The document discusses how business ethics has evolved over time. It has evolved from being an isolated discipline to being integrated with other business areas like management and marketing. Business ethics has evolved due to conflicts between profit motives and moral principles, and due to digital media publicizing ethical violations. The document also discusses how events like the Enron scandal and 2008 financial crisis increased focus on business ethics. It explores the relationship between legal and ethical environments and how companies use CSR for public relations. Overall, the document analyzes how business ethics has become more prominent in business over the past decades due to various internal and external factors.

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Running head: THE EVOLUTION
The Evolution of Business Ethics
Kevin Cotton
OMM 640: Business Ethics and Social Responsibility
Instructor: Roberto Coto
June 1, 2013

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THE EVOLUTION
The Evolution of Business Ethics
Evolution of Business Ethics in today’s Environment, despite the factors contributing to
the evolution of the business environment, Business ethics in a legal environment have evolved
over the years because of the way we do business. (Ferrell et al. 2013 p. 30). Define business
ethics as “the principles and standards that determine acceptable conduct in business
organizations”. The discipline of business ethics has evolved substantially as both an area of
scholarly research and as a practical academic field of study over the past several decades. The
greatest change seen in business ethics is the movement from ethics as a solitary, isolated
business discipline, to one that is central to business education and scholarship, and integrated
with other business disciplines, including management, finance, and marketing. Business ethics
has evolved in two key ways. First, due to the conflicts inherent in capitalist enterprises with a
strong profit motive, the need for both management controls and personal moral principles that
guide corporate decision-making became a growing concern. Second, digital media has
publicized ethical violations that further caused the evolution of business ethics. As (Ferrell et al.
2013 p. 30) say, “Wrongdoing by businesses has focused public attention and government
involvement to encourage more acceptable business conduct” .
As far as conflicting goals between corporations seeking profit and ethics, Doane’s
(2005) study called “The myth of CSR: The problem with assuming that companies can do well
while also doing good is that markets don’t really work that way” provides an excellent
illustration of the problem. The article was published in the Stanford Social Innovation Review.
What CSR refers to, according to Doane (2005), is the Corporate Social Responsibility
movement (p. 23) that has become more prevalent since 2000, where organizations create
massive public relations campaigns in order to “market” their ability to fund socially responsible

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causes. What Doane states about CSR are that the free market system has encouraged corporate
greed? While Ferrell et al. (2013) and business ethicists maintain that businesses “should”
consider the social, environmental and financial impacts of their decisions, Doane argues that it
is a paradox to think that companies can both be profitable and “do good” at the same time.
Doane illustrates in this article how the corporate responsibility movement (CSR) is more of a
symbolic movement that companies use as public relations, to attempt to present an image that
they are doing good, when in fact it is not possible for them to do so as capitalist, profit-making
enterprises. (Ferrell et al. 2013 p. 30) question this view with research that shows that ethical
companies are more profitable. Clearly, this type of argument is what has also allowed evolution
of business ethics scholarship.
In addition, the growing ambiguous relationship between the ethical and legal
environment in business has also given a wider audience to business ethics. For example, (Ferrell
et al. 2013 p. 30) say that “all actions deemed unethical by society are not necessarily illegal”.
However, illegal practices have also driven business ethics. Therefore, as far as key events that
gave rise to the present focus on business ethics, it is most obvious to look at two key
overarching trends in the business world: First, the fall of organizations, including the once-
powerful company Enron which serves as the “poster child” for a need for business ethics.
Organizations such as Enron have diminished in power or crumbled altogether due to unethical
financial management and dishonesty in communication with both the external and internal
stakeholders, including Boards of Directors and employees. Second, the global financial crisis of
2008 that resulted in the subprime mortgage crisis, severe unemployment, government bailouts
and changes in lending provisions, reporting laws and Security and Exchange Commission
(SEC) provisions (Deroy & Clegg, 2011) serves as a key event that gave rise to an even greater

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focus on business ethics. In addition, these changes impact current business philosophies and
reporting practices in the way that they have served to move business ethics from a separate
study, as a discipline that is closely integrated with other business disciplines, particularly
finance, accounting and marketing.
Finally, my own ethical values and principles have emerged and evolved over time along
with the discipline of business ethics. Like many people, the media coverage about business
ethics violations has caused me to question my own behavior and put myself in “what if”
situations where my ethics might be tested. As Deroy and Clegg (2011) say, often ethical events
“comprise those unpredictable things that happen” (p. 637). The goal for me is to know how I
feel about my own ethical boundaries before an unexpected issue happens so I can react
appropriately. I think the main way ethical principles has caused me to evolve, along with the
discipline, is that there is research that shows how ethical behavior enhances leadership and
creates a more positive work environment. (Ferrell et al. 2013) outlines this research and it is
compelling. I think business ethics has forced me to view problems as opportunities to
demonstrate ethical behavior. Things like honesty and office politics, conflicts of interest,
corporate gift policies and other everyday issues are in the realm of business ethics, just as large-
scale scandals like the 2008 financial crisis are. I feel more connected to these everyday
scenarios that are ethical in nature, and I think the way people handle these everyday issues says
a lot about how they might view larger ethical issues. I reflect more about these issues, and I
think a large part of business ethics is allowing time for reflection before acting and making a
difficult decision.

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References
Deroy, X. & Clegg, S. (2011). When events interact with business ethics. Organization, 18(5),
637-653.
Doane, D. (2005). The myth of CSR: The problem with assuming that companies can do well
while also doing well is that markets don’t really work that way. Stanford Social
Innovation Review, 23-29.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business ethics & social responsibility
[OMM640 Custom Edition]. Mason, OH: Cengage Learning.