(FORTUNE Magazine) – Forward Indicators Dept.: Looking for a sure sign that corporate America has regained its composure after the unpleasantness in the financial markets? Just watch for a revival of talk about ethics in business. You remember the good old prelapsarian days: A CEO at every Rotary Club lunch, inveighing about The Problem. No, the talk was not all cant. Many people in business were genuinely shocked by insider trading. But we also heard a lot of bellowing from recently gored oxen. How many of those speeches by CEOs turned out to be diatribes against raiders who had threatened them with takeover? Perhaps most disappointing in all the talk was the notable lack of specifics. Okay, okay, so the example has to be set at the top, and once again, good ethics are good business. But which ethics, the beleaguered middle manager might ask, and in which situations? ''Harrumph,'' comes the offended reply, ''you can't teach someone ethics on the job (in college, in business school); that's for families (elementary school, Sunday school), and the game is pretty much over by the time the student is, oh, 10.'' Not quite. Observes LaRue Hosmer, who bears the intriguing title Professor of Corporate Strategy and Managerial Ethics at the University of Michigan: ''Maybe you can't change moral standards. But you can teach people how to analyze questions so as to bring to bear whatever moral standards they have.'' The effort can pay off handsomely. For years, Johnson & Johnson executives hammered home to subordinates the company's basic principles, which stress obligations to the customers, the employees, the communities in which J&J operated, and the shareholders, in that order. When poisoned Tylenol was found on store shelves, employees across the country independently took action in accordance with those tenets, to the company's honor and benefit. Herewith a modest introduction to practical ethics for managers, organized under three headings: How to spot a problem. How to attack it. And what a manager can do to get his subordinates to act ethically. Some ethical problems come up and hit you in the face. The trouble is, these are usually the easy problems, the kind that executives with a modicum of moral sense will steer clear of almost automatically. Professor Lawrence Lavengood, a so-called business ethicist at Northwestern's school of management, describes the usual scenario: ''Those involved know they shouldn't be doing it. But they cover all this over by elaborate rationalizations. When the wrong is unmasked, each participant usually concedes the objective facts of the situation. There follows a gush of excuses, and an attempt to spread the blame around with phrases like 'Everybody was doing it.' '' The real doozies more often sneak up on you. For managers who don't want to be caught unawares by ethical questions, either about their own actions or those of their subordinates, the experts offer advice on where to start looking for possible trouble. Where the industry is changing, for example. In such situations, Lavengood points out, somebody typically uses the uncertainty about what rules apply to push to the limit of good ethics, or beyond. Witness the current state of investment banking. Even in stable industries, watch out for new practices that could take you close to the edge -- the gathering of intelligence about competitors, for instance. Be alert to areas where public scrutiny is increasing, or where society may be coming to a new view of old arrangements. Yesterday's custom -- dumping pollutants in a river, say -- can quickly become today's ethical dilemma. PERHAPS MOST important, look where competitive and economic pressures are greatest. Not just on underlings, who may be tempted to cut corners, but also on the company as a whole. Pay particular attention to managerial choices that decision-makers may be tempted to pass off as matters of economic necessity. Mark Pastin, director of the business ethics center at Arizona State, cites two as especially problematical: how companies caught up in restructuring deal with their older employees -- not-so-voluntary early retirement all around? -- and how they handle businesses they have acquired. Pastin notes: ''You know trouble is coming when this 34-year-old guy shows up and says 'Hi, I'm Toby and I'm from Corporate. I'm here to help you with your personnel planning.' '' Then the ax comes down. In trying to spot a problem, what you are looking for, at the most basic level, is potential harm to another. Ethical thinking begins with the recognition that the choices you make have consequences. These consequences may be readily apparent -- in the face of an employee laid off after 20 years, or the disruption in a family rocked by scandal. Or they may be harder to divine: the slow erosion of a company's reputation, the damage to the commonweal when an industry -- the airlines, say -- lets its standards deteriorate. But as the person making the choice, it is your duty to trace out, and weigh, the potential consequences. To help you, ethicists down through history have provided a variety of analytical techniques. Perhaps the simplest are rules against which you can measure the action you contemplate: Do unto others as you would have them do unto you, which you probably learned well before business school. Or the rule may be built into a device like the so-called mirror test: How would you feel about explaining this to your children? Professor Thomas W. Dunfee of the Wharton School has gone so far as to propose eight principles of business ethics to govern the conduct of managers in the same way that the lawyer's or doctor's professional code guides his. Among Dunfee's principles: Act so as to avoid even the appearance of a conflict of interest. Respect the liberty and constitutional rights of others. Rules have limitations, though. For example, they don't help you distinguish between the harm or benefit done to different parties affected by your decision. For that, you need what Pastin, in his book The Hard Problems of Management, calls applied end-point ethics, a.k.a. utilitarian ethics, after the 19th-century school of philosophy. BEGIN BY listing the different people or groups that your decision will impact, as they inelegantly put it in managerese. Then figure out how the different choices you might make will affect them. Ask them what they think of the alternatives. Assign priorities to the parties, based on both how hard they will be hit and whatever duty you owe each, whether as customers, shareholders, employees, or merely fellow human beings. Armed with this reasonably complete understanding of how each of the options will play out, you can then decide among them. If you want to make sure that your methods will satisfy even the most rigorous ethicist, you may also want to run the competing choices by some standard of justice. Standards currently fashionable among academics include ''Act so as to maximize the benefit to the least advantaged in society, or at least to do them no harm.'' Or, alternatively, ''Act so that other people's ability to lead their lives as they wish is enhanced, not limited.'' All right. You have the drill down. But what about your people? You can provide training in ethics, as more companies are doing. But the single, Numero Uno hands-down-among-the-ethicists most important thing you can offer is a good example. SHOULD YOU promulgate an elaborate corporate code of ethics? Surprisingly enough, many of the experts say no. While it's important that employees know the rules, an overly elaborate, legalistic code can send the wrong kind of message. For instance, that you don't trust the troops. If you insist on having such a code, make sure that the folks down the ladder have a hand in writing it. You may be better off with a simple corporate credo, like Johnson & Johnson's. You should also do all you can to encourage candor among employees, both back and forth among peers and up and down the hierarchy. This goes well beyond the basics, which at a minimum include a clear channel upward, around the boss if necessary, for people who think they see an ethical problem. In conversations with experts on corporate ethics, one is struck by the degree to which they believe in, indeed insist upon, participative management. You have to let the troops know what's happening, comes the clear message, and give them a voice in corporate decisions, if you expect them to carry out those decisions responsibly. Reserve some of that candor for your assessment of the organization's effect on you. Know your own values. And know the company's, based not on what the top brass say, but what they do. Tulane Professor of Management Jeffrey Barach points out that if the two sets of values are too far out of kilter, you are going to get sick before the company does. Ah, but if the place lets you be your best self, what an easy, even proud time you will have explaining the day's events to loved ones. Not to mention facing yourself in the mirror next morning. It beats marking your sense of self-worth to the value of your portfolio, especially these days.