The case of market failure can be caused by the instance where a market agent is able to obtain power in the market which allows the agent to hinder other trade profits that are beneficial to both sides from transpiring. One of the effects of this case is inefficiency brought about by imperfect competition manifested in terms of market competition that is essentially a monopoly by nature (Epstein). The monopoly by a certain company, although favorable to the monopolizing company, is an explicit illustration of an ‘unfair’ market where the business is empty of real competition.
In any case, ‘unfair competition’ in commercial law is prohibited especially in the United States where a healthy market is considered to be a market composed of several companies engaged in a healthy competition (Nachbar, p. 1313). For the most part, it is not only against the federal law for companies to resort to measures that promote unfair competition such as trademark infringement, misappropriation of trade secrets, fraud, misrepresentation, unconscionable contracts and tortuous interference just to name a few. These actions are also considered unethical. The ethics behind business essentially advocates for a fair system of competition.
It attempts to promote a healthy business competition without compromising the status of every individual company competing against one another. While the federal government, through the Uniform Trade Secrets Act and the Economic Espionage Act of 1996, proscribes misappropriation of trade secrets, several unethical notions also attempts to dismantle the corporate acts of espionage towards rival companies and fraud towards the clients of these companies. The existing legislature which puts sanctions towards these acts serves as a limiting factor on the probable course of actions of companies.
As the federal government seeks to provide a lawful means of furthering the economic goals and status of the companies within the United States, the position and perceptions of the federal government consequently shapes the behavior of businesses. For instance, legal prescriptions towards the policies of corporations concerning their employees are concrete examples of how the federal government has changed the way businesses are put up over the years (Mookherjee, p. 740). More importantly, the groundings for these legal prescriptions are presumed to be ethical.
That is, the laws, rules or regulations that surround the business realm within America are founded upon several important ethical theories. Among these theories are Utilitarianism and the ethical theories of Immanuel Kant. For the most part, the ethical decision making in business are affected by the federal government in many ways, and most of these ways are summed up in terms of how businesses should act in accordance to the law with respect to other businesses as well as how businesses should conduct their ways internally such as the treatment and proper allocation of compensation for employees.
Contracts engaged into by business are also affected by the federal government. While every business seeks to promote its side while considering the ethical aspect alongside the financial aspects of the contract, the federal government through the laws seeks to ensure that the contract will be thoroughly followed and that no breaching will take place. The tax policies of the federal government also affect the ethical decision making of companies.
Inasmuch as corporations seek to profit the most out of their activities, it should not be the case that these corporations should evade their responsibility of paying taxes such as excise and estate taxes as it is not only unethical but also illegal. Otherwise, they will be held liable before the law. Federal laws also apply to the ethical considerations of businesses when hiring or firing employees.
For instance, an employee cannot be discharged from his work and ultimately from the company just for the sole reason of his physical disability and his medical status because of existing statutes that prohibit such discriminatory act such as the Americans with Disabilities Act (Scotch and Schriner, p. 149). Further, a female employee who requests to temporarily leave from work may use the Family and Medical Act to her defense since it contains employee and employer prescriptions and proscriptions on child care policy (Asher and Lenhoff, p.
115). On the other hand, individuals can also raise their concerns over the layoff if their discharges are based upon the grounds of sexual orientation and national origin which are prohibited by Executive Order 11246. Further, employees cannot be determined under the layoff decision of the company solely because of the employee’s age as it is likewise prohibited and sanctioned by the Age Discrimination in Employment Act.
Since the decisions needed to arrive at the best interest of the company are of primary necessity with regards to the layoff, the essential bases or grounds for the layoff should be anchored on the legal doctrines that revolve around the conduct of business especially in employee and employer relations. Nevertheless, the legal rights of the employees must also be given proper attention so as not to surmise the established employment statutes as well as the ethical precepts upon which these laws are based on.
In general, it can hardly be doubted that the federal government affects ethical decision making in business as laws directly relate to the circumstances dealt by companies. Past and current legislations have played a core role in the operations of a business down from the local level to a multinational level of business.
Asher, L. J. , and D. R. Lenhoff. “Family and Medical Leave: Making Time for Family Is Everyone’s Business. ” The Future of Children 11. 1 (2001): 115.