Ethical considerations have become a cardinal consideration in making business decisions. Indeed, ethical principles have become a supplement to law and regulations, which company executives must take into account. While debate abounds as to what is ethical and what is unethical, some social scientists have argued that this is beside the point and a trite discussion. However, the business community recognizes the crucial need to define the criteria by which decisions have to be made into their typology for examinational purposes. It is a conundrum to define with certainty what entails ethical behavior. Many scholars have come up with their own definitions, but what are depended on the most are the standards of ethics. Whether one is judging a behavior in management or not the standards are usually subjective by their own inherent nature.
Furthermore, the standards applicable in any natural ambience are subject to cultural settings. Fair outcomes are the end result of an ethical decision-making process. Three critical elements are critical to these processes. These include moral affiliations, empathy and principles. Ethical considerations denote the considerations of not only legal, but also, morally acceptable decisions to the whole community or society at large. Indeed, the definition does not entail a standard of absolute judgement, but one which encompasses a socially accepted format. This has to be based on organizational, cultural and societal standards. This paper will interrogate these ethical considerations and whether they are a cardinal supplement to rules and regulations in business administration and management. The paper will also comprehensively canvas the role played by ethical principles in the arena of business law. It will discuss their applications and whether it is a practice to be encouraged among the business community or not.
The observance of business laws and regulations are a mandatory practice if one is to succeed in any lawful enterprise. The law is the handmaiden of business practices. This includes compliance with both national and local trade practices and regulations. Laws ensure that there is an element of order in the industry. Chaos and anarchy is thus averted. This is especially critical when an enterprise is in its nascent stages. Ethical standards, on the other hand, are heavily influenced by the social, cultural and organizational construction of the society within which the business is located. However, the two can easily blend together. In fact, the insistence of ethical considerations in decision making makes compliance to the law an extremely easy practice. Ethics encompass the concept of legality. Therefore, breaking the law is regarded as an immoral or unethical behavior. The nexus between ethical and legal consideration is a complicated one. There are many instances where an individual can break the law while still acting ethically or morally. Thus it is critical to ensure that both legal and ethical instruments are interpreted in a manner that enables them supplement each other rather than conflicting each other.
Many scholars and business managers suffer from an inherent problem, which is seeking to define ethical decision making and consideration in tandem with laws and regulations. It is vital to interrogate the phenomenon of social control first. This entails the fundamental forces within business activities thus reducing human variability and creating a sense of social control. There is a desire, be it organizational or societal, to achieve a level of coordinated efforts of organization. This is only possible through laws, regulations and standards of ethics. While laws and regulations ensure the adherence of law and order as the common denominator in an organization, ethical considerations ensures that individuals sacrifice their short-term desires to accomplish long-term organizational goals. Indeed, achieving a company’s goals and objectives such as targets for the year and the level of profit margins are matters of priority to a business enterprise. It is often easy to achieve such goals using child labor, where applicable, ignoring health and safety measures, discriminative practices, ignoring the impact on the environment and compliance with the requisite laws and regulations. These are some of the ethical considerations that form the pillars of business organizations. There are many costs incurred by organizations which consider all ethical conundrums in their field.
Furthermore, relationships of trust like fiduciary ones require the trustee to comply with ethical principles. This is cardinal in maintaining and sustaining the relationship. It is critical to use guidelines, rules and codes among other systems to identify unethical behavior. A company’s code is a desirable plan to start such an initiative. Laws and regulations are designed to ensure fair play, observance of the tenets of equality, equity and fair competition. Ethical considerations as stipulated in a code of conduct or any other organizational system operate like the other systems such as national and local laws, social norms and company rules. This is because they can be implemented not only through internal means, but also through external ones.
Ethical principles are extremely useful and necessary in business law. The main reason for starting a business is to make profits. Therefore, the principle obligation of business law is to ensure that entrepreneurs have a competent environment to carry out their business. That is a friendly business community governed by fair and just laws. Business laws also have a responsibility to ensure that traders do not exploit their clients or customers. However, the most significant role played by ethics principles is instilling trust in a business. Stakeholders in the business should trust that the management shall comply with all legal instruments and ethical principles. If stakeholders do not trust the ethics of an enterprise, it is hard for the proprietors of the business to make profits despite the fact that they may have complied with all laws and regulations governing the industry. Businesses that take into account ethical considerations adhere to ethical principles and value essential qualities such as integrity, honesty, dependability compassion and respect among other business and personal values. Furthermore, ethical principles are also useful in business law as they help a company increase its ethical commitment. This is because it gives the company a sense of fairness, responsibility, caring, trustworthiness and respect. The overriding objective of an ethical business mind is that one is making the right decision after considering all the relevant factors and ignoring the irrelevant factors.
When making ethical considerations affecting business laws and regulations it is cardinal to recognize the fact that good intentions are not enough. Indeed, an entrepreneur is supposed to act in a disciplined manner and in tandem with the standards of ethics. Adoption or merging the respect of business laws and regulations with the observance of ethical considerations guarantees to all stakeholders in a business, that its management will always take a particular course of action. This promotes dependability, reliability and certainty within business circles which are factors the instruments of the law seek to promote. Furthermore, this will also guarantee that the decision-making processes will provide outcomes that are acceptable to the entire marketplace, despite them having fundamental difference in other sectors. Therefore, during the application of business laws, entrepreneurs should place more emphasis on determining what is right in the situation. Alternatively, one can also use the utilitarian theory to make a decision. This entails arriving at a decision that guarantees the maximum amount of happiness to the greatest number of people affected by the decisions. By the inherent nature of moral questions, ethical considerations could place the decision maker in a tricky situation. While the essence of a business is making profits, it should not be the overriding objective. The adoption and application of ethical standards and their subsequent integration into business law systems allows entrepreneurs and business managers to carry out a factual examination and moral consideration not only in the decision making patterns of the business, but also the entire organization. More significantly, it legitimatizes the claim that a business is acting ethically and morally. Indeed, laws and regulations compel business to navigate their decision making processes through the conflicting phenomena and extralegal obligations owed to different stakeholders, which can only adequately be addressed and serviced by adhering to the ethical principles that govern the society.
Halbert, Terry and Elaine Ingulli. Law and Ethics in the Business Environment. New York: Cengage Learning, 2011.
Mallor, Jane, et al. Business Law. New York: McGraw-Hill Education, 2012.