For instance, laws protect customers from being exploited by companies. Laws protect companies from other companies. Laws even protect citizens and corporations from the government. However, law is neither perfect nor all encompassing. Sometimes, societal ethics fill the voids that laws leave behind; other times, usually when societal ethics have been systematically violated by a group of the population, we write laws that are designed to require individuals to live up to certain ethical standards. In the backlash of the Enron scandal (where Enron executives used accounting tricks to hide losses) for example, new accounting laws were passed. Similarly, as a result of the financial crisis of 2008, legislators proposed new regulations designed to enforce a certain standard of ethical behavior within the financial services industry.
This course will introduce you to the laws and ethical standards that managers must abide by in the course of conducting business. Laws and ethics almost always shape a company’s decision-making process: a bank cannot charge any interest rate it wants to charge—that rate must be appropriate. Car manufacturers must install hardware and develop new technologies to keep up with regulations designed to reduce pollution. By the end of this course, you will have a clear understanding of the legal and ethical environment in which businesses operate.