Effects of Ethics Laws and Regulations on Organizations Order Instructions: Write a paper evaluating how a company system of ethics, case law, and statue, as well as government regulations, affect business organizations. Further, discuss how such should help protect the general public from harm or unfair business practices.

7 scholarly sources is a must

Effects of Ethics Laws and Regulations on Organizations Sample Answer

Effects of Ethics, Laws, and Regulations on Organizations

The achievement of an organization’s vision is dependent on its adherence to the code of ethics, government regulations and laws. The code of ethics stipulates the relationship between an organization with employees, suppliers, the society, and the global market. When an organization places emphasis on protecting the rights of individuals, its reputation is enhanced leading to its profitability and sustainable growth (Chevron, 2016). The government sets out policies that regulate the operations of an organization in the form of taxes, global trade, bureaucracies, and employee relations. Laws control the activities and decisions of a firm and make them take responsibility for their actions (Gia, 2012).

If there are no laws or ethical systems, the market would be corrupted with illegal business activities and monopoly powers that would deprive employees and consumers their rights. For instance, The US Department of Labor was set up to act as the intermediary between employer and employees to deal with their grievances and advocate for their rights, the Federal Trade Commission protects consumers from dishonest companies, and Environmental Protection Agency ensures that both consumers and organizations are protective of the environment. A sound ethical system is essential in ensuring that a firm follows the laid down regulations and is protective of the general public.

The effect of ethics in business organizations

A system of ethics consists of values that a firm uses in its activities. The principles that an organization applies affects its public image, profitability, and survival. According to Luanne (2013), the code of ethics comprises of leadership ethics, employee ethics, supplier ethics, and it shapes the culture and values of a firm. Apple’s supplier code of ethics governs the operations and decisions of its suppliers and sets up measures and standards that are to be followed failure to which disciplinary action, including contract termination, are enacted. For Example, the company’s suppliers are supposed to give employees leave and off-days, institute proper waste management procedures, carry out communal activities and uphold integrity in all their operations.

Through the ethical system, all employers and employees are aware of their responsibilities and rights in an organization. Consumers and the general public can as well use the code to sue an organization if they’re wrongfully attended to, or demand a firm to perform activities in a certain way. Through the code, activists can activate for the rights of children by demanding firms to refrain from employing underage children. Thus, a firm is supposed to prioritize the ethical system but not just a moral or legal obligation since it is the foundation through which its activities should be based on (Stephen, 2015).

1. Managerial code of ethics: Managerial ethics affect the productivity of employees and their perception towards the organization. Employees follow the steps of their leaders thus when managers have high ethical standards, they pass the same to the workers leading to a shared vision. Moreover, leaders are supposed to enact ethics that stipulate the expected behavior of the employees and disciplinary actions liable if they are not followed. Since leaders mirror an organization to the internal and external stakeholders, the exercise of high ethical standards, including loyalty, honesty, and integrity goes a long way in ensuring that a firm gets a reputation that translates to profits.
2. The employee code of ethics: In every firm, there are set standards that govern the activities of employees. For instance, customer care clerks are supposed to be friendly and listen to the needs of clients in a warm way and accountants should follow International Accounting Standards while preparing financial statements. All employees should prioritize the goals of the firm and perform their duties honestly. Otherwise, the organization has the right of punishing the employees through suspension, retrenchment or filing for a case. Ethical standards ensure that employees produce quality goods and services and are productive leading to the growth of a firm.

iii.    The supplier system of ethics: To ensure consistency in production and quality, a firm designs a code of ethics that suppliers follow while carrying out their operations. The suppliers must align their activities to the expectations of the firm if they seek a long-term and beneficial relationship with the firm. The ethical system ensures that suppliers provide quality materials, are on time, and represent the company in a reputable manner leading.

