THE ROLE OF THE U.S. LEGAL SYSTEM IN UPHOLDING BUSINESS ETHICS

By: Sha CarsonTHE ROLE OF THE U.S. LEGAL SYSTEM IN UPHOLDING BUSINESS ETHICS Capstone 2012The role of the us legal system in upholding business ethics

What is Business ethics?To understand how U.S. legislation can affect business ethics, we must first develop a working definition for business ethics.

According to Velasquez (2012) business ethics are defined as:

a specialized study of moral right and wrong that concentrates on moral standards as they apply to business institutions, organizations and behavior (Velasquez, 2012, p. 15). Velasquez, M. G. (2012). Business ethics: Concepts and cases (7th ed.). Upper Saddle River, New Jersey: Pearson. p. 15RightWrongVs.Moral ReasoningVelasquez, M. G. (2012). Business ethics: Concepts and cases (7th ed.). Upper Saddle River, New Jersey: Pearson. p. 15Business ethicsVelasquez, M. G. (2012). Business ethics: Concepts and cases (7th ed.). Upper Saddle River, New Jersey: Pearson. p. 15Fundamental themes in business lawThroughout the numerous laws pertaining to business practices, the same fundamental themes seem to be the basis on which these laws were built to promote:

FairnessEqualitySafetyProtectionWell-beingUnited States Department of Labor. (2009). Employment law guide. Retrieved from http://www.dol.gov/elaws/elg/.

Therefore, while it cannot be said that the U.S. legal system produces and enforces polices and laws that directly pertain to business ethics, it can be inferred that many of the federal and state laws concerning the business system have been enacted with the underlying purpose of upholding and encouraging strong ethical practices.

Since the subject of business ethics deals directly with moral judgment and moral reasoning, it would be difficult for the U.S. government to pass laws that deal directly with ethical behaviorHow can it be said that laws concerning the business system have been enacted with the underlying purpose of upholding and encouraging strong ethical practices?A general perception of right and wrong transcends all levels of business and can be applied across the board with continuity.

Lawrence & Weber (2011) argue that businesses should not develop their own ethical principles, but rely on already established principles when developing business practices.

This general consensus of right and wrong is what allows the U.S. government to translate ethical business practices into laws that promote these beliefs and principles.Lawrence, A. T., Weber, J. (2011). Business and society: Stakeholders, ethics, public policy(13th ed.). New York, NY: McGraw-Hill.Occupational safety & health act (OSH Act) of 1970Implemented regulations which guarantee employers develop adequate measures to ensure employee well-being while at work.

Covers all employers and employees in the U.S.

Regulated by the Occupational Safety and Health Administration (OSHA).

OSHA sets standards and conducts inspections to certify that employers are providing a safe and healthy workplace for employees.

United States Department of Labor. (2009). Employment law guide. Retrieved from http://www.dol.gov/elaws/elg/.Applied to the Occupational Safety & Health Act of 1970:

The OSH Act took the general perception that it is Right to provide a safe and healthy work environment for employees, and applied this established principle to develop a universally accepted business regulation.

This Act promotes the moral reasoning that to be considered righteous, a company must provide safety and health to its employees.How can it be said that laws concerning the business system have been enacted with the underlying purpose of upholding and encouraging strong ethical practices?United States Department of Labor. (2009). Employment law guide. Retrieved from http://www.dol.gov/elaws/elg/.Three categories of law related to business practicesTypes of Laws that Affect the Business System

Laws affecting business commerceLaws affecting business occupationsLaws affecting the business organizationMcGraw-Hill. (2012). Business, ethics, and the legal environment of business. Retrieved from http://highered.mcgraw-hill.com/sites/dl/free/0073524565/324445/jon24565_ch05.pdf.Laws affecting business commerceAntitrust, public interest, consumer safety & environmental protectionAntitrust, public interest, consumer safety & environmental protectionAntitrust laws - intended to prevent abuse of monopoly power.

Antitrust laws can be toted with the accomplishment of spurring several new governing agencies which are responsible for investigating and modifying unethical business practices (McGraw-Hill, 2012).

Public interest laws - advance the public interest or country-specific standards which serve to evaluate how a certain action will affect the well-being of a society.

