.

One of the concepts that can be used to explain the practices of Unilever advertising is Moral myophia, the failure of Unilever to see the moral dimension at all. The advertisements done by the firm have probably been successful. How else would you explain the never ending promotional campaigns all over the media; print, display or broadcast. Success in this case relates to the increasing profitability of the firm after a particular ad campaign. The social implications of this to the society are however conveniently ignored. Quite clearly, Unilever seems to be following the belief of the only bad advert is one that does not work.

The content of the product website makes things a little more complicated. The website claims to be helping women in India, often considered to be the weaker sex. The Fair and Lovely Foundation, an initiative of Hindustan Lever Limited seeks economic empowerment of Indian women through information and resources in the areas of education, career guidance and skills training. Comprising of an advisory body of leading individuals, this foundation aims to undertake various projects and initiatives in keeping with its vision of empowering women to a brighter future. Prominent women organizations and achievers partner initiative to promote economic empowerment of women. (Grace & Cohen 2005)

Noble thought?

It sure is, but at what expense. Isn't it strange and ironic that this company, and others in the business, continue to sell fairness as a desirable quality, be it for success in marriage or career, and equate dark complexions with failure and undesirability? Where does a company draw the line between selling a product and being socially sensitive? What is even more disturbing is the fact that there is a constant attempt to disguise these socially unacceptable practices. As noble as the idea behind the Fair and Lovely Foundation might be, it still does not solve the root problem. Addressing one problem in the society can not come at the expense of exaggerating the other one. Women in India need to be empowered, and be told that they are no less than their male counterparts, however the people of India also need to be told that the mere colour of skin does not make one superior. The society needs to get over the colonial hangover, and the least that companies like Unilever can do is not spend millions of dollars on campaigns which do more social harm than good.

Nike Dilemma: Still waiting for them to “do it”!

Another corporate giant having its fare share of controversies over the years is Nike. Nike employs approximately 26,000 people worldwide. In addition, approximately 650,000 workers are employed in Nike contracted factories around the globe. More than 75% of these work in Asia, predominantly in China, Thailand, Indonesia, Vietnam, Korea and Malaysia (Nike 2006). In 1998 Nike came under fire for the sweatshop conditions of the workers in the Nike factories in China and other third world countries. The evidence showed that the workers were regularly subject to physical punishment and sexual abuse and exposed to dangerous chemicals. (Nike Accused of Lying About Asian Factories 1998). Sub standard working facilities, bare minimum wages and risks to health of labourers mark NIKE factories in Asia. The firm was also accused of practicing child labour in Pakistan.

So the question now is, why did it happen, and more importantly, has anything been done since to correct it.

So why did it happen?

Well that is quite clear. The reason why most firms outsource their activities to lesser developed countries is to exploit cheaper labour and production costs. Nike has a brand reputation worldwide, and in-fact is a market leader in the sales of athletic shoes. The constant focus is to formulate ways and strategies to reduce production costs, and one way of that is fewer wages to the workers. The high unemployment levels in the third world countries, as well as the desperation for people to be employed, in any kind of work, allows multinationals like Nike , the perfect platform to indulge in malpractices without getting into too much trouble. A look at some of the ethical issues concerned with Nike’s human (or inhuman!) right violations would give a better understanding of the concern.

Ethical Dilemma:

Any firm which expands its operations globally needs to follow the basic code of international ethics:

• Not to intentionally direct harm in the host country. By providing below standard and unsafe working conditions, and low wages, Nike was clearly intentionally doing harm.

• Benefit the host country. Although Nike was indeed expanding the number of jobs available in China, a desirable aspect, but the extremely low wages meant it was all beneficial for the corporation and not the people in China.

• Respect the human rights of employees. Reports of unsafe and hazardous working conditions proved that Nike did not care much about the human rights in China.

• Respect the values, culture and laws of the host country- as long as they are not morally wrong or against human rights. (Grace & Cohen 2005)

It would be a fair assumption to make, if a certain behaviour is unacceptable in the home country, it would most likely be morally wrong in a foreign environment as well. Managing stakeholder interests is also extremely important for any firm. However problems arise when businesses fail to prioritize the stakeholder interests. Nike prioritizes its stakeholders in terms of their importance to the firm, and quite clearly the workers in Asia, do not seem to be anywhere near top of this priority list. As a consequence, all the efforts of the firm are directed towards the consumers, who typically are in developed countries, with more money, and who can not care less about what might be happening in a Nike factory miles away from home.

