Legal and Ethical Issues in Global Business
Before establishing any kind of business around the world many things have to be taken into consideration. Important decisions have to be made before a particular business venture could operate in a certain country. Some of the factors that have to be given due attention are the legal and ethical issues that have to be study and analyze before anyone may it be someone well adept with business matters or not enter into a business venture especially if it deals with global business.
This paper aims to discuss the legal and ethical issues that have to be properly addressed before entering into global business. In relation to this, the definition of legal issues as well as ethical issues will be included in this paper. Moreover, the important elements of these issues will also be given proper consideration. Definition of Legal Issues Almost all business organizations are subjected under the laws of a particular country, which they operate in. Business personnel should not only be profit-oriented because they also have to be aware of their responsibilities to their consumers.
In doing so, they have to abide by the laws of the government in which they are operating and they also have to uphold the country’s various provisions and guidelines in their businesses (Cheeseman, 2007). Being the case, issues or concerns that have to do with the laws of a particular country or are connected with it are pertain to as legal issues. Definition of Ethical Issues Business ethics is defined as “the study of standards which businesses should observe in their dealings, over and above compliance with the law” (London South East, n. d. ).
Concerns that are related with business ethics are also referred to as Ethical Issues. This aforementioned ethical standard tends to vary from one country to another. This is due to the fact that government laws regarding business contracts, employee rights, and other related issues have a wide range, thus, these laws are not similar in every country. Another reason as to why ethical standards are unique per country is because it is dependent upon the culture and tradition of a particular place (Chesseman, 2007). Importance of Legal and Ethical Issues
Analyzing legal and ethical issues are important in doing a business. When businessmen/women are going to conduct operations in a foreign country, they should be aware of the proper business conduct that is acceptable in that particular country. There are also many issues that have to be consider like changes in laws, as well as the impact of the business itself to the environment of the country. In doing so, transactions would be done easily and hassle-free and more importantly, good working relationship would be established among business associates (Cheeseman, 2007).
The advancement of information technology is also another reason why legal and ethical issues should properly accounted for. Due to technological development, the way people do things have also changed and one of which is how people do business. The existence of the information technology in the form of the internet and software applications has given the business industry with an alternate means to conduct their operations as compared to the traditional one.
Nevertheless, this technological advancement also has its disadvantages, which includes susceptibility to threats like corrupt practices through the use of the Internet (Chesseman, 2007). Due to these, fully understanding the different issues involve in business would also be beneficial especially in dealing with the changes that occurring in this field. Legal Issues and Code of Ethics In order to fully understand legal and ethical issues, the succeeding paragraphs would give examples of some of the guidelines that have to be properly consider before establishing a business that is international in nature.
The business sector has their own code of business ethics that they adhere to. Lars G. Harrison’s code of business ethics gives a good starting point in businesses can establish their own ethical contract regarding management personnel. It is a document that provides the codes that management personnel should abide by. This aid in universalizing the expected behavior of management personnel as well as recognizing the humanity of all individuals that are directly or indirectly related to the business sector.
In relation to this, this document addresses the needs of almost all businesses that operate in any level. Nevertheless, applying this document to a larger and globally competitive business is possible without substantially modifying or altering the main points of the document. Moreover, this document would also aid companies to have legal position in terms of ethical behavior that would give a particular company the right to terminate an employee who breached this said contract (Harrison, 1996).
One of the most prevalent issues in conducting business in different countries is the problem of discrimination. The government of the United States of America created the Federal Equal Employment Opportunity (EEO) laws in order to address this issue. These laws stipulate that discrimination against employees is prohibited. Different kinds of discrimination based on race, color, religion, sex as well as nationality is considered as unlawful. Furthermore, these laws also tackle equal pay, age discrimination as well as discrimination against individuals with disabilities.
These laws give due importance to the humanity of the employees, which it aims to protect by guiding the decision-making of these employees. As such, these laws served as a guideline that both the company and the employees must adhere to in order to establish good working relationship among them (United States Equal Employment Opportunity Commission, 2004). International business is also governed by laws in order to facilitate the interaction of various countries and multinational companies.
A good example of these laws is the Anti-Bribery and Books and Records Provisions of the Foreign Corrupt Practices Act (FCPA). FCPA is series of statutes that deals with all acts of fraud that may happen in the course of international business transactions. The statutes stipulate the responsibilities of businesses to report and do the necessary prevention that might jeopardize their business during the transaction itself. One of the exemplary features of this document is the individual protection that it gives to those who report corrupt practices.
In connection to this, FCPA emphasize the importance of ethical business practices in terms of its application in treating people as individuals. Moreover, it is also pressure those who would commit unethical behavior to act accordingly (United States Department of Justice, 2004). Conclusion The discussions above show that different legal and ethical issues have to be properly given attention to as it play a vital role in the operation of international businesses. Some of these issues are exemplified by company and employee misconduct, discrimination and fraud.
In relation to these, various laws served as guidelines in order for those people who are related in the business sector to act accordingly and also to address various issues like the abovementioned concerns. Some of examples of these laws are Harrison’s code of business ethics, the Anti-Bribery and Books & Records Provisions of the Foreign Corrupt Practices Act and the Federal Equal Employment Opportunity (EEO) Laws. Being the case, people who are planning to engage in international business transactions have to consider many things and these include legal and ethical matters.
References Cheeseman, H. R. (2007). Chapter 7: Ethics and Social Responsibility of Business. Retrieved August 6, 2008, from University of Phoenix : https://ecampus. phoenix. edu/content/eBookLibrary/content/eReader. h Harrison, L. G. (1996). Harrison on Leadership: Code of Business Ethics. Retrieved August 6, 2008, from http://www. altika. com/leadership/ethics. htm. London South East. (n. d. ). Business Ethics Definition. Retrieved August 6, 2008, from http://www. lse. co. uk/financeglossary.
asp? searchTerm=business&iArticleID=2420&definition=business_ethics. United States Department of Justice. (2004). Anti-Bribery and Books & Records Provisions of the Foreign Corrupt Practices Act. Retrieved August 6, 2008, from http://www. usdoj. gov/criminal/fraud/docs/statue. html. United States Equal Employment Opportunity Commission. (2004). Federal Equal Employment Opportunity (EEO) Laws: Overview. Retrieved August 6, 2008, from http://www. eeoc. gov/abouteeo/overview_laws. html.
