Law essay on: Comparative Business Ethics

1. Introduction

Ethics can be explained as the moral values that help to decide what is wrong and right. Business Ethics guides organizations how they should deal or behave with the world. Challenges have been faced by organizations to expand the business in an ethical manner (Markkula Center for Applied Ethics    2010). It is related with the terms like Public Image, Investment, and Partnerships. There is an interesting case of Martha Stewart which can be compared with the Business ethics. It is one of the well known American Scandals. Martha Stewart is a well know name which can be recognized by every American. Martha Stewart is a Lady who has been in Business world since 1967.It was an issue related to insider trading. She owned the shares of a company called ImClone. In 2001 Imclone was sent a notice regarding new proposal of a drug in which company had invested a lot for research and developmental activities. The notice was regarding the FDA (Food & Drug Corporation) which did not approve the new proposal. The CEO of the company Sam Waskal wanted to avoid financial losses. He called the share broker who also used to serve Martha Stewart to dump shares of the company (Liberty University     2009). The broker suggested Martha Stewart to sell the 4000 shares held by her. In the mean time Securities & Exchange Commission (SEC) noticed the strange coincidence of selling the shares. SEC wanted to investigate Ms. Martha whether she was guilty or not. Illegal Insider Trading is an activity where one buys and sells the securities breaking the law. Ms. Martha conspired along with the broker in the insider trading. It can be understood that she was knowingly not involved in the insider trading but during the confession time she tried to protect herself and tried to cheat the Legal Authorities. This case represents that knowingly people sometime involve in unethical Business activities.

2. FACTS

Organizations should try to maintain ethics in their dealings. There are certain facts that every organization needs to take care while running their business. The organization should maintain trust with everyone. For improvement in the business the Leaders of an organization should think with an open mind. The goals of an organization should be achieved honestly. The Documents of Business should be transparent enough to the stakeholders. There should be control of Legal Authorities to abide the business by Law (Small Business Information    2012). As per this case the facts drawn are listed below.

1. There was information that court has declared imprisonment and hefty fines which was four times greater than the losses she was going to face.
2. Later on she was found guilty with different charges.
3. Ms. Martha came under tension and problems which she was going to face in her own company.
4. The confidence Level of Living Omnimedia fell down due to unethical behavior of Ms. Martha Stewart.
5. There could be negative impact upon Living Omnimedia because when Imclone sold its shares seeing the losses similarly it might happen with it.
6. If the guilt was confessed earlier the issue might have been avoided. She was too arrogant in her behavior to admit the guilt.

3. THEORY

As per the ethical Business Theory is concerned it can be related with Deontological Theories of Ethics. This theory although explains that result of an act should be fruitful, some acts are always wrong as per morality.

1. Actions of an individual are judged by seeing ethical and unethical aspects.
2. As per this case Ms. Martha Stewart wanted to prevent from the share losses but she has to suffer with the loss of their reputation in the market.
3. The investors did not have confidence on her.
4. The management of an organization is always responsible to the investors. Decisions are made by the Legal authorities to grant permission for any law based changes for any organization (GODAR    2005).

4. RESEARCH

As per this case the investors has no confidence in Ms. Martha because she only thought of making profits without knowing the consequences for future of the company.

1. She asked the broker to sell the shares. Moreover she was not ready to accept that she had done a mistake.
2. If she had maintained loyalty and Honesty in her dealing she could have increased the sales, attract investment, create transparency and enhance the motivation level.
3. An ethical Leader always depicts a good image of an organization.
4. Doing business is not a big thing managing it with ethical practices is a challenging task.
5. Any unethical business is responsible to bring certain changes in the market, community, within the workforce of an organization and environment.
6. Ethical Behavior also helps to build the customer loyalty towards any organization. Any wrong and illegal activity will create the bad culture for everyone in an organization.
7. To avoid fines sometime companies avoid the ethical norms and go out of the way which creates problem for everyone in the organization.
8. h.    The examples of unethical business practices are tax evasion, wildlife trading, software piracy, Narcotics, Human Trafficking, Smuggling and Gambling. False Documents must not be creates to show the profits and fool the stakeholders.

5. Conclusion

Martha Stewart could have admitted her mistake in the beginning when Legal authorities had investigated her. If she had accepted her mistake she could have been saved from all the charges. Certain check point like notification about the shareholders shares should be there to avoid such critical situations. Arrogant Behavior never works in Business so Martha Stewart should have avoided it (Miller K.W   2012). Any unethical work of an employee, manager, CEO is responsible for the entire business world. Legal officers should be appointed to have check upon fraud and corruption based activities. Maintaining ethics has been an important topic for all the organizations. The objective of Business is to make profit but it should never cross the boundaries of the Law. Competition should be taken as a challenge for the growing business. Companies should communicate the things clearly to the public to remove ambiguity. Everyone should be treated with respect in business (Stephen Cohen   2007). Right Decisions ensure good ethics which corresponds to Good Business. Ethical Dilemmas faced by the employees at work place should be removed by giving them proper training and development. If an employee tries to cheat the organization he/she can never be ethical to anyone (Hearst Communication Inc   2012). The Lehman Brother Case in 2008 was an unethical Business Practice. The Sub Prime Borrowers crisis was caused because company gave credit without seeing the credibility of an individual. Later on as a result it affected the world economy because financial investors of different countries were connected with Lehman Brothers. Manpower should not be exploited in an organization. People get inspiration from the ethical behavior of others. Business should be treated as a fair game where ethical business practice will ensure success for the longer period of time (Carnegie Mellon University    2003). Investing finance for expanding business does not state that go beyond the law to create illegal activities. Ranking Profits before the customers always helps to achieve the short term objectives. Ethical business practices can help to earn marketing edge over others. There is improvement in the performance level of the employees and the organization. Any Scandal will create a bad image in the market for an organization and its employees. The Legal Policies should be strictly followed by the organization as a whole (Aveta Solutions   LLC    2012).It creates a solid foundation for the ethical culture. It supports right things to be done by the organization. As per 2012 survey most ethical companies are CISCO, Ford, Timberland and etc (Ethisphere 2012).People should not run business to earn profits by any cost. The motive of running business should be treating everything in a fair manner and to achieve long term goals of the organization. Due to Globalization every company tries to expand in shorter span of time and earn maximum profits. Those organizations remain stable who work with ethical standards. Ethical behavior also explains how to deal with dignity among the stakeholders. Ethics of an organization is measured by the behavior of the employees and its outcomes. It can also be known and checked through the financial records of an organization. There for Business ethics plays an important role and it should be managed by everyone at work place.

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