corporate ethics: who cares?

Journal of the Academy of Marketing Science Summer 1977, Vol. 5, No. 3, 154-167

Corporate Ethics: Who Cares?*

HAROLD W. BERKMAN, Ph.D.

University of Miami

What do Yoshio Kodama, leader of the militaristic right-wing political party of

Japan, and Prince Bernhard, husband of Queen Juliana of the Netherlands, have in

common? The question may seem frivolous in the context of an article about

corporate ethics. The answer, however, shows the serious state of deterioration of

corporate morality among some of America's large multinational companies. It was

revealed in 1976 that both Kodama and Prince Bernhard received more than $1

million in bribes from Lockheed. The issue of corporate ethics is certainly a broad

one, ranging from problems of internal policy and treatment of individual

employees to environmental and social concerns which may have global impact.

This article will focus on the ethical problems faced by America's multinational

enterprises, especially on the issues created by the recent discovery and publication

of the extent to which bribes and payoffs, "facilitating payments," are part of doing

business abroad.

Some of the debris that washed up in the wake of the Watergate hurricane

consisted of fragments of corporate honor. Lockheed, Northrop, Gulf-- to name

only three--were among those whose ethical integrity was revealed to be less than

total. Payoffs to South Korean officials, bribes, illegal campaign financing, here and

abroad, and other under-the-table financial maneuvers had taken millions of dollars

from the corporate coffers, without the knowledge of employees or stockholders.

*The author gratefully acknowledges a grant from the Ellis Phillips Foundation. The author wishes to dedicate this article to Professor Charles W. Garrett (d. 1977) and also to thank Professors Berleant, Garrett, Jarolem, and Walther, all of C.W. Post Center, L.I.U., for providing the stimulating and provocative dialogue that served as the catalyst for this essay.

154

155 CORPORATE ETHICS: WHO CARES?

On the o'ther hand, part of the cost of doing business abroad, say high company

officials, part of doing as the Romans do when doing business in Rome, makes it

necessary for payoffs to absorb a portion of the company budget. And surely the

bottom line is the point, isn't it? No one would expect American businesses to hold

themselves self-righteously aloof from the modus operandi of whatever countries they are establishing production facilities or markets in. And then, too, as long as the employees draw their regular paychecks and as long as the stockholders get their dividends, and as long as the company does not fail, who cares?

The article which follows is an examination of the ethical aspect of corporate

corruption. The economics and aesthetics of immoral business behavior are not

part of this essay, which will focus instead on some of the moral problems of the

multinational corporations. A brief review of some of the more modern concepts of

ethics will note the increasing rift between religion and the moral base of society in

present thinking. With the definition ofsituationist ethics, it is possible to establish a

connection between ethical theory and modern business practices.

For the multinational corporations, both large and small, business practices in other countries seem necessarily to entail behavior considered immoral in this

country. Bribes and payoffs, distasteful and illegal here, are standard operating procedure in many other countries. This article will point out some of the reasons

for payoffs, cite some specific examples of multinational graft, look at the question of whether or not it is fair to impose our business standards and ethics on other nations, and take up the other side of the issue: maybe there is nothing wrong with

"facilitating payments" when no one gets hurt, and when they are part of a socially, legally, and politically accepted way of getting things done.

Such payments, do, however, put American companies in a moral bind. Can it

possibly be ~right" for the multinational corporations to operate under a double

staladard? By concealing payments abroad, are they violating SEC discolsure

regulations? Where is the fine line between a reasonable act to facilitate business and

an immoral payoff?. Who cares about corporate ethics? Not the general public, whose faith in

American business leaders is very far eroded at present, and who consider under-

the-table dealings in Japan or Italy very far from vital in their everyday lives. The Securities and Exchange Commission cares, and has made recommenda-

tions about this problem, as have a number of corporations themselves. Not

surPrisingly, many business leaders would like to see self-policing and self-

regulations rather than federal investigations and interference. Further

recommendations for corporate governance have been published by the American

Assembly, Columbia University, a group of sixty-four distinguished Americans who, at Arden House in Harriman, New York, in April, 1977, considered the ethics

of corporate conduct.

