c
 

 
The term 'business ethics' is used in a lot of different ways, and the history of business ethics will
vary depending on how one conceives of the object under discussion. The history will also vary
somewhat on the historian²how he or she sees the subject, what facts he or she seeks to
discover or has at hand, and the relative importance the historian gives to those facts. Hence the
story being told will be somewhat different from the story someone else might tell in various
particulars, and we hope that instead of being a dull recitation of facts it might in fact prompt
some discussion at the end by those who would tell a somewhat different story.

The story has three strands, because the term business ethics is used in at least three different,
although related, senses. Which sense one chooses therefore gives priority to nature of the
history of the topic. The primary sense of the term refers to recent developments and to the
period, since roughly the early 1970s, when the term 'business ethics' came into common use in
the United States. Its origin in this sense is found in the academy, in academic writings and
meetings, and in the development of a field of academic teaching, research and publication. That
is one strand of the story. As the term entered more general usage in the media and public
discourse, it often became equated with either business scandals or more broadly with what can
called "ethics in business." In this broader sense the history of business ethics goes back to the
origin of business, again taken in a broad sense, meaning commercial exchanges and later
meaning economic systems as well. That is another strand of the history. The third stand
corresponds to a third sense of business ethics which refers to a movement within business or the
movement to explicitly build ethics into the structures of corporations in the form of ethics
codes, ethics officers, ethics committees and ethics training. The term, moreover, has been
adopted world-wide, and its meaning in Europe, for instance, is somewhat different from its
meaning in the United States.

   
   
 
In this broad sense ethics in business is simply the application of everyday moral or ethical
norms to business. Perhaps the example from the Bible that comes to mind most readily is the
Ten Commandments, a guide that is still used by many today. In particular, the injunctions to
truthfulness and honesty or the prohibition against theft and envy are directly applicable. A
notion of stewardship can be found in the Bible as well as many other notions that can be and
have been applied to business. Other traditions and religions have comparable sacred or ancient
texts that have guided people's actions in all realms, including business, for centuries, and still
do.

If we move from religion to philosophy we have a similar long tradition. Plato is known for his
discussions of justice in the Republic, and Aristotle explicitly discusses economic relations,
commerce and trade under the heading of the household in his Politics. His discussion of trade,
exchange, property, acquisition, money and wealth have an almost modern ring, and he makes
moral judgments about greed, or the unnatural use of one's capacities in pursuit of wealth for its
own sake, and similarly condemns usury because it involves a profit from currency itself rather
than from the process of exchange in which money is simply a means. He also gives the classic
definition of justice as giving each his due, treating equals equally, and trading equals for equals
or "having an equal amount both before and after the transaction."

In the West, after the fall of Rome, Christianity held sway, and although there were various
discussions of poverty and wealth, ownership and property, there is no systematic discussion of
business except in the context of justice and honesty in buying and selling. We see this, for
instance, in Thomas Aquinas's discussion of selling articles for more than they are worth and
selling them at a higher price than was paid for them and in his discussion of, and, following
Aristotle's analysis, his condemnation of usury. Nonetheless he justified borrowing for a good
end from someone ready to lend at interest.

Luther, Calvin, and John Wesley, among other Reformation figures also discussed trade and
business and led the way in the development of the Protestant work ethic. R. H. Tawney's
Religion and the Rise of Capitalism argues persuasively that religion was an essential part in the
rise of individualism and of commerce as it developed in the modern period. The modern period,
however, sought the divorce of the religious from the secular and politics from religion. In the
process, economics and economic activity were similarly divorced from religion and joined with
politics to form what was known as political-economy.

John Locke developed the classic defense of property as a natural right. For him, one acquires
property by mixing his labor with what he finds in nature. Adam Smith is often thought of as the
father of modern economics with his An Inquiry into the Nature and Causes of the Wealth of
Nations. Smith develops Locke's notion of labor into a labor theory of value. In modern times
commentators have interpreted him as a defender of laissez-faire economics, and put great
emphasis on his notion of the invisible hand. Yet the commentators often forget that Smith was
also a moral philosopher and the author of The Theory of Moral Sentiments. For him the two
realms were not separate. John Stuart Mill, Immanuel Kant, G. W. F. Hegel all wrote on
economic matters and just distribution. Karl Marx, however, stands out as the most trenchant
critic of capitalism as it had developed up through the Nineteenth Century, and Marx's critique in
one form or another continues up to today, even when not attributed to Marx.

Marx claimed that capitalism was built on the exploitation of labor. Whether this was for him a
factual claim or a moral condemnation is open to debate; but it has been taken as a moral
condemnation since 'exploitation' is a morally charged term and for him seems clearly to involve
a charge of injustice. Marx's claim is based on his analysis of the labor theory of value, according
to which all economic value comes from human labor. The only commodity not sold at its real
value, according to Marx, is human labor. Workers are paid less than the value they produce. The
difference between the value the workers produce and what they are paid is the source of profit
for the employer or the owner of the means of production. If workers were paid the value they
produced, there would be no profit and so capitalism would disappear. In its place would be
socialism and eventually communism, in which all property is socially (as opposed to privately)
owned, and in which all members of society would contribute according to their ability and
receive according to their needs. The result would be a society (and eventually a world) without
exploitation and also without the alienation that workers experience in capitalist societies.
Marx's notion of exploitation was developed by Lenin in Imperialism: The Highest Stage of
Capitalism, in which he claims that the exploitation of workers in the developed countries has
been lessened and the workers' conditions have improved because the worst exploitation has
been exported to the colonies. His criticism has been adapted by many contemporary critics who
claim that multinational corporations derive their profits from the exploitation of workers in less
developed countries.

Marx appealed to the workers of his time and helped start the labor movement, which improved
the situation of the workingman. Marx's collaborator, Frederich Engels, saw the world as divided
between those who follow Marx and those who follow religion, and the Marxists sought the
hearts and minds of the workers. Refusing to yield the moral high ground, Pope Leo XIII in 1891
issued the first of the papal encyclicals on social justice, Rerum Novarum. As opposed to Marx,
it justified private property, while seeking the answer to exploitation in the notion of a just wage,
which was one sufficient "to support a frugal and well-behaved wage-earner," his wife and his
children. Later popes followed Leo's example. Pope Pius XI in 1931 wrote Quadragesimo Anno,
which morally attacked both Soviet socialism and laissez-faire capitalism, a theme continued by
Pope John Paul II in Laborem Exercens (1981) and Centesimus Annus (1991). The U. S.
Catholic Bishops in 1984 issued a Pastoral Letter on the U.S. Economy along the same lines,
although more open to the U. S. free enterprise system. The aim of the encyclicals was not to
propose any particular economic system but to insist that any system should not be contrary to
Christian moral principles and should improve the conditions of the masses of humanity,
especially of the poor and the least advantaged. Hence although the popes were critical of
existing economic structures, the emphasis in the pulpits was still primarily on individuals living
up to the demands of morality, including the giving of charity to those in need.

The same is true of the Protestant tradition as of the Catholic, even though there is no central
authority to issue documents such as the encyclicals. Perhaps the most influential protestant
figure in this regard was Reinhold Niebuhr whose trenchant critique of capitalism in Moral Man
and Immoral Society became the basis for courses in seminaries and schools of theology. In 1993
the Parliament of the World's Religions adopted a Declaration of a Global Ethic that condemned
"the abuses of the Earth's ecosystems," poverty, hunger, and the economic disparities that
threaten many families with ruin.

