The need for ethical policies has become as large as the corporations that they govern. The continuous need for ethics comes in the shadow of the collapse of several mega corporations, Wall Street insider trading scandals and waves of other corrupt corporate dealings. Within the past two decades many unethical cases of corporate dishonesty and fraud have established an expectation that CEOs and Presidents of companies display a sound strong ethical conduct. Leadership is expected to help set the ethical tone for the rest of the organization and establish both norms and culture that reinforce the importance of ethical behavior (Whetstone, 2005).
The destruction of major organizations like Enron, WorldCom and Arthur Andersen brought to the forefront the issues those organizations faced with the lack of corporate ethics. The crisis associated with the destruction of these mega corporations can be attributed to greed, mismanagement and unmoral business practices. Rhee (2008) suggested the crisis at the dawn of the new century concerned the behavior of managers in Corporate America. As corporates continue to grow in size, and become more globalize; modern corporations have vast power, and thus their actions and behavior raise ethical issues (Rhee, 2008). As Addullah & Valentine (2009) argued corporations have become powerful and dominant institutions.
Businesses in today’s corporate world face two major problems in relation to ethics: (a) how to ensure that top managers and employees are upholding the highest ethical standards and behavior within the organization, and (b) how to regain consumer and investor confidence. Fombrun (2004) explained a consumer study report released in 2004,... [continues]
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