Abstract
Whether the nation of Israel has become a “light unto the nations” in terms of ethical behavior among its business community remains in doubt. To examine the current state of business ethics in Israel, the study examines the following: (1) the extent of business ethics education in Israel; (2) the existence of formal corporate ethics program elements based on an annual survey of over 50 large Israeli corporations conducted over 5 years (2006–2010); and (3) perceptions of the state of business ethics based on interviews conducted with 22 senior Israeli corporate executives. In general, and particularly as a young country, Israel might be considered to have made great improvements in the state of business ethics over the years. In terms of business ethics education, the vast majority of universities and colleges offer at least an elective course in business ethics. In terms of formal business ethics program elements, many large companies now have a code of ethics, and over time continue to add additional elements. Most respondents believed they worked in ethical firms. Despite these developments, however, there appears to be significant room for improvement, particularly in terms of issues like: nepotism/favoritism; discrimination; confidentiality; treatment of customers; advertising; competitive intelligence; whistle-blowing; worker health and safety; and the protection of the environment. When compared with the U.S. or Europe, most believed that Israeli firms and their agents were not as ethical in business. A number of reasons were suggested that might be affecting the state of business ethics in Israel. A series of recommendations were also provided on how firms can better encourage an ethical corporate culture. The paper concludes with its limitations.
Similar content being viewed by others
References
Adam, A. M., & Rachman-Moore, D. (2004). The methods used to implement an ethical code of conduct and employee attitudes. Journal of Business Ethics, 54(3), 225–244.
Arvidsson, S. (2010). Communication of corporate social responsibility: A study of the views of management teams in large companies. Journal of Business Ethics, 96(3), 339–354.
Belal, A., & Roberts, R. (2010). Stakeholders’ perceptions of corporate social reporting in Bangladesh. Journal of Business Ethics, 97(2), 311–324.
Berenbeim, R. E. (1999). Global corporate ethics practices: A developing consensus. Research Report. New York: The U.S. Conference Board.
Bior, H. (2008). Sexual harassment complaints filed in 80% of organizations. Haaretz. http://www.haaretz.co.il/hasen/spages/954483.html.
Brinkley, J. (1991). Israeli General pleads guilty in bribery case. New York Times. http://query.nytimes.com/gst/fullpage.html?res=9D0CE7DC143FF93AA25750C0A967958260.
Bronner, E. & Cohen A. L. (2008). Olmert says he never took a bribe. The New York Times. http://www.nytimes.com/2008/05/09/world/africa/09iht-09olmert.12724346.html.
CNN. (2006, June 15). Iscar deal puts Israel on investment map. http://edition.cnn.com/2006/TRAVEL/06/13/biztrav.israel.iscar/index.html.
Dangelico, R. M., & Pujari, D. (2010). Mainstreaming green product innovation: Why and how companies integrate environmental sustainability. Journal of Business Ethics, 95(3), 471–486.
Deutch, S. (2004). Protection of the bank customer: By statute or by ethical codes—which is preferable? An Israeli Perspective. DePaul Business & Commercial Law Journal, 2(3), 419–439.
Economist. (2008, April 5). The next generation, p. 4.
Enderle, G. (1997). A worldwide survey of business ethics in the 1990s. Journal of Business Ethics, 16(4), 1475–1489.
Ethics Resource Center. (2009). National Business Ethics Survey. Washington: D.C., ERC. http://www.ethics.org/nbes/files/nbes-final.pdf.
Frenkel, D. A., & Lurie, Y. (2001). The Israeli approach to advertising: Ethical and legal norms. Business Ethics: A European Review, 10, 248–256.
Friedman, R. (2010, May 28). 40% of women report sexual harassment at work unfortunate. The Jerusalem Post. http://www.jpost.com/Israel/Article.aspx?id=176705.
Gedalyahu, T. B. (2008, July 1). ‘Tel Aviv meets Wall Street in stock exchange pact. http://www.israelnationalnews.com/News/News.aspx/126691.