The idea of ethics in business continues until the present day. In general, in the United States this
focuses on the moral or ethical actions of individuals. It is in this sense also that many people, in
discussing business ethics, immediately raise examples of immoral or unethical activity by
individuals. Included with this notion, however, is also the criticism of multinational
corporations that use child labor or pay pitifully low wages to employees in less developed
countries or who utilize suppliers that run sweat shops. Many business persons are strongly
influenced by their religious beliefs and the ethical norms that they have been taught as part of
their religion, and apply these norms in their business activities. Aaron Feuerstein is a prime
example of someone whose actions after fire destroyed almost all of his Malden Mills factory
complex kept his workers on the payroll until he could rebuild. He has stated often and publicly
that he just did what his Jewish faith told him was the right thing to do.
This strand of the story is perhaps the most prominent in the thinking of the ordinary person
when they hear the term business ethics. The media carries stories about Enron officials acting
unethically and about the unethical activities of Arthur Andersen or WorldCom, and so on, and
the general public takes this as representative of business ethics or of the need for it. What they
mean is the need for ethics in business.

    c 
Business ethics as an academic field, just as business ethics as a corporate movement, have a
more recent history.

The second strand of the story has to do with business ethics as an academic field.

The 1960s marked a changing attitude towards society in the United States and towards business.
The Second World War was over, the Cold War was ever present, and the War in Viet Nam
fostered a good deal of opposition to official public policy and to the so-called military-industrial
complex, which came in for increasing scrutiny and criticism. The Civil Rights movement had
caught the public imagination. The United States was becoming more and more of a dominant
economic force. American-based multinational corporations were growing in size and
importance. Big business was coming into its own, replacing small and medium-sized businesses
in the societal image of business. The chemical industry was booming with innovation, and in its
wake came environmental damage on a scale that had not previously been possible. The spirit of
protest led to the environmental movement, to the rise of consumerism, and to criticism of
multinational corporations.

Corporations, finding themselves under public attack and criticism, responded by developing the
notion of social responsibility. They started social responsibility programs and spent a good deal
of money advertising their programs and how they were promoting the social good. Exactly what
"social responsibility" meant varied according to the industry and company. But whether it was
reforestation or cutting down on pollution or increasing diversity in the workforce, social
responsibility was the term used to capture those activities of a corporation that were beneficial
to society and usually, by implication, that made up for some unethical or anti-social activity
with which the company had been charged. The business schools responded by developing
courses in social responsibility or social issues in management²courses which continue to thrive
today. For the most part, in the 1960s such courses put an emphasis on law, and the point of view
of managers prevailed, although soon that of employees, consumers and the general public was
added. The textbooks paid no systematic attention to ethical theory, and tended to be more
concerned with empirical studies than with the development or defense of norms against which
to measure corporate activity. The history of the social responsibility movement is a story in
itself and one that different people are writing somewhat differently. One version, by Archie
Carroll, describes social responsibility as a pyramid that encompasses the four types of
responsibility that businesses have: At the bottom is economic, then legal, then ethical and then
philanthropic. And although some representatives of corporate social responsibility claim that
they did business ethics before business ethics became popular and although some claim that
what they do is business ethics, that is not the story of business ethics.
Business ethics as an academic field emerged in the 1970s. Prior to this time there had been a
handful of courses called by that name; and a few figures, such as Raymond Baumhart, 11 who
dealt with ethics and business. For the most part ethical issues, if they were discussed, were
handled in social issues courses. Theologians and religious thinkers, as well as media pundits
continued writing and teaching on ethics in business; professors of management continued to
write and do research on corporate social responsibility. The new ingredient and the catalyst that
led to the field of business ethics as such was the entry of a significant number of philosophers,
who brought ethical theory and philosophical analysis to bear on a variety of issues in business.
Business ethics emerged as a result of the intersection of ethical theory with empirical studies
and the analysis of cases and issues.

Norman Bowie dates the birth of business ethics as November 1974, with the first conference in
business ethics, which was held at the University of Kansas, and which resulted in the first
anthology used in the new courses that started popping up thereafter in business ethics.12
Whether one chooses that date or some other event, it is difficult to identify any previous period
with the sort of concerted activity that developed in a short period thereafter. In 1979 three
anthologies in business ethics appeared: Tom Beauchamp and Norman Bowie, Ethical Theory
and Business; Thomas Donaldson and Patricia Werhane, Ethical Issues in Business: A
Philosophical Approach; and Vincent Barry, Moral Issues in Business. In 1982 the first single-
authored books in the field appeared: Richard De George, Business Ethics; and Manuel G.
Velasquez, Business Ethics: Concepts and Cases. The books found a ready market and courses in
business ethics both in philosophy departments and in schools of business developed rapidly. As
they did, the number of textbooks increased exponentially.

The field developed very similarly to the field of medical ethics, which had emerged ten years
earlier in the 1960s, and the name paralleled that of the earlier field²although even whether the
term "business ethics" should be adopted was discussed among the relatively small group that
was engaged in starting what has become a field. The seminal work of John Rawls in 1971, A
Theory of Justice, had helped make the application of ethics to economic and business issues
more acceptable to academic philosophers than had previously been the case. Whereas most of
those who wrote on social issues were professors of business, most of those who wrote initially
on business ethics were professors of philosophy, some of whom taught in business schools.
What differentiated business ethics as a field from social issues in management was 1) the fact
that business ethics sought to provide an explicit ethical framework within which to evaluate
business, and especially corporate activities. Business ethics as an academic discipline had ethics
as its basis. While social responsibility could be and was defined by corporations to cover
whatever they did that they could present in a positive light as helping society, ethics had
implicit in it standards that were independent of the wishes of corporations. To that extent, 2) the
field was at least potentially critical of business practices²much more so than the social
responsibility approach had been. If we take Archie Carroll's pyramid, those in business ethics
did not see ethics as coming after economics and law but as restraints on economic activity and
as a source for justifying law and for proposing additional legal restraints on business when
appropriate. As a result business ethics and business ethicists were not warmly received by the
business community, who often perceived them as a threat²something they could not manage,
preaching by the uninformed who never had to face a payroll.
The development of the field was far from easy, and those academics working in it initially also
found a cool reception both from their colleagues in philosophy departments and from those in
business and in business schools. The former typically did not see business as a philosophically
interesting endeavor, and many of them had an anti-business mind-set. The latter questioned
whether philosophers had anything of interest to bring to business. The initial efforts were
tenuous, and more and more people entered the field who were often ill-informed, or who, in
fact, adopted polemical attacks against or positions in defense of business. Many observers
dismissed business ethics as a fad that would pass. Many misunderstood its aims and envisioned
it as providing justification or a rationale for whatever business wanted to do. It took a number of
years for the field to define itself, incorporate standards of scholarship and rigor, and become
accepted.

As a field, business ethics covered the ethical foundations of business, of private property, and of
various economic systems. 3) Although the field was concerned with managers and workers as
moral persons with responsibilities as well as rights, most attention was focused on the
corporation²its structure and activities, including all the functional areas of business, including
marketing, finance, management, and production. Related issues, such as the environmental
impact of business actions, were included in most courses and texts, as were, with increasing
attention, the activities of multinational corporations. As a field, business ethics included a good
deal, but not all, of what was covered in social issues courses and texts, as well as giving
structure to discussions of ethics in business. As it emerged by the middle of the 1980s it was
clearly interdisciplinary, with the lines between philosophy and business research often blurred.

Initial discussions of business ethics introduced students to two of the basic techniques of moral
argumentation, that used by utilitarians (who hold that an action is right if it produces the
greatest amount of good for the greatest number of people), and that used by deontologists (who
claim that duty, justice and rights are not reducible to considerations of utility). Other approaches
were soon introduced including natural law, virtue ethics (based on Aristotle), and the ethics of
caring (often associated with a feminist approach to ethics). An initial philosophical discussion
that arose concerned the moral status of corporations and whether one could appropriately use
moral language with respect to them, or whether the only proper objects of moral evaluation
were human beings and their actions. That controversy has not completely subsided, but most
authors take into account the fact that most people do attribute actions and policies to
corporations as well as to the individuals within them.

What did the development of business ethics as an academic field add that common sense
morality couldn't handle; and who was the target audience?

