Question

Business ethics in the United States and Saudi Arabia.
Research the differences between the US and Saudi legal environments and business ethics.

Answer 1

Legal Environment

Organizations need to comply with each country’s laws and regulations in which they do business. Rules and regulations can change frequently and are often ambiguous; they also depend on the political culture in a country. Many industries are heavily regulated around the world, such as banking and finance, utility, transportation, oil and gas, and mining. The regulations will have a major influence on your business model. Moreover, the legal system can differ from one country to the other (e.g., civil law, common law, religious law) and often requires very specialized expertise.

US Legal Environment

There are various laws that are used to ensure that the business works in the right way. These laws are put in place to regulate the way the business is done and are meant to curb unethical business activities. Therefore, there is need to look at the laws and the reason why they were passed. In this case, we will look at the law that regulates businesses in United State of America.

1.Contract law

Contract law covers obligations established by agreement (express or implied) between private parties. Generally, contract law in transactions involving the sale of goods has become highly standardized nationwide as a result of the widespread adoption of the Uniform Commercial Code. However, there is still significant diversity in the interpretation of other kinds of contracts, depending upon the extent to which a given state has codified its common law of contracts or adopted portions of the Restatement (Second) of Contracts.

2.Fair Labor Standards Act

This act regulates federal minimum wage, overtime rules, child labor bans, and record keeping requirements. You’ll want to read through it to make sure you comply with the current regulations.

3. Federal Equal Employment Opportunity laws

This set of laws prohibits discrimination based on race, color, religion, sex, or national origin. It also includes equal pay for men and women, and protects people with disabilities.

4. Family and Medical Leave Act

If an employee is dealing with a medical condition, or a family member with a medical condition, there are rules an employer must follow.

5.Obtain an employer identification number

To file your business taxes, you’ll need an employer identification number.

6.Telemarking Sales Law

If you plan to sell products by mail, phone, or online, you’ll need to brush up on the FTC’s telemarketing rule. Under this rule, businesses must ship products within 30 days, provide delivery notices if a product is delayed, and give refunds if an order can’t be filled.

7.Antitrust Laws

Any time a company conspires with its competitors, third-party vendors, or other relevant parties, it may run afoul of antitrust laws.

8.Email Marketing

Closely related to advertising is email marketing. If your business engages in email marketing, there are separate regulations you’ll need to comply with under the CAN-SPAM Act.

9.Environmental Acts

As a businessman some environmental protection laws should be fulkfilled. The United States Congress has enacted federal statutes intended to address pollution control and remediation, including for example the Clean Air Act (air pollution), the Clean Water Act (water pollution), and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or Superfund) (contaminated site cleanup). There are also federal laws governing natural resources use and biodiversity which are strongly influenced by environmental principles, including the Endangered Species Act, National Forest Management Act, and Coastal Zone Management Act. The National Environmental Policy Act, governing environmental impact review in actions undertaken or approved by the U.S. federal government, may implicate all of these areas.

Saudi Legal Environment

Saudi Arabia is the largest economy in the Middle East and the richest Arab country in the region. The policy of large-scale public works undertaken by the authorities, as well as foreign direct investment and the soundness of the banking and financial system, have enabled the country to become the number one regional economy and one of the largest in the world. However, the economy of Saudi Arabia is almost entirely based on oil, with GDP growth being closely linked to real oil growth.

The legal system of Saudi Arabia is based on Sharia, Islamic law derived from the Qur'an and the Sunnah (the traditions) of the Islamic prophet Muhammad. Let's look at the law that regulates businesses in Saudi Arabia.

1.Commercial and contract law

Business and commerce are governed by Sharia, commercial jurisdiction rests with the Board of Grievances composed of Sharia-trained judges,but "Special Tribunals" tasked with "finding ways to circumnavigate the more restrictive aspects of Shariah Law" have been established.

2.Labor law

Employers have a number of obligations, including at least 21 days paid holiday after a year's employment and will be 30 days after five years of continuous service. Terminated employees must receive an "end-of-service" payment of a half a months' salary for each year employed going up to one month if employed for more than 5 years.

3.Political freedom and freedom of speech

No political parties or national elections are permitted in Saudi Arabia.

4.Human rights and rule of law issue

These include criminal law punishments that are considered as cruel, as well as the position of women, religious discrimination, the lack of religious freedom