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Ethics and the Law In the last segment, we addressed how the organizational culture and practices shape individual ethical behavior. Now we move on to how rules of law affect individual behavior within a business organization. In its broadest sense, a law is any rule that must be obeyed. Most of us think of law as a body of rules enacted or enforced by some government authority, such as the legislature, the police, or the courts. There are fine courses at this institution on “business law,” addressing the laws that apply to business organizations. Today, we tackle a subset of that body of law, focusing on laws that shape the ethical decisions of individuals within a business organization. We cannot, in the time allowed in this segment, even touch on all of the various laws that shape business ethics. Instead, we begin with a discussion of the overlap between ethics and the law, progress to corporate rules as law, and then consider three specific laws in the commonly understood sense of the word: discrimination law, whistleblower laws, and the federal organizational sentencing guidelines. By touching on these subjects, we can gain an appreciation for the scope of such rules. So let’s begin. 1. The Relationship Between Ethics and the Law. The text accurately describes business law as “reflecting society’s minimum norms and standards of business conduct.” Many believe that respect for the law is itself an ethical value. Consider the following two true/ false statements that, really, you have to resolve for yourself. Statement 1: True or false: Anything I do within the law as an employee is by definition ethical. Statement 2, True or false: Anything I do that violates the law is by definition unethical. According to the text, “the domain of ethics includes the law but extends beyond it to include the ethical standards and issues that the law does not address.” Do you as a businessman have the right to violate a law that you consider unethical? The classic historical example, and the one the book uses, is a law that required racial discrimination. But why do we have to go back in time? What if you considered the law that prohibits the hiring of undocumented immigrants to be unethical? If you are in charge of hiring at your company, may you violate the law on ethical grounds? My point is not to answer a question that only you can answer for yourself, but to illustrate how ethics and the law may cooperate or collide. Dr. Ryan will address the issue when she discusses Kohlberg’s levels of moral development. 2. Corporate Rules as “Law” : Every organization of any size has rules that it expects and insists that individuals within it to follow and that are not the creation of any government body. Where individuals break those rules, there are varying levels of punishment. If you belong to a club at school, you know what I mean. That is no less true in business.
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This note was uploaded on 01/23/2012 for the course BUSINESS IDS301 taught by Professor O'byrne during the Spring '09 term at San Diego State.

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