Ethics from the top: top management and ethical business

Abstract

Codes of ethics and conduct typically demand the highest standard of ethical behaviour from every single employee. This implies a democratic or lobbyist understanding of ethics in business. The contrasting view would argue that business ethics is an elitist undertaking that can only be instigated from the top, by managing directors or owner managers. This article looks at three types of ethical businesses, three types of approaches to ethical problem‐solving, and three possible incentives for ethical business to see which of the above is more convincing. It will be argued that the impulse for value‐driven business has to come from the top. Only top management and owner managers have the opportunity to foster major change in business practice.

Tone at the Top: An Ethics Code for Directors?

“…Along with senior management, directors set by their words and deeds the ethical tone for the organizations (Schroeder, 2002). All others involved with the firm look to the top for guidance.…”

Corporate Ethics And Ethical Behaviour: The Significant Function Of Top Management Role Modelling

“…The most important strategy for enhancing ethics in business organizations entails emphasising the exemplary ethical conduct of top management. Ethical obligations usually are understood as mutual or reciprocal (Schroeder, 2002), so if ethics are to invade the organisation, they must start at the top. This study elucidates the important function of top management role modelling as a strong determinant of employees' ethical thinking and behaviour, more important even than formal organisational mechanisms, such as those related to sanctioning immoral behaviours.…”

Complementary Resources and Capabilities for an Ethical and Environmental Management: A Qual/Quan Study

“…And it depends on the way in which managers accept their leadership responsibilities to define ethical behavior and to pursue it relentlessly as a top-priority goal (Thomas et al, 2004). Leadership responsibilities about business ethics may be due not only to the firm's access to additional resources used to implement social performance programs but also to the increased influence of additional stakeholders (Stanwick and Stanwick, 1998), as well as the satisfaction of working for an ethical firm and introducing ethical practice into a given organization (Schroeder, 2002). Thus, the passive, accommodating or proactive environmental attitude of managers and the available resources in the firm are significant factors in determining firm environmental orientation.…”

“…The issues are becoming clouded, the context is changing, and the risks incurred in leaving the resolution of business dilemmas to the moral consciousness of managers are growing (Webley, 2001). Therefore, in every business, a focus on traditional ethical values will not only provide some stability and consistency in the face of such massive changes, but also enable those businesses to command greater trust from their stakeholders and become more successful (Schroeder, 2002).…”

“…Social issues, environmental pressures and ecological sensitivity of stakeholders have affected corporate decision-making and behavior, as well as the ecological sensitivity of managers. In fact, some of them have seen in business ethics a competitive opportunity if they move before competitors, because ethical consumers have increased their demand for green and ethically produced goods (Schroeder, 2002). Literature has made relatively few contributions to the analysis of the potential advantages derived from moving first, and always relating them to characteristics typically associated with the introduction of preventive environmental practices, for which the resource-based view has been adopted (Christmann, 2000;Nehrt, 1996).…”