A Question of Ethics

When it comes to businesspeople, we seem prepared to expect the most unethical behavior. And with the headlines filled with savings and loan cheats, inside traders, and corrupt defense contractors, it does seem that business ethics are at an all-time low. Indeed, this belief is so strong that it continues despite evidence to the contrary. Take, for example, the way UCLA publicized a study of business ethics conducted by two of its marketing professors.

Hal Kassarjian and Barbara Kahn presented a number of vignettes illustrating business-related moral dilemmas to business executives, MBA students, and business school faculty members. In each case, respondents were asked to indicate (on a scale of 1 to 5) how strongly they approved or disapproved of the hypothetical businessman's behavior. Kassarjian and Kahn then compared the answers to those given by business executives who took the same test in 1964.

"The big news is that there has been no significant change over time," says Kassarjian. "Today's responses were about the same as those given in 1964. To the extent that there was change it was a greater emphasis on personal integrity and loyalty to shareholders and less emphasis on more general 'social' concerns."

For example, respondents in 1988 were less tolerant of salesmen who padded their expense accounts or a newspaper that gave undeservedly favorable coverage to a big advertiser. On the other hand, they were less likely to endorse corporate contributions to colleges or condemn trading with Communist countries—thereby earning them lower "social responsibility" scores. The mean social responsibility score declined by 1.6 points, while the mean personal ethics score rose by 3.1 points.

Some business critics might see both results as positive indicators. Corporate executives have come under fire, after all, for ignoring the interests of the stock-holders—their supposed employers—while pursuing their own agendas, including pet causes. But a public relations brief issued by UCLA framed the report a little bit differently.

The brief tersely noted that the people tested in 1964 and those tested in 1988 "did not significantly differ from each other in their commitment to personal integrity and honesty." (Remember the people in 1988 were slightly more honest.) The last third of the brief was devoted to the dip in "social responsibility," even though that drop was only half as great as the rise in personal integrity.

"Businesspeople today felt that, once an individual has met the requirements of the law," it said, "one has fulfilled one's ethical responsibilities and is free to conduct business as one pleases without acting unethically."