Those in philosophy added a theoretical framework to the area that had been previously lacking.
Within that framework they integrated both the personal responsibility approach that ethics in
business emphasized and the social responsibility of business approach, which they pushed
explicitly into the ethical realm by applying ethics to economic systems, to the institution of
business, and especially to corporations.

Common sense morality and the ethics in business approach that I described are fine for the
ordinary, everyday aspect of ethics in business. Employees shouldn't steal from their employers,
and companies should cheat their customers. No one needs an academic business ethicist to tell
them that. And if that is all business ethics had to contribute, it would indeed be superfluous. But
what the business ethicists could add is not only arguments that show why most common sense
judgments are indeed correct, but also the tools by which the morality of new issues could be
intelligently debated. They could and did also join that debate²the debate for instance on
whether affirmative action is justifiable, and even more basically, what affirmative action means.
Ethicists analyzed and defended workers' rights, the right to strike, the ethical status of
comparable worth in the marketplace, what constitutes bribery and whistle blowing, and so on.
One need only look at the journals for the wide variety of issues that have been clarified,
discussed, and argued²often to a conclusion. The moral status of leveraged buyouts, of
greenmail, of outsourcing, of restructuring, of corporate governance raise complex issues to
which ordinary common sense morality has no ready answers or obvious intuitive judgments. It
is odd that no company would think of making a serious financial commitment without extensive
study, but some people think that moral judgments should be made instantaneously and require
no thought, study, debate or time. Levi-Strauss, long noted for governing by values, knew
enough that it had a high level committee study whether it was appropriate to operate in China
for three months before coming to a decision.

If those in business ethics wrote only for themselves, however, one could well question the
relevance of what they wrote to business. What they wrote helped inform a large number of
teachers who teach business ethics, and in turn has influenced a large number of students who
have gone on to be practitioners. Moreover, many of those in business have also turned to the
writings of those in business ethics, or have asked them for guidance as consultants on issues or
for help in writing corporate codes or designing training programs. The media as well frequently
turns to those in the field for guidance, help, or sound bites. Many of the academics in business
ethics have made an effort to open a dialogue with those in business, and have frequently been
successful in doing so. The audience, therefore, has been not only colleagues and students, but
also corporate managers and the general public. Mediating between the academic in his or her
office and the corporate executive have also been a host of non-academic consultants, many of
whom use the scholarly material to become informed about the state of the art and the arguments
for or against various positions. Some of these act not only as intermediaries but, in a sense, as
translators, translating technical jargon into business-speak.

The development of the field, moreover, was not restricted to textbooks and courses. What
differentiates earlier sporadic and isolated writings and conferences on ethics in business from
the development of business ethics after the mid-70s is that only in the latter period did business
ethics become institutionalized on many levels. By the mid-1980s there were at least 500 courses
in business ethics taught across the country to 40,000 students. Not only were there at least
twenty textbooks in the area and at least ten casebooks, but there were also societies, centers and
journals of business ethics.

The Society for Business Ethics was started in 1980. The first meeting of the Society for
Business Ethics was held in conjunction with the meeting of the American Philosophical
Association in December in Boston. Other societies turned increasing attention to business
ethics, including the Social Issues in Management Division of the Academy of Management,
which had been established in 1976. Other societies emerged, such as the International
Association for Business and Society. Still other societies, some specialized, and some general
were formed as well. A number of European scholars became interested in the American
developments and organized the European Business Ethics Network (EBEN), which held its first
meeting in 1987. Many individual European nations in turn established their own ethics network
or business ethics society. In general, the European approach to business ethics has placed more
emphasis on economics and on social structures, with less emphasis on the activities of
corporations as such, than the U. S. approach does. Both approaches were captured in the
International Society for Business, Economics and Ethics, which was founded in 1989. That
society in turn helped national groups throughout the world to develop local or regional societies
of business ethics, so that now there are societies in a large number of both developed and less
developed countries.

Simultaneous with these developments were the founding of centers for business ethics at a
variety of academic institutions, and the establishment of a number of journals dedicated to
business ethics, in addition to those journals that carry articles in business ethics among others.
The Bentley College Center for Business Ethics was founded in 1976 and continues as one of the
leading business ethics centers. Over a dozen more appeared within the next ten years, and many
others have been established since then around the United States and in countries around the
world. The Markkula Center includes business ethics as one of its areas, as we well know. The
first issue of the Journal of Business Ethics appeared in February 1982; the first issue of the
Business Ethics Quarterly in January 1991; and the first issue of Business Ethics: A European
Review in January 1992. A number of other journals in the field have appeared since then.

The field has continued to develop as business has developed. By the mid 1980s business had
clearly become international in scope, and the topics covered by business ethics expanded
accordingly. Thomas Donaldson's The Ethics of Business Ethics (New York: Oxford University
Press, 1989) was the first systematic treatment of international business ethics, followed by
Richard De George's Competing with Integrity in Internal Business (New York: Oxford
University Press, 1993). The focus on multinational corporations has been broadened in the light
of the globalization of business to include ethical issues relating to international organizations,
such as the World Trade Organization. Similarly, just as business has moved more and more into
the Information Age, business ethics has turned its attention to emerging issues that come from
the shift.

By 1990 business ethics was well established as an academic field. Although the academicians
from the start had sought to develop contacts with the business community, the history of the
development of business ethics as a movement in business, though related to the academic
developments, can be seen to have a history of its own.

    
Business ethics as a movement refers to the development of structures internal to the corporation
that help it and its employees act ethically, as opposed to structures that provide incentives to act
unethically. The structures may include clear lines of responsibility, a corporate ethics code, an
ethics training program, an ombudsman or a corporate ethics officer, a hot or help line, a means
of transmitting values within the firm and maintaining a certain corporate culture, and so on.
Some companies have always been ethical and have structured themselves and their culture to
reinforce ethical behavior. Johnson & Johnson's well-known Credo was written and published by
General Robert Wood Johnson in 1943. But most companies in the 1960s had paid little attention
to developing such structures. That slowly began to change, and the change became a movement
when more and more companies started responding to growing public pressure, media scrutiny,
their own corporate consciences, and, perhaps most importantly, to legislation. We have already
seen that big business responded to criticism in the 1960s by turning to corporate social
responsibility, and the movement can be traced back to that period.

The U. S. Civil Rights Act of 1964 was the first piece of legislation to help jump start the
business ethics movement. The Act prohibited discrimination of the basis of race, color, religion
or national origin in public establishments connected to interstate commerce, as well as places of
public accommodation and entertainment. Many corporations added equal opportunity offices to
their human resources department to ensure compliance, and in general the consciousness of
business about discrimination, equal opportunity, and equal pay for equal work came to the fore.
This in turn led to more consciousness of workers' rights in general, and of corporate America's
need to respect them. The U. S. Occupational Safety and Health Act of 1970 enforced the
mandate to take those aspects of workers' rights seriously. In the same year the Environmental
Protection Act forced business to start internalizing the costs of what had previously been
considered externalities²such as the discharge of toxic effluents from factory smokestacks.

In 1977, following a series of scandals involving bribery by U. S. firms abroad including the
Lockheed $12 million bribery case that led to the fall of the Japanese government at the time, the
U. S. government passed the Foreign Corrupt Practices Act. The Act was historic because it was
the first piece of legislation that attempted to control the actions of U.S. corporations in foreign
countries. The Act prohibited U. S. companies from paying large sums of money (or their
equivalent) to high level government officials of other countries to obtain special treatment. A
number of companies prior to the Act had already adopted the policy of refusing to pay bribes as
a matter of ethical principle. IBM, among others, was known for adherence to this policy, as was
Motorola. The Act forced all companies to live up to the already existing ethical norm. Its critics
complained, however, that it put U. S. companies at an unfair disadvantage vis-à-vis companies
from other countries that were permitted to pay bribes. The U. S. government applied what
pressure it could to encourage other countries to follow its lead, and finally twenty years later the
OECD countries agreed to adopt similar legislation.