Sarbanes-Oxley Act of 2002 - The U.S. Congress passed this Act which forced organizations to give up some of their self-regulating authority in order to advance the public interest

Consumer safety laws - concerned with the best practices for ensuring consumer safety standards.

Environmental laws - influence how corporations preserve the environment in which people live and functionMcGraw-Hill. (2012). Business, ethics, and the legal environment of business. Retrieved from http://highered.mcgraw-hill.com/sites/dl/free/0073524565/324445/jon24565_ch05.pdf.

Carlton, D.W. (2007). Does antitrust need to be modernized? Journal of Economic Perspectives,21(3), 155-176.

Thornburg, S., & Roberts, R. W. (2008). Money, politics and the regulation of public accounting Services: Evidence from the Sarbanes-Oxley Act of 2002. Accounting, Organizations and Society, 33(2-3), 229-248.

Laws affecting business occupationsOccupational qualifications, diversity & employee health & safetyOccupational qualifications, diversity & employee health & safetyEmployee health and safety companies must protect the health and safety of employees.OSHA is the governing body.

Diversity - reassure that the procedures a company uses to hire, fire and promote employees is ultimately defendable in court. These laws create an even playing field for every person in the job market. They encourage employers not to discriminate in a time when globalization and diversity are at their peak.

Occupational qualifications - help enforce ethical hiring practices.Ensure that employees are hired based upon their skills and not discriminated against for unethical reasons.Ethical hiring practices aim to put the best people in the most optimal positions and avoid discriminating against them for any reason other than aptitude and ability.United States Department of Labor. (2009). Employment law guide. Retrieved from http://www.dol.gov/elaws/elg/.

McGraw-Hill. (2012). Business, ethics, and the legal environment of business. Retrieved from http://highered.mcgraw-hill.com/sites/dl/free/0073524565/324445/jon24565_ch05.pdf.

Melvin, S. (2011). The legal environment of business: A managerial approach: Theory to practice. Canada: McGraw-Hill Ryerson.

Laws affecting business organizationIncorporation, bankruptcy, patents & copyrights & trademarksIncorporation, bankruptcy, patents & copyrights & trademarksIncorporation laws - necessitate that businesses make information about their financial condition and business model available to the public. This full disclosure asserts that no unethical practices are being conducted by an organization.

Bankruptcy laws - are intended to further entrepreneurship and advance business viability.

Patent, copyright and trademark law - inspire companies to continue to research and develop new, innovative products for which they can be assured ownership.Without the legal guarantee that patent, copyright and trademark law provides, many companies would cease to produce and develop new goods and services for fear that they would be stolen. These laws are set in place to protect businesses, their intellectual property and other resources. Baughn, C., & Bixby, M. (1997). Patent laws and the public good: IPR protection in Japan and the United States. Business Horizons, 40(4), 59.United States Patent and Trademark Office. (2012). U.S. trademark law: Federal statutes. Retrieved from http://www.uspto.gov/trademarks/law/Trademark_Statutes.pdf.

McGraw-Hill. (2012). Business, ethics, and the legal environment of business. Retrieved from http://highered.mcgraw-hill.com/sites/dl/free/0073524565/324445/jon24565_ch05.pdf.

Promoting ethics vs. preventing unethical practicesThe legal environment of business consists of thelaws and regulations that have been passed toprevent unethical business activities from occurring (McGraw-Hill, 2012).

Overview

The U.S. legal system, in an effort to uphold a high standard of business ethics, sets forth legislation that is intended to prevent unethical behavior and practices in respect to the business system.

This is done through applying a fundamental appreciation for right and wrong that is accepted by general standards across all business related legislation.

The result of this practice, is a system of laws which enforce standards of strong ethical behavior through prevention of unethical practices in business related issues.

While business law does not directly enforce good business ethics, it does strongly influence virtuous business practices through the prevention of unethical practices.

ConclusionIn conclusion, it can be said that the United States legal system plays a critical role in upholding business ethics through implementing laws, regulations and governing bodies whose foundation is based on a general perception of moral rightness and wrongness and which promotes the fundamental purpose of building legislation that upholds these standards.

Deprived of these regulations, it can be assumed that business practitioners would become less concerned with ethical implications of immoral behavior and ultimately, this would lead to a diminished application of ethical principles in business systems.

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