Letter: Theory and reality in business ethics

Sir: Your leading article 'Good behaviour pays' (12 January) shows that ethical issues and standards in business demand continuous monitoring. This applies, as you point out, to all industries, and not just to the airline industry which occasioned your comments.

Research in America and Europe demonstrates that although business is not generally corrupt, there are no grounds for complacency. Whether established ethical standards are good enough, clear enough or pay in the long run is far from settled. Our research identifies a gap between 'official' aspirations and reality that varies over time and between industries. The voluntary elements to which you refer do need to be supplemented. The European business ethics movement, which relies on them, has as yet shown no noticeable influence on business behaviour.

Several things are needed if high-standard and efficient business behaviour is seriously sought: supportive and enabling laws, understanding of ethical issues, and understanding of the causes of the gap between official standards and actual practice. Providing supportive legislation, codes, etc, can be no more than fumbling in the dark without knowledge of the real expectations of the 'stakeholders' in the economy.

One constructive proposal has not had the public discussion that it deserves. David Huddy, a chartered accountant and company director, proposed a register in which firms can record their value systems and codes, and in which alleged breaches or problematic areas can be recorded, with official replies.

This has the merit of bringing the 'perfect knowledge' assumptions beloved of economists nearer to reality: no one would have to trade with, work for or invest in any company whose values or practices were unacceptable, and everyone would have the means of finding out what these values and practices were.

Yours sincerely,

JOHN DONALDSON

Chairman

Centre for Service Management Studies

Charvil, Berkshire

14 January

The writer is the author of 'Business Ethics: A European Casebook' (Academic Press, 1992).