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How Business Ethics Developed In America:A Step By Step Guide To Six Fundamental Stages In Evolution

Updated on April 12, 2011

The development of Business ethics In North America

  1. The recognition of Business ethics as a field of knowledge in North America has undergone a number of distinct evolutionary stages.Knowing this is fundamental to knowing the direction in which business ethics will take in the 21st Century.


(i) Before 1960s:Ethics In Business

  1. Before the 1960s the Protestant and Catholic churches often discussed ethical issues related to business theologically. Religious leaders raised questions about fair wages, labor practices, workers rights and living conditions, and for improving the conditions of the poor. Some religious colleges and universities developed courses on ethics in business. Such religious traditions provided a foundation for the future field of business ethics. Each religion applied its moral concepts not only to business, but also to government, politics, and to family and personal life. For example, the Protestant work ethic encouraged individuals to be frugal, honest, work hard, and attain success in the capitalistic system ( Farrell,O.C.& Fraedrich,John,Business Ethics:ethical decision making and cases)
  2. This led to the systematic laying of groundwork for future take off of the field of business ethics as a major discipline.

The 1960s:The Rise of Social Issues in Business

During the 1960s,American society turned to causes.Widespread criticism arose regarding pollution and decay of inner city areas.This period saw the rise of consumerism i.e.activities undertaken by independent individuals,groups and organizations to protect their rights as consumers(p. )

Consumers no longer just concentrated on the quality attributes of products consumed in general but went a step further to take into consideration the reputation of the producing firm in particular.

The 1970s: Business Ethics as an Emerging Field

Business ethics began to develop as a field of study in the 1970s.Theologians and religious thinkers had already laid the foundations by suggesting that certain religious principles could be applied to business activities.Consequently academics began to teach and write about corporate social responsibility,philosophers began to apply ethical theory to philosophical analysis to structure the area of business ethics.Business became more concerned with their public images and as social demands grew,they realized  they had to address ethical issues more directly.By the end of 1970s a number of ethical issues had emerged, such as bribery,deceptive advertising,product safety and the environment.The term business ethics had become a common expression.Academic researchers sought to identify ethical issues and describe how business people might  choose to act in particular situations.However,only limited efforts were made to describe how ethical decision making process worked and to identify the many variables influencing ethical decision making process in organizations.

The 1980s:Consolidation

In the 1980s,business academics and practioners acknowledged business ethics as a field of study .Agrowing group of institutions with diverse interests promoted the study of buisiness ethics.Many firms established ethics committees to address ethical issues.At this time the Reagan and Bush eras took the view that self regulation rather than regulation by the government was in the public interest.Because of deregulation,businesses had more freedom to make decisions in their operations at national and international levels.However,the government was also developing stringent laws for firms that were involved in misconduct.At this time, the Reagan and Bush eras took the view that self-regulation, rather than regulation by the government, was in the public interest. Because of deregulation, businesses had more freedom to make decisions in their operations at national and international levels. However the government was also developing stringent laws to control firms that were involved in misconduct.

The 1990s:Institutionalisation of Business Ethics

While the Clinton administration supported self-regulation and free trade, it also supported the concept of organizational accountability for misconduct and damages.The study of business ethics began to evolve to its present form.

Business ethical issues could be dealt with in a pragmatic way,seeking solutions for specific managerial issues.

They could be approached from the perspective of law,philosophy,theology or social sciences.During this period an attempt was made by business managers,academics and the government to link the concepts of ethical responsibility and decision- making within an organization.

Thus crucial managerial decisions such as the drafting and implementing of the company's business strategy added on, for the first time, business ethics accountability factor into consideration thereby putting ethics at the heart of business strategy.

This in part has played a major role in shaping the direction of business ethics at the turn of millennium,practically  lobbying for cultural based organizational ethics initiatives approach.

2000 and beyond

The current trend is to move away from legally based ethical initiatives in organizations to cultural or integrity based initiatives that make ethics a part of core organizational values.Firms that have developed proactive culturally based organizational ethics initiatives have helped support many positive and diverse organizational objectives such as profitability,hiring employees satisfaction,customer loyalty and supply chain relationships.At an international level,the development of global codes of ethics reflects common ethical concerns for global firms.


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      okello jacob 18 months ago

      perfect flow of ethical management arrangement well understood by me and rest of the crew our school of business