Term Paper on "Ethical Analysis Is Commerce"

Term Paper 3 pages (1042 words) Sources: 4

[EXCERPT] . . . .

Commerce ever Ethical?

The issue of ethics in business has become increasingly important in recent years, in particular in light of the wave of frauds and accounting scandals in the early 2000s that led to the passage of the Sarbanes-Oxley Act. This paper will investigate the history of business ethics and the current ways in which ethical programs have developed.

The subjects of business and ethics were disconnected throughout the 19th and early 20th centuries. Even the most basic of ethical philosophies, such as Kant's moral imperative, when ignored by substantial components of industry. Although the underlying philosophies of business ethics existed at the time -- Mill developed utilitarianism during the industrial revolution -- these philosophies seldom found their way into business practice. Ethics were enforced only through the passage of laws. As an example, the Food, Drug and Cosmetic Act was enacted in response to the "elixir of sulfanilamide" scandal, in which over 100 people were killed by a poisonous health product (FDA, 2009).

During the 1960s, social norms began to shift and more interest was paid to the issue of corporate responsibility. There were calls for corporations to measure their outputs in ways beyond the income statement. In response to this, Milton Friedman published his treatise in 1971 arguing that the social responsibility of business was to create profit. The pursuit of other social responsibilities was the responsibility of the shareholders, who are free to do as they please with their profits. Managers, however, act as agents of the shareholders and have only been given a mandate to increase profit.


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