So has Nike done anything about it?

Since the controversy first broke out in 1998, Nike has claimed to taken several steps to correct the mistakes. Or so is what the organisation claims. This section of the article focuses on Nike’s efforts, the truth, the lies and the myths about it. After the controversy broke out in the international media, Nike’s founder and CEO Mr. Philip Knight made six commitments:

• All Nike shoe factories will meet the U.S. Occupational Safety and Health Administration's (OSHA) standards in indoor air quality.

• The minimum age for Nike factory workers will be raised to 18 for footwear factories and 16 for apparel factories

• Nike will include non-government organizations in its factory monitoring, with summaries of that monitoring released to the public.

• Nike will expand its worker education program, making free high school equivalency courses available to all workers in Nike footwear factories.

• Nike will expand its micro-enterprise loan program to benefit four thousand families in Vietnam, Indonesia, Pakistan, and Thailand.

• Funding university research and open forums on responsible business practices, including programs at four universities in the 1998-99 academic year. (Connor 2001)

However there was still no mention of the human rights of workers, higher wages, more reasonable working hours, safer and healthier work places and respect for Workers' Right to Freedom of Association. Later consumer activist Marc Kasky filed a lawsuit in California regarding newspaper advertisements and letters Nike distributed in response to criticisms of labour conditions in its factories. Kasky claimed that the company made representations that constituted false advertising. Nike responded the false advertising laws did not cover the company's expression of its views on a public issue, and that these were entitled to First Amendment protection. The local court agreed with Nike's lawyers, but the California Supreme Court overturned this ruling, claiming that the corporation's communications were commercial speech and therefore subject to false advertising laws. (Kasky V. Nike 2002)

The parties subsequently settled out of court before any finding on the accuracy of Nike's statements, for $1.5 million. Discovery in the Kasky case had the potential to open the Nike files to public scrutiny, to document the mistreatment of workers throughout the world, and the flow of money from Nike to public interest groups. However Kasky and his lawyers settled this potential historic case for a $1.5 million donation to a group controlled by the shoe and apparel industry. There hasn’t been a word about it since.

(Weissman & Mokhiber 2002)

In 2004 Nike announced that it would be developing a balanced scorecard to integrate corporate responsibility into its business. The sports goods manufacturer said it would introduce corporate responsibility as an integral part of its contract manufacturing business. Sourcing decisions were to be based not just on price, quality and delivery but also a contractor’s pledge towards labour management and environmental, health and safety programmes.

In 2005, seven years from the time when the controversy was first made public, an independent research conducted showed that although 60% of factories monitored achieved an A or B rating in terms of compliance with agreed standards, a quarter of factories were found to present more serious problems. These ranged from a lack of basic terms of employment and excessive hours of work to unauthorised sub-contracting, confirmed physical or sexual abuse and the existence of conditions which could lead to death or serious injury. The Guardian also reported some of the conditions that existed in the Chinese factories in 2005

• Between 25% and 50% of the factories in the region restrict access to toilets and drinking water during the workday.

• In more than half of Nike's factories, the report said, employees worked more than 60 hours a week. In up to 25%, workers refusing to do overtime were punished.

• Wages were also below the legal minimum at up to 25% of factories (What are factory conditions in China 2005)

Once again Nike said it would set up a taskforce to improve compliance with its code of conduct on working hours. It will also work with factories to help them address the most pressing problems as well as seeking to establish a set of common standards across the industry. (Nike opens up in Standards Drive 2005)

The question of course is, would anything still be done. There is a good chance it may never be. Nike sees business ethics as “no good at all”, and believes acting ethically would not be in the best of interests of the business. Not till the time, the sales of the business go down alarmingly, would there be any hope for any drastic improvements in these conditions. Nike has always had its share of controversies, and the firm seems to be thriving on it. The firm manages to use the controversies as a publicity tool. Thus far, Nike has treated allegations as an issue of public relations rather than human rights. Every allegation is followed by the release of public statements across various magazines and newspapers stating the efforts made by the firm to make the difference, but seven years down the road, the differences are yet to be seen. Meanwhile the efforts of Nike to manipulate and win even more customers go on. The corporate website of the firm talks heavily about their shifting approach to labour compliance.

