What (Business) Ethics is Not? [Part 1]

This time I’ll be trying to specify the common pitfall which people struggle while setting the boundaries of (Business) Ethics.

Question: Does not Business Ethics involve law, religion and sacrifice?

Argument: If we obey the rules of the legal system of the state which we are living in and the orders of the holy book that we believe, wouldn’t everything be so great with (plus) some sacrifice? Then, why do we need (Business) Ethics for?

Answer: (Business) Ethics is Not Law.
GOLDEN RULE FOR THIS PART: “Acting ethical requires freedom of choice.”
The nature of any legitimate business requires to be acting in compliance with local laws when conducting even the simplest business operation. (Not only in a business of course, we are all obliged to move in such a manner within the society anyway) The reason why it is basically impossible for a business to undermine the law is, that a business’s foundations fully depend on the legal system. The fall of a business (and the whole business system eventually) is inevitable without protection against physical violence, without property rights and insuring an observance of contracts.
So, undermining one of those acts would not only destroy a business’s long term value (such behavior may produce some short-term advantages) but also would jeopardize it’s own existence.
However, legal systems are not always fully designed perfectly to meet all needs of all the businesses within that state. In such a position, for the sake of the “democratic society”, the business may need to find a better way to comply to those acts rather than directly taking a position against them. Violating any law may create much more severe damages in the “owner value” of the business than that of behaving unethically. And as the purpose of “Business” is “maximizing owner value over the long-term”*, it is impossible for a business to score (in the long-run) by breaking the laws.
BUT, when it is a complete loss/loss situation with quite a mass of a legal system, it may be time to consider changing locations to do business.
So, we can say that a “real business” tries to find legal correspondence first of all, and afterwards thinks about other options regarding its ethical code and all other values.
That’s all I got to say for this week’s subject, I’ll be back with my post “Business Ethics is not Religion” next week. Hope you all enjoy...

*: Just Business: Business Ethics in Action by Elaine Sternberg, Oxford University Press, USA; 2. Edition (October 2000)