A business is a member of the community and there are roles expected of that business in the community. Social learning theory provides more hope that business ethics can be taught. In the past it was assumed that all that had to be done to ward off bad behavior and unethical practices in the financial industry was to put in place regulations to help guide and encourage ethical behavior in the marketplace.
They should also immediately work to change their corporate culture and reinstate a sense of ethics, integrity and responsibility in their employees which probably entails changing senior management and the Board of Directors who have now demonstrated their inability to run their companies correctly.
The ethical issues in business have become more complicated because of the global and diversified nature of many large corporation and because of the complexity of economic, social, global, natural, political, legal and government regulations and environment, hence the company must decide whether to adhere to constant ethical principles or to adjust to domestic standards and culture.
Ethical behavior doesn’t always insulate a firm from lawsuits, bad publicity, or other such negative and costly conditions, but it can certainly reduce the probabilities or mitigate the damage. Institute of Management Accountants Standards of Ethical Conduct (IMASEC) applies to all facets of financial management and accounting.
Historically, transparency has been seen more as an ethics practice for third party analysis of an institution’s finances and practices; however, the more widespread study of business ethics and organizational behavior is pointing to operational transparency as a management practice that can both address those daily management issues, and also become an internal source of sustainable competitive advantage that is difficult for competitors to imitate.