RUNNING HEAD: LEGAL AND ETHICAL RESPONSIBILITIES OF COMPANIES
Legal and Ethical Responsibilities of Companies to their Customers
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LEGAL AND ETHICAL RESPONSIBILITIES OF COMPANIES
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Legal and Ethical Responsibilities of Companies to their Customers
Legal responsibilities to what the society terms as vital with respect to the required
corporate behavior. Precisely, this statement means that businesses are required to attain their
economic objectives in the framework of the legal demands placed by town councils, nation
legislatures, and federal management agencies (Daft & Marcic, 2010).
In the contemporary world, the managers while in their managerial duties are faced with
numerous problems as they strive in helping to shape their behavior. The difficulties are varied
and they range from societal pressures like the religion also law as they make contact with their
immediate community. At the same time, the built in the natural environment influence their
actions.
Some of the illegal acts by organizations include doing firm fraud, intentionally
supplying defective commodities, doing unnecessary repairs, willing misleading buyers, and
billing clients for undone work. Companies that knowingly go against the law are bad performers
in this situation (Daft & Marcic, 2010).
Ethical responsibilities constitute behaviors that are unnecessary codified within the
law and may not be used in the company’s direct economic responsibilities. In order to be
ethical, company policy makers ought to serve with balance, fairness and impartiality; honor the
rights of the customers; and provide distinct treatment of customers only when appropriate to the
company’s objectives and tasks. Unethical behaviors takes place when policies enable a firm to
benefit at the expense of customers or the society at large (Daft & Marcic, 2010).
A good example is what is taking place in the student loan industry. This organization
has come intense scrutiny following a research that depicted that Student Loan Xpress gave
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financial help directors in three colleges a sum of $160,000 as consultation fee, individual tuition
reimbursement, and several other payments a process of being placed on the colleges lists of
favored leaders. Researchers are seeking to determine if lenders are being referred to learners
due to the hidden payments officials are getting rather point that they provide the very best
lending conditions to students (Daft & Marcic, 2010).
Cases in which a company endangered customers
(a) Emotional Fashion Advertising
Fashion firms are experiencing particular ethical issues because of the nature of
their adverts. Extra ethical considerations take place when fashion adverts have a strong
emotional appeal from the customers. Emotional unethical adverts are seen as unethical due to
the rising number of stakeholders and particularly consumers, as they promote an idealized,
unhealthy and non-realistic portray of beauty and thinness, which targets to develop the demand
in customers’ minds to promote their physical impression by buying the advertised commodity
(Strahle, 2015).
It is well understood that firms have an ethical responsibility, to the society at large,
and their customers, and their advertising methods have to go hand in hand with these
responsibilities. This is particularly important when they use advertising practices that impact
psychological and proper impacts on customers and may sometimes be dangerous to a number of
them. Though it was depicted that advertisers usually I press moral myopia and muteness, that
bares an ethical approach in the advertising process. Thus, a firm’s management is advised to
promote and assure ethical advertising (Strahle, 2015).
The Don Chemical Company Fine
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This is a chemical firm that manufactures pesticides. This company was once fined
$2, million for going against an agreement to stop false safety claims from customers,
concerning its pesticide commodities. Prudential insurances were also intensively investigated
for misleading users concerning variable life insurance decisions (Daft & Marcic, 2010).
LEGAL AND ETHICAL RESPONSIBILITIES OF COMPANIES
References
Daft R. & Marcic D. (2010). Understanding Management. Cengage Learning.
Strahle J. (2015). Emotionalizing Fashion Retail. BoD-Books on Demand.
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