In 1978 General Motors and a group of other U. S. companies adopted what are known as the
Sullivan Principles, which governed their actions in South Africa. The signatories agreed that
they would not follow the discriminatory and repressive apartheid legislation in South Africa and
would take affirmative action to try to undermine apartheid not only by not following the
existing South African apartheid statutes, but also by lobbying the South African government for
change. Adherence to the Principles was seen as a way by which American companies could
ethically justify doing business in South Africa. They were adopted in part as a response to
public pressure on the companies to leave South Africa. The Principles have become a model for
other voluntary codes of ethical conduct by companies in a variety of other ethically questionable
circumstances.
By the 1980s many companies had started reacting to calls for ethical structures, and more and
more started adopting ethical codes and instituting ethics training for their employees. Each wave
of scandals, which seemed to occur every ten years or so, resulted in more pressure for
companies to incorporate ethics into their structures. In 1984 the Union Carbide disaster at its
plant in Bhopal, India, which killed thousands of people and injured several hundred thousand,
focused world attention on the chemical industry. This led to the chemical industry's adopting a
voluntary code of ethical conduct known as Responsible Care, which became a model for other
industries. In 1986, in response to a series of reported irregularities in defense contracts, a special
Commission Report on the situation led to the establishment of the Defense Industry Initiative
(DII) on Business Ethics and Conduct, signed by thirty-two (it soon increased to fifty) major
defense contractors. Each signatory agreed to have a written code of ethics, establish appropriate
ethics training programs for their employees, establish monitoring mechanisms to detect
improper activity, share their best practices, and be accountable to the public.

The DII became the model for what has been the most significant governmental impetus to the
business ethics movement, namely, the 1991 U. S. Federal Sentencing Guidelines for
Corporations. That law took the approach of providing an incentive for corporations to
incorporate ethical structures within their organizations. If a company could show that it had
taken appropriate measures to prevent and detect illegal and unethical behavior, its sentence, if
found guilty of illegal behavior, would be reduced considerably. Appropriate measures included
having a code of ethics or of conduct, a high-placed officer in charge of oversight, an ethics
training program, a monitoring and reporting system (such as a "hotline"), and an enforcement
and response system. Fines that could reach up to $290 million could be reduced by up to 95
percent if a company could show bona fide institutional structures that were in place to help
prevent unethical and illegal conduct.

The result was a concerted effort on the part of most large companies to incorporate into their
organizations the structures required. This led to the development of a corporate position known
as the Corporate Ethics Officer, and in 1992 to the establishment of the Corporate Ethics Officer
Association.

The most recent legislative incentive to incorporate ethics in the corporation came in the
Sarbanes-Oxley Act of 2002, passed as a result of a rash of scandals involving Enron,
WorldCom, Arthur Andersen and other prominent corporations. The Act requires, among other
things, that the CEO and CFO certify the fairness and accuracy of corporate financial statements
(with criminal penalties for knowing violations) and a code of ethics for the corporation's senior
financial officers, as well as requiring a great deal more public disclosure.

Corporations have responded to legislative and popular pressure in a variety of ways. The
language of social responsibility rather than explicitly ethical language is still probably the most
commonly used. Self-monitoring of adherence to a corporation's stated principles and self-
adopted standards is becoming more common, and some companies have voluntarily adopted
monitoring of their practices, policies and plants by independent auditors. The notion of a Triple
Bottom Line, which involves financial, social and environmental corporate reporting, has been
adopted by a number of companies. Other popular reporting mechanisms include corporate
environmental sustainability reports and social audits, which vary considerably in what is
reported and how it is reported. Ethical investing is another aspect of the movement, and
mangers of ethical investment funds have begun proposing stockholder proposals as a means of
encouraging more ethical behavior on the part of corporations in which they own stock.

Nor is the business ethics movement confined to the Unites States. Other countries have adopted
legislation similar to that of the United States, and the UN has developed a voluntary Global
Compact for Corporations. The Compact, which was endorsed by all governments, contains nine
guiding principles, which focus on human rights, labor standards, and the protection of the
environment. Over 1,500 companies worldwide have joined the compact, and it seems likely that
more and more will feel the pressure to become signatories and to abide by the required
standards.

The business ethics movement, like business ethics itself, has become firmly entrenched. The
concern for ethics in business continues. Business ethics as an academic field contributes
discussion forums, research and teaching that inform both ethics in business and the business
ethics movement. The business ethics movement is responsive to the other two and in turn has
interacted with them. All three together make up the history of business ethics in its broadest
sense.

From an academic perspective, looking back over the past thirty or so years, a lot has been
accomplished. A historian deals with the past and not the future. But looking to the future, it is
easy to see that there is still a lot to do. Both globalization and the march into the Information
Age are changing the way business is done and the ethical issues businesses face. If business
ethics is to remain relevant, it must change its focus accordingly.

If there is anything that the story I've told can teach us, it is not that business ethics is a fad as
some claimed early on, nor an oxymoron, as so many lamely joked. It is a vibrant, complex
enterprise developing on many levels, with the three strands I've mentioned intertwining in
complex, dynamic and fascinating ways. We can expect all three to remain vibrant and
interacting for the foreseeable future.

   
     

According to the American Management Association, it is an important characteristic of
effective leaders today. In a survey of 462 executives who were asked, ³What characteristics are
needed to be an effective leader today?´ 56% ranked ethical behavior as an important
characteristic, followed by sound judgment (51%) and being adaptable/flexible (47%).

However, with all due respect to the AMA survey, it is strongly believed that it is much more
than ³important,´ it is a ³critical, essential and non-negotiable´ characteristic of an effective
leader. Strong business ethics is a pillar of my strategic planning and strategic thinking business
coaching efforts each and every day. Clients are encouraged to develop a set of core values and
guiding principles and publish them for their clients and stakeholders to know that this is the way
they do business. And furthermore, the clients are continually reminded to make sure the core
values are demonstrated in all that they do.

Examples of unethical behavior abound in business stories around the world. And individuals
witness some form of unethical behavior in their workplace every day. Unethical behavior where
people deliberately intend to harm themselves or others, develops from and is reinforced by,
destructive states of mind, including fear, greed, anger and jealously. In contract, ethical
behavior enhances the well-being of everyone because it is developed from and reinforced by
strong motives and emotions such as love, joy, generosity and compassion.

We need to ask these questions: ³How ethically vulnerable is our company or organization?´
³What are the core values and guiding principles of our company or organization?´ ³Are we
committed to living and exhibiting our core values in everything we do?´ The answers to these
questions will define the state of ethics in our business.

Leadership in business must set the standard and ³walk the talk´ when it comes time to ethical
behavior. There can be no compromise of ethics. There can be no ³waiver of ethics.´ A leader
must constantly keep his or her actions above reproach. If leaders are committed to that high
standard, there will be no more Enron, WorldCom, Tyco, and Adelphia ethical meltdowns.

Knowing what is right is very important to personal and business ethics. Doing what is right is
absolutely critical to personal and business ethics. A strong unwavering commitment to your
core values and guiding principles of your business or organization will lead to the right ethical
decisions and actions. In the absence of these actions, all one has is good intentions and that
simply is not enough for effective leadership.

 
Business ethics is a form of applied ethics that examines ethical principles and moral or ethical
problems that arise in a business environment.

In the increasingly conscience-focused marketplaces of the 21st century, the demand for more
ethical business processes and actions (known as ethicism) is increasing. Simultaneously,
pressure is applied on industry to improve business ethics through new public initiatives and
laws (e.g. higher UK road tax for higher-emission vehicles).
Business ethics can be both a normative and a descriptive discipline. As a corporate practice and
a career specialization, the field is primarily normative. In academia descriptive approaches are
also taken. The range and quantity of business ethical issues reflects the degree to which business
is perceived to be at odds with non-economic social values. Historically, interest in business
ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and
within academia. For example, today most major corporate websites lay emphasis on
commitment to promoting non-economic social values under a variety of headings (e.g. ethics
codes, social responsibility charters). In some cases, corporations have redefined their core
values in the light of business ethical considerations (e.g. BP's "beyond petroleum"
environmental tilt).

