ETHICAL LAWS

ASWATHI KRISHNAN

Three basic principles of business ethics

The three basic principles of ethics are:
Utilitarianism Principle of rights Principle of justice

Utilitarianism
It preaches maximum good for maximum number of people as a result of an action. The utilitarian theory focuses on the end result rather than the means that produce the result. Under this a loss- making unit should be closed down if the resources so released are utilised in other activities that cause increase in employment ,income,or taxes to the government which are send back to increase the public welfare.

Principle of rights
Rights

can be natural or legal. Right to life,freedom and happiness are examples of natural rights In India and US there exist fundamental rights like freedom to speech and expression,religion,assembly and right to vote.

Conti..
In the world of business various pieces of legislators,savers,owners,workers and suppliers. These rights protect the respective group against unethical or unfair practices of others. Similarly there are rights for business property and environment rights.

Principle of justice
This principle seeks to provide fair and just treatment to individuals and organisations. In business environment,like in other non business situations there are basically three types of justice-distributive justice ,compensatory justice and retributivejustice.

Distributive justice
Distributive justice refers to equitable and and just distribution of benefits,gains and burdens or cost of business. Main channels of this in bussiness take place troughdividend policies,remunaration system and pricing practices. When business practice doesnot follow this principle,the government intervention is called for to undertakecorective action.

Compensatory justice
It

is concerned with paying fair amounts in compensation against losses incured as a result of particular business decision.the loss could arise to a worker by an individual accident or to a consumer by a unsafe product or to suppiler by way of a delayed payment. The damage to the society may also be from pollution. The companies which donot adhire to this principle are often challenged in court of law.

Retributive justice
It refers to justice by way of punishment to the wrong doer. A company could be punished for violating laws,tax evasion or misleading advertising and could be made to pay heavy damages to the victims. This may erode the financial viability and reputation of the organisation

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