Legal Rules and Ethical Responsibilities

Legal rules and ethical responsibilities

Why might legal rules be insufficient for fulfilling one's ethical responsibilities?

The law is the set of rules that guide our conduct in society and enforceable through public agencies. For business environment, the law provides an important guide to ethical decision making. But legal norms and ethical norms are not identical, nor do they always agree. Some ethical requirements are not legally required, though they may be ethically warranted. Conversely, some actions that may be legally permitted would fail many ethical standards. Ethical values and legal principles are usually closely related, but ethical obligations typically exceed legal duties, though law often embodies ethical principles.

For a long time, business executives and managers worked under the assumption that

their conduct was morally acceptable as long as they stayed within the law. The problem with that assumption is that the law often lags behind community standards, especially when the ethical questions involved aren't necessarily universal. So you can stay within the law and still fail to do the right thing.

In business, the law doesn't always address issues of ethical concern, so a company that merely complies with the law can end up with gaping holes in its obligations to its stockholders, employees, suppliers, and community. Besides, companies often have ethics-sensitive knowledge that people outside the company aren't privy to, and lawmakers and regulators can't address problems they aren't aware of. For example, regulators didn't know about cancer-causing properties of asbestos for years; only the people inside the companies that worked with asbestos knew about its dangers. Just because the government hasn't set up regulations that required those companies to make safer products (because they didn't know the products were unsafe to begin with) didn't mean the companies could ethically continue making cancer-causing asbestos.

Can you think of cases in which a business person has done something legally right, but ethically wrong and vice versa?

I have faced a lot of situations where I am legally right, but ethically wrong in my work.

When I have sold the products to customers, the terms specified in the contract that we will not be responsible for maintenance such as natural disasters, fires or lightning. Unfortunately, there are quite a lot of products damaged by lightning just after 2 or 3 days of use (of course the warranty is still valid). Legally by contract, our company was not obligated to repair the failed devices. However, I feel it is ethically right to help to support with the repair.

In any case, we should avoid breaking the law. The business decisions more closely adhere to the law. However, in practice we sometimes forced to break the law in force majeure.

Some benefits and costs of acting unethically in business

Behaving unethically may have some short-term benefits for a company. However, in the long-term it will harm stakeholder support.

The some short-term benefits can be as follows:

Make companies look more financially profitable than they actually are. As a

result the stockholder value of the company increases, and anyone with stock profits directly.

A company might get a lucrative contract, for example, because some money was

paid to the management team of the contracting organization, not because quality of proposal.

Companies sometimes behave in ways that show a lack of respect for customers

or a lack of concern with public safety. Examples here include advertisements that lie (or at least conceal the truth) about particular goods or services.

Many companies have externalized the costs associated with their negative impact

on the environment, whether in relation to their own operations to produce goods and services, or in terms of the use and later the disposal of the goods that have sold. It means that companies do not themselves pay for the environment costs that they create.

The some long-term costs (harms) can be as follows:

Companies sometimes decide that breaking laws and paying the fines involves

lower costs than the financial gain made from breaking those laws. However, consistently breaking laws can lead to costly legal battles that outweigh the initial gain. Additionally, executives at companies who break laws and engage in unethical behavior that leads to harmful practices for employees and customers could find themselves facing criminal charges.

A lack of ethics has a bad effect on employee achievement. In some cases,

employees are so concerned with getting ahead and making more money that they ignore procedures and protocols. Additionally, employees who feel acting ethically and following the rules will not get them ahead in business sometimes feel lack of motivation, which often leads to decrease in achievement.

When manager or executives of a business exhibits a lack of ethical behavior, he

faces losing the respect of his employees. It is difficult to have a successful business without well-respect leaders. A lack of ethical behavior can also cause tension among employees. Unethical behavior in the workplace also has the potential to lead a lack of trust among employees, which is detrimental to a business that relies on collaboration and a sense of community.

If a lack of ethics in a business becomes public knowledge, that business loses

credibility. While some businesses survive public knowledge of a lack of ethics through reimaging and advertising campaigns, many lose a key customer base. Even if a business recovers from news about its lack of ethics, it takes a lot