Question

Discuss, using external sources to back up your assertions, the differences between law and ethics in the context of business and the entrepreneur.   For instance, all that is ethical may not be legal, and all that is legal may not be ethical.    Where are we seeing this issue play out today?    Is there a clear line that should not be crossed? Why? How do you instill ethical codes that go beyond the legal requirements imposed on your business?

Answer 1

Anything that is a requirement of any Law or Statute is Legal. There is no choice but to abide by the legal requirements. Following the law is very straight forward - Do what is allowed by the Law and Don't do what's prohibited.

But when it comes to Ethics, is becomes very subjective. Being Ethical simply means doing the right things. It may or may not be the law. There might be quite a few loopholes in the law that allows some kind of mischief, but it is the ethics that may prevent one from exploiting the loopholse in the law.

The ethical standards may differ from person to person. Something that is ethical to one may not seem ethical to another. Everyone has to follow the law, but there is no compulsion on anyone to follow any ethics. But this doesn't mean that one should not follow ethics at all.

In the long term, your business may to known for its Ethics. In a practical world, the example of Tata Group Vs Reliance can be taken. Tata group is well known for its better Ethics; many people tend to trust Tata more, also a great reputation is created in the minds of the general public for Tata. Reliance on the other hand earns more profit, but doesn't have the same image that Tata has.

Every business has to have a clear code of Ethical Standards that should be followed. There should be a clear line that should not be crossed. Having such Standards helps build a reputation for the business in the minds of the people. This will definitely be beneficial in the long term.