Bridging the Foundational Gap between Theory and Practice: The Paradigm on the Evolution of Business Ethics to Business Law

Bridging the Foundational Gap between Theory and Practice: The Paradigm on the Evolution of Business Ethics to Business Law

Ben Tran (Alliant International University, USA)
DOI: 10.4018/978-1-4666-7476-9.ch007
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Abstract

This chapter addresses the relationship between ethics and law and the evolution from ethics to law so that practitioners can implement ethical business practices. Practitioners must first understand the differences in the foundational gap in theory between ethics and law as it applies to business in practice. This chapter provides a review of the foundation of the differences between ethics and law as addressed from a practical standpoint. Furthermore, a practical strategy in addressing business law is offered. Thus, the operational definition of ethics, in this chapter, is the study of business situations, activities, and decisions where issues of right and wrong are addressed based on the principles, norms, and standards of conduct governing an individual or group. Law, on the other hand, is essentially an institutionalization or codification of ethics into specific social rules, regulations, and proscriptions and represents the minimum acceptable standards of behavior in a society.
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Corporate Social Responsibility: Background And History

The roots of CSR certainly extend before World War II. However, it should be noted the coverage in this paper will not go back that far. According to Carroll and Shabana (2010), Bert Spector has argued that the roots of the current social responsibility movement can be traced to the period of 1945-1960; the early years of the Cold War. Spector has argued that Dean Donald K. David1 and other advocates of expanded notions of CSR used this as a means of aligning business interests with the defense of free-market capitalism against what was then perceived to be the danger of Soviet Communism (Spector, 2008). Dean David exhorted in 1946 to the incoming MBA class at the Harvard Business School that future business executives take heed of the responsibilities that had come to rest on the shoulders of business leaders (Spector, 2008).

Key Terms in this Chapter

Morality: Indicates what ought to be done and what ought not to be done. Morality then, is part of ethics and moral thinking is a subset of ethical judgments.

Law: Essentially an institutionalization or codification of ethics into specific social rules, regulations, and proscriptions and is the minimum acceptable standards of behavior in a society.

Company: A group of individuals who had come together for a common purpose—in this context, contributing risk capital for joint business activity.

CSR 2.0: Corporate Sustainability & Responsibility (CSR).

Corporation: Any association of individuals bound together into a corpus, a body sharing a common purpose in a common name.

Business Ethics: A form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment.

Applied Ethics: The field of ethics the deals with ethical questions in many fields such as technical, legal, business and medical ethics.

Ethics: The study of issues of right and wrong on the principles, norms, and standards of conduct governing an individual or groups.

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