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Business Ethics and Corporate Social Responsibility

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Business Ethics and Corporate Social Responsibility
April Duhon
DeVry University

The United States has several laws that are intended to further fair, balanced, and competitive business practices. Do you think that such laws are effective? If so, why? If not, why not? The effectiveness of the laws that the United States have that are intended to further fair, balanced, and competitive business practices depends on how ethical a business is. Below I will explain why I do not believe these laws are effective due to the way ethical businesses follow the law and unethical businesses do not follow the law. In response to the growth of monopolies that threatened to destroy competition in the marketplace Congress passed the Sherman Antitrust Act in 1890. According to the Encyclopedia of White-Collar & Corporate Crime, “The Sherman Act was officially enacted because companies in various industry groups were attempting to eliminate their competition in the marketplace, thus hurting the economy.” (Encyclopedia of White-Collar & Corporate Crime, 2004, p. Introduction) The Sherman Act has two provisions in place to prevent this. The first stops the restraints of trading between states or foreign nations and the second makes monopolies illegal. The penalties for violating the Sherman Act are severe and include prison time of up to 10 years and a $1 million dollar fine for Individuals and $100 million dollar fines for businesses. The Clayton Act was passed by congress in 1914 to clarify and strengthen the Sherman Act. As stated by Britannica, “…the Clayton Act defined as illegal certain business practices that are conducive to the formation of monopolies or that result from them.” (Clayton Antitrust Act, 2014, http://www.britannica.com.proxy.devry.edu/EBchecked/topic/120766/Clayton-Antitrust-Act) Although the Sherman Act has severe consequences, when implemented, it was rarely used against the monopolies it was written to prevent. According to Britannica, “…the Sherman Act was invoked only rarely against industrial monopolies, and then not successfully…” (Sherman Antitrust Act, 2014, http://www.britannica.com/EBchecked/topic/540115/Sherman-Antitrust-Act) So, this leaves me to believe that although these laws are in place to prevent unethical behavior, unethical behavior still exists. Take the case of Firestone on child labor laws in which they won their case, from Reuters.com, “He said the 2nd Circuit ruling concluded incorrectly that because corporations have never been prosecuted for violating customary international law, there was no principle under that law to bind them.” (Firestone wins Liberian child labor case in US, 2013, http://www.reuters.com/article/2011/07/13/ozatp-firestone-childlabor-idAFJOE76C02L20110713) This is an example that, to me, shows that unethical behavior is not punishable simple because it did not take place in the US. If this were to take place in the US, Firestone would have been punished to the fullest extend. They are taking advantage of the way our system works. In conclusion, I believe that for companies that are ethical these laws will be effective, but ethical businesses do not need this law in the first place. These laws are for those who are unethical, but that means that if companies are being unethical then the laws are not effective. It is a “catch 22” and we as a people, I believe, need to come up with a better way to prevent corruption and scandal within companies. These laws will never be effective as long as there is corruption within businesses so it is not laws that we need. Some companies apparently do not have any respect for the law. I believe we need to provide more rewards since people seem to respond more in favor of these. Some companies provide this within their businesses to encourage ethical behavior. According to our book, “Companies with strong ethical practices create cultures that reward good behavior—and don’t intentionally or unintentionally reward bad behavior.” (Bovee, 2013, p.72) This may prove to be more beneficial and will give a business an incentive to want to do good instead of downgraded punishments for doing wrong. References
SALINGER, LAWRENCE M. (2004). Encyclopedia of White-Collar & Corporate Crime, CA: Sage Publications, Inc.
Clayton Antitrust Act, 2014, http://www.britannica.com.proxy.devry.edu/EBchecked/topic/120766/Clayton-Antitrust-Act
Sherman Antitrust Act, 2014, http://www.britannica.com/EBchecked/topic/540115/Sherman-Antitrust-Act
Firestone wins Liberian child labor case in US, 2013, http://www.reuters.com/article/2011/07/13/ozatp-firestone-childlabor-idAFJOE76C02L20110713
Bovee, C. L., Thill, J. V. (2013). Business in Action Upper Saddle River, NJ: Pearson Education, Inc.

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