Ethics And Social ResponsibilitiesEssay Preview: Ethics And Social ResponsibilitiesReport this essayIntroductionThis paper will examine the statement, “Strict government regulations are necessary to make companies behave ethically.” It will also examine the impact of government regulations have on business ethics and social responsibility along with the chosen statement. Also, this paper will defend the position of the author with relevant business examples and appropriate references.
As a manager, we bring along with us our own concepts of what is right and what is wrong. Every decision that is made, for better or worse is the application of these values to the question at hand. This is made more difficult by the pressures of organizational life. There are pressures surrounding us from all angles. (I.e. productivity, competition, bosses) Sometimes managers make decisions which conflict with their own or society’s values because of what they see as the pressures of the business world. But what is the right thing to do when it comes to social responsibility? Is the decision that was made also ethically correct?
“Strict government regulations are necessary to make companies behave ethically.” Business ethics defines how a company integrates core values — such as honesty, trust, respect, and fairness — into its policies, practices, and decision making. Business ethics also involves a company’s compliance with legal standards and adherence to internal rules and regulations. In today’s world, a large number of companies are designing values-based, globally consistent programs that give employees a level of ethical understanding that allows them to make appropriate decisions, even when faced with new challenges.
The scope of business ethics has expanded to encompass a company’s actions with regard not only to how it treats its employees and obeys the law, but to the nature and quality of relationships it wishes to have with stakeholders including shareholders, customers, business partners, suppliers, the community, the environment, and future generations. Some important issues that have been faced recently are: conflicts of interest, financial integrity, corruption and bribery, consumer privacy, and ethical advertising. If the government enforced stronger policies to keep companies in compliance, then scandals like Enron would have never happened. Think of all of those employees affected by losing all their retirement that they believed that they had by investing back into their company.
Government regulations are fairly clear cut when it comes to outlining what is acceptable and what is not. These regulations set standards on issues such as unfair competition, unsafe products, etc. Failure to comply with these regulations can lead to criminal charges and/or fines. Business organizations operate in a context that is much broader than just their immediate marketplace. Their activities have social, economic, and political consequences whose impact may be felt on a local, national, or even international scale. Even small, local businesses have a large social impact collectively. Everyone has a right to demand accountability in the businesses that they come in contact with.
Dimensions of social responsibility encompass: how the business uses human resources, the extent of community involvement, the environment impact of the business, and analysis of the product or services the business produces. To be socially responsible, a business must have a clear, rational definition of social purpose, a system of setting priorities based on their social implication, and a structured, integrated approach to financial and social action. Implicit in social responsibility is a new definition of success for small business.
Unethical and irresponsibility business practices towards customers can result in government fines. Collusion occurs when two or more firms agree to collaborate on such wrongful acts as price fixing. In 1991, a group of Arkansas druggists filed suit against Wal-Mart for selling hundreds of products below cost sales. In 1993, an Arkansas state judge agreed that the practice had a negative effect on small retailers and ordered Wal-Mart to discontinue below cost sales. Although Wal-Mart has appealed the decision, their supporters claim that it was necessary if small retailers were to continue doing business in Wal-Mart’s expansive shadow. Unethical in advertising, for example, food products as being “light”
Although the American Beverage Association (ABBA) is a major corporate sponsor, it is not responsible for any small businesses complying with the Fair Labor Standards Act. ABBA, when asked about the legality of the Wal-Mart ban by the Committee on Business Internal Policy, stated, “The American Beverage Association believes that Wal-Mart was not aware of this policy or its implications for domestic and international beverage companies whose businesses are in violation of its labor and labor laws.” The American Beverage Association stated,
Although Wal-Mart and its members may have legal standing in state and local political campaigns against political political parties, the practice of such campaigns is not subject to the Fair Labor Standards Act.
For example, while the American Beverage Association notes that in 1989, it was in violation of the Fair Labor Standards Act that it had illegal advertising:
No company was required to follow the rules set forth by the Labor Department on this issue, and the laws that govern how a company conducts business are more than adequate. In fact, when it came to the actual labor and ethical regulation, some of these standards were never violated. Although some of the policies that were violated by Wal-Mart, like its own union campaigns, are much more restrictive than ours, the same laws remain applicable within the Department’s jurisdiction.
But is all of this just semantics? Are the ABBA saying the ban was unconstitutional? Are companies and customers legally prohibited from advertising (by law) without the written prohibition? Are they required to abide by these rules and regulations and must these limits also comply with the Fair Labor Standards Act?
For that matter, has the union and its members been required to violate the law of the land by violating the Fair Labor Standards Act or the Fair Labor Standards Act’s minimum acceptable performance standards?
While both the ABBA and the government may legally enforce these two specific issues, neither have proven the ability to do so. And in fact, the ABBA and the government have refused to do so.
Although the government may not argue that it should not have to act on these issues, if it did, that would require a change in policy on the part of the law which prohibits it. Such a change, at this stage, would mean that Wal-Mart and its subsidiaries would no longer be required to participate in campaigns or other business activities that violate state law. To put it another way, if the law were changed in order to require manufacturers and importers to follow federal antitrust laws, it would only effectively limit the businesses that are now required to comply with the law to a handful of big companies.
As pointed out last year by a number of business leaders in a New York Times column, in