The Importance of Business Ethics 15

and respond to ethical issues. In our book the term ethical culture is acceptable behavior as defined by the company and industry. Ethical culture is the component of corporate cul- ture that captures the values and norms an organization defines and is compared to by its industry as appropriate conduct. The goal of an ethical culture is to minimize the need for enforced compliance of rules and maximize the use of principles that contribute to ethical reasoning in difficult or new situations. Ethical culture is positively related to workplace confrontation over ethics issues, reports to management of observed misconduct, and the presence of ethics hotlines. 33 To develop better ethical corporate cultures, many businesses communicate core values to their employees by creating ethics programs and appointing ethics officers to oversee them. An ethical culture creates shared values and support for ethical decisions and is driven by top management.

Globally, businesses are working closely together to establish standards of acceptable behavior. We are already seeing collaborative efforts by a range of organizations to estab- lish goals and mandate minimum levels of ethical behavior, from the European Union, the North American Free Trade Agreement (NAFTA), the Southern Common Market (MER- COSUR), and the World Trade Organization (WTO) to, more recently, the Council on Economic Priorities’ Social Accountability 8000 (SA 8000 ), the Ethical Trading Initiative, and the U.S. Apparel Industry Partnership. Some companies refuse to do business with organizations that do not support and abide by these standards. Many companies dem- onstrate their commitment toward acceptable conduct by adopting globally recognized principles emphasizing human rights and social responsibility. For instance, in 2000 the United Nations launched the Global Compact, a set of 10 principles concerning human rights, labor, the environment, and anti-corruption. The purpose of the Global Compact is to create openness and alignment among business, government, society, labor, and the United Nations. Companies that adopt this code agree to integrate the ten principles into their business practices, publish their progress toward these objectives on an annual basis, and partner with others to advance broader objectives of the UN. 34 These 10 principles are covered in more detail in Chapter 10 .

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