Agreements & Disagreements in Arguments in relation to Ethics & Law Essay Example
These three authors would agree that legal rules can never account for the description and possibly prevent unethical actions for which business actors make efforts in their immediate pursuit of higher profits. It takes the interpretation of business leaders for legal actions to be effective. Taking a look at Enron’s case, it can be said that the management and CFO in specific while could be seen working within the borders of legal frameworks still engaged in unethical application of the mark-to-market accounting policy for the purpose of creating personal wealth at the expense of the shareholders. In fact, despite the fact that Enron was allowed to avail its own estimate as to the value of those contracts; the legal ambiguity allowed the management to formulate and implement own determination in relation to the valuation of assets (Fisch, 2006). Certainly, it was thus upon the ethicality of the management to establish the viability of legal rule that focused on protecting the investors that were currently relying on financial statements to be true. Kurbjeweit (2011) further notes that the law does not possibly deter harms from happening since it only assigns costs that relates to them. It thus goes without saying that the corporations would continue to engage in prohibitive behaviors knowing very well that they would only be required to pay fines for certain breach of contracts or even expectations. They would understand that that they are presently engaging in prohibited behaviours but still do since they consider the risk worth-taking. In fact, it can be safely argued that the true and effective measurement of corporate social responsibility and the immediate role of a business conducting its operations in a recommended manner within the society is not dependent on the set of rules and regulations or rather laws set in place. It is however, dependent on its underlying willingness as well as the constant internalisation of its immediate externalities.
The three authors could agree on the assumption that law can only be used to compensate harms that are considered to be fungible in nature. This means that the law can only be a system that promotes indemnification of losses to injured persons whenever its overall objectives can result to remedies that are deemed sufficient enough on what was lost in the first place. For instance, in the event that the harm is focused on monetary losses, the law provides a framework for sufficient solutions given that money is indeed fungible in nature. However, in the event that the loss is non-fungible, then it goes without saying that law cannot provide any form of compensation. A good example can be seen with BP spill-over case where massive pollution was caused (Greeneimier, 2010). While it might be true that the corporation was required to pay the pollution in monetary damages; the loss could not be accounted for since lots of aquatic life was lost and that even during the present day, the area cannot provide sufficient grounds for fishing at it provided prior to the pollution effect.
On the contrary though, the three authors fail to agree that even though corporations are not obligated to exercise their operations in an ethical manner and within the legal frameworks already in place, there are some factors that could compel them to act ethically. This basically means that despite the fact business actors are required to willingly act ethically; they can be forced to do so in some cases. According to Kirby and Meyer(2010), these factors could extend to the feedback received from influential stakeholders like customers; the scale of the externality like BP pollution that resulted to the loss of a substantial level of aquatic life; sensibilities, which is a direct result of instantaneous communications that has spill-over to global connectedness and responsibility. For instance, the unfortunate occurrence of Enron case resulted to public outcry amongst the many American stakeholders especially since lots of money was lost. As a result of this, the SEC was compelled to come up with even stricter regulations on how large corporations would adopt and apply definite accounting policies in their preparation of instruments of finance like the balance sheet and statement of earnings. This was in an aim to ensure that potential and existing investors would be protected from such accounting fraud in the future period.
Fisch, JE. (2006). ‘The Bad Man goes to Washington: The Effect of Political Influence on Corporate Duty’ Fordham Law Rev, 75(3), 1593-1614.
Greeneimier, L. (2010). ‘Gulf Spillover: Will BP’s Deep-water Disaster Change the Oil Industry, Scientific American. Accessed from https://www.scientificamerican.com/article/molotch-deepwater-environmental-sociology/
Kurbjeweit, B.H. (2011). The Relationship of Ethics and Law in Governing the Game of Business’. Journal of Business Ethics Education, 8, 55-62
Kirby, J & Meyer. C. (2010). The Big Idea: Leadership in the Age of Transparency. Harvard Business Review.
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