Ethics, because it requires us to systematically examine values, can help us to clarify our own values and to decide which are most important. But what are values? They are simply things one considers to be most important. Ethics is the branch of philosophy concerned with the systematic investigation of such values. It also deals with moral principles, or more specifically, with the principles governing ideal human character and the ends of human action.

Being responsible for a business firm is similar to being responsible and a senator or as a university president. Rather the question is not, 'Do I want to do the right thing?' it arises in the form, 'What is the right thing to want to do?'. The choice is not always between some selfish temptation and some obviously responsible course. It is a matter of choice among values.

With respect to ethics to the organizational level, two topics are usually considered: organizational culture and social responsibility. The organizational culture refers to the shared values of big organizations like corporations, on how the values of strong CEOs can permeate an entire organization when about ethics. Some organizations show tough-guy, macho cultures in which rugged individualists are encouraged to take risks and accept the consequences. Other organizations put a considerable emphasis on rules and procedures. Behind each of these organizational cultures is a set of values. Therefore the concept of organizational culture cannot be divorced from ethics.

But, most of the values and therefore the what is or is not ethical is set by the culture, society, government, or environment. Therefore, judging a corporation or an organization in general, as acting ethically or not, it may be subject to interpretation. And therefore, a difference between a corporation seen as acting ethically or unethically. The impact is mostly an economic impact to the corporation, in a free market society. The corporation own existence is at stake based on this type of view of it from the rest of the environment: other organizations, corporations, government, various groups, or individuals. They will judge the ethical or unethical behavior or that given organization with their dollars, that ultimately will translate into a business, economic impact on the organization.

Some ethical issues are so wide in their impact that their resolution is beyond the capability of single organization, much less individual. Because these issues affect society as a whole, we refer to them as systemic. The growing movement for private, profit-seeking hospital chains to purchase, lease, or manage public hospitals is such an issue. Affirmative action, especially the use of quotas, as a means toward achieving a more equitable society also raises important ethical questions on the systemic level.

At stake, regardless of the defined values of a given society or environment is the mere existence of that organization or society at large, when ethical or non ethical decision are being made and implemented.

In spite of the positive benefits of good ethical practices, ethical problems do occur in business. Following are some of the main reasons.

Personal gain. Personal gain, or even greed, causes some ethical problems. Business sometimes employs people whose personal values are less than desirable. They will put their own welfare ahead of all others, regardless of the harm done to fellow employees, the company, or society. In the process of selecting employees there is an effort to weed out ethically undesirable applicants, but ethical qualities are difficult to anticipate and measure. Lacking a perfect screening system, business is not likely to eliminate this kind of unethical behavior entirely. Moreover, business has to proceed carefully in screening applicants, taking care not of trample on individuals' rights in the search for potentially unethically employees.

Individual Values in Conflict with Organizational Goals. Ethical conflicts frequently occur when a company pursues goals or uses methods that are unacceptable to some of its employees. The protesting employees in these companies were not troublemakers; they tried to work through internal company procedures to get the problem corrected. The ethical dilemma arose because the company's goals and methods required the employees to follow orders that they believed would harm themselves, other employees, customers, or the general public. As far as they were concerned, they were asked to do something unethical.

Managers' values and Attitudes. Managers are the key to whether a company will act ethically or unethically. As major decision makers and policy makers, they have more opportunities than others to set an ethical tone for their company. Employees look to the top levels of authority for ethical guidance. The values held by these top managers are all-important in promoting ethical activities.

Competitive Pressures. When companies are squeezed by severe competition, they sometimes engage in unethical activities in order to beat out a competitor. Rivalry between employees for advancement fan motivate some kinds of unethical behavior, as apparently happened among some managers in a given corporation.

Cross-Cultural Contradictions. Some of the knottiest ethical problems occur as corporations do business in other societies where ethical standards differ from those at home. Parallel problems can be found when companies operate in nations with repressive governments, or when another country's customs permit (or may even legalize) questionable payments that others would call bribes. In all such cases, what is thought acceptable by one nation is considered unethical in another. The resultant ethical dilemmas can be difficult ones for business firms and their managers to solve.

