Reflect on the Relationship between Law Legal Rights and the Role of Ethics in Business Practices

The irony of Andersen as a child model for overly aggressive accounting practices is that the man who founded the company built it on integrity and simple practices. “Think straight, talk straight” was the company`s motto. Andersen established the company`s reputation for integrity more than a hundred years ago by refusing to play numbers games for a potentially lucrative client. What does it mean to say that the entrepreneur has a “social responsibility” as an entrepreneur? If this statement is not pure rhetoric, it must mean that he must act in a way that is not in the interest of his employers. For example, that it should refrain from raising the price of the product in order to contribute to the social objective of preventing inflation, although an increase in prices would be in the best interest of the group. Or that it should make expenditures to reduce pollution that exceed the amount that is in the best interest of the company or required by law to contribute to the social objective of improving the environment. Or that it should hire “hardline” unemployed people instead of better-skilled available workers at the expense of corporate profits in order to contribute to the social goal of poverty reduction. Because of their shared focus on right and wrong, preventing immoral behavior and formulating standards for specialized professions such as doctors and social workers, ethics and law are inextricably linked. Nevertheless, ethics and law are different fields, and a person`s ethical responsibilities often outweigh their legal responsibilities.

It is a common theme in law and ethics that they are meant to discourage people from behaving in a certain way. To ensure the functioning of society as a whole, the law is designed to defend the rights of all citizens. The purpose of ethics is to guide people in making moral decisions about their behavior. One attempt to integrate the two views of stakeholder theory and shareholder primacy is the conscious capitalism movement. Companies that practice conscious capitalism embrace the idea that profit and wealth can and should go hand in hand with social justice and environmental responsibility. You work from a holistic or systemic perspective. This means that they understand that all stakeholders are interconnected and interdependent. They reject false trade-offs between stakeholder interests and strive to find creative ways to achieve win-win-win outcomes for all. [10] Legal standards are useful because they help people know what they cannot do. Legal standards allow authorities to apply rules when people do something illegal.

For example, if someone steals, the legal standard “you can`t steal” is used to discipline that person, perhaps by putting them in jail. In this discussion, students will critically reflect on the differences and similarities between legal and ethical norms. Use these questions to stimulate in-depth discussion and reflection on these concepts. To combine our discussion on ethics and stakeholders, the following framework may be helpful in addressing an ethical issue. The public certainly thought it was wrong. Shkreli, who was arrested for securities fraud in December 2015 while working at Retrophin, another biopharmaceutical company, was immediately vilified. Even former Valeant CEO Michael Pearson has changed his mind about his own business decisions. He recently testified before a Senate committee that he regretted pursuing acquisitions for the main reasons based on rising drug prices. But Shkreli stands by his decision. At a health summit hosted by Forbes, Shkreli was asked what he would do differently if he could go back in time before his decision to raise the price of the drug. He replied that he should have raised prices.

“I could have increased it and made more profit for our shareholders. That is my main duty. There are several respected views on ethical issues. Some of them have been around for centuries. It is important to know that many of those who think a lot about economics and ethics have deeply rooted beliefs about which perspective is best. Others would recommend looking at ethical issues from different angles. Here we take a quick look at (1) utilitarianism, (2) ethics, (3) social justice and social contract theory, and (4) virtue theory. We leave out some important perspectives, such as general theories of justice and “rights” and feminist thought on ethics and patriarchy.