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EBM3113

INTRODUCTION

The body of principles recognized and applied by the State in the administration of Justice. In other words, law consists of the rules recognized and acted on by courts of justice. (By Sir John Salmond Jurisprudence)

Law as a command set by a superior being (the state) to an inferior being (individual) and enforced by sanctions (punishments). (By John Austin The Province of Jurisprudence Determined)

The law has evolved slowly, and it will continue to change. It results from a continuous effort to balance, through a workable set of rules, the individual and group rights of a society. Different societies have different forms of laws and orders. Law plays an important part in the creation and maintenance of social order. The maintenance of social order is the way in which it deals with disorder or conflict. Law is a formal mechanism of social control.

Maintenance of social, political and economic stabilities Dispute resolution Protection of property Preservation of the State

Sanctions are the means by which the law enforces the decisions of the courts. Without sanctions, laws would be ineffectual and unenforceable.

Malaysia, which consists of Peninsular Malaysia, Sabah and Sarawak, is one political unit but it is not governed by the same set of laws. Within Malaysia, there are thirteen states. Each state has a government and has rules which lay down who shall govern and how. Malaysia has a written constitution and it is called the Federal Constitution. The Federal Constitution declares itself to be the supreme law of federation.

Justice basically means that which is right or fair. Justice as that which is not a product of intellect but of spirit. The nearest we can go to defining justice is to say that it is what right-mined members of the community those who have the right spirit within them believe to be fair. Lord Denning

The underlying principle of the rule of law is that every person and organization, including the government, is subject to the same laws. For as in absolute governments the king is law, so in free countries the law ought to be king; and there ought to be no other.
Thomas Paine (Common Sense)

In short, in examining the concept, one should consider: whether judges are entitled to make law; or whether that is the exclusive prerogative of parliament. Successful economic systems based on three essential factors: 1. Systems of formal rules that reward people for their efforts; that is, that allow people to retain much of the benefit of their creativity, labor and skill [i.e. legislation]. 2. Norms of behavior that support the rules, and support compliance with the formal rules. 3. Effective enforcement mechanisms for the rules [i.e. courts and police and legal representation for citizens].

The concept rule of law is generally associated with several other concepts, such as: Nullum crimen, nulla poena sine praevia lege poenali This means that there should be no ex post facto laws. Presumption of innocence Legal equity Habeas corpus ad subjiciendum You must have the body to be subjected (to examination).

Ethics - A branch of Philosophy dealing with values that relate to the nature of human conduct and values associated with that conduct. Business - Conduct and values of business operation are complex and individuals are working together to maximize profit. Business ethics balancing the goal of profits with values of individuals and society. It seeks to understand the moral issues that arise from business practices, institutions, and decision making and their relationship to generalized human values.

Employees

society

Customers

Business

Competitors

owners

Employment relationship
Safety and compensation of workers, their civil rights (privacy, equal treatment, freedom from sexual harassment), legitimacy of whistleblowing

Customers
Product safety, customer protection

Owners
Corporate governance, shareholder voting, & managements duties to shareholders

Competitors
Efforts to promote fair competition over the temptation of collusive conduct

Society
Pollution of the physical environment, commitment to the communitys economic and social infrastructure, and the depletion of natural resources

Law
You must drive on the right side of the road.

Thou shall not kill

Morals
You should not silently stand by and watch a blind man walk off a cliff.

Ethics relate to morals, the treatment of moral questions and acting in a morally correct and honorable way. An ethical judgment is one which can be seen to apply to everyone in similar circumstances and not only to a particular individual. Ethical opinions must be supported by reasons and should not be based on mere personal preferences.

Custom, Social Values

Legislation, English Common Law

Ethics

Consequentialism and Utilitarianism Deontological Ethics Virtue Ethics Relativism

Consequentialism means concerned with the consequences. It is approach to morals which evaluates behavior according to the consequences of that behavior. A form of consequentialism, known as utilitarianism, was developed by the sixteenth century philosopher, Jeremy Bentham. He argued that ethically right behavior was to perform the action which resulted in a greater number of utilities than could be achieved by any other action. The action which produced a greater amount of general good than general detriment was the action which should be performed.

The sixteenth century German philosopher, Immanuel Kant was a proponent of deontological ethics. Kant argued that morality required one to do ones duty regardless of the consequences. William Ross, a twentieth century philosopher, updated Kants concept of duties and set out some duties of his own which apply to both business and personal situations. These duties are: duties which result from an act for which the actor is responsible; duties of gratitude which arise from the actions of others; duties of justice; duties of beneficence; duties of self-improvement; and duties not to injure others.

