If the majority of companies strive to conduct their business ethically, why is there a need to create laws?

Question

If the majority of companies strive to conduct their business ethically, why is there a need to create laws? How are ethics different from the law? How are ethics and the law the same? Support your answer with real-world examples.

Answer 1

Profit with honor but not with deception. Laws are created in order that companies will not violate regulations.

Answer 2

The laws in the US arose from Judeo-Christian moral principles. Ethics is an umbrella term for different systems of morality (i.e. relativism, judeo-christian, absolutism, etc.).

So ethics underly the law. The law enforces ethical behavior. That means that when a company says that it acts ethically, that can mean a whole host of things because, as said above, ethics is a catch-all term.

Well, I'm a ret. business consultant and I can tell you that a lot of companies do try to conduct business ethically, but it's NOT the majority. The foremost objective is to "increase the return on investment." That means to do whatever it takes to make money for the shareholders. That is the bottom line.
Sometimes that can be done ethically, sometimes ethics becomes a very fluid term because what may be ethical to you may not be ethical to me.

A good example is comparing how companies do business in different countries. Nike, for example, does not employ child labor in the US. They portray themselves as being an ethical company. They do employ child labor in Indonesia and hire Korean subcontractors to supervise the manufacturing of shoes, so when something goes wrong, they blame the Koreans. Now we cannot tell Nike what to do in Indonesia, but we can tell them what not to do in the US because in the US, we believe it's morally wrong to put children to work and we produced the laws to back it up. Now just because Nike follows the rules in the US does not make it an ethical company, does it?

Answer 3

Because without the laws or penalties for "x" behavior, companies wouldn't strive to conduct their businesses ethically. Businesses would only do that in a utopian society, and we are definitely not there yet.

Answer 4

The reason for the laws: The minority that choose to conduct their business without ethics, screwing anyone and everyone just to make a buck.

Ethics are similar to morals - morally it is wrong to kill another human, but morals are not enough for many individuals, so that is why there are murder laws. Laws impose punishments for violation - ethics are only a code of conduct, or guideline.

I hope this is enough. . .

Answer 5

Striving and doing are not the same. Their standards will be lower than they need to be. Their primary goal is profit and doing what is right is often costly. Besides, the hardly seem to be striving when oil profits are breaking records while the price at the pump keeps rising, CEO's are making obscene and unjustifiable salaries and benefits and fiascoes like Enron are about to happen. Industry does not put the good of others ahead of their profits. Sorry.

Answer 6

Real world?

The need to create new laws stems from the need of politicians to get re-elected. They must face the voters every few years and they need to be able to say what they have done.

So they go do something. Doesn't really matter what... their press people can gin up anything into a "major scandal"... doesn't matter if it was needed... doesn't even matter if it is effective or even a if it is a good idea.

The whole objective is to generate a few good press releases, and hence media stories.

So they will come across the "vital threat" that oh... Communist Field Mice pose to us... or even better "to your children".

Much noise will be made in the press about the threat that communist field mice (or global warming, or medicade abuse, illegal immigration, private firearms ownership, or the ability of people to take cigarette lighters onto airplanes, or whatever you want) poses to our freedom, our way of life, and our children. The press loves this... they get to run lots of fearmongering stories about the threat that infiltration by communist field mice poses to our schools and such.

Then the "brave" legislators will hold press conferences... oh excuse me, they will hold HEARINGS on the immenent threat that communist field mice (and their "powerful lobbist and special interest group allies"... don't worry about logic here, I mean anyone with a brain knows field mice can't be communists... bue we are talking politics, facts don't enter into the equation) pose to us, our way of life, our freedom, and our children.

Then the legislators will bravely "stand up" to the communist field mice and their powerful special interest group backers (somehow there are always powerful special interest groups involved here...almost like they were invented... himmm....) and enact a law that looks good in a press release, but probably won't really do anything, (if we are lucky) or takes away just a little more or our liberty, (if we aren't), or totally screws things up and has to be fixed later after tens of millions of dollars are poured down a rat hole.

Then the legislators will all go home to their districts and tell people that "I stood up for YOU" against the evil, godless, communist field mouse threat and its powerful special interest lobby.

Answer 7

Business, like most human endeavors, have good and bad elements.

Take a basic profession like plumbing.

It's codified, highly regulated and as far as I know requires a license from a state to do business in a state.

There are good plumbers, bad plumbers, honest plumbers and dishonest plumbers. They have to have their work inspected. There are good inspectors, bad inspectors, honest inspectors and dishonest inspectors.

Many years ago I became acquainted with a lifelong professional thief who spent several years incarcerated in Arkansas State Prisons.

While incarcerated he studied plumbing, learned enough to pass the state exam, got his license and started a small independent business.

I asked him why he wanted to get into plumbing.

His response was verbatim, "It was a business for which the state actually issued a license to steal."

I soon thereafter required the services of a plumber. I called several and obtained estimates.

The job required a new natural gas line of nearly 300 feet in length buried through my neighbors yard and mine.

The estimates varied from over $2,000 to just under $1,500. I wasn't real comfortable with any of those estimates but chose one to do the job.

Then I remembered the prison educated professional thief.

I gave him a call and told him of my predicament. He asked me if I had hired anyone. When I told him, he told me the guy who ran the business was one of the biggest thieves in plumbing and if I was told the job would be $1,400 to expect a bill at least double the estimate when the job was completed. He also told me the guy changed the name of his business every couple of years so BBB complaints were always skewed. I had only enquired about a business name but did not reference the license number.

I asked the prison educated plumber what he would charge.

I was flabbergasted at his response. $500!!

I hired him and called the other guy to fire him.

The life long professional thief did the job, it passed inspection, the utility turned my gas back on and although the plumber had a couple of unexpected problems with the installation, my bill was $500.

I tried to offer him more because his expenses were higher than expected. He refused the extra money.

I was more than pleased with his attitude but couldn't help but think of his reason for getting his plumber's license, so I asked him, why?

He said, "Yep, I said it was a license to steal but that doesn't mean I want to or have to. I'm trying to make an honest living now."

As in any dealings with humans, it's best to know who your dealing with. Get recommendations, references, call the BBB, research them anyway you can.

Just because a business is highly regulated doesn't mean it's not filled with crooks.

I'm by no means a fan of the Federal Reserve Bank, but take the following words to the bank.

"Regulation - which is based on force and fear - undermines the moral base of business dealings. It becomes cheaper to bribe a building inspector than to meet his standards of construction. A fly-by-night securities operator can quickly meet all the S.E.C. requirements, gain the inference of respectability, and proceed to fleece the public. In an unregulated economy, the operator would have had to spend a number of years in reputable dealings before he could earn a position of trust sufficient to induce a number of investors to place funds with him. Protection of the consumer by regulation is thus illusory."

Alan Greenspan, former Fed Chairman

I believe a free market monitored by a free press to be the best way to “govern” business.

As long as the information is out there, easily accessible and available for use voluntarily by those that want to find it and use it, then bad businesses will go the way of the dinosaur soon enough. Failure to do the research is on the consumer and to put the onus of controlling bad businesses on government opens government up to corruption.

As far as oil companies making “obscene” profit, well they have had more than their share of obscene losses, but gas stations have always had gas I could put in my car.

I don’t know of too many companies that would stay in business following year after year of losses, but they know the whole economy depends on them getting a product to the consumer. Their investors kept all of us going to work, to school and kept goods and food flowing to consumers so I don’t begrudge them making money now. By the way, governments were making money from oil products even when they weren’t.

As far as Nike being ethical or not, the company has two sets of demands to meet. Those of the investors and those of the consumers.

A free press can report the "child" labor to produce the shoes but the press is also obligated to report why the child is working.

To meet the demand of consumers, who think nothing of paying 200 dollars for basketball shoes, and to help feed the family of which he is a member.

If children of the poor are working, then the family is less likely to starve. Is it company greed or family need or both?

Is it ethical of the consumer to demand the end of child labor in poor countries bringing to a halt the additional money his family may need to feed him?

That's no more ethical than minimum wage laws which eliminate jobs at the very level needed, among the poor.

Earning 6$ an hour is more ethical than holding out your hand asking for payment from the taxpayer (some of whom make minimum wage) for nothing in return.

I don't believe many of us feel we earn what we are worth.