In my company, as I think any other company, the managers do derive ethical values from the society at large, from the environment where the company does business. Environment and society at large are the thermostat of ethical values. These days many companies, including the one I work for, are driven by "mission statements" visible displayed in the company. A good part of this mission statement, has built in ethical values. Most of these ethics values can be groups in to two categories: those dealing with ways to do business at large, customer-oriented values, and those that deal with conducting personal duties, roles and responsibilities to support the general firms ethic values. These ethics code is usually developed by the personnel department and each employee upon hiring is educated and trained into. Later one, periodically, these ethics value are reaffirmed through pamphlets, and internal memorandums.

In addition, each employee, myself included, has his or her own set of ethical values. Some of this are just an extensions of the above, company imposed. Others are just of a personal matter. The later are coming either from society at large or from education at home or from a personal education. It is desirable that each employee's personal ethical values are close or a match to those of the company he or she works for. Otherwise, the employee has to make a personal effort to "behave" accordingly during the business hours, even though his or her personal ethical values may not be in synch with the ones of the business firm he or she works for. Therefore, the issue of company, employee, and manager in particular, ethics values is complex. Environment, society, personal education values can all come in together. Even more the ethical values are dynamic; they change in time, as the environment changes. For instance, these days when doing business we are more and more aware of the global and international aspect of it, or the fairness practices as defined by the government, or the "political correctness" of such actions. That was not the case in the past as history can prove. Tomorrow the ethics value can change again.

The same can be said on an individual basis, in a management capacity or not. The personal and ethical values changes over time, influenced by the environment, society, or other factors. Most of them are cultural, too. For example, doing business in the United States is quite different than let's say in a Third World country or even in country highly industrialized such as Japan, or Western Europe. Any reasonable bright person can rationalize virtually any decision. One way to avoid this trap, and to insure that the decision reflects true self-interest, is to ask yourself a series of hard questions. Several questions concern problem definition:

• Have I defined the problem accurately?

• How do others see the problem?

• How did the problem arise? (What’s its history?)

• Do I need more information?

• Did I eliminate unfavorable information?

With the problem in focus, one can then consider the fundamental question of duty: To whom and what do I ultimately give my loyalty? Company? Church? Family? Community? Nation? Profession? The decision process itself should also be subjected to critical questioning:

• Is these consistency in my reasoning?

• What is the symbolic effect of the decision?

• Do I need to explore more alternatives?

• Does the decision go against prior commitments?

• Can and should affected parties be brought into the process?

A final set of questions force the decision maker to think ahead:

• Will my decision be valid over the long run?

• Can I explain exactly how and why I arrived at my final decision?

• How many people would be convinced?

• Will others affect my reason? If I were "others" would I?

Managers must use ethical decision framework as a part of their decision-making. Making decisions is a rather an economic-political process. Managers make decision in the interest of their own company's interest. That interest is a free market-driven one. Ethical aspects of that decision making process is always an important factor, since its political aspect. Even if the decision is made just for the pure business aspect, if that decision is not also taking in consideration the long term political and ethical values of the companies, it's going to have a negative impact. In particular the social impact can be measurable. For example, the following guidelines may be considered by a manager as far as social impact management, as part of the ethics values when making decisions:

• Consider periodic research to find out what the public—particularly your most important constituents—expects of your company; set targets for improvement where indicated; measure progress against benchmarks.

• Get top management involvement and commitment in your program and communicate that fact throughout the organization.

• Concentrate your efforts on the internal, so-called mainstream, issues of corporate responsibility.

• Once you have a successful track record, do not fully communicate this to your constituents, but do so with taste, accuracy, and understatement.

In short, social impact management means that a company has a responsibility, not to that amorphous entity called society, but to those groups in society that are affected either directly or indirectly by what the company does.