Virtues are personal qualities that provide the basis for an individual to lead a good and noble life. It rejects the idea of dealing with moral problems by applying the correct maxim. Instead, it focuses on a persons response to a moral problem as that of a moral person.

Relativism suggests that moral values are relative to a particular environment. It argues that moral values can differ from one culture to another, from one society to another, from one time to another, and even from one individual to another.

Insider trading Giving and receiving gifts Conflict between commercial interests and social utility Conflict of interest Unconscionable contracts Misuse of limited liability of a company Tax evasion and tax havens

Institutionalized wrongdoing Organizational integrity Corporate codes of conduct

Ethical investing is investment in companies that operate ethically, provide social benefits and are sensitive to the environment. Positive factors Environmental protection Pollution control Conservation of resources Health and safety of the workplace and the community Ethical employment policies

Negative Factors Armaments Terrorism Money laundering Oppressive regimes Environmentally damaging practices Unethical employment practices Animal exploitation Tobacco or alcohol Gambling Pornography and other vices

Mr. A is an owner of a manufacturing company. He has just received a report suggesting that a chemical his company uses in its manufacturing process is very dangerous. He has not read the report, but he generally aware of its contents. He believe that the chemical can be replaced fairly easily, but that if word gets out, panic may set in among employees and community members. A reporter asks him if he have seen the report, and he say no. Is his behavior right or wrong? Explain.

Consequentialism and Utilitarianism The answer of Mr. A is right. He really did not see the report. However, he knew the issue. According to the Consequentialism theory, the answer of Mr. A did not affect anybody and his answer is ethical. Deontological Ethics The usage of poisonous chemical for a long time will affect the health of employees and the community members. Even if Mr. A stop using the chemical in the manufacturing operations, the health will be affected before his aware of it. The reason of Mr. As answer is that he want to deny the aware of the issue and restrain the responsibilities on it. He only think his own benefits and ignore the others. According to the Deontological ethics theory, his action is wrong.

Virtue Ethics The answer of Mr. A shows his low moral quality. It can be said that he knows the real intention of the reporters question. He should not only say his aware of the issue and also announce the news to the public. According to the Virtue ethics theory, his action is unethical.

Relativism Mr. A believe that his answer will not affect anybody. He do not need to take responsibilities on the usage of dangerous chemical in the past because he is also the one who did not realize the issue. The reporter believe that if Mr. A knows the issue, he should tell the truth. At least he should admit his awareness. In the view of reporter, Mr. As action is wrong. The employees and society believe that they have the rights to know the truth. This is the universal human rights. Moreover, the issue seriously concerned with their health. They want to know the truth and the strategic plan to solve the issue. In the view of employees and society, Mr. As action is definitely wrong.

Omega, Inc., a publicly held corporation, has assets of $100 million and annual earnings in the range of $ 13 to 15 million. Omega owns three aluminum plants, which are profitable, and one plastics plant, which is losing $ 4 million a year. The plastics plant shows no sign of ever becoming profitable because of its very high operating costs, and there is no evidence that the plant and the underlying real estate will increase in value. Omega decides to sell the plastics plant. The only bidder for the plant is Gold, who intends to use the plant for a new purpose, to introduce automation, and to replace all current employees. Would it be ethical for Omega to turn down Golds bid and keep the plastics plant operating indefinitely, for the purpose of preserving the employees jobs? Explain.

Consequentialism and Utilitarianism If Omega, Inc. sold the plant to Gold, the current employees who work at the plant will loss their jobs. If Omega, Inc. continued the operations of the plant, the annual loss amount which is one third of the incomes is too high and it is largely affected the other business of the corporation. It can be said that the losing money of the plant will be impacted all employees jobs in the future. The continuing operations of the plant is high risk and the plant should be sold to Gold.

Deontological Ethics If Omega, Inc. sold the plant, the employees will loss their jobs and the corporation ignores the responsibilities on its employees. If the corporation continued the operations, it will loss capital and the corporation ignores the duties on its shareholders (owners). Selling the plant is unfair for employees and continuing the operations is unfair for shareholders. Therefore, the Deontological ethics theory cannot give a good decision in this case.

Virtue Ethics

Moral quality of the corporation contradict between the employees benefits and the shareholders benefits. This theory cannot explain the current case.

Relativism

Continuing the operations of plant will definitely impact the economy of the corporation and the wealth of the shareholders in the near future. The decision to keep the plant operations is unwise decision in the business view. In the ethic view, the corporation neglects the responsibilities on the employees of the plant. However, the corporation can announce the news of selling the plant and the reasons of decision as well as the consequences of it. In addition, the firm can make a strategic plan to recruit the employees at the other plants.