Éthique des affaires (document en anglais)

Final Assignment

Business Ethics

Consider the role of the state and discuss whether business organisations can and should influence political processes

Table of contents

Introduction 3

I. The role of the State in business organizations 4

II. The influence of business organizations in political process through lobbying 6

III. The advantages and disadvantages of the influence of business organizations in political process 9

Conclusion 11

Bibliography 12

Introduction

The relationship between states and businesses is a controversial issue that has been debated for many years.

Indeed, with the current economic situation, we tend to think that multinationals are now major players in the global economy. Those earlier which were under the influence of states today impose their own rules and it is the turn of the States to adapt. Multinational firms then play their influence. We tend to link this new trend to business ethics. It may be unethical and even illegal for a company to influence political processes.

According to Joseph Betz , the relationship between business ethics to politics has two explanations. According to this author, there are two kinds of ethical issues in business ethics namely basic ethical norms and complex ethical norms.

The first are ethical issues we can find in every social institution which everybody agrees on. Those are the common ethical issues we can find when human beings are living in society with each other like those prohibiting lying, wanton injury, and sexual harassment.

The second one is more complex. There can be some conflicts of interests when you have to different ways of behaving ethically. In some situations, you can have to choose between different solutions of an ethical issue.

However, the main problem is to choose the good way of acting ethically. We can take the example of a case of fraud or corruption when certain CEO pay bribes to politicians to avoid the payment of taxes.... This example shows a real problem of business ethics issues in business ethics. Should business organizations influence political processes? We will examine the role of State in business world and also the role of business organizations on political process in order to explain how and why companies can influence political processes. Then we will see the impact of lobbying to highlight the influence of business organizations. Finally, we will talk about the advantages and disadvantages of the influence of business organizations in political process.

I. The role of the State in business organizations

Nowadays, in most countries, the state intervenes significantly in the functioning of economic activity. This procedure is done in three main forms are: production, redistribution, regulation and control. These three functions differ from one country to another; the action of the State is very present in some economies and less interventionist in others.

However, its main function is the regulation and control of economic activity.

Indeed, the State organizes legal relations and activities between economic actors to balance and secure their relations. This procedure allows some relations do not turn improperly in favor of certain actors than others.

Thus, the State creates the legal framework of trade through the competition law to prevent the domination of certain companies in certain sectors of the economy, such as monopolies or alliances among producers that would put consumer’s position of inferiority (eg agreements on the sale price that would negate the effects of free competition).

Finally, the State regulates the relations between employers and employees through labor law, which governs the employment contract and defines the rights and duties of each party. It is the State which sets the maximum hours of work, the minimum paid leave, the rate of pay "floor" (minimum wage) , the conditions of hiring and firing , the rules of safety at working etc. .

However, it also works to harmonize the pace of economic activity through the implementation plan of economic recovery in the event of a slowdown in economic activity.

The State therefore has a regulatory role that allows him to compensate for market failures.

However, the main issue of this relationship lies in the business ethics.

Indeed, it is impossible to separate the business ethics in the relationship between the state and business.

To understand this issue, it is important to ask the following question: how and why State can has an impact on companies?

Albert Carr’s very popular essay, “Is Business Bluffing Ethical?” says that “There are rules, but within the rules it is permissible to bluff in order to mislead others. In fact one must do so or lose the game. The ethical rules of everyday life therefore do not apply to business.”

The author wants us to understand that business can’t be regulated with conventional ethics rules because the business world is a competitive world and we have to take that into account.

The state plays a gendarme role because the market is far from perfect and be the better social and economic solution. You are under morality as long as you comply with laws.

From this theory, we can say that the State is clearly involved in business ethics because it establishes business ethical frames.

The role of State in business organizations is clearly illustrated at the beginning of the 21st century which was marked by a number of corporate scandals that prompted the need for major legislation.

For example , the accounting scandals discovered at Enron and Arthur Andersen in 2001 which caused thousands of employees to lose their jobs and their retirement savings, as well as the demise of the firms or the fraud at WorldCom (2002) and Tyco (2002).

These scandals prompted the government to pass the 2002 Sarbanes-Oxley Act (referred to as SOX), which mandated a new way of doing business. This corporate reform legislation responded to growing concerns over the financial reporting of

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