(Evolution: Shifting Approach to labor compliance 2006)

Unlike Nike, Unilever has not quite been indulging itself in illegal activities, but does that make it any less harmful, or does that make Unilever any bit more ethical than Nike?

According to this writer, the answer to both the questions is NO. In fact what makes Unilever’s practices even scarier than those of Nike is the fact that they cause as much harm, but still there seems to be little concern over it. The firm has been in operation since 1978, and even 28 years after there seems to be little or no concern. There is little media coverage over the menace, possibly because of the advertising revenues being paid, or just the ignorant nature of the present day media, which seems to be more interested in scandals rather than some social concerns in a third world country.

The double standards practised by both Nike Inc, and Unilever are quite apparent as well. The majority of Nike clothing is produced in countries it hardly has any sales, but of course the factory conditions of a worker based in an American factory is strikingly different from that of a worker in a Chinese factory. Likewise Unilever manipulates the market by introducing fairness creams in cultures where beauty equates fairness. To boost the sales, the company goes a step further by trying to position the product by changing consumer perception of fairness as being successful, both socially and emotionally.

Social impacts? Did you ask?

Of course that’s hardly on the agenda. The interesting thing is, although Unilever operates in over 40 different counties, including Australia, the ‘Fair & Lovely’ product is only available in a handful of markets. The company does not have any ‘Dark & lovely’ brands in their western markets, possibly because they perceive this market to be more educated and therefore tougher to manipulate.

The firms of course have their reasons, and one of them is us, the consumers, who purchase these products. It is the age old formula of demand and supply. We demand the product, and the firm of course goes to any lengths to fulfil the gap. In Unilever’s case, there is an obvious need in the mind of the consumers in India to have fair skin. Similarly for Nike, the worldwide demand for their apparels compels the firm to go to unbelievable extent to produce lower cost products. The story unfortunately does not end here. We the consumers, then put the firm under even more pressure to maintain their profitability, only this time we take the role of investors. Investor’s of course are only concerned with the share return, and cannot care less about how the firm maintains its profitability.

Jennifer Abbott and Mark Achbar, in their documentary ‘The Corporation’, proved that corporations in the present time fit the definition of a ‘psychopath’. The concern is that this psychopath is being raised and bred by us, the consumers, and the investors. These are average times we are living in, with every day more issues, more scandals and more controversies breaking out. However reading the stories is nearly not enough. Something somehow somewhere needs to change and change sooner rather later, before it gets too late.

End of story?

Unfortunately, I don't think so.

Saturday, June 23, 2007

Business Ethics: Lesson Plans, Knowledge Management, Ethics and Capitalism Collide

Recently I read of a new website where teachers can post and sell their lesson plans to recover the time that they had spent in developing these plans. On the surface, this sounds reasonable and why would anyone object to teachers making a little more money through such a capitalist venture and leveraging their intellectual capitol?

However this question is much more about understanding the importance of retaining intellectual capital (knowledge management) within the educational system and how this demonstrates questionable ethics on part of the teachers.

Consider the following scenario:

I am an instructional designer (person who writes training programs) and employed full time. Part of my job is to create activities that promote learning for the target audience. Do I have a right to sell those activities on my own time on a website? Even though I am not a lawyer, I know that this would be highly unethical and probably illegal. These activities are the direct result of my job description. My employer has already paid me for their creation.

Now, I am a teacher who is paid to educate young people. Also, I am paid to attend numerous professional development days in which I learn to create specific lesson plans that promote learning for my students. Do I have a right to sell those activities on my own time on a website? From a legal standpoint, I don't know the answer to that question. However, from an ethical standpoint, absolutely not! What is happening is that I am being paid twice to perform the same work. Some individuals call this double dipping and in many proven cases it is illegal.

As a former public school teacher, elected school board trustee and now a performance improvement consultant, I have seen hundreds of thousands of dollars lost by school systems because they had not created a knowledge management process. Lesson plans created during school hours and during time designated to teacher professional development should be archived by the school corporation so that every teacher benefits from this knowledge. Just think about all that lost knowledge and wisdom and its very expensive price tag.

