Business Ethics Facing Up To The Issues By Chris Moon and Clive Bonny; The Economist in association with Profile Books, £20 (UK)

Milton Friedman, a Nobel prize winner and high priest of the free market famously argued that "there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits".

Since the freebooting days of Margaret Thatcher and Ronald Reagan, the landscape for business has altered. The rise of the green lobby groups, the increasing reluctance to allow business to exist in an untrammelled environment and the new, harder edge espoused by the anti-globalisation movement has meant that business has had to adapt.

Allied to this is a growing body of evidence that suggests companies that act in an ethical way, and interact with their staff and the wider world in such a fashion, do better than those who don't.

As the Economist put it: "Companies with an eye on their triple bottom line - economic, environmental and social sustainability - outperform their less fastidious peers on the stock market."

What Moon and Bonny have done in this book is to gather together specialists in the field of business ethics and focus on what they see as the four main areas:

the implications of the new economy;

the relationship between individual and organisations;

ethical problems such as corruption; and

how organisations can develop and implement codes of ethics.

In Transparency International's Corruption Perception Index 2000, the Republic clocks in at number 19, nine places behind Britain but just ahead of Spain and France, and we don't feature at all in the 19 countries least likely to tolerate bribe-paying.

The argument long favoured by business when confronted by bribe-paying was to say that it was just engaging in local practices and who was it to judge.

However, the "when in Rome" argument no longer washes, as the World Bank, among other organisations, has said that it will permanently or temporarily disbar any company that engages in corruption to win work from a contract in which the Bank is involved. In 1999, British company Case Technology was barred permanently, and subsequently went into liquidation. Another thorny area for business is the problem of sourcing labour. Nike is the most high-profile company to become embroiled in controversy in this area as activists and consumers alike have become concerned with the link between low supplier prices and poor employment conditions.

Western companies have become exposed as never before on this front; at best many seem complacent and at worst they appear to be exploitative over such issues as child labour, low pay and discriminatory practices.

One way to brand your company as ethical in this area is to have an SA8000, which is the international ethical standard and is based on the International Labour Organisation's conventions on forced labour, freedom of association, as well as the Universal Declaration of Human Rights and the United Nations Convention on the Rights of the Child.

Moon and Bonny's central thesis, that acting ethically is good for the bottom line and that sometimes virtue is its own reward, is echoed by the specialists who contributed. As George W Bush does his best to recreate the free-market world of the 1980s, it will be interesting to see how many of the ideas espoused in this challenging book make it into practice.

comidheach@irish-times.ie