_  
  
 
 
 
?‘ This part of business ethics overlaps with the philosophy of business, one of the aims of
which is to determine the fundamental purposes of a company. If a company's main
purpose is to maximize the returns to its shareholders, then it could be seen as unethical
for a company to consider the interests and rights of anyone else.
?‘ Corporate social responsibility or CSR: an umbrella term under which the ethical rights
and duties existing between companies and society is debated.
?‘ Issues regarding the moral rights and duties between a company and its shareholders:
fiduciary responsibility, stakeholder concept v. shareholder concept.
?‘ Ethical issues concerning relations between different companies: e.g. hostile take-overs,
industrial espionage.
?‘ Leadership issues: corporate governance.
?‘ Political contributions made by corporations.
?‘ Law reform, such as the ethical debate over introducing a crime of corporate
manslaughter.
?‘ The misuse of corporate ethics policies as marketing instruments.

4 

Professional ethics covers the myriad practical ethical problems and phenomena which arise out
of specific functional areas of companies or in relation to recognized business professions.

  
 
?‘ Creative accounting, earnings management, misleading financial analysis.
?‘ Insider trading, securities fraud, bucket shops, forex scams: concerns (criminal)
manipulation of the financial markets.
?‘ Executive compensation: concerns excessive payments made to corporate CEO's and top
management.
 ?‘ Bribery, kickbacks, and facilitation payments: while these may be in the (short-term)
interests of the company and its shareholders, these practices may be anti-competitive or
offend against the values of society.

  
 
 
The ethics of human resource management (HRM) covers those ethical issues arising around the
employer-employee relationship, such as the rights and duties owed between employer and
employee.

?‘ Discrimination issues include discrimination on the bases of age (ageism), gender, race,
religion, disabilities, weight and attractiveness. See also: affirmative action, sexual
harassment.
?‘ Issues surrounding the representation of employees and the democratization of the
workplace: union busting, strike breaking.
?‘ Issues affecting the privacy of the employee: workplace surveillance, drug testing. See
also: privacy.
?‘ Issues affecting the privacy of the employer: whistle-blowing.
?‘ Issues relating to the fairness of the employment contract and the balance of power
between employer and employee: slavery, indentured servitude, employment law.
?‘ Occupational safety and health.

    

Marketing which goes beyond the mere provision of information about (and access to) a product
may seek to manipulate our values and behavior. To some extent society regards this as
acceptable, but where is the ethical line to be drawn? Marketing ethics overlaps strongly with
media ethics, because marketing makes heavy use of media. However, media ethics is a much
larger topic and extends outside business ethics.

?‘ Pricing: price fixing, price discrimination, price skimming.

?‘ Anti-competitive practices: these include but go beyond pricing tactics to cover issues
such as manipulation of loyalty and supply chains. See: anti-competitive practices,
antitrust law.
?‘ Specific marketing strategies: greenwash, bait and switch, shill, viral marketing, spam
(electronic), pyramid scheme, planned obsolescence.
?‘ Content of advertisements: attack ads, subliminal messages, sex in advertising, products
regarded as immoral or harmful
?‘ Children and marketing: marketing in schools.
?‘ Black markets, grey markets.

  

This area of business ethics deals with the duties of a company to ensure that products and
production processes do not cause harm. Some of the more acute dilemmas in this area arise out
of the fact that there is usually a degree of danger in any product or production process and it is
difficult to define a degree of permissibility, or the degree of permissibility may depend on the
changing state of preventative technologies or changing social perceptions of acceptable risk.

?‘ Defective, addictive and inherently dangerous products and services (e.g. tobacco,
alcohol, weapons, motor vehicles, chemical manufacturing, bungee jumping).
?‘ Ethical relations between the company and the environment: pollution, environmental
ethics, carbon emissions trading
?‘ Ethical problems arising out of new technologies: genetically modified food, mobile
phone radiation and health.
?‘ Product testing ethics: animal rights and animal testing, use of economically
disadvantaged groups (such as students) as test objects.

  
    
Knowledge and skills are valuable but not easily "own able" as objects. Nor is it obvious who
has the greater rights to an idea: the company who trained the employee, or the employee
themselves? The country in which the plant grew or the company which discovered and
developed the plant's medicinal potential? As a result, attempts to assert ownership and ethical
disputes over ownership arise.

?‘ Patent infringement, copyright infringement, trademark infringement.

?‘ Misuse of the intellectual property systems to stifle competition: patent misuse, copyright
misuse, patent troll, submarine patent.
?‘ Even the notion of intellectual property itself has been criticized on ethical grounds: see
intellectual property.
?‘ Employee raiding: the practice of attracting key employees away from a competitor to
take unfair advantage of the knowledge or skills they may possess.
?‘ The practice of employing all the most talented people in a specific field, regardless of
need, in order to prevent any competitors employing them.
?‘ Bioprospecting (ethical) and biopiracy (unethical).
?‘ Business intelligence and industrial espionage.

ð 
      
The issues here are grouped together because they involve a much wider, global view on
business ethical matters.

ð 
 
While business ethics emerged as a field in the 1970s, international business ethics did not
emerge until the late 1990s, looking back on the international developments of that decade.
Many new practical issues arose out of the international context of business. Theoretical issues
such as cultural relativity of ethical values receive more emphasis in this field. Other, older
issues can be grouped here as well. Issues and subfields include:
 ?‘ The search for universal values as a basis for international commercial behavior.
?‘ Comparison of business ethical traditions in different countries.
?‘ Comparison of business ethical traditions from various religious perspectives.
?‘ Ethical issues arising out of international business transactions; e.g. Bioprospecting and
biopiracy in the pharmaceutical industry; the fair trade movement; transfer pricing.
?‘ Issues such as globalization and cultural imperialism.
?‘ Varying global standards - e.g. the use of child labor.
?‘ The way in which multinationals take advantage of international differences, such as
outsourcing production (e.g. clothes) and services (e.g. call centres) to low-wage
countries.
?‘ The permissibility of international commerce with pariah states.

   

This vaguely defined area, perhaps not part of but only related to business ethics, is where
business ethicists venture into the fields of political economy and political philosophy, focusing
on the rights and wrongs of various systems for the distribution of economic benefits. The work
of John Rawls and Robert Nozick are both notable contributors.

 
  
 
! 
Business ethics can be examined from various perspectives, including the perspective of the
employee, the commercial enterprise, and society as a whole. Very often, situations arise in
which there is conflict between one or more of the parties, such that serving the interest of one
party is a detriment to the other(s). For example, a particular outcome might be good for the
employee, whereas, it would be bad for the company, society, or vice versa. Some ethicists (e.g.,
Henry Sidgwick) see the principal role of ethics as the harmonization and reconciliation of
conflicting interests.

 
  
Philosophers and others disagree about the purpose of a business ethic in society. For example,
some suggest that the principal purpose of a business is to maximize returns to its owners, or in
the case of a publicly-traded concern, its shareholders. Thus, under this view, only those
activities that increase profitability and shareholder value should be encouraged, because any
others function as a tax on profits. Some believe that the only companies that are likely to
survive in a competitive marketplace are those that place profit maximization above everything
else. However, some point out that self-interest would still require a business to obey the law and
adhere to basic moral rules, because the consequences of failing to do so could be very costly in
fines, loss of licensure, or company reputation. The noted economist Milton Friedman was a
leading proponent of this view.
Other theorists contend that a business has moral duties that extend well beyond serving the
interests of its owners or stockholders, and that these duties consist of more than simply obeying
the law. They believe a business has moral responsibilities to so-called stakeholders, people who
have an interest in the conduct of the business, which might include employees, customers,
vendors, the local community, or even society as a whole. They would say that stakeholders have
certain rights with regard to how the business operates, and some would suggest that this
includes even rights of governance.