HAROLD W, BERKMAN, Ph.D. 156

The United States government also cares. The border between foreign policy and

foreign trade has been blurred. Payments made to political parties and government

officials in other countries by American corporations exert strong influences. Who

remains in power, who is toppled and who gains, can be and is affected by American

money.

The article will look at some considerations of the federal government's attitudes

toward the conduct of American companies abroad.

THEORIES OF ETHICS

A number of those who are reluctant to judge the multinational corporations too

harshly for participating in payoff schemes cite profound changes in our whole

society as the basis for accepting ethical standards which differ from those of a

earlier generation. It is true that until fairly recently religion was seen as the starting

point, the wellspring, of right behavior. Those who subscribed to the Judeo-

Christian tradition could fall back on the Torah, the Ten Commandments, and the

Sermon on the Mount for ethical precepts. Although subject to vast amounts of

interpretation, these moral standards were often considered not far short of

absolute.

In the aftermath of two horribly destructive world wars, with the threat of global

annihilation arising out of the spread of atomic weaponry,.disillusion and cynicism

have lead some prominent theologians and philosophers to devise a different ethical

base. Since the Judeo-Christian ethic did not prevent the holocaust, they searched

for some more "workable" foundation for morality.

Ethical Relativism

The concept of relating any given decision about right and wrong to the specific

situation at hand seemed appealing, and generated an approach which was the

opposite of absolutistic. This newer approach, a kind of ethical relativism, has been

given many different labels, depending on the slightly different emphases various

thinkers have made. Of these labels, two are most relevant to a discussion of current

business ethics: situation ethics and pragmatism.

The pragmatist says, basically, "If it works, it is good." Defining situation ethics

for those in the field of business management, Joseph Fletcher sums up ethical

relativism:

Circumstances alter cases--i.e ..... in actual problems of conscience, the

situational variants are to be weighed as heavily as the theoretical

constants, so that circumstances alter not only cases but rules.


Fletcher goes on to note that a business ethic has to be "practical." Any system of

ethical absolutes, no matter how clearly stated (as in the Christian tradition) or how thoroughly refined (as in the Mishnaic tradition of Judaism) will not serve as a guide

for business ethics if it lacks practical relevance.

How, then, are ethical decisions to be made? The structure of such decision-

making has, classically, involved the determination and weighing of four factors:

First, the end--the outcome sought; second, the means--the methods employed;

third, the motive--the urge which makes the decision necessary in the first place;

and fourth, the foreseeable consequences. In classical terms, if any one of these four

factors was wrong, the entire action was immoral. If an American shirt manufacturer went into a poor hill village in Puerto Rico and brought a higher standard of living to the natives by providing work in his new factory while at the same time producing a quality shirt at a price the middle classes could afford, but had to pay a kickback to the local government officials to operate, he would, bythe

classical system defined above, be immoral. Even though his motive, his ends, and

the foreseeable consequences were good, his means involved an immoral and/or

illegal act.

Situation Ethics

The "situationist," instead of isolating each factor of moral decision-making and judging it along, looks at all of them together within the framework of the specific situation at hand, After thoughtful scrutiny, in the above situation he or she might well say that the kickback was right, good, and moral. Fletcher quotes a French priest who noted that "Fanatic love of virtue has done more damage to men and

society then all the vices put together." A cautionary note is struck, however, by a more recent writer who observed that pragmatic or situationist ethics demands

always that very close attention be paid to changing circumstances?

Of particular relevance to business ethics and to the current clamor about the way

the mult inat ional corporations do business abroad is Reinhold Niebuhr's

observation that "The moral attitudes of dominant and privileged groups are characterized by universal self-deception and hypocrisy. ''3 These classes, he notes,

tend to feel that they are contributing in some way to the good of the whole society.

Hence, the Japanese officials who accepted millions of dollars in payoffs from

Lockheed may believe that they have used their influence to aid their nation in acquiring superior planes, the better to defend the homeland in case of war. Moreover, Niebuhr points out that those who initiate the struggle for social justice

are at the moral disadvantage of upsetting the social orderliness of the status quo, of

destroying social harmony and peace, 4 Thus, it could be argued that for American

corporations to attempt to sell their wares abroad without greasing the economic

HAROLD W. BERKMAN, Ph.D. 158

and official machinery with a little (or a lot of) well-placed cash is for them to be

endangering whatever order there may be in the local social system.

