THE CORPORATE ETHICS TEST

US and European chief executive officers (CEO) and senior managers see corporate ethics as a subject to be dealt with on 3 levels: 1. the corporate mission, 2. constituency relations, and 3. policies and practices. Corporate mission is easily defined as the objective the firm wishes to promote that will benefit the community. Constituency relations involves responsibilities not only to management and employees but to customers, suppliers, shareholders, government agencies, and sometimes the general public. Evaluating policies and practices is more difficult because it is felt that ethical considerations are inappropriate for many management decisions and policies. Under certain circumstances, public commitments to ethical principles may give way to business priorities, or the connection between ethical commitments and social policies may make the company a target for pressure groups. In a recent survey, CEOs were presented with 4 hypothetical situations involving ethical decisions to consider, as well as a rank order survey.