Some theorists have adapted social contract theory to business, whereby companies become
quasi-democratic associations, and employees and other stakeholders are given voice over a
company's operations. This approach has become especially popular subsequent to the revival of
contract theory in political philosophy, which is largely due to John Rawls' A Theory of Justice,
and the advent of the consensus-oriented approach to solving business problems, an aspect of the
"quality movement" that emerged in the 1980s. Professors Thomas Donaldson and Thomas
Dunfee proposed a version of contract theory for business, which they call Integrative Social
Contracts Theory. They posit that conflicting interests are best resolved by formulating a "fair
agreement" between the parties, using a combination of i) macro-principles that all rational
people would agree upon as universal principles, and, ii) micro-principles formulated by actual
agreements among the interested parties. Critics say the proponents of contract theories miss a
central point, namely, that a business is someone's property and not a mini-state or a means of
distributing social justice.

Ethical issues can arise when companies must comply with multiple and sometimes conflicting
legal or cultural standards, as in the case of multinational companies that operate in countries
with varying practices. The question arises, for example, ought a company to obey the laws of its
home country, or should it follow the less stringent laws of the developing country in which it
does business? To illustrate, United States law forbids companies from paying bribes either
domestically or overseas; however, in other parts of the world, bribery is a customary, accepted
way of doing business. Similar problems can occur with regard to child labor, employee safety,
work hours, wages, discrimination, and environmental protection laws.

It is sometimes claimed that a Gresham's law of ethics applies in which bad ethical practices
drive out good ethical practices. It is claimed that in a competitive business environment, those
companies that survive are the ones that recognize that their only role is to maximize profits.

    
!  
As part of more comprehensive compliance and ethics programs, many companies have
formulated internal policies pertaining to the ethical conduct of employees. These policies can be
simple exhortations in broad, highly-generalized language (typically called a corporate ethics
statement), or they can be more detailed policies, containing specific behavioral requirements
(typically called corporate ethics codes). They are generally meant to identify the company's
expectations of workers and to offer guidance on handling some of the more common ethical
problems that might arise in the course of doing business. It is hoped that having such a policy
will lead to greater ethical awareness, consistency in application, and the avoidance of ethical
disasters.

An increasing number of companies also require employees to attend seminars regarding

business conduct, which often include discussion of the company's policies, specific case studies,
and legal requirements. Some companies even require their employees to sign agreements stating
that they will abide by the company's rules of conduct.

Many companies are assessing the environmental factors that can lead employees to engage in
unethical conduct.

Not everyone supports corporate policies that govern ethical conduct. Some claim that ethical
problems are better dealt with by depending upon employees to use their own judgment.

Others believe that corporate ethics policies are primarily rooted in utilitarian concerns, and that
they are mainly to limit the company's legal liability, or to curry public favor by giving the
appearance of being a good corporate citizen. Ideally, the company will avoid a lawsuit because
its employees will follow the rules. Should a lawsuit occur, the company can claim that the
problem would not have arisen if the employee had only followed the code properly.

Sometimes there is disconnection between the company's code of ethics and the company's
actual practices. Thus, whether or not such conduct is explicitly sanctioned by management, at
worst, this makes the policy duplicitous, and, at best, it is merely a marketing tool.

To be successful, most ethicists would suggest that an ethics policy should be:

?‘ Given the unequivocal support of top management, by both word and example.
?‘ Explained in writing and orally, with periodic reinforcement.
?‘ Doable....something employees can both understand and perform.
?‘ Monitored by top management, with routine inspections for compliance and
improvement.
?‘ Backed up by clearly stated consequences in the case of disobedience.
?‘ Remain neutral and nonsexist.

 
Ethics officers (sometimes called "compliance" or "business conduct officers") have been
appointed formally by organizations since the mid-1980s. One of the catalysts for the creation of
this new role was a series of fraud, corruption and abuse scandals that afflicted the U.S. defense
industry at that time. This led to the creation of the Defense Industry Initiative (DII), a pan-
industry initiative to promote and ensure ethical business practices. The DII set an early
benchmark for ethics management in corporations. In 1991, the Ethics & Compliance Officer
Association (ECOA) -- originally the Ethics Officer Association (EOA) -- was founded at the
Center for Business Ethics (at Bentley College, Waltham, MA) as a professional association for
those responsible for managing organizations' efforts to achieve ethical best practices. The
membership grew rapidly (the ECOA now has over 1,100 members) and was soon established as
an independent organization.

Another critical factor in the decisions of companies to appoint ethics/compliance officers was
the passing of the Federal Sentencing Guidelines for Organizations in 1991, which set standards
that organizations (large or small, commercial and non-commercial) had to follow to obtain a
reduction in sentence if they should be convicted of a federal offense. Although intended to assist
judges with sentencing, the influence in helping to establish best practices has been far-reaching.

In the wake of numerous corporate scandals between 2001-04 (affecting large corporations like
Enron, WorldCom and Tyco), even small and medium-sized companies have begun to appoint
ethics officers. They often report to the Chief Executive Officer and are responsible for assessing
the ethical implications of the company's activities, making recommendations regarding the
company's ethical policies, and disseminating information to employees. They are particularly
interested in uncovering or preventing unethical and illegal actions. This trend is partly due to the
Sarbanes-Oxley Act in the United States, which was enacted in reaction to the above scandals. A
related trend is the introduction of risk assessment officers that monitor how shareholders'
investments might be affected by the company's decisions.

The effectiveness of ethics officers in the marketplace is not clear. If the appointment is made
primarily as a reaction to legislative requirements, one might expect the efficacy to be minimal,
at least, over the short term. In part, this is because ethical business practices result from a
corporate culture that consistently places value on ethical behavior, a culture and climate that
usually emanates from the top of the organization. The mere establishment of a position to
oversee ethics will most likely be insufficient to inculcate ethical behavior: a more systemic
programme with consistent support from general management will be necessary.

The foundation for ethical behavior goes well beyond corporate culture and the policies of any
given company, for it also depends greatly upon an individual's early moral training, the other
institutions that affect an individual, the competitive business environment the company is in
and, indeed, society as a whole.

v
   
 
The historical and global importance of religious views on business ethics is sometimes
underestimated in standard introductions to business ethics. Particularly in Asia and the Middle
East, religious and cultural perspectives have a strong influence on the conduct of business and
the creation of business values.

Examples include:

?‘ Islamic banking, associated with the avoidance of charging interest on loans.

?‘ Traditional Confucian disapproval of the profit-seeking motive.
?‘ Quaker testimony on fair dealing
v 
Business ethics should be distinguished from the philosophy of business, the branch of
philosophy that deals with the philosophical, political, and ethical underpinnings of business and
economics. Business ethics operates on the premise, for example, that the ethical operation of a
private business is possible -- those who dispute that premise, such as libertarian socialists, (who
contend that "business ethics" is an oxymoron) do so by definition outside of the domain of
business ethics proper.

The philosophy of business also deals with questions such as what, if any, are the social
responsibilities of a business; business management theory; theories of individualism vs.
collectivism; free will among participants in the marketplace; the role of self interest; invisible
hand theories; the requirements of social justice; and natural rights, especially property rights, in
relation to the business enterprise.

Business ethics is also related to political economy, which is economic analysis from political
and historical perspectives. Political economy deals with the distributive consequences of
economic actions. It asks who gains and who loses from economic activity, and is the resultant
distribution fair or just, which are central ethical issues.
  "
It is the field of applied ethics which examines and sets standards for engineers' obligations to
the public, their clients, employers and the profession. This article addresses the subject for both
professional engineers and other engineers.

Engineering does not have a single uniform system, or standard, of ethical conduct across the
entire profession. Ethical approaches vary somewhat by discipline and jurisdiction, but are most
influenced by whether the engineers are independently providing professional services to clients
or the public if employed in government service; or if they are employees of an enterprise
creating products for sale.

