ETHICS- It is a practice of deciding what is right or wrong in a reasoned, impartial manner. To involve in ethics, a decision must affect you or others in a significant way. Business ethics are ethical principles used in making business decisions. Case Example: Alaska enacted a statue known as “Alaska Hire.” It required employers in the state to hire qualified Alaskan residents in preference to non-residents. Hicklin, a nonresident, sued Orbeck, the state official charged with enforcing the statue. After the Supreme Court of Alaska found the statue constitutional, Hicklin appealed to the U.S. Supreme Court, which found the statue to be in conflict with the U.S. Constitution.( Hicklin v. Orbeck, 437 U.S. 518) Pros:
Consumers learn to trust ethical brands and remain loyal to them, even during difficult periods. Society benefits from business ethics because ethical companies recognize their social responsibilities. It helps avoid regular legal problems.
Business ethics reduce a company's freedom to maximize its profit. Ethics are different in the various countries and may make international trade slow. Creates divisions among various opinions.
Who Benefits: Workers and consumers
CONSUMER PROTECTION- It is the protection of consumers in the marketplace through their own actions as well as the actions of the government to protect them. Consumers are always to be made aware of anything concerning the product. Case Example: Mahaney purchased a used car from Perry Auto Exchange. Mahaney was told the car was in “perfect, A-1, and first class condition.” A written statement given to Mahaney at time of the sale described the car as being in “good operating condition.” Mahaney had no opportunity to investigate the truth of these statements. Later, it was determined that the car had a problem in the differential and had no brakes at the time of sale. Mahaney sued for recession. (Mahaney v. Perry Auto Exchange, 85 N.E. 2d 558, Ohio). Pros: