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Abstract
In 1986, President Reagan created the Packard Commission, a blue-ribbon commission to investigate defense contracting procurement fraud. The Packard Commission's major recommendation was for defense contractors to adopt ethics programs. Out of this recommendation emerged the Defense Industry Initiative (DII). Signers of the DII must adhere to 6 principles of business ethics and conduct intended: 1. to promote sound management practices, 2. to ensure that companies comply with complex regulations, and 3. to restore public confidence. A close examination of the implications of the DII reveals that what has thus far developed does not approach a system whereby ethics can be prescribed and sustained. It falls short of being an effective method of self-regulation because it does not: 1. achieve complete industry-wide cooperation, 2. establish uniform standards of ethical conduct within the industry, 3. hold the signatory companies accountable for creating a strong system of ethical conduct, or 4. relieve the organizational and market pressures to be unethical.