In the United States the first are usually licensed Professional engineers, are governed by statute,
and have fairly consistent codes of professional ethics. The latter, working as engineers in
industry, are governed by various laws including whistleblowing, and product liability laws, and
often rely on principles of business ethics rather than engineering ethics.

4  ! 

Professional engineers (Chartered engineers in the United Kingdom.) are distinct from other
engineers in that they have obtained some form of license, charter, or registration from a
government agency or charter-granting authority acting on their behalf. As such they are subject
to regulation by these bodies, as are other regulated professions.

Professional and Chartered engineers enjoy significant influence over their regulation. They are
often the authors of the pertinent codes of ethics used by some of these organizations. These
engineers in private practice often, but not always, find themselves in traditional professional-
client relationships in their practice. Engineers employed in government service find themselves
on the other side of the same relationship.

Engineers in industry, sometimes termed "graduate engineers" in the US if they hold a Bachelor's
degree, are not formally accredited by government agencies. Their professional relationships are
much more likely to be employee-employer relationships.

Despite the different focus, engineers in industry or private practice face similar ethical issues
and reach similar conclusions. One American engineering society, the National Society of
Professional Engineers (NSPE) has sought to extend professional licensure and a code of ethics
across the field regardless of practice area or employment sector.

!
   
Many American engineering professional societies have prepared codes of ethics. Some go back
to the early decades of the twentieth century. These have been incorporated to a greater or lesser
degree into the regulatory laws of most states and codes
The Institution of Civil Engineers (ICE) in the UK has a code of ethics incorporated into its
standards of conduct. The Canadian societies of Professional engineers likewise have as well.
These codes of ethics share many similarities. (See "Reference" below for some of these and
links.)

 

Codes of engineering ethics identify a specific precedence with respect to the engineer's
consideration for the public, clients, employers, and the profession.

This is an example from the American Society of Civil Engineers (ASCE):


 !
1.‘ Engineers shall hold paramount the safety, health and welfare of the public and
shall strive to comply with the principles of sustainable development in the
performance of their professional duties.
2.‘ Engineers shall perform services only in areas of their competence.
3.‘ Engineers shall issue public statements only in an objective and truthful manner.
4.‘ Engineers shall act in professional matters for each employer or client as faithful
agents or trustees, and shall avoid conflicts of interest.
5.‘ Engineers shall build their professional reputation on the merit of their services
and shall not compete unfairly with others.
6.‘ Engineers shall act in such a manner as to uphold and enhance the honor,
integrity, and dignity of the engineering profession and shall act with zero-
tolerance for bribery, fraud, and corruption.
7.‘ Engineers shall continue their professional development throughout their careers,
and shall provide opportunities for the professional development of those
engineers under their supervision."

Like virtually all professional societies and chartering authorities, ASCE expands upon these and
publishes specific guidance.

 

As noted above, generally the first duty recognized by Professional and Chartered engineers is to
the safety of the public.

The ICE's "Code of Professional Conduct" identifies similar ethical values as the ASCE's but
likewise places the good of the public as the highest ethic.

"Members of the ICE should always be aware of their overriding responsibility to the
public good. A member¶s obligations to the client can never override this, and members
of the ICE should not enter undertakings which compromise this responsibility. The
µpublic good¶ encompasses care and respect for the environment, and for humanity¶s
 cultural, historical and archaeological heritage, as well as the primary responsibility
members have to protect the health and well being of present and future generations."

Canadian engineering codes of ethics also place the public good above all other concerns:

?‘ 4  _ (PEO): "A practitioner shall, regard the

practitioner's duty to public welfare as paramount."
?‘ ( _  #
 
$
# (OIQ): "In all aspects of his work, the
engineer must respect his obligations towards man and take into account the
consequences of the performance of his work on the environment and on the life,
health and property of every person."

As in ASCE's Fundamental Canon 1, other American professional societies are likewise specific
on this point:

?‘ ã %  4  (NSPE): "Engineers, in the

fulfillment of their professional duties, shall: Hold paramount the safety, health,
and welfare of the public."
?‘ c %    (ASME): "Engineers shall hold
paramount the safety, health and welfare of the public in the performance of their
professional duties."
?‘ ð
      (IEEE): "We, the members of
the IEEE, « do hereby commit ourselves to the highest ethical and professional
conduct and agree: 1. to accept responsibility in making decisions consistent with
the safety, health and welfare of the public, and to disclose promptly factors that
might endanger the public or the environment;"
?‘ c ð
  !  (AIChE): "To achieve these goals,
members shall hold paramount the safety, health and welfare of the public and
protect the environment in performance of their professional duties."


A basic ethical dilemma is that an engineer has the duty to report to the appropriate authority a
possible risk to others from a client or employer failing to follow the engineer's directions.
According to first principles, this duty overrides the duty to a client and/or employer. An
engineer may be disciplined, or have their license revoked, even if the failure to report such a
danger does not result in the loss of life or health.

In many cases, this duty can be discharged by advising the client of the consequences in a
forthright matter, and assuring the client takes the engineer's advice. However, the engineer must
ensure that the remedial steps are taken and, if they are not, the situation must be reported to the
appropriate authority. In very rare cases, where even a governmental authority may not take
appropriate action, the engineer can only discharge the duty by making the situation public. As a
result, whistleblowing by professional engineers is not an unusual event, and courts have often
sided with engineers in such cases, overruling duties to employers and confidentiality
considerations that otherwise would have prevented the engineer from speaking out.
_  

There are several other ethical issues that engineers may face. Some have to do with technical
practice, but many others have to do with broader considerations of business conduct. These
include:

?‘ Quality
?‘ Ensuring legal compliance
?‘ Conflict of interest
?‘ Bribery and kickbacks
?‘ Treatment of confidential or proprietary information
?‘ Consideration of the employer¶s assets
?‘ Relationships with clients, consultants, competitors, and contractors
?‘ Gifts, meals, services, and entertainment
?‘ Outside employment/activities (Moonlighting)

Some engineering societies are addressing environmental protection as a stand-alone question of

ethics.

The field of business ethics often overlaps and informs ethical decision making for engineers.



  
   
As engineering rose as a distinct profession during the nineteenth century, engineers saw
themselves as either independent specialists or technical employees of large enterprises. In the
United States growing professionalism gave rise to the development of four founding
engineering societies: ASCE (1851), the American Institute of Electrical Engineers (AIEE)
(1884), ASME (1880), and the American Institute of Mining Engineers (AIME) (1871). ASCE
and AIEE were more closely identified with the engineer as learned professional, where ASME,
to an extent, and AIME almost entirely identified with the view that the engineer is a technical
employee. Even so, at that time ethics was viewed as a personal rather than a broad professional
concern.


    
  
 
As the nineteenth century drew to a close and the twentieth century began, there were a series of
significant structural failures, including some spectacular bridge failures, notably the Ashtabula
River Railroad Disaster (1876), Tay Bridge Disaster (1879), and the Quebec Bridge collapse
(1907). These had a profound effect on engineers and forced the profession to confront
shortcomings in technical and construction practice, as well as ethical standards.
One response was the development of formal codes of ethics by three of the four founding
engineering societies. AIEE adopted theirs in 1912. ASCE and ASME did so in 1914. AIME did
not adopt a code of ethics in its history.

Concerns for professional practice and protecting the public highlighted by these bridge failures,
as well as the Boston molasses disaster (1919), provided impetus for another movement that had
been underway for some time: to require formal credentials (Professional licensure in the US.) as
a requirement to practice. This involves meeting some combination of educational, experience,
and testing requirements.

Over the following decades most American states and Canadian provinces either required
engineers to be licensed, or passed special legislation reserving title rights to organization of
professional engineers. The Canadian model is to require all persons working in fields of
engineering that posed a risk to life, health, property, the public welfare and the environment to
be licensed, and all provinces required licensing by the 1950s.