MULTIONATIONAL MORALITY

How extensive is the problem of international bribery? The New York Times

(February 15, 1976) published a list of American corporations with reported

amounts they paid out abroad, and recipients. Sixteen corporations were on the list,

among them Ford and General Motors; Exxon, Gulf and Ashland Oil; Lockheed,

Grumman, Northrop and McDonnell Douglas; and United Brands. Exxon,

Lockheed, and Northrop go to the head of the line in dollars paid out, each having

paid various foreign political parties and government officials between twenty and

fifty million dollars over the past few years. Grumman takes the lead for a single

payment with six million dollars going to a "consultant to lran," but United Brands

is not far behind with one and one-quarter million dollars paid to a "Honduran

government official. "5 Newsweek's list of the ten "biggest spenders," published the

following week (Febnaary 23, 1976) included two more companies, not on the Times" list. 6 It is sometimes said that under-the-table payments are"part of the cost of doing

business" in the developing or third world countries, as though to suggest that we of

the more civilized western world are merely stooping to reach less sophisticated

markets. But the lists show that Italy, Japan, Holland, and yes, even Canada were

among the nations in which bribes were part of the overhead.

The hands of Americans are not so clean, either. A few years ago Clive Davis of

Columbia Records went down in flames over the furor arising from a payola

scandal involving the record company and disc jockeys as a possible drug scheme.

And Broadcasting, a trade journal, reported that the president-chairman of

Teleprompter, Corporation of New York was indicted by a special federal grand

jury on charges of bribery and more. His firm paid $15,000 to the Mayor and two

city council members of Johnstown, Pennsylvania, in order to get their support, in

bidding for a franchise for cable TV in Johnstown.

One of the most entrenched and complex systems of payoffs is operating in

indonesia. 7 There the military, since 1965, has taken over a formal role in shaping

the "ideological. political, social, economic, cultural and religious field" of

Indonesian affairs. Military officers were placed in control of such giant enterprises

as the national rice trading agency, a general trading corporation, and the state oil

industry, as well as many others. These officers used their executive posi-

tions to raise money for the military, on a massive scale. Thus, "by retaining the

system of 'unconventional' financing of the armed forces, the military-dominated

government was able to create the impression that priority was given to its economic

development programme, when in fact the government's budget allocation for


defense and security covered only about a third to a half of actual expenditure... "The military men who were in charge of the large corporations, men, for example,

such as General Sutowo, used their power to "arrangC business matters for foreign

investors, and received immense payments in return for their services. The rapid growth of the modern sector of the economy through the influx of foreign investment and oil funds has provided constantly expanding

resources with which to reward supporters and buy off potential

dissidents. 8

Some of that money has come from American corporations. 9

Throughout 1975 and 1976, a Senate sub-committee on mult inational

corporations, headed by Senator Frank Church, turned up more and more

shocking instances of international bribery on a large scale. Northrop paid nearly

half a million dollars to two Saudi Arabian generals to promote their F-5 lightweight fighter planes. Gulf Oil contributed four million dollars to the re- election campaign of President Park of Korea. United Brands paid well over a million dollars to the president of Honduras in various ways. Mobil Oil supported politicians in Canada and Italy. Merck & Co., Inc. admitted to "commission-type

payments" of $3 million to employees of thirty-six foreign governments in the years

between 1968 and 1975.

Reasons for Payments

On the other hand, let us look at the reasons for some of these payoffs. In some

cases it appears that the motive force was extortion. Gulf claims, according to a staff-written piece in The Economist of May 24, 1975, that the $4 million it paid to bankroll the re-election of the President of Korea "was not so much a bribe as an

extortion wrung from the company by threats against ks $350 million investment in

the country. "1~ There is, after all, a clear difference between bribery and extortion. A

bribe is freely offered as an incentive to advantageous treatment, which may or may

not be illegal. Extortion, on the other hand, is paid only under extreme duress, and is paid in order to get treatment to which one is legally entitled. A distinction also

exists between a bribe and agents' fees. A good agent is often a necessary liaison

between an American company and the foreign country in which it is opening

business operations. The agent does not by definition pay out his fees in bribes or

kickbacks. Then, too, there is the universal "tip," or customary payment in appreciation of specially efficient or prompt services rendered. Again, such

payments, generally relatively small, should probably not be considered immoral. But there are sums of money paid out for less honorable reasons, and these seem

to be more capable of definition as unethical, or, at best, questionable. While tips, facilitating payments, agents' fees, and extortion do not make a company culpable.


kickbacks, bribes, payoffs, and campaign contributions of hundreds of thousands

or even millions of dollars are reprehensible. Why, then, do American corporations

participate in such expenditures?

