[15][16] Firms began highlighting their ethical stature in the late 1980s and early 1990s, possibly in an attempt to distance themselves from the business scandals of the day, such as the savings and loan crisis.
This era began the belief and support of self-regulation and free trade, which lifted tariffs and barriers and allowed businesses to merge and divest in an increasing global atmosphere.
One of the earliest written treatments of business ethics is found in the Tirukkuṛaḷ, a Tamil book dated variously from 300 BCE to the 7th century CE and attributed to Thiruvalluvar.
In practice, many non-shareholders also benefit from a firm's economic activity, among them employees through contractual compensation and its broader impact, consumers by the tangible or non-tangible value derived from their purchase choices; society as a whole through taxation and/or the company's involvement in social action when it occurs.
It concerns technical issues such as the mix of debt and equity, dividend policy, the evaluation of alternative investment projects, options, futures, swaps, and other derivatives, portfolio diversification and many others.
[citation needed] The theory holds that open financial systems accelerate economic growth by encouraging foreign capital inflows, thereby enabling higher levels of savings, investment, employment, productivity and "welfare",[50][51][52] along with containing corruption.
[46][74] Particular corporate ethical/legal abuses include: creative accounting, earnings management, misleading financial analysis, insider trading, securities fraud, bribery/kickbacks and facilitation payments.
[75] Human resource management occupies the sphere of activity of recruitment selection, orientation, performance appraisal, training and development, industrial relations and health and safety issues.
In the workplace what is unethical does not mean illegal and should follow the guidelines put in place by OSHA (Occupational Safety and Health Administration), EEOC (Equal Employment Opportunity Commission), and other law-binding entities.
[79][86][87] Trade unions, for example, may push employers to establish due process for workers, but may also cause job loss by demanding unsustainable compensation and work rules.
[citation needed] Among the many people management strategies that companies employ are a "soft" approach that regards employees as a source of creative energy and participants in workplace decision-making, a "hard" version explicitly focused on control[97] and Theory Z that emphasizes philosophy, culture and consensus.
Blackstone conceptualized property as the "sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe".
"[147] Davis claims that common law theory generally favors the view that "property is not essentially a 'right to a thing', but rather a separable bundle of rights subsisting between persons which may vary according to the context and the object which is at stake".
[164] Singer continues implying that legal realists "did not take the character and structure of social relations as an important independent factor in choosing the rules that govern market life".
The US Constitution included the power to protect intellectual property, empowering the Federal government "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries".
Patent protection enables drug companies to recoup their development costs because for a specific period of time they have the sole right to manufacture and distribute the products they have invented.
[169][170] One attack on IPR is moral rather than utilitarian, claiming that inventions are mostly a collective, cumulative, path dependent, social creation and therefore, no one person or firm should be able to monopolize them even for a limited period.
Issues and subfields include: Foreign countries often use dumping as a competitive threat, selling products at prices lower than their normal value.
[186] The ethical issues associated with honesty are widespread and vary greatly in business, from the misuse of company time or resources to lying with malicious intent, engaging in bribery, or creating conflicts of interest within an organization.
Some cultures and belief systems even consider honesty to be an essential pillar of life, such as Confucianism and Buddhism (referred to as sacca, part of the Four Noble Truths).
The misuse of resources costs companies billions of dollars each year, averaging about 4.25 hours per week of stolen time alone, and employees' abuse of Internet services is another main concern.
In accordance with this, the Foreign Corrupt Practices Act was established in 1977 to deter international businesses from giving or receiving unwarranted payments and gifts that were intended to influence the decisions of executives and political officials.
If a country is heavily plagued with poverty, large corporations continuously grow, but smaller companies begin to wither and are then forced to adapt and scavenge for any method of survival.
Counter to Friedman's logic it is observed that legal procedures are technocratic, bureaucratic, rigid and obligatory whereas ethical act is conscientious, voluntary choice beyond normativity.
[208] Employees with strong community involvement, loyalty to employers, superiors or owners, smart work practices, trust among the team members do inculcate a corporate culture.
[211] Incorporation of these considerations is increasing, as consumers and procurement officials demand documentation of a business's compliance with national and international initiatives, guidelines, and standards.
An organization can implement sustainability initiatives by improving its operations and manufacturing process so as to make it more aligned with environment, social, and governance issues.
In Alcoa, an aluminum company based in the US, "1/5th of executive cash compensation is tied to safety, diversity, and environmental stewardship, which includes greenhouse gas emission reductions and energy efficiency" (Best Practices).
"According to research analysis done by Pearl Meyer in support of the NACD 2017 Director Compensation Report shows that among 1,400 public companies reviewed, only slightly more than five percent of boards have a designated committee to address ESG issues."
It is mentioned that Christianity has the potential to transform the nature of finance and investment but only if theologians and ethicist provide more evidence of what is real in the economic life.