Roles That Ethics & Laws Play in an Organization
Even though you may think you are a moral person who knows right from wrong, as a business owner, you are likely to encounter situations that ask you to make ethical decisions you have never considered before. This is where a good course in business ethics and law will serve you well. Business ethics and law are areas of study specifically developed to address the moral concerns of organizations. While they are comprised of a variety of ever-changing topics, an understanding of the roles they play within organizations is a good place to start.
According to the Stanford Encyclopedia of Philosophy, business ethics is "the applied ethics discipline that addresses the moral features of commercial activity." On the other hand, U.S. Legal defines business law as simply the branch of the law that deals with all things business, such as contracts, sales and employee management. In many cases, business law is designed to right or prevent an ethical wrong. For example, the California law requiring foreclosure consultants to register with the state was in response to a number of foreclosure scams.
Governing Employee Relations
Ethics and law play a large part in the way organizations may treat those who work for them. Both ethical and legal concerns deal with when employees can be hired and fired, how management may treat them and pay them and what kind of work environment they can expect. For example, the Stanford Encyclopedia of Philosophy reports that the idea of "at will" employment is one that is still debated among academics. In other words, academics are engaged in debating for what reasons firing an employee is ethical. In addition, in the United States, institutions like the Occupational Safety and Health Administration (OSHA) and the Equal Employment Opportunity Commission (EEOC) have been developed to address employees' areas of ethics through law.
Governing Customer Relations
Law and ethics also play a large role in governing how organizations may treat their customers. In fact, University of Tennessee-Martin Philosophy professor Jim Fieser notes that some academics argue that ethical principals are what make a business successful. This has a great deal to do with customer relations. For example, if a business sells items that break as soon as the customer gets them home, the business probably won't have much repeat or new business once word spreads. Laws have also arisen to enforce the ethical treatment of customers in some situations. For example, the Federal Trade Commission's Truth-in-Advertising law requires that business show only fair, true and proven advertisements.
The area of business ethics and laws and the roles they play in organizations is massive. If you are concerned about an ethical or legal question regarding your business, you can hire a management consultant or lawyer to help you make a decision. However, if you simply need an overview of business ethics and law to help you become a better small-business owner, consider taking a class in business ethics or law at your local college or online.
- "Stanford Encyclopedia of Philosophy"; Business Ethics; April 2008
- USLegal: Business Law and Legal Definition
- "Sacramento Business Journal"; Foreclosure Consultants Must Register With the State; June 2009
- Equal Employment Opportunity Commission
- Find Law: Fair Advertising: A Guide for Small Business
- Occupational Safety and Health Administration
Miranda Morley is an educator, business consultant and owner of a copywriting/social-media management company. Her work has been featured in the "Boston Literary Magazine," "Subversify Magazine" and "American Builder's Quarterly." Morley has a B.A. in English, political science and international relations. She is completing her M.A. in rhetoric and composition from Purdue University Calumet.