The US model has generally been only to require those practicing independently (i.e. consulting
engineers) to be licensed, while engineers working in industry, education, and sometimes
government need not be licensed. This has perpetuated the split between professional engineers
and those in industry. Professional societies have adopted generally uniform codes of ethics. On
the other hand technical societies have generally not adopted these, but instead sometimes offer
ethics education and resources to members similar to those of the professional societies. This is
not uniform, and the question of who is to be held in the highest regard: the public or the
employer is still an open one in industry, and sometimes in professional practice.

!
 

The difference in perspective between the "engineer as a professional" and the "engineer as
employee" is still reflected today in the use of the title "engineer". In US industry, the title
"engineer" is determined by the firm and can often apply to anyone executing design work.
These can include individuals with an Associate degree or degree in engineering technology.
Here, the term "graduate engineer" is pertinent to differentiate those with a Bachelor of Science
degree in engineering. While most American state licensure laws require a Bachelor of Science
degree for licensure, the current US model law for Professional Engineers requires a minimum of
a Master of Science degree in engineering, or a Bachelor of Science degree with additional
equivalent graduate level work... This has received strong support from civil engineers.

That difference in perspective has also led to the division of engineering societies broadly into
professional and technical societies. Both professional and technical societies advance technical
practice through developing standards, and providing educational, and training resources.
However, professional societies like ASCE, ASME, IEEE, and later AIChE (1907), and NSPE
(1934), also focus on professional practice issues facing the engineer such as licensing laws and
ethics.
Technical societies like AIME, the American Railway Engineering Association (AREA) (1899),
and later the Society of Automotive Engineers (SAE) (1905) and Society of Manufacturing
Engineers (SME) (1932) generally don't address professional practice issues, including ethics.

!
  

Efforts to promote ethical practice continue. In addition to the professional societies and
chartering organizations efforts with their members, the Canadian Iron Ring and American Order
of the Engineer trace their roots to the 1907 Quebec Bridge collapse. Both require members to
swear an oath to uphold ethical practice and wear a symbolic ring as a reminder.

Currently, bribery and political corruption is being addressed very directly by several
professional societies and business groups around the world. However, new issues have arisen,
such as off shoring, sustainable development, and environmental protection, that the profession
is having to consider and address.
  
The inspiration for environmental ethics was the first Earth Day in 1970 when environmentalists
started urging philosophers who were involved with environmental groups to do something about
environmental ethics. An intellectual climate had developed in the last few years of the 1960s in
large part because of the publication of two papers in %: Lynn White's "The Historical
Roots of our Ecologic Crisis" (March 1967) and Garett Hardin's "The Tragedy of the Commons"
(December 1968). Most influential with regard to this kind of thinking, however, was an essay in
Aldo Leopold's c % !
 c, "The Land Ethic," in which Leopold explicitly
claimed that the roots of the ecological crisis were philosophical. (Although originally published
in 1949, % !
 c became widely available in 1970 in a special Sierra
Club/Ballantine edition, which included essays from a second book, v
 v.

Most academic activity in the 1970s was spent debating the Lynn White thesis and the tragedy of
the commons. These debates were primarily historical, theological, and religious, not
philosophical. Throughout most of the decade philosophers sat on the sidelines trying to
determine what a field called environmental ethics might look like. The first philosophical
conference was organized by William Blackstone at the University of Georgia in 1972. The
proceedings were published as 4   ! in 1974, which included
Pete Gunter's first paper on the Big Thicket. In 1972 a book called Is It Too Late? A Theology of
Ecology, written by John B. Cobb, was published. It was the first single-authored book written
by a philosopher, even though the primary focus of the book was theological and religious. In
1973 an Australian philosopher, Richard Routley (now Sylvan), presented a paper at the 15th
World Congress of Philosophy "Is There a Need for a New, an Environmental, Ethic?" A year
later John Passmore, another Australian, wrote   v  ã
, in which,
reacting to Routley, he argued that there was no need for an environmental ethic at all. Most
debate among philosophers until the mid-1980s was focused on refuting Passmore. In 1975
environmental ethics came to the attention of mainstream philosophy with the publication of
Holmes Rolston, III's paper, "Is There an Ecological Ethic?" in .

Arne Naess, a Norwegian philosopher and the founding editor of the journal ð&
 authored
and published a paper in ð&
 "The Shallow and the Deep, Long-Range Ecology Movement"
in 1973, which was the beginning of the deep ecology movement. Important writers in this
movement include George Sessions, Bill DeVall, Warwick Fox, and, in some respects, Max
Oelschlaeger.

Throughout the 1970s ð&

 was the primary philosophy journal that dealt with environmental
ethics. Environmental ethics was, for the most part, considered a curiosity and mainstream
philosophy journals rarely published more than one article per year, if that. Opportunities for
publishing dramatically improved in 1979 when Eugene C. Hargrove founded the journal
Environmental Ethics. The name of the journal became the name of the field.

The first five years of the journal was spent mostly arguing about rights for nature and the
relationship of environmental ethics and animal rights/animal liberation. Rights lost and animal
welfare ethics was determined to be a separate field. Animal rights has since developed as a
separate field with a separate journal, first,   c, which was later superseded by
Between the Species.

Cobb published another book in the early 1980s, The Liberation of Life with coauthor Charles
Birch. This book took a process philosophy approach in accordance with the philosophy of
organism of Alfred North Whitehead. Robin Attfield, a philosopher in Wales, wrote a book
called     !. It was the first full-length response to Passmore.
An anthology of papers,    , was edited by Donald Scherer and Tom
Attig.

There was a turning point about 1988 when many single-authored books began to come
available: Paul Taylor's v  ã
; Holmes Rolston's  ; Mark
Sagoff's     ; and Eugene C. Hargrove's Foundations of Environmental
Ethics. J. Baird Callicott created a collection of his papers, ð '   ( . Bryan
Norton wrote  4 ã
 ' Followed more recently by  (
 . A large number of books have been written by Kristin Shrader-
Frechette on economics and policy.

In the 1980s a second movement, ecofeminism, developed. Karen Warren is the key philosopher,
although the ecofeminism movement involves many thinkers from other fields. It was then
followed by a third, social ecology, based on the views of Murray Bookchin. An important link
between academics and radical environmentalists was established with the creation of the
Canadian deep ecology journal, The Trumpeter. In 1989, Earth Ethics Quarterly was begun as a
more popular environmental publication. Originally intended primarily as a reprint publication,
now as a publication of the Center for Respect for Life and Environment, it is focused more on
international sustainable development.

The 1990s began with the establishment of the International Society for Environmental Ethics,
which was founded largely through the efforts of Laura Westra and Holmes Rolston, III. It now
has members throughout the world. In 1992, a second refereed philosophy journal, dedicated to
environmental ethics, Environmental Values, published its first issue in England. In 1996, a new
journal was established at the University of Georgie, Ethics and the Environment. (In 2001, it
became a publication of Indiana University Press.) In 1997 a second international association
was created, the International Association for Environmental Philosophy, with an emphasis on
environmental phenomenology.

On the theoretical level, Taylor and Rolston, despite many disagreements, can be regarded as
objective nonanthropocentric intrinsic value theorists. Callicott, who follows Aldo Leopold
closely, is a subjective nonanthropocentric intrinsic value theorist. Hargrove is considered a
weak anthropocentric intrinsic value theorist. Sagoff is very close to this position although he
doesn't talk about intrinsic value much and takes a Kantian rather than an Aristotelian approach.
At the far end is Bryan Norton who thought up weak anthropocentrism but wants to replace
intrinsic value with a pragmatic conception of value. The anti-intrinsic value pragmatic
movement includes such philosophers as Anthony Weston and Andrew Light, although Ben
Minteer has recently indicated that intrinsic value could be included in an environmental
pragmatism.