Glazer, B., & Strauss, A. L. (1967). A discovery of grounded theory: Strategies for qualitative research. New York: Aldine Publishing Company.
Harif, T. B. (2009, June 16). Israel named developed at MSCI. Bloomberg. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a0zM6pZVRHRM.
Hoffman, G. (2010, May 10). PM celebrates Israel’s OECD accession. Jerusalem Post. http://www.jpost.com/Business/BusinessNews/Article.aspx?id=175170.
Hofstede, G. (1997). Cultures and organizations: Software of the mind. New York: McGraw-Hill.
IMD. (2006). World competitiveness report. http://www.imd.ch/research/publications/wcy/index.cfm.
IMF. (2010, January). Israel: Staff report for the article IV 2009 consultation. Washington D.C.: International Monetary Fund. http://www.imf.org/external/pubs/ft/scr/2010/cr1023.pdf.
Izraeli, D. (1988). Ethical beliefs and behavior among managers: A cross-cultural perspective. Journal of Business Ethics, 7, 263–271.
Izraeli, D. (1997a). Business ethics in the Middle East. Journal of Business Ethics, 16(14), 1555–1560.
Izraeli, D. (1997b). Business ethics in the Middle East. In P. H. Werhane & R. E. Freeman (Eds.), Encyclopedic dictionary of business ethics (pp. 78–80). Oxford, UK: Blackwell Publishers.
Jackson, T., & Artola, M. C. (1997). Ethical beliefs and management behaviour: A cross-cultural comparison. Journal of Business Ethics, 16(11), 1163–1173.
Kapstein, M. (2004). Business codes of multinational firms: What do they say? Journal of Business Ethics, 50(1), 13–31.
Kaufman, J. L. (1985). American and Israeli planners: A cross cultural comparison. Journal of the American Planning Association, 51(3), 352–364.
Lappin, Y. (2010). Holyland case just the start. The Jerusalem Post. http://www.jpost.com/Israel/Article.aspx?id=173193.
Lashem, G. (2007, November 20). One quarter of all government company workers are kin. Haaretz Online. http://www.haaretz.co.il/.
Lashem, G. (2008, July 6). Doing business in Israel is tough, and only getting tougher. Haaretz. http://www.haaretz.com/print-edition/business/doing-business-in-israel-is-tough-and-only-getting-tougher-1.249179.
Leshem, G. (2008, June 19). The true cost of white-collar crime. Haaretz. http://www.haaretz.com/print-edition/business/the-true-cost-of-white-collar-crime-1.248131.
Lichtman, G. (2008). Teaching Jewish business ethics to Israeli high school students. http://jewishtucson.org/page.aspx?id=25180.
Lurie, Y., & Frenkel, D. A. (2002). Mobility and loyalty in labour relations: An Israeli case. Business Ethics: A European Review, 11, 295–301.
Maala. (2010). Maala annual ranking. http://www.maala.org.il/eng/tools/ranking/01/default.asp?ContentID=339.
Malag General Report. (2007). Committee for the evaluation of business administration study-programs, Israeli Council for Higher Education.
Marcus, A. D. (1994, February 17). Former bankers are convicted in ’83 Israel case. Wall Street Journal, A10.
Melé, D., Debeljuh, P., & Arruda, M. D. (2006). Corporate ethical policies in large corporations in Argentina, Brazil and Spain. Journal of Business Ethics, 63(1), 21–38.
MSNBC. (2005). Israeli ‘Trojan Horse’ scandal widens. http://www.msnbc.msn.com/id/8064757.
Myre, G. (2006, March 26). A Knesset class in need of remedial ethics. New York Times. http://www.nytimes.com/2006/03/26/international/26corruption.html?pagewanted=1.
O’Dwyer, B., & Madden, G. (2006). Ethical codes of conduct in Irish companies: A survey of code content and enforcement procedures. Journal of Business Ethics, 63(3), 217–236.
O’Fallon, M. J., & Butterfield, K. D. (2005). A review of the empirical ethical decision-making literature: 1996–2003. Journal of Business Ethics, 59(4), 375–413.
