Corporate Regulations: A Legal Study, Essay Example

The key element in any effective management is for an organization to determine its surrounding environment and the ideal alignment between the environment and the organization. It should therefore work out on how to maintain that alignment in accordance to the legal regulations set to govern safety environment. The stakeholders of a company in a retail and distribution industry would be classified into two; those in the internal environment and those in the external environment. The internal would normally comprise of employees and owners while the external looks at those who are not closely connected to the organization but influence the company from outside.

The internal stakeholders like employees would really benefit from a safe environment in the company in terms of favourable working conditions, employment benefits which include a salary, health benefits and other allowances. It is deemed to be the employer’s responsibility according to the health and safety work Act 1974 such that if the employer fails to adhere by these regulations, he could be held liable for failing to act or due to certain actions that could be unfavourable. The employer is also expected to recognize employees with special needs and direct consultation is advised through an elected representative on safety and health issues. (Compact Law 2010)

Deceptive advertising on the other hand is a completely wrong move by the company because it is done with an aim to benefit one party not caring about the other. FTC considers a deceptive representation as that which will mislead customers from reasonable acting and has a material implication. (Stouffer Foods Corporation 1994) This way of advertising mostly affects the customer who believes about the products or services and later finds out that this special attribute that the marketers mentioned is non-existence. That is why the government has come up with regulations to protect a customer and this is stipulated in the FTC Act section 5 in the US and the Control Misleading Advertisements Regulations works on it in the UK. The two bodies work to see that the customer is protected from greedy marketers and irrespective of whether the deceptive advertising turns out to be of benefit to the customer or loss.

The financial records are a main focus among most of the stakeholders of an organization and a case of unethical financial or accounting practise would affect them all. These unethical practices can be made by either accelