Show Me the Regulation? There are at least two different positions taken on the
ID: 369716 • Letter: S
Question
Show Me the Regulation?
There are at least two different positions taken on the question of whether government regulation or laws can facilitate ethical behavior. The author in “Ethics Without Regulation Won’t Cut It”, http://blogs.reuters.com/great-debate/2009/01/30/ethics-without-regulation-will-not-cut-it/ takes the position that you cannot trust businesses on their own to do what is ethical; therefore some government intervention in the form of laws and regulations is necessary. In two of your readings for the week, “Role of Government in Regulating Business Ethics” and Business Ethics: The Law of Rules”, the authors seem to argue that overreaching laws and regulations do not facilitate ethical behavior, and indeed might have the opposite effect. Using these articles as an initial starting point, what do you think about the debate and what is your position? Why do you believe your position is sustainable or defensible?
Explanation / Answer
I agree with the points laid out by the authors in the two readings. I strongly believe that in a free market the lower is the amount of intervention the better it would be. Government should not impose heavy-handed restrictions on business to ensure ethical behavior on their part. What the government should rather do is to encourage the business to behave in an ethical manner. The government should lean more towards encouragement and less towards coercion.
Although it cannot be assumed that all businesses will behave in an ethical fashion in the absence of any regulations, in the long run, if business establishments are provided enough encouragement and incentive to adopt ethical practices they will have no reason to violate code of ethics in their business practices. Rather than imposed regulations businesses should be encouraged to adopt model of self regulation.
To ensure that business establishments comply with their ethical obligations and do not engage in dishonest public practices government should take a preventive approach and should focus on adopting an incentivizing role. Ethical behavior can be incentivized through attractive incentives like tax breaks etc. This approach will make business establishments realize that it is in their best interest as well as the interest of all their stakeholders in the long run to strictly adhere to their ethical obligations. This will make the approach sustainable in the long run. On the other hand the approach of controlling business through heavy-handed restrictions will not be sustainable in the long run as business establishments usually find a way to circumvent the law and take advantages of loopholes in the system and law, if any.