Effects of government regulations on businesses

Regulations are enacted to control the activities of businesses and protect consumers from exploitation, control profits, and protect the environment (Mitchelle, 2012). Taxes and tariffs are the most common types of policies that affect every organization. After an accounting period, firms publicize their profits and the government through the established bodies takes a percentage of their profits. Thus, taxes affect a number of profits that a business earns at the end of a financial period. The high the gross profits, the more the tax. Trade regulators enact policies that affect the interest rates charged by financial institutions and also the globalization procedures. For instance, some governments regulate the type and number of imports into a country which affects the activities of the business. To protect domestic industries, international firms gave strict policies in the form of taxes or type of operation that they can carry out or the production capacity. All these policies affect the productivity and profitability of a firm negatively or positively. Other common regulations are in advertising, health and safety, labor and employment, and environmental.

1. Policies on product promotion: The Federal Trade Commission was put in place to control the affairs of businesses with regards to advertisements. Through the commission, consumers are protected from sub-standard products and services. The commission examines products before businesses launch them in the market and they also have to pass through Standard Bureaus to ensure that they conform to the expected quality standards. Advertisements must be honest and non-exploitive, firms should be in a position to back-up the adverts, and they must not be unfair to competitors. Moreover, each product must have information relating to its size, expiry date, and content. Failure to adhere to the set standards can lead to disciplinary actions taken against a firm.
2. Labor relations and recruitment: Regulators set laws that affect benefits, minimum salaries, working conditions, health and safety, confidentiality, and recruitment opportunities. Through the Fair Labor Standards Act, organizations are mandated on how they are to treat and compensate workers while the Department of Labor mediates between employers and employees to ensure that the demands of both parties are considered. Other policies are on insurance, employee compensation in case of damages, and Social Security.

iii.    Health and safety policies: Health Act provides for the safety standards that firms must follow. Inspection for compliance is usually done by regulators who insist that products must be processed in a clean environment and the employees must be protected from injuries. Moreover, the Act stipulates that employers should take insurance cover that compensates employees in case of injuries while in the line of duty.

1. Confidentiality: During recruitment exercises, companies collect private information such as personal numbers, address, and health situation. Employers are thus supposed to keep such information confidential unless a required during a court proceeding. If the information is used against an employee or used without the consent of an individual, the injured has a right to sue a firm.
2. Corporate social responsibility and environment: Environmental agencies exist to train and educate firms on correct disposal and environment management techniques. With the continued increase in population, much of the land is taken up by industries and humans thus leading to environmental pollution. To ensure that the environment is safe from air, water, and land pollution, the agencies set up by the government provide firms with resources that can be used to dispose of waste. Firms are supposed to be socially responsible such that they establish infrastructures in accordance to set environmental laws and also get involved in community activities such as clearing and planting trees to protect the environment.

How regulations and ethical systems protect the public from unfair business practices

Constitutional, case and statutory laws are enacted to provide guidelines through which people and businesses are to conduct themselves. Since there are different industries with diverse product portfolios, the government comes in to ensure that order is maintained and that consumers are not exploited. According to Berger (2013), the constitution acts as the system through which other laws are established and provide for the way cases are solved through the different jurisdiction bodies. If any member of the public or an organization is wronged, they have a constitutional right to sue the perpetrator.

An ethical system protects the public by making firms liable for damages that they experience as a result of their malpractices. Since businesses are mandated to consider the rights of workers and the community while conducting their operations, the code of ethics establishes that it’s their responsibility to correct any problem that arises as a result of their actions (Chevron, 2016). For instance, if a manufacturing firm disposes of waste that leads to land infertility or diseases, the responsible firm should take measures to eliminate pollution and ensure that the affected get medical treatment. Moreover, agencies responsible for environmental conservation can sue the firm on behalf of the public and advocate disciplinary actions against the firm. With such agencies and measures in place, firms usually take caution while carrying out their operations to avoid damaging their reputation.

Policies on advertising and product promotions protect the public from toxic and unfair prices. Before products are advertised, firms must pass them through the agencies as well as quality regulators to ensure that they are of the correct standards and quantity. By having correct labels, descriptions of content and quantity, consumers can make unbiased judgments and buy products that fit their specific needs. Prices set are also fair and in accordance with the current market conditions such that unfair competition is avoided giving the public the power to choose from different substitutes. If such policy did not exist, the monopoly would lead to the provision of over-priced products that are of poor quantity.  By enacting rules that preserve the privacy of employees and other people that send their details seeking for employment, regulators protect the public from the wrongful handling of their personal information. Hence, people give out personal information without the fear of defamation or being exploited, and if it happens, there are instituted channels through which they can air their grievances and compensated as required.

Through case and statutory laws, consumers are able to file for damages and get a compensated if the firms are found culpable. For instance, if a firm sells products that do not conform to set standards or an employee is injured in the course of duty and firms do not compensate, they have a right to take the matter to a court of law. Thus, the government through statutory bodies acts as an intermediary between aggrieved parties and the firms. For instance, employees can sue a firm if they are mistreated or unfairly compensated for work done. In addition to the statutory bodies, labor agencies also mediate by setting minimum wage rates thus protecting the employees from exploitation by firms.

Moreover, trade regulations assist in protecting less privileged nations from exploitation by foreign firms through the heavy tax, entry barriers, and heavy fines in case of wrongful practices. Otherwise, developing nations would be run by monopolies which would misuse their resources and charge high prices for their products with no or little return to the citizens of the country.  Also, ethical systems ensure that foreign firms consider the residents of the regions in employment opportunities as some tend to only employ workers from their respective countries. Hence, the members of the community get employment opportunities and a chance to grow by being part of the industries.

Through the constitution, the government sets out laws and regulations that govern the way firms carry out their operations, treat their employees and other stakeholders, and the society at large. If there were no laws and regulations, the public would be exploited by firms through wrongful product descriptions and pricing, confidential information would be wrongfully handled, and employees unfairly compensated. Thus, businesses are supposed to familiarize with the established local and international regulations so that they carry out their activities in an ethical way. Failure to follow the set out standards can lead the regulatory bodies to an organization which is damaging to its reputations.

All firms have their set of ethical principles that are specific to leaders, employees, suppliers, and the overall firm (Chevron, 2016). Leaders are supposed to be of integrity and carry out their activities honestly since they represent the organization, and they are the role models for employees. If the leaders are ethical, employees become motivated to work for the firm leading to high productivity and profits. On the other hand, employees should also be ethical in how they carry out their duties and how they treat customers to ensure the reputation of the firm is upheld. Supplier code of ethics also stipulates the ethical concerns with respect to how they treat their workers and the neighboring community, taking care of the environment, and safety conditions. Since firms are made responsible for their actions through the established ethical systems and statutory laws and regulations, the public and other regulatory agencies have the right to file complaints and sue firms if they are unfairly treated. Thus, following set rules and ethical systems should be prioritized by all firms to ensure that they survive in the market.

Effects of Ethics Laws and Regulations on Organizations References

Janie, B. (2013). Ethics in organizations and leadership, 3 (34), Jones and Barlett. Retrieved from http://www.jblearning.com/samples/0763749761/EthicalLeaderhip.pdf

Stephen, B. (2015). The role of ethics in 21st-century organizations, 11. Retrieved from http://www.regent.edu/acad/global/publications/lao/issue_11/brimmer.htm

Luanne, K. (2013). The importance of ethics in organizations. Retrieved from http://smallbusiness.chron.com/importance-ethics-organizations-20925.html

Mitchell, H. (2012). Areas of business regulation in business. Retrieved from http://smallbusiness.chron.com/five-areas-government-regulation-business-701.html

Berger, H. (2013). Sources of law. Retrieved from http://www.businesslawbasics.com/chapter-5-sources-law

Chevron (2016). Business conduct and ethics code, 3(30). Retrieved from https://www.chevron.com/~/media/chevron/shared/documents/chevronbusinessconductethicscode

Gia, W. (2012). Effects of business regulations, 2(10), Doing Business. Retrieved from http://www.doingbusiness.org/reports/global-reports/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB14-Chapters/DB14-Research-on-the-effects-of-business-regulations.pdf