Legal and Ethical Practices in Business


Morality and ethical practices create an avenue for developing sustainable behavior in the world’s economy. Laws govern rules that dictate right and wrong approaches to specific matters within society. Failure to adhere to the regulations results in penalties in fines, jailing, and many more. Laws are essential for the development of a country and the continuity of businesses because they create awareness on how people should conduct themselves by maintaining respect among them. This essay emphasizes the various categories of law, ethical practices, industry and their impacts, and sources of conflict between intellectual property rights and social good. It boosts the understanding of general terms used in law and their importance in changing society. Additionally, the essay will discuss the impacts of deontological theory on an organization’s growth. The report also elaborates on the effects of the global patent regime under (Trade-Related Aspects of Intellectual Property Rights “TRIPS”) on patents, people, and profits related to access to medicines.

Law as an Instrument of Societal Changes

Various laws support the development of the justice system in a country. Law comprises multiple categories based on how they are formed and how they apply to different groups of people. Laws aid in society’s organization and elimination of behaviors that may contribute to some businesses’ destruction such as fraud (Armingeon et al. 2018. p. 546). To understand the types of laws in place, one must acknowledge that legislations are divided into different categories based on their function, the borders they apply to, and many more. For instance, based on the boundaries where laws apply, it is divisible into domestic and international laws. Domestic laws apply within a specific locality, while international laws are treaties between different nations to guide the relationship between the two parties. Legislations are also categorizable into public and private laws based on who makes them and whom they impact. Whereas public laws apply to all citizens, privacy laws are applicable between parties and do not count in the general public’s actions.

Other laws include labor laws, civil laws, administrative laws, community care laws, and common law (Berens and Kemmerling, 2019. p. 31). Common laws are those unwritten laws provided by the court that influence decision-making and their precedent standings influence the recent decisions by the court in cases of common law. Additionally, the jury is obligated to make trials under common law, and the doctrine of supremacy of law is present. On the other hand, civil laws are written to direct the court on the direction to take when deciding on a case. Civil laws bring unity in a country and eliminate elements of biases in the judicial system because all offenders face similar consequences as stipulated in the written conduct. Civil laws are well-organized to create easy accessibility, order, cooperation, and predictability of the possible outcomes. Such laws also guide an organization’s involvement in protecting human rights and the constitution that provides rules that govern society.

Ethical Theories and their Impact on Professional Organization’s Planning and Implementation of Company Policy

Organizational planning relies on the understanding and application of ethical theories such as virtue theory, consequentialism (also utilitarian) theory, and deontological theory. These theories guide organizational behavior and influence the employees’ attitude. All these theories define the reason for how employees conduct themselves and indicate the possible outcomes of these behaviors. They are the three major classifications of normative ethics in any organization. Normative ethics is a branch of philosophical morality that defines right or wrong morals. It is a criterion that answers how a person should behave in an organization. Normative ethics is categorizable into three major theories; virtue theory, consequentialism theory, and deontological theory. Employee and customer management in a business is dependent on these three approaches since the management uses them to make crucial decisions that influence the attitude within the organization.

Virtue ethics is a theoretical term that emphasizes the morals and virtues of an individual towards their performance towards achieving a specific goal in the organization. It encourages behavior such as honesty, courage, compassion, generosity, fidelity, and many others (Van Zyl, 2018. p.5). The virtue ethical theory supports the organization by impacting the employees to maintain a good relationship between them, the management, and the employees. This theory is essential for the development of many businesses because it facilitates the creation of an excellent public image for the company. It also attracts new customers and maintains old ones. Virtue ethics also contribute significantly to the formulation of laws within organizations. For example, an employee cannot abuse the customers because insulting is not a behavior promoted in businesses. If an employee goes against the virtue, they may attract firing. Therefore, virtue ethics contribute significantly to maintaining a conducive relationship between the parties in a corporation.

