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Today, success finds those companies that understand the importance of relationships and earn the support of their stakeholders. This proves to be the right strategy—right because it fulfills commitments to people, and right because it routinely yields successful companies. In short, it's corporate responsibility. Unfortunately, today we're talking about ethical bankruptcy.

With the massive fallouts of Enron, Global Crossing, Tyco International, ImClone, WorldCom, and Merck, it is clear that a handful of leaders from America's once-praised companies lacked the ethical compass. Yet, did it have to be this way?

While there is plenty of blame to go around, much of it must be directed to a lack of integrity among senior leadership. As a result, the collapse of these corporate giants has left everyone from Washington to Wall Street up in arms and with depleted portfolios.
Missing from the mid-1990s "success" stories of these companies were critical performance and relationship factors among major stakeholder groups—shareholders, employees, customers, partners, business communities, and government.

With newspaper headlines reading more like tabloid cover stories, we know how these groups were affected. Thousands of workers are now unemployed, and many retirees are without legitimate pension plans and healthcare benefits. And while tougher laws will help, the general public and business leaders nationwide must call for better leading indicators from all companies.

How would employees from these fading firms have rated their companies on ethical issues in 2000 or early 2001? A 2001 National Employee Benchmark Study on business integrity revealed that less than half (49 percent) of all U.S. employees believe their senior leaders are people of high integrity. It also found that the three most important workplace elements were care and concern, the organization's overall reputation, and trust in employees. Finally, the study uncovered that employees are seven times more likely to be loyal to their employer when they perceive management as ethical leaders.
The list of companies who have come under scrutiny resembles a "Who's Who" of large, high profile organizations, leading to many questions. For example:
 
• Are large organizations more likely to fall to corporate scandals and ethical improprieties?
• Are smaller companies more ethically sound?
• What are the ethics trends in mid-size companies?

While the list of fallen giants might suggest that ethical violations only occur at large, global corporations, attention to business ethics is critical for businesses of all sizes. However, larger organizations face a number of obstacles not as prevalent among smaller and mid-size companies, including complex internal communications issues, increased pressures to continue and exceed past growth and success, and prominent media coverage of high-profile companies and executives.