To many, the old adage that business and ethics never mix, has been reinforced by the revelations of the various tribunals set up since the early 1990s. Irish company law has been characterised by a culture of non-compliance, with only 13 per cent of companies filing returns on time to the Companies Office in 1997.

Persistent breaches of the Companies Act, banking scandals and alleged payments to politicians, would lead most observers to believe that the question of business ethics has never been high on the agenda of certain Irish companies and entrepreneurs.

These revelations have had societal consequences and have awakened the interest of the media, and the Irish public at large, in business ethics.

The question of business ethics, the art of applying one's personal moral norms to the activities and goals of a business, has been top of the agenda of US business since the 1980s. Companies have witnessed the high costs of corporate scandals that have hit America, which included heavy fines, bad public relations, high employee turnover, and in many cases, loss of market share and revenue.

Major corporations such as Johnson & Johnson, Boeing, Xerox, Hewlett Packard and others, have introduced ethics codes, social responsibility audits, and ethics training to emphasise that high standards of personal conduct are an invaluable asset.

A survey by Fortune magazine of 500 American companies in the manufacturing sector, and a further 500 in the services sector, revealed that 91 per cent had a written code of ethics, 49 per cent had ethics training in place for all employees, and 87 per cent surveyed believed that the public is now much more aware of ethical issues in business than they were in the past.

While many cynics will still argue that the high moral ground of many major multinational corporations is motivated solely by profit, the philosophy of the corporation's role in society has changed over the years.

Milton Friedman's notion that the only responsibility business has is "to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in free and open competition, without deception or fraud", is now outdated.

Dr Friedman's argument could be seen as somewhat flawed when "the rules of the game" in many less developed countries would allow such things as the exploitation of child labour or environmental pollution.

Current thinking would suggest that, while the business of business is to maximise return for its shareholders, every business and its employees are major stakeholders in a wider society. The business enterprise as a social and economic stakeholder is obliged to act in a morally responsible way towards any person or group it interacts with.

Issues such as false/misleading advertising, genetically modified foodstuffs, dangerous products, recycling, and destruction of the ozone layer, force companies to balance their social responsibilities to the consumer with the return-on-investment demands of shareholders. It follows that companies must balance their moral, social, economic, legal and societal responsibilities as part of normal routine.

Despite current theory, it is very difficult to have generic codes of ethical behaviour in a multicultural global marketplace. Research supports the idea that we learn appropriate behaviour by modelling the behaviour of persons we see as important - parents, siblings, peers, teachers, mentors, friends, colleagues.

In the international and, indeed, national marketplace many people encounter each other with completely different value systems and behaviour based on socialisation.

How should a manager react to a difficult sales target in a declining market full of unethical competitors with shareholders pressurising the company? How does being reared in the right way provide an automatic solution to a possible ethical dilemma and the choices that must be made about one's obligation to the customer, the shareholder or society in general?

When it comes to business ethics, there are no hard and fast answers to these questions. While the law has a very important role to play in punishing unethical behaviour, the efficient operation of a free market economy will depend on the deliberate maintenance of a complex set of ethical values in the face of ever increasing and often conflicting pressures.

Patrick McGarty is head of the School of Business and Languages at the Institute of Technology, Blanchardstown