When the CEO pulled up in front of George's house, the evidence was painfully evident--three expensive Japanese cherry trees on the front lawn. George had been in charge of selecting a landscaping firm to plant several dozen such trees at the company headquarters.

"Did you buy the trees?" asked the CEO. No.

"Was the gift made before your recommendation?" Yes.

"Do you think it influenced your decision?"

"Absolutely not," George maintained. "I'm a professional. I can keep these things separate."

"You know, it doesn't even matter," said the CEO, "because the word on the street is that you can be bought."

George should have known better. But business is a minefield littered with poor judgment and opportunities to fudge, pad, evade, exaggerate, and falsify. If integrity is the only bulwark against the lure of wealth, power, and expensive cherry trees, then it's not surprising that integrity so often comes up bloodied. If the only reason to do the right thing is because it's the right thing to do, then the real surprise is that there aren't a lot more wrong things happening.

"When you're in a leadership position, it's real easy to be corrupted," says Steven Bucky, professor at the California School of Professional Psychology. "I frequently see morality missing in our leaders because power, control, and money take priority over morality and ethics."

There are other reasons to do the right thing, fear of getting caught with cherry juice on your hands, perhaps first among them. But something deep within humankind yearns for fairness. For the rules of the game to be honored. And for good reason, because without rules there is no game.

Humankind has tussled with what the rules of business ought to be since the first Neanderthal slipped some pebbles in the bottom of a scanty rice basket. In the millennia since, moral leaders from Thomas Aquinas to the present Pope have had something to say about the rules of business.

Modern-day cynics may get a chuckle out of the oxymoronic notion of business ethics but there is a renewed interest in the topic. "When I was in business school in the 70s, there was almost no attention paid to ethics," says Greg Mellema, professor of philosophy at Calvin College in Grand Rapids, Michigan. What has happened since? "A lot of scandals," he says.

The cost of bad behavior

Bad behavior has a price tag. It undermines public trust, for one thing, and cynicism is bad for business. We need to trust that the plant down the street isn't giving us cancer or that the subcompact we drive has been adequately crash tested.

Eventually, misbehavior also creates more regulation. When the unwritten rules of ethical conduct are trodden underfoot, they tend to turn into laws. If you refuse to deal with your emissions, the EPA will set standards and monitor your smokestacks. If too many people die in your cars, you will face fines and greater oversight.

"You're a whole lot better off taking care of ethics internally in a preventive way than waiting until the sky is falling and the feds come in," says John Lincourt, director of the Center for Professional and Applied Ethics at the University of North Carolina at Charlotte.

Shaky business practices exact other costs as well. Productivity and quality suffer when employees labor in abusive conditions and sloppy work environments. People simply don't do their best work when they are demoralized or afraid or not given the right tools to work with. "Excellent products and services cannot be produced from a foundation of mediocrity, frustration, fear, and moral poverty," says Robert G. Kennedy, professor of business ethics at the University of St. Thomas in Minnesota.

"Of course, you can succeed for a while by twisting the rules. You can race ahead of the pack, temporarily. But unethical behavior involves a very strenuous juggling act: You've got to keep track of your lies, and the persons you lied to. In the end, honor is not just better--it's also easier," said former Texaco president and CEO James W. Kinnear in a 1995 speech.

And in the end, neither business nor life can function without honor. Mistakes happen. People let us down. But without a basic level of trust and integrity, business can't operate at all. "If there was no trust in a business handshake, if good faith could not be placed in the written and spoken word, the system would degenerate quickly into chaos," write Bill Shaw and Frederick R. Post in a 1993 article for the Journal of Business Ethics.

The cost of being good

White hats don't come cheap, either. It's expensive to take care of your employees, treat suppliers fairly, and clean up after yourself. Conventional wisdom says that "profit at any cost" companies get rich quick, but that best practices companies are more successful over the long haul. Customers and stockholders like to feel good about where they put their money; suppliers vie for clients that compensate them fairly; and the best employees look for good management and a good working environment.

While high standards have a price tag, they also create enviable numbers. "Companies with strong corporate reputations have been shown to outperform the S&P 500, have higher sales, sustain greater profits and have stocks that outperform the market. These are results that no bottom-line fixated manager can ignore," said Levi Strauss & Co. Chairman and CEO Robert D. Haas in a 1994 speech.

Ethics works best when it is embedded in the organization, when everyone knows what the company stands for. When that message permeates the organization, there can be fewer rules and less supervision because everybody's eating at the same lunch counter. "Ultimately," said Haas, "high ethical standards can be maintained only if they are modeled by management and woven into the fabric of the company."

Which is all well and good, except that companies now are the size of cities and are spread across cultures and regions that don't have the same values or operate by the same standards. So, how does a company maintain its values in very different cultures? And how can it protect itself from explosive and reputation-ruining events such as discovering--after the media has unearthed the story--that one of its suppliers employs children?

It's a small world after all

Every year in the Swiss village of Caux, movers and shakers of global commerce gather for a round table. For over a decade these business leaders from Asia, Europe, and the United States have met twice annually for honest discourse about the issues that divide them and the ways in which business must promote the interests of global stability and peace.

The Caux Round Table holds that business should be a force for good in the world. It espouses two ethical ideals: kyosei--a Japanese concept of working together for the common good, and that of human dignity--the intrinsic value of every individual.

If there is a light anywhere in the world upholding the compassionate practice of business, it shines at Caux. That multinational gathering also demonstrates that leaders from many cultures can agree on fundamental human values. Despite the customs and conventions that divide us, there are core values we all hold in common.

In an international survey, Rushworth Kidder, president of the Institute for Global Ethics and author of How Good People Make Tough Choices, distilled five core values shared by most cultures: compassion, fairness, honesty, responsibility, and respect for others. But that doesn't mean that global American companies don't have to make very tough decisions about how they do business overseas. There is a fine balancing act between moral imperialism, which assumes that my way is the right way, and moral relativism, which says that any way is the right way. Operating ethically in a global marketplace demands both a clear understanding of one's own core values and the ability to deal creatively and flexibly in cultures very different from our own.

Levi Strauss faced one of those tough decisions when it discovered underage workers in two contractors' factories. Firing the children would leave their families in extreme hardship; employing children violates a very deep human value. Having collided with the harsh realities of a different and impoverished culture, Levi Strauss opted for creativity and compassion. The contractors were told not to hire children again. Levi Strauss would continue to pay the children's wages as well as for books and tuition while they attended school. Their jobs would still be available when they came of age.

The forces of commerce will continue to shape the world, as they always have. There will always be selfish, corrupt actors as well as moral giants. The difference now is that the stakes are high, and the potential effect of good and evil are potentially so much greater. Fewer of us can afford to be neutral. "Without a moral purpose, we sail along rudderless, coping with the inevitable wind and waves but making little progress toward the destinations we pick for ourselves," says Max DePree former Herman Miller chairman and CEO in Leading Without Power. Rudderless individuals might survive, albeit fruitlessly; rudderless organizations--those without vision and moral purpose--won't.

KATE CONVISSOR is a freelance writer who runs a one-horse show and so generally manages to dodge the really tough ethical dilemmas. She just writes about them for Herman Miller and a handful of consumer magazines.