Although not directly asking or answering this question, an article published by Penn’s Wharton School and republished in theindustryradar.com puts it out there for all to squirm about.  In fact, after reading the article (which is a balanced, reasoned approach to this issue), one could wonder if “business ethics” should be one of the terms defined in the frequent list of Corporate BS appearing on this blog. 

This article caught my eye, because it’s starting point is the Mitchell Report and the steroids in baseball controversy, a subject that I’ve done several posts on.  If you want to make your own judgments about this article, don’t read any further.  Just go back and click “article” in the paragraph above.  If you want your judgments to be informed by my interpretations of a few of the article’s startling highlights, read on.  (And, of course, you can form your own judgments and then come back to my interpretations.)

–The steroids controversy isn’t an ethical crisis to fans, because they still fill stadiums and support their teams.  They’re willing to give their favorite players a pass, for the most part, because these players are simply pursuing a competitive advantage that’s being pursued by a lot of other players. 

–Generally, people aren’t concerned about ethical lapses unless they go to a company’s core mission.  Thus, Arthur Andersen’s sins were too much to bear, because honesty is essential to an accounting firm.  Martha Stewart’s could be forgiven, because how she bought and sold stock (and whether that landed her in jail) had nothing to do with her instructions on how to fold a napkin or broil a fish. 

–Another example strikes home for human resources and employment law.  Yellow Rat Bastard, a trendy clothier, was sued in an employment case for failing to pay overtime, failing to pay minimum wage, and wrongful terminations.  Early this year, the company settled the suit by agreeing to pay $1.4 million in fines and back pay.  Because YRB is a clothing company with cool looking clothes, it’s a good bet that its HR ethical problems will fade away.  That should be no surprise, I suppose, since we buy tons of clothes made in China where child labor laws don’t exist and wages in some provinces are so low that workers are euphemistically said to work in sweatshops.  Sharper critics call these workers slave labor.

–Most people think of themselves as more ethical than others, making their own ethical misbehavior ok, relatively speaking.  After all, in Russia, bribes are the norm, and we don’t do that–at least, we usually don’t do that.

–If you’re caught with your ethical pants down, you can ordinarily recover if you admit your mistake (and maybe go into rehab).  If you try to cover it up, that can be the killer.  Compare the perception of Andy Pettitte, who admitted to being injected with illegal performance enhancing drugs, with the perception of Roger Clemens, who has denied being injected by the same guy who says he injected both Pettitte and Clemens.

–To find a case study where ethics carried the day and saved the company, the article’s authors had to go back 25 years to the Tylenol crisis when several people died after taking cyanide-laced extra-strength Tylenol.  Johnson & Johnson stepped up quickly, admitting what had happened, recalling 31 million bottles of Tylenol at the cost of $100 million, and relaunching the product in tamper-proof packaging. 

Business ethics are certainly relative.  I’m reluctant to say they’re dead, but 25 years ago, I would’ve probably been reluctant to say they were relative.  Once something becomes relative, is it dead?  That might be a good question for business leaders (and I include HR professionals and employment lawyers in that group) to seriously ponder.

The way I read the Wharton article, if business ethics are about to expire, it’s not the fault of business.  It’s everyone’s fault.