Laika Andrea Mhel Limon GOVBUSE BJAC01

State of Business Ethics in Israel

In a few clicks we can find numerous headlines about corporate scandals from
around the world. Some of them even stay with us which serve as a deterrent to commit
such fraudulent acts. This leads us to conclude that the inculcation of ethics is
indisputably a necessity in business settings. Every country has its own ethics that the
people try to uphold and it varies because of factors such as history and culture. This
article briefly discusses the state of business ethics in Israel based on a research
conducted by Mark S. Schwartz.
There are not many articles and research that talk about the business ethics in
Israel, so Schwartz’ research serves as a comprehensive study about the state of ethics
in the country in three core dimensions—business sectors, business ethics
organisations and the academic sector. A detailed survey data on formal ethics
programs shows an increasing percentage in all elements—increase in number of
companies with written code of ethics, increase in training which is the implementation
of the code, the growth of the number of people reporting unethical behaviours,
increase in numbers of ethics officers, and the development of mechanisms and
procedures that deal with unethical behaviour.
In the interviews conducted with twenty-two company executives in Israel, most
of them believe that acting ethically can be important to the success of the business as
unethical reputation poses a serious threat to the business. It has also been deduced
that certain types of industries are more susceptible to unethical practices. Specific
ethical issues in the Israeli context are then raised to present the big picture of what
needs to be improved.
The ethical issues that remain problematic are nepotism/favouritism,
discrimination against Israeli Arabs, Ethiopians, pregnant women, ultra-Orthodox and
physically disabled, theft/use of company equipment such as car for personal use,
confidentiality in which Israelis tend to like to talk based on their ego, lack of privacy due
to constant monitoring, treatment of customers where quality of products and services
remains an issue, most do not disclose defects/mistakes they did, deception in
advertising continues, aggressive or unethical competitive intelligence remains a
problem, and there is little enforcement when it comes to health, safety and the
environment. On the bright side, on ethical issues such as sexual harassment, gifts,
kickbacks, and bribery, accuracy of financial records, and whistleblowing there have
been a significant improvement.
The interviewees recommended measures that might improve the state of
business ethics in Israel and these are (1) greater education/awareness; (2) clear
statement on ethics by the firm; (3) additional ethics training; (4) firms and their
managers ‘walking the talk’; (5) greater enforcement for ethical misconduct; and (6)
modification of compensation systems that might be encouraging misconduct.
Having read the research, I could say that the state of business ethics in Israel
has really improved over time and it is only a matter of more experience, exposure to
expectations of behaviour outside their country, and more trainings before they could
foster a strong and high ethical standards for themselves that could positively affect not
just their relationship with customers and co-workers but also their other decisions.

Reference/s:
Schwartz, M., MBA, LLB, PhD. (n.d.). The State of Business Ethics in Israel: A ‘Light
Unto the Nations’? Retrieved January 20, 2021, from http://mishkenot.org.il/wp-
content/uploads/2015/03/mark-shwarts-the-state-of-business-ethics-in-israel.pdf