OECD. (2008, December 8). Israel joins OECD working group on bribery. http://www.oecd.org/document/7/0,3343,en_2649_201185_41820423_1_1_1_1,00.html.
Preble, J. F., & Reichel, A. (1988). Attitudes towards business ethics of future managers in the U.S. and Israel. Journal of Business Ethics, 7, 941–949.
Raz, H., & Zarchin, T. (2008, June 17). Building firm CEO who left hundreds homeless signs plea agreeing to 7 years in jail. Haaretz Online. http://www.haaretz.com/news/building-firm-ceo-who-left-hundreds-homeless-signs-plea-agreeing-to-7-years-in-jail-1.247868.
Schwartz, M. (2001). The nature of the relationship between corporate codes of ethics and behaviour. Journal of Business Ethics, 32(3), 247–262.
Schwartz, M. S., & Weber, J. (2006). A Business Ethics National Index (BENI): Measuring business ethics activity around the world. Business & Society, 45(3), 382–405.
Senor, D., & Singer, S. (2009). Start-up nation: The story of Israel’s economic miracle. New York: Twelve.
Shachaf, T., & Fishel, D. (2006, August 3). HP’s Israeli investment. Forbes.com. http://www.forbes.com/2006/08/02/hp-israel-mercury-cz_df_0803israel.html.
Sims, R. L. (2002). Support for the use of deception within the work environment: A comparison of Israeli and United States employee attitudes. Journal of Business Ethics, 35(1), 27–34.
Sims, R. L. (2006). Comparing ethical attitudes across cultures. Cultural Management, 13(2), 101–113.
Sims, R. L., & Gegez, A. E. (2004). Attitudes towards business ethics: A five nation comparative study. Journal of Business Ethics, 50(3), 253–265.
Small, M. W. (1992). Attitudes towards business ethics held by Western Australian students: A comparative study. Journal of Business Ethics, 11(10), 745–752.
Solomon, I. (2011, January 5). Survey: Employers don’t want Arabs, heredim, disabled. Haaretz. http://english.themarker.com/survey-employers-don-t-want-arabs-haredim-disabled-1.335287.
Steinberg, J. (2003, November 14). A regulatory can of worms. The Jerusalem Post. http://info.jpost.com/C003/Supplements/FSB/031114/art.01.html.
Svensson, G., Wood, G., & Callaghan, G. M. (2006). Codes of ethics in corporate Sweden. Corporate Governance, 6(5), 547–566.
Transparency International. (2006). Bribe payer’s index. http://www.transparency.org/news_room/in_focus/bpi_2006.
Transparency International. (2010). Corruption perception index. http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results.
Waldoks, E. Z. (2011). Firms paid more attention to social, environmental issues. Jerusalem Post. http://www.jpost.com/Business/BusinessNews/Article.aspx?id=202246.
Werhane, P. H., & Freeman R. E. (Eds.). (1997). Encyclopedic dictionary of business ethics. Oxford, UK: Blackwell Publishers.
Whipple, T. W., & Swords, D. F. (1992). Business ethics judgments: A cross-cultural comparison. Journal of Business Ethics, 11, 671–678.
World Bank. (2010). Gross Domestic Product 2009. http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf.
World Economic Forum. (2010). Global Competitiveness Report. http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf.
Wrobel, S. (2010, May 21). Israel ranked 17th-most competitive economy in the world. The Jerusalem Post. http://www.jpost.com/Business/BusinessNews/Article.aspx?id=176043.
Yom Tov, S. (2006, October 26). Former comverse CFO pleads guilty in options backdating affair. Haaretz. http://www.haaretz.com/hasen/spages/779812.html.
Acknowledgements
The author would gratefully like to thank the Arthur W. Page Center at Penn State University for providing financial support toward this research, as well as the anonymous reviewers for their constructive comments.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Schwartz, M.S. The State of Business Ethics in Israel: A Light Unto the Nations?. J Bus Ethics 105, 429–446 (2012). https://doi.org/10.1007/s10551-011-0975-x
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-011-0975-x