Conversely, consequentialism theory implies the participant’s satisfaction and creation of happiness. If a behavior makes the person happy, they adopt it and make it a lifestyle (Everett and Kahane, 2020. p. 129). The rightness or wrongness of an action depends on the outcome. If the positive result creates happiness, the step is correct, but the move is wrong if the consequence is negative. The utilitarian theory is based on the level of joy that results in a massive difference in the organizational structure and planning (Kim, 2021. p.16). Application of the utilitarian theory in businesses gives employees independence to make decisions on the company’s behalf but consider the outcome. If the decision’s effect is positive, the management praises the employee, but when the ending is downbeat, the managers reprimand the employee’s choice. The utilitarian theory is critical in formulating corporate laws because it supports the employees’ actions provided, they contribute positively to the organization.

Another theory impacting professionalism in an organization is the deontological theory. This theory supports the use of rules and regulations to direct a person’s action. In this theory, conducting the steps is more critical than the outcome (Kim, 2021. p.16). It implies that the result does not impact as long as the employee or management strictly follows the correct procedure. This theory goes concurrently with the use of laws to direct dealings within an event. Many organizations use the deontological theory to conduct their activities since the ending is predetermined and formulate a procedure to achieve the projected goal. Deontological theory varies from the other theories because it is based on the protocol observed in conducting the business rather than the sequel (Bauer, 2020. p.268). Whether the outcome is positive or negative, people should follow the initial plans strictly to the latter. It states that some actions are obligatory to the organization regardless of their impact on the business.

The deontological ethical theory is essential in a business because it provides management and workers with a framework for responding to specific events. Prior planning outlines the organization’s scheduled activities, thus creating flow and time-saving. Besides providing a framework on future expectations, deontological theory creates accountability among parties since they have to prove their adherence to stipulated laws (Kim, 2021. p.16). People judge other people’s morality based on the set rules agreed on before conducting the venture. Since the motive of the deontological theory is good, the participants must stick to the set of regulations. Businesses should use deontological ethics in their regular operations to enhance a sense of responsibility and save on time while including accountability in the engagements.

Ethical Behaviors to Contribute to Achievement of the Triple Bottom Line

The triple bottom line business plans include profit maximization, corporate social responsibilities, and planet and environmental conservation. Many businesses are profit-oriented and thus target maintaining good corporate relations with their customers as they continue attracting more (Birkel and Muller, 2021. p.125612). However, despite being profit-oriented, the companies cannot exploit their customers by overpricing their commodities and services, using wrong measurements, and offering low-quality goods and services. Government policies hinder organizations from unfair dealings in their operations. The government uses its agencies to regularly review the items to ensure that they meet its citizens’ appropriate standards for consumption. Profit maximization can be ethical when using activities that maintain a good relationship with current customers (Baltazar and Li, 2021. p.8). Following government policies on the protection of the customers through the delivery of quality goods and services preserves customers and attracts new ones seeking good quality and quantity products. Profit maximization is attainable through a rational understanding of consumers’ preferences.

Moreover, the business can attain the triple bottom line business plan through corporate social responsibilities. Corporate social responsibilities are duties that the business owes the community to improve its public image (Nuseir and Ghandour, 2019. p. 600). Corporate social responsibilities are those opportunities that the company has to strengthen its relationship with society by providing them with essential services. For example, a company may offer the surrounding communities education and healthcare services. Providing humanity with such amenities that may be difficult for some of them to obtain builds the company’s image and promotes its support from neighbors. While many firms are profit-oriented and continually seek to decrease costs, they are obligated to provide the society with some of the most difficult-to-obtain items as a gesture of appreciation for their contribution to its development (Milic, 2004). The company may also provide corporate social responsibilities by protecting the society from adverse conditions of their activities, for example, exposure to chemical waste products.

