Type: Business
Pages: 3 | Words: 655
Reading Time: 3 Minutes

In business, the legal environment refers to the appropriate laws and guidelines under which the business functions. Ethical environment, on the other hand, refers to the expected business code of conduct in relation to the society and the whole organization (Simply_coool, 2009). In general, society can advocate for and pass laws that indicate what a business may do and may not do. The ethical laws are to govern the business operation and if broken, sanctions may be applied.

State of Our Legal System in Terms of Ethics

The necessities to organize, order, and form legislation on behavior at personal, business, and management levels have pre-historic origins. Bribes prohibiting in Babylon in the 18th century is an example of such codes. The current society has a common feature in its ethical codes. Issues such as murder, damage to the body, and violation of one’s personal respect and character are legally forbidden since they are considered to be a violation of the law (Simply_coool, 2009).

The systems of law and communal justice are strongly connected with ethics. The legal system in the current society is seen to establish and put into effect specific ethical responsibilities. The system punishes those who deviate from the set standards. However, there are cases where the laws are neutral to issues of ethics and are only referred to during situations of ethical dilemmas.

Businesses today are faced with two ethical concerns that have legal implications. They include micro and macro-management issues. Micro-management ethical issues include conflicts of interests, sexual persecution, and propriety of information among others. Macro-management issues include corporate social responsibility, product liability and employment rights such as the right to privacy among others.

The legal systems have introduced professional codes in the business environment. Professions that necessitate licensing from state authorized boards are compelled to be competent and ensure they follow moral values while operating in the market (Simply_coool, 2009). Codes of ethics have become popular. For example, about 95 percent of Fortune five hundred companies have codes. Such an undertaking is seen in the corporate sector in India too.

The Kind of Ethics Promoted by the Legal System

Laws can be neutral regarding ethical issues, they can promote some ethical issues or be against them. Generally, the legal system promotes good ethics. A number of legal systems in the world have developed guidelines to respond to certain factors in organizations. An organizational culture that enhances good ethical behavior to employees is recommended and attracts legal penalties in case of violations.

Laws have aimed at defining appropriate and inappropriate behavior. Simply_coool (2009) asserts that the legal system is simply an attempt aimed at formalizing accepted codes of behavior. The rules encourage ethical behavior in organizations. This has led to the formulation of legislative Acts formed to ensure proper ethical practices are followed operating the businesses. Such Acts include the Foreign Exchange Regulation Act and Companies Act established to define the ethics in a company in relation to employees. And lastly, of benefit, is the Monopolies and Restrictive Trade Practices Act (Simply_coool, 2009).

The laws also may authorize deeds that are unethical. This means that whatever the law authorizes, it may not be necessarily ethical. The law, for example, accepts breaking of rules and promises that have no legal contracts. This may offer a challenge to any business.

Role of Judges in Promoting Good Legal Ethical Practices

Judges play an important role in promoting good legal ethical practices. The judiciary is independent of any other state organs. Therefore, the decisions made by judges concerning certain cases of ethics are independent of influence. They act to protect the legal ethics of a society. Judges are expected to resolve ethical dilemmas and interpret the law as well as apply it to uphold good ethical practices.


Ethics plays a critical role in business. It is the foundation upon which a society is built. Businesses that lack ethics are bound to fail. Thus there is a necessity of following and adhering to business ethics and legal guidelines.

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