Most firms try to resolve this with the consoling belief that such clashes are more imagined than real, and that virtue will pay in the end. Yet they cannot always be right. Indeed, companies face more ethical quandaries than ever before. Technological change brings new debates, on issues ranging from genetically modified organisms to privacy on the Internet. Globalisation brings companies into contact with other countries that do business by different rules.
Competitive pressures force firms to treat their staff in ways that depart from past practice.
The first corporate-ethics office was created in 1985 by General Dynamics, which was being investigated by the government for pricing scams. Under pressure from the Defence Department, a group of 60 or so defence companies then launched an initiative to set up guidelines and compliance programmes. But the law is not the only motivator. Fear of embarrassment at the hands of NGOs and the media has given business ethics an even bigger push. Companies have learnt the hard way that they live in a CNN world, in which bad behaviour in one country can be seized on by local campaigners and beamed on the evening television news to customers back home.