Planet and environmental protection are other responsibilities the business has to do to have an added advantage. All companies should ensure they do not expose the environment to activities that may contribute to degradation and loss of value. Some of the activities that affect the environment negatively are oil spillage, carbon emission to the atmosphere, and deforestation. These activities affect land through blockage of soil aeration leading to erosion (Nuseir and Ghandour, 2019. p. 600). Oil spillage attracts fire incidences and destroys aquatic life, while emission of carbon to the environment causes reduction of the ozone layer, increasing radiation in the world. The Pollution Prevention Act has laws that protect the environment from pollution by some firms.

The Conflict between Intellectual Property Rights and Social Goods

Intellectual Property Rights are properties awarded to a person to allow them to operate as a monopoly. These rights give ownership for personally created ideas that one owns and does not want to allow others to use them to benefit themselves (Mormina, 2019. p.680). Intellectual Property Rights include properties such as copyrights, trademarks, patents industrial designs, among others. Ownership of these rights prevents other creators from using these rights as their own. On the other hand, social goods benefit many people, for instance, clean water, clean air, and others. Also known as, common goods, social goods are essential for basic human survival. A conflict arises between Intellectual Property Rights and social interests because the owner of these rights demands payment from the public to allow them access to these items. It is challenging to balance the incentives and social goods because it is impossible to measure the value an investor gains from the ownership and its cost to the public (Mormina, 2019. p.680). An excellent example of an intellectual property right is a patent for the personal computer filed by Steve jobs and other colleagues in Apple Inc in 1980. Since the filing for the patent in 1980, only Apple Inc. has the right to manufacture the computers and sell them to people to transfer ownership.

Global Patents Regime Under (Trade-Related Aspects of Intellectual Property Rights “TRIPS”

Intellectual Property Rights influence the supply and accessibility of essential commodities like medicine. The World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) has minimum standards for the protection of IPR and its enforcement. IPR hinders people from accessing and utilizing some items they have not created or purchased (Schneider, 2019. P 186). In some cases, scientists may own patents for medicines they invent to cure some diseases. Such ownership of the IPR for treatment affects the accessibility of healthcare services among the sick. The world witnessed problems related to patents ownership on the verge of the COVID-19 pandemic since some countries lacked patent rights for emerging diseases (Motari et al. 2021. p. 2). The United States government has made agreements with some nations to prevent instances where its citizens fail to access health products due to Intellectual Property Rights (Mah, 2019. p.250). The World Health Organization (WHO) aids in protecting the patent agreements on Trade-Related Aspects on Intellectual Property Rights to ensure that many countries access medicines freely.

TRIPS is a multilateral agreement on intellectual property that came into effect on January 1, 1995. It covers areas of the intellectual property rights such as copyrights, trademarks, geographical indications, industrial designs, and patents (Abbott, 2020. p.18). TRIPS has three primary characteristics: standards, enforcement, and dispute settlement. The agreement states minimum standards that protect every subscriber, while the enforcement section provides guidelines on the procedure to follow when enforcing patent rights. Lastly, the dispute settlement section deals with any dispute that may arise during the enforcement of these rights. The Agreement on Trade-Relates Aspects of Intellectual Property Rights is an important agreement that protects countries from suffering enormously from some adversities like pandemics.


This essay highlights various laws that govern business operations and how they influence decision-making processes. Some of the statutes identified are domestic laws, international laws, common law, soft law, traditional law, public and private laws. All these types of rules vary from how they are applied in the workings and their possible consequences. The essay also discusses the use of ethical theories in company management. It indicates the impacts of the utilitarian theory, virtue theory, and deontological theory on the decisions in business. From the findings on the most impactful theory about the report highlighted earlier, the report recommends the deontological theory as the most influential theory because it applies laws to conduct the operations. Additionally, the essay reports how a business can meet the triple bottom line of success. Understanding the causes of conflict between IPR and social goods creates a conducive environment for laying regulations and attracting negotiations like the Agreement on Trade-Related Aspects of the Intellectual Property Rights.

Reference List

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LawBirdie. "Legal and Ethical Practices in Business." June 3, 2023.