Santa Clara U: Five Most Crucial Ethical Issues in America Identified in Business Ethics Outlook 2006-07

Business Wire, Oct 27, 2006

SANTA CLARA, Calif. -- This week, The Markkula Center for Applied Ethics at Santa Clara University released the Business Ethics Outlook, an agenda of the five most crucial ethical issues facing American business:

Business and Personal Information
        What is an organization's responsibility for data privacy?
Private Equity and Business Ethics
        Are we in a new era of corporate raiders?
Fooling with the Free Market
        Is the (market) price always right?
What is the Role of Business in...Immigration, Global Warming, Free
 Trade, Health Coverage
        How should business weigh in on the great public issues of our
         time?
Different Countries; Different Values
        When should businesses "do as the Romans do" and when should
         they leave?

Center Executive Director Kirk O. Hanson said, "These are the issues shaping the character of American business in the coming year. If we don't face the implications of these issues, we will do damage to the country's moral leadership in the world."

The Business Ethics Outlook was developed in consultation with a group of scholars and executives including Hanson; Robert Finocchio, former CEO, Informix, and dean's executive professor, Leavey School of Business, SCU; Dennis Moberg, SCU professor of management and editor of The Next Phase of Business Ethics; Debra Dunn, former senior vice president of Corporate Affairs and Global Citizenship for Hewlett-Packard; Al Hammond, director, Broadband Institute of California, and director, law and public policy SCU Center for Science, Technology, and Society, and others.

This is the Center's fifth annual Ethics Outlook, and the first to focus specifically on Business Ethics. The issues, described in brief below, "ought to be on the front cover of every business publication during the next year," Hanson said.

Business and Personal Information

What is an organization's responsibility for data privacy?

"Chase reveals data security breach." "Another breach at Wells." "Files hint `pretexting' may be common among firms." "Whistle-blower says AT&T gave spy agency access to network." These recent headlines point to a critical ethical issue facing American businesses: Who is responsible for data security? the consumer? the company storing the data? the data security firm? the third party auditor who loses a computer with customer records? the software manufacturer whose program can be hacked? the federal government arguing that the information is crucial for national security? How should a company balance potential harms and costs in the protection of privacy?

Private Equity and Business Ethics

Are we in a new era of corporate raiders?

The breakup of Knight-Ridder and the attempts by Kirk Kerkorian to remake General Motors are just two recent illustrations of the growing power of private equity investors including hedge funds. Often using mechanisms put in place to protect shareholders, private equity is taking "strategic positions" in companies a then buying, selling, and breaking them up at an increasing rate. Compensation of private equity managers is based on getting in, doing a deal, and getting out. Have we ushered in a new era of equity investors eschewing long-term results in favor of short-term? Does the short-term focus drive out concern for employees, the community, and ethics?

Fooling with the Free Market

Is the (market) price always right?

A Memphis hotel that raised its room rates from 31 to 105 percent in the week following Hurricane Katrina was recently required to pay refunds in one of many price-gouging cases to come out of that disaster. And anti-gouging legislation aimed specifically at gas prices passed the U.S. House of Representatives and awaits action in the Senate. Yet many economists a Freakonomics author Steven Levitt among them a argue that such regulations are likely to backfire and impede recovery from disasters and shortages. On the other side of the question, cities all over the country are considering living wage ordinances that would set a minimum wage for all businesses contracting with the municipality. Should the market always be free to set wages and prices, or are there moral goals that should guide the "invisible hand?"

What is the Role of Business in...Immigration, Global Warming, Free Trade, Health Coverage

How should business weigh in on the great public issues of our time?

Currently American businesses are in the business of providing medical insurance, vetting the immigration status of workers, lobbying for or against subsidies and tariffs, and determining sustainability policies. But are these really issues for businesses or are they matters only for public policy makers? Do businesses have a duty to do something about global warming, for example, or the uninsured, or the undocumented, or should they argue the issues strictly from self-interest?

Different Countries; Different Values

When should businesses "do as the Romans do" and when should they leave?

When Google, Yahoo, and Microsoft agreed last year to acquiesce to the Chinese government's policies restricting access to certain information on the Internet, they began a new chapter in an old story: the issue of how businesses should deal with governments that may have different attitudes than the United States on such key issues as human rights, women's rights, intellectual property, and bribery. As American businesses go global, they must decide how to operate in countries where corruption is rife or where native workers are subject to repression. They must navigate boycotts by the United States or other governments or non-governmental organizations. In 1977 Leon Sullivan promulgated a set of principles for companies operating in South Africa. Is it time for a new set of Sullivan principles for the 21st century?