Businesses serve society and, in doing so, interact with other persons. Thus they are also a part of society and their interactive behaviour, just like that of humans, is governed by entitlements and responsibilities. When these entitlements and responsibilities are recognised and understood by persons on their own and given effect to, through voluntary behaviour, we say the persons are guided by ethics. However, there are times when persons may not be guided by ethics, or where, ethics notwithstanding, rights and duties are to be determined. For such times, when entitlements and responsibilities are to be laid down and enforced by authority, we have laws.
So, whether for individual humans, or for societal ‘persons’ in the larger sense, ethics and laws are actually similar in objective - they seek to bring about that proper application of rights and duties of persons that would enable society to function smoothly.
This holds just as true in the world of business which, as discussed earlier, is part of society. Therefore, when we consider ‘Ethics versus Law’ in the area of business we cannot mean that one opposes the other but that, depending on circumstances and situations, one is effective where the other is not (or that one is more effective than the other.)
The application of ethics in business would mean that the parties in a business relationship (whether the business itself, or customers, associates, authorities, employees or owners - anyone who could be called stakeholders) recognise and do what needs to be done to see that others get their entitlements, that their rights are not infringed, and that no harm or loss comes to them. This is what we have in mind when we speak of...