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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.
157 CORPORATE ETHICS: WHO CARES?
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
159 CORPORATE ETHICS: WHO CARES?
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.
HAROLD W. BERKMAN, Ph.D. 160
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
161 CORPORATE ETHICS: WHO CARES?
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."
HAROLD W. BERKMAN, Ph.D. 162
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.
HAROLD W. BERKMAN, Ph.D. 166
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 con- tributed 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 be- havior. He has also served as a consultant to firms in retailing, consumer goods
manufacturing, and publishing.