Professional development is truly expensive. According to Northern Central Regional Learning Laboratory (NCRL), a quick search revealed the following allocation of funds for professional development:

Illinois over $100 million annually for professional development
Iowa over $50 million
Michigan over $20 million
Ohio over $25 million

Additionally within each school day, teachers receive paid preparation time to work on their lesson plans, grade students' papers, etc. For many teachers, the designated time is not enough and time must be spent after school hours to complete their daily tasks. And the question then arises, if I am doing it on my own time, then I own the intellectual capitol and have the right to sell this capitol. However, many salaried people take their work home to finish it and are not compensated for those efforts. In the real world, it is part of the job.

What for me is most troubling about teachers selling lesson plans (that in many cases are the intellectual property of the school) is one of ethics. Since I was a former teacher, I experienced first hand the extra hours invested in preparing my room, grading papers and creating engaging learning activities. Yet, coming from a small business background, doing all this perceived extra stuff wasn't really all that extra because it was part of the job, plain and simple. To go out and sell the fruits of my labor that were paid for by my employer would be totally unethical and probably would get me fired. Yet, teachers are being encouraged to engage in unethical behavior and they probably believe it is OK.

And finally there is the issue of copyright. In many teacher professional development workshops, the speakers distribute sample lesson plans. With today's technology, a quick scan and a few edits can change the visual ownership of the lesson plan, but the intellectual capitol still belongs to the presenter of the workshop. Of course if a student did this, it would be cheating or plagiarism.

As a small business and education coach who has created hundreds of learning activities to help clients better understand key concepts, I have always acknowledged the source of the activity such as a concept, story or quote when it wasn't mine. This keeps me always aware of my own ethical standards and ensures that I hold fast and true to those standards.

So before any teacher sells what they believe to be their lesson plan, maybe they need to identify where that plan came from and ask themselves: "Have I already been paid for that lesson plan?"

Business Ethics and Unethical Practices

The study of business ethics and its implications for different stakeholders have seen tremendous growth in the past few decades. There has also been a rise in the use and development of codes of ethics and announcements for ethical practices by many firms; however companies are still criticized for their unethical practices at different levels (Papers4you.com, 2006). Business ethics, according to the literature has been entrenched with the philosophical details of Ethics (Trevino & Nelson, 1999). Ethics has been defined as ‘the activity of examining the moral standards of a society, and asking how these standards apply to ones life and whether these standards are reasonable’ (Velasquez, 1998; p. 11).

The literature on business ethics is divided on its views about the motivation and reason for businesses to have an ethical dimension. Drawing upon Harrison (2001), there are two major schools of thoughts, firstly those who suggest that firms are profit generating institutions and therefore business ethics is yet another way to attract customers, secondly those who support corporate conscience and intrinsic motivation for the adoption of business ethics.

Business ethics has been considered very subjective in nature and according to Paul (2001) is considered a function of time and culture. It has been established that with the passage of time business ethics have evolved and also that the cultural values and norms drive business ethics within national and regional boundaries. One of the major studies regarding the national values has been conducted by Hofstede (1983). According to this research, which was only based on four indicators i.e. individualism, power distance, uncertainty avoidance and masculinity, there is a great deal of differences among values across different nations and consequently the business ethics. Globalization combined with standardization has made businesses financially efficient but at the same time poses questions regarding the standardized codes of business ethics across national boundaries.

Vinten (1991) has divided the business ethical issues at different levels i.e. international business, domestic business and professional ethics. At the international level ethical issues include free-masonry and socialism versus capitalism; at domestic level these include religious dimensions, social marketing and ethical education; and lastly at the individual level these include bribery, corruption and data protection (Papers4you.com, 2006).

There are many reasons and criticisms for the failure of adoption of ethics in the business world. Firstly, the concept is considered to be overly theoretical and it also negates the basic purpose of any business i.e. to create shareholder’s wealth. Secondly, it has lack of direction and unanimity across different cultures and academic groups. Lastly, it has many inherent unresolved dichotomies that according to Sternberg (1994) make it a case of rejected relativism.