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Up From Flatland: Business Ethics in the Age of Divergence

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  • Hasnas, John

Abstract

The corporate scandals of the past few years have brought renewed attention to the problem of curtailing dishonest and fraudulent business practices, a problem on which strategic, ethical, and law enforcement interests should be aligned. Unfortunately, several features of federal criminal law and federal law enforcement policy have driven a wedge into this alignment, forcing managers to choose between their ethical obligations and their obligation to obey the law or aid law enforcement. In this article, I examine the nature and implications of the growing divergence between managers’ ethical and legal obligations. After describing the traditional approach to business ethics analysis, I identify the features of federal criminal law and law enforcement policy that are responsible for the divergence and show how they are undermining the efficacy of the traditional approach. I illustrate this effect with the issue of workplace confidentiality. I then argue that the traditional approach must be reformed to give explicit recognition to the legal dimension of normative analysis, and demonstrate how such a reformed approach would function by applying it to three illustrative issues—organizational justice, privacy, and ethical auditing—and supplying a case study—KPMG's allegedly abusive tax shelters.

Suggested Citation

  • Hasnas, John, 2007. "Up From Flatland: Business Ethics in the Age of Divergence," Business Ethics Quarterly, Cambridge University Press, vol. 17(3), pages 399-426, July.
  • Handle: RePEc:cup:buetqu:v:17:y:2007:i:03:p:399-426_00
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    Cited by:

    1. Antonella Forganni & Heidi Reed, 2019. "Circumvention of Trade Defence Measures and Business Ethics," Journal of Business Ethics, Springer, vol. 155(1), pages 29-40, March.
    2. Thomas Hemphill & Francine Cullari, 2009. "Corporate Governance Practices: A Proposed Policy Incentive Regime to Facilitate Internal Investigations and Self-Reporting of Criminal Activities," Journal of Business Ethics, Springer, vol. 87(1), pages 333-351, April.
    3. Michael D. Pfarrer & Ken G. Smith & Kathryn M. Bartol & Dmitry M. Khanin & Xiaomeng Zhang, 2008. "Coming Forward: The Effects of Social and Regulatory Forces on the Voluntary Restatement of Earnings Subsequent to Wrongdoing," Organization Science, INFORMS, vol. 19(3), pages 386-403, June.

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