Far more frequently cited than extortion as a reason for such payments is the

argument that "that's the way it's done." American executives may grant that under-

the-table exchanges of money and preferential treatment are evil, but they assert

that the system is a necessarr evil. In some countries, where salaries of public

officials may be on the low side, "grease" payments and even bribes are thought of as

necessary additional compensation to which government employees are entitled, A

French official t, as been quoted as viewing the American furor over multinational

corporate practices involving bribery as "crazy" because payoffs constitute a regular

and normal portion of ordinary commerce.

The ultimate justification given for the payoffs is in terms of enhances

profitability. If a payoff of a few hundred thousand dollars enabled Lockheed to sell

more than I000 F- 104s to Germany a few years ago, the company's executives and

stockholders are not likely to see it as objectionable. Eberhard Faber has stated, "It

seems to me that if American business must operate abroad with ground rules that

are different from those followed by the competition, it will suffer heavily. "H

Exported Ethics

If payments on the side, large or small, are part of the standard, normal, legal,

and accepted style of doing business in other countries, another question arises. Is it

fair, is it right, for America to export its own ethics? Fred T. Allen, Chairman of

Pitney-Bowes, has expressed clearly the position of the modern ethical relativist:

Morality only exists within a culture. And it is not for us to say what is

moral in someone else's culture.~2

Pitney-Bowes commissioned the Opinion Research Corporation to study the

practices and policies of multinational corporations regarding bribery and other

such extra-legal payments. That study revealed that about one out of every five

executives questioned believed that bribes should be paid if such payments~ were

normal in the host country, that many believed payoffs were a necessary cost of

conducting business in certain countries. The Conference Board surveyed seventy-

three American business leaders and found three-fourths of them had met with

demands from foreign officials for unusual payments. "Nearly half of the business

leaders surveyed said that companies should make payoffs in countries where such

practices are accepted." Sales and Marketing Management magazine, with

responses from about sixty members of their Leadership Panel, found that a large

majority "believed that U.S. firms would be put at a serious disadvantage should

they be restricted from making such payments. ''j3


It would appear to be presumptious and arrogant for American business to

attempt to alter what is actually a way oflife in many countries. SEC Commissioner

A.A. Sommer, J r. noted that "a hundred dollars to a customs official, fifty dollars to

the mailman, a thousand dollars to the tax collectors" and even larger bribes were

not only a way of life, but also part of a deeply entrenched system of commerce. ~4

Sommer went on to add an even more impressive list of possible dire

consequences of the imposition of American ethics on trade practices of other

countries where Americans are doing business:

Furthermore, there is some reason to believe that disclosure that such

payments have been made would result in expropriation of properties,

the toppling of governments and political figures (some perhaps friendly

to this country), the curtailment of American overseas activity, the denial

of future favor, and in some cases perhaps even the loss of life. ~5

Whether or not it is right, or even advisable, for American corporations to try to

get other countries to do business in a more forthright and above-board manner,

there is a Cruel Catch-22 in the situation. SEC Commissioner Sommer has

delineated it clearly: the argument for full disclosure of illicit or improper overseas

payments rests in part on the notion that such payments make a company less

stable, less desirable as an investment than one whose sales stem from better sales

skills or a better product. But it is indeed the very disclosure of those payments

which is most likely to make the company totter.~6

SOLUTIONS

Harris Polls, and others, show that public confidence in businessmen is low.

Current criticism of corporate executives focusses primarily on illegal campaign

contributions at home and overseas bribery. But the corporate ethic is a pragmatic

one, based on performance, growth, effectiveness, and rate-of-return, as well as on a

hard-headed realistic acceptance of the way of the world. How, then, is top-level

management to reconcile the pressures of business with social concern and public

image demands?

From Religious Sources

A few years before the Watergate and ensuing scandals, the Rev. Billy Graham

published in Nation's Business "The Answer to Corrpution. ''~7 Graham's answer

was to subject any decision or proposed course of action to a four-question test:

questions 1 and 2 involved determining whether the attitude or action glorified God

and was deserving of His blessing; questions 3 and 4 involved determination of

whether the attitude would be a "stumbling block" or would "contribute to a

healthy, moral atmosphere."


A Center for Organizational Ethics, established in January 1977 by The Catholic

University of America, has set out to define and build a conceptual base for ethical

responses to current business-oriented problems, to provide case-writing for use in business courses and in professional schools of business, to do comparative analysis of professional codes of conduct, and to set up "Counselors-for-Business," a sort of "jury" or ethical advisory panel, t8

From International Organizations

The Organization for Economic Cooperation and Development (OECD), which

includes the United States, Canada, Japan, and twenty-one other nations (mostly

Western European countries) has drafted a set of guidelines for multinational

corporation and governmental relations. One item, significant to the payoff

problem is a prohibition against giving "any bribe or other improper benefit, direct

or indirect, to any public servant. "~9 Another provision calls for non-interference in political activities. Public disclosure of information including financial data, is called for, and business policies are to respect national environmental and social goals of the host country. 20 Compliance to this code is voluntary.

The United Nations Center on Transnational Corporations held a meeting in March 1976 at which the United States came forth with a proposal for guidelines

which would curb bribery, regulate the use of agents, and go a bit farther than the

OECD guidelines, in setting up steps by which governments could punish violators.

From Business Leaders

Michael Blumenthal of Bendix Corporation has urged that "it should be business executives, not outsiders, who are the most vocal in condemning improper conduct." He felt that a national organization of business executives could "monitor the behavior of corporations, provide a forum for resolving issues of morality, and write a code of ethics..."2~ This national code of business ethics would be analogous

to the professional ethics and standards set by other groups, such as the American

Bar Association or the American Medical Association.

Not surprisingly, many corporations have set about to establish some sort of

internal codes of conduct and self-regulation. The Caterpillar Company issued a

"Code of Worldwide Business Conduct" in 1974 which has served as a model for

other companies. Allen (of Pitney-Bowes) wants the chief executives and top

management of corporations to take more moral responsibility.

If morality is to be practiced at all levels, the corporation's adherence to a

code of ethics must be scrupulously maintained at the top and published through the company. 22

163, CORPORATE ETHICS: WHO CARES?

Not only by setting a good example, but also by setting realistic sales and profit goals can senior managers encourage subordinates to proper conduct of their business. He agrees with the echoes the Caterpillar Code--the law is only a rock bottom. "Ethical Business conduct should normally exist at a level well above the minimum required by law. "23

SEC Commissioner A.A. Sommer, Jr. has added public condemnation to the

duties of such a national organization of business leaders. A condemned practice

might be abandoned under pressure of trade turned elsewhere, which is what he

envisions public condemnation would cause. 24

From the Securities and Exchange Commission

The SEC uses disclosure requirements (mainly enforced through aduit procedures) as a solution to the international bribery problem. Disclosure is vital to

the system by which corporate ownership (of public corporations) operates in this

country. Investors are entitled by law to have available to them any information

material to the investment decision. The Supreme Court has defined materiality in

terms of "information that might be important to a reasonable investor," that is, not only a long-term investor but also a short-term speculator. 25 Disclosure has

certainly exerted a tremendous pressure on corporations to cease and desist from unethical practices. Top executives (as at Lockheed) have been forced to resign; publication of payments has produced increasingly vocal criticisms at annual

meetings. But there should be, according to some, limits to disclosure. SEC Commissioner

A.A. Sommer, Jr., asserted, Disclosure is not an absolute; in many situations it can be such simply because it is impossible to identify any conflicting or competing values. 26

But, as he pointed out, there are "concerns and values and national interest involved

here that cannot be dealt with simply through the mechanisms of disclosure under

the federal securities laws. "27

Sommer suggested a compromise position on disclosure which is interesting

enough to be quoted at length:

"I would suggest another course which may not, given the practicalities of our time, be feasible or even realistic. Perhaps we can tailor disclosure pattern that will prevent the adverse consequences I have discussed while at the same time protecting the interest of investors. Such a pattern would require the disclosure by corporations of the extent to which their business overseas depended upon or had been secured as the result of payments disclosure of which would jeopardize that business; the names of the recipients and the countries in which the related business was done would not be demanded and the payments would not have to be characterized otherwise than by indicating that, to the extent true, their detailed disclosure or their discontinuance would adversely impact the business to which they related. The disclosure would indicate the approximate total volume of

HAROLD W. BERKMAN, Ph,D. 164

business, and the profitability of it, related to such payments, without detailed narration. In the past we have usually required that an issuer in disclosing "let it all hang out." I would suggest in these matters we should somewhat more discerningly decide what an investor really wants to know and not require disclosure of details of only peripheral importance to his investment decisions. "28

From the Federal Government

Federal law prohibits a U.S. corporation from deducting"improper payments to

foreign officials" as ordinary business expenses, and thus gives the Internal Revenue

Service a powerful weapon with which to hit multinational corporations that are

indulging in bribery of any sort. Early in 1977 the IRS began a "large case audit"

program, going into the books of companies with more than $250 million in assets.

It should be mentioned here that Germany and Great Britain do permit certain

kinds of payoffs abroad to be deducted from tax returns of their own corporations.

The Anti-trust Division of the Department of Justice is currently issuing

warnings that it will be on the look-out for payments abroad which might have been

used to block out other U.S. firms or to corner scarce commodities. The Defense

Department, too, is reviewing contracts for fuzzy "overhead expenses" and

commissions paid to middlemen.

Inquiries, such as those conducted by Senator Frank Church's Subcommittee on

Multinational Corporations, the Senate Banking Committee, and the Senate

Foreign Relations Subcommittee, are another means of using federal clout to

resolve the international bribery problem. Various bills relating to outlawing bribes and taxing the money used to pay them are under consideration in the Congress now. The Federal Trade Commission may get new and extensive investigative

powers.

WHO CARES?

Although the scandals of multinational bribery made a splashy news story some

months ago, now that the discoveries of improprieties have tapered off, so has

public interest. True, a few voices in the press now and again mention the shocking

conduct of American businesses abroad, but on the whole the public is apathetic

about corporate ethics.

Obviously, the U.S. government and the Securities and Exchange Commission

care deeply and continually. But it remains to be seen just how stringent will be the

measures either takes to curb unethical practices. It appears that there will not be

strong public pressure to enact legislation or conduct inquiries into the problem. The question, then, is whether the Congress and other branches of the government

will merely pay lip service to the need to clarify and improve on corporate ethics, or,

165 CORPORATE ETHICS: WHO CARES'?.

on the other hand, enact legislation and reguations with force. The situation is

complicated by the fact that fairness is needed as well as force. Compelling U.S.

corporations to operate at a disadvantage in the international market is not going to

solve the problem. The solution will only derive from full understanding of the

complex trade-offs between right behavior and economically effective practices.

A POSTSCRIPT

There is another point of view on the problem of international payoffs and

bribery. It is possible to see the situation not as a problem in ethics but rather as a problem in adjustment to an entirely new phenomenon: the modern corporation as a political entity. Stephen J, Kobrin 29 has presented the position that "large scale

payments by multinational corporations" should not be analyzed "in terms of a

decline in morality (business or general)", but rather are a manifestation of a

different set of issues. One issue is that in its capacity to concentrate economic power on a global scale, a

power not sensitive to market control, the modern corporation has gained immense

political power.

A second issue, corollary to the first, is that these corporations then become

"transnational political actors" playing highly significant roles in international affairs.

The third issue, is that these non -gove rnmen ta l in te rna t iona l poli t ical

corporations are as responsive to external forces as they are to the control of their "host" governments.

Communications and production technologies have helped foster the emergence

of these "large centrally integrated corporations with the ability to transcent both the limitations of the market and national boundaries,"

The basic issue is that of changes that are necessary in both socio-

economic and political institutions to cope with the major changes that

have taken place in the nature of productive enterprise,

FOOTNOTES

I Joseph Fletcher, Moral Responsibilio,: Situation Ethics at Work, (Philadelphia, Pa.,: Westminister Press, 1967), p. 168. ZGerald J. Dalcourt, "The Pragmatist and Situationist Approach to Ethics," Thought 51

(June 1976 No. 201) p. 145. 3Reinhold Niebuhr, Moral Man and Immoral Society: A Study in Ethics and Politics, (New

York and London: C. 5cribner & Sons, 1932), p. 117. A paperback edition was published in 1960. 4Niebuhr, op. cit., p. 129. ~Ann Crittenden, "Closing In On Corporate Payoffs Overseas," New York Times, February

15, [976, pp. 1 and 7.


6"Payoffs: The Growing Scandal," Newsweek, February 23, 1976. 7Harold Crouch, "Generals and Business in Indonesia," Pacific Affairs, 48 (Winter 1975),

This discussion draws on Crouch's article for its substance. 8Crouch, op. cit., p. 540. 9The Economist 255 (June 14, 1975), p. 44.

IOThe Economist 255 (May 24, 1975), p. 67. UEberhard Faber, "How I Lost Our Great Debate about Corporate Ethics," Fortune, (November 1976), p. 188. ~2Fred T. Allen in Stephen J. Kobrin, Morality, Political Power and Illegal Payments by Multinational Corporations," Columbia Journal of World Business 77 (Winter 1976), p. 105. t3Jack G. Kaikati, "The Phenomenon of International Bribery," Business Horizons, 20, No. 1, (February 1977), p. 105. t4A. A. Sommer, Jr., "The Limits of Disclosure," an address before the Wharton-AICPA Advanced Management Program for CPA Firm Partners, Wharton School of the University of Pennsylvania, Philadelphia, June 24. 1975. Released by the Securities and Exchange Commission News. p. 9. ~Sommer, op. cit., p. 10. ~6Sommer, op. cit., pp. 13-M. tTThe Rev. Billy Graham, "The Answer to Corruption," Nation's Business, 57, Part 2 (September 1969), p. 49. 18Clarence Walton, ed., The Ethics qfCorporate Conduct, (Englewood Cliffs, N.J.,: Prentice- Hall, 1977) ~gKaikati, op. cit., p. 34. ZoOECD Observer, 77, (November 1975) p. 17. "Guidelines for Multinationals." 2~ W. Michael Blumenthal, "Business Morality Has Not Deteriorated: Society Has Changed," The New York Times, Sunday, January 9, 1977. 22 Fred T. Allen, "Corporate Morality: Executive Responsibility," Atlanta Economic Review, 26, (June 1976), p. 9. 23Allen, op. cit., p. 10. 24A. A. Sommer, Jr., "Crisis and the Corporate Community," an address at the Midwest Securities Commissioners Association Conference, Aspen, Colorado, June 21, 1975. Released by the Securities and Exchange News. p. 15. 25Sommer, "The Limits of Disclosure," p. 4. 26Sommer, "The Limits of Disclosure," p. 15. 27Sommer, "The Limits of Disclosure," p. 13. 2SSommer, "The Limits of Disclosure," p. 17.

P O S T S C R I P T

29The food for thought in this postscript was largely drawn from the concluding pages of the article by Stephen J. Kobrin, "Morality, Political Power, and lllegal Payments by Multinational Corporations," Columbia-Journal of Worm Business, 77 (Winter 1976), pp. 105-110.

167 CORPORATE ETHICS: WHO CARESS.

ABOUT THE AUTHOR

HAROLD W. BERKMAN (Ph.D., St. John's Unviersity) is currently Professor of Business Management and Director of the Executive Master of Business Administration Program at the University of Miami. Prior to his affiliation at Miami he was Professor of Business at C.W. Post Center of Long Island University. Dr. Berkman has published a number of books including: The Human Relations of Management; Cases and Issues: The Human Relations of Management (with J. Young); Contemporary and Classical Readings in Human Relations (Armandi and Barbera, co-editors); Marketing Update (Ryans and Vernon, co-editors), and Consumer Behavior: Concepts and Strategies (with C. Gilson). His current work Perspectives on International Business (with I.R. Vernon)will be released by Rand McNally College Publishing Company early in 1979. In addition, he has contributed a number of scholarly articles to various journals. He serves as Director of the Academy of Marketing Science and conference chairman of the annual International Marketing Conference. Dr. Berkman has been involved in various research projects such as business ethics, psychographics, and organizational behavior. He has also served as a consultant to firms in retailing, consumer goods

manufacturing, and publishing.

corporate ethics: who cares?

Documents