When ethics violations occur in business, we often hear it is the result of “a few bad apples”—individuals like Bernard L. Madoff or Kenneth Lay. Yet a simple Google search of recent business ethics scandals may alarm even the most cynical observer. From engaging in relationships with subordinates to violating workers’ rights, ethics offenses plague the business world. It’s no wonder that “corporate social responsibility” has gained popularity.
CSR policies seek to encourage companies to employ ethical standards and mindsets, by encouraging philanthropy or “greener” forms of production, for example. But according to social scientists André Nijhof and Ronald Jeurissen, companies employing such policies often “cherry-pick” the social issues they wish to address based on profitability and positive brand association (International Journal of Sociology and Social Policy, 2010). Because businesses serve their shareholders first, the bottom line rules. For example, retail giant Wal-Mart, no stranger to controversy, focuses on environmental sustainability to reduce operating costs and to appear more favorable to customers: “Save money. Live better.”
But even when the business sector acknowledges that social responsibility is important for its own sake, it can fail to effectively institutionalize such practices. Last year, less than two years after Yahoo! unveiled a new ethics training and compliance program, allegations surfaced that CEO Scott Thompson had falsified a college degree on his résumé.
Perhaps the bad apples are much more plentiful than we would like to admit.