Most authorities agree that there is room for improvement in business ethics. One of the most problematic questions raised in relation to business ethics is whether or not companies can become more ethical in the real world. The majority opinion on this issue suggests that the government, trade associations, and individual businesses can set acceptable levels of ethical behavior.
The government can do this by legislating stricter regulations. But, the rules require compliance and when in many cases there is evidence of non-compliance, even the ethical businessman will tend to “sneak away” undetected. More regulation can help, but it surely can’t solve all business ethics problems.
Trade associations can and often do provide ethical guidelines for their members. These organizations within particular industries are in an excellent position to put pressure on members who stoop to questionable business practices. However, the application and authority vary from one association to another. Furthermore, precisely because trade associations exist for the benefit of their members, harsh crackdowns can backfire.
Employees can more easily determine and adopt acceptable behavior when companies provide them with a “code of ethics.” Such codes are perhaps the most effective way to encourage ethical behavior. A code of ethics is a written guide to acceptable and ethical behavior that outlines uniform policies, standards, and penalties for violations. Because employees know what is expected of them and what will happen if they break the rules, a code of ethics goes a long way toward encouraging ethical behavior. However, the codes cannot cover all situations. Companies must also create an environment in which employees recognize the importance of complying with the written code. Managers must provide guidance by fostering communication, actively modeling and encouraging ethical decision making, as well as investing in training employees to make ethical decisions.
Sometimes even employees who want to act ethically can have a hard time doing so. Unethical practices can become entrenched in an organization. Employees with high personal ethics can then take a controversial step called “reporting.” Whistleblowing is reporting to the press or government officials about unethical practices in an organization. Whistleblowing could have averted the disaster and prevented unnecessary deaths in the Space Shuttle Challenger disaster, for example. How could employees know about life-threatening problems and let them pass? Whistleblowing, on the other hand, can have serious repercussions for employees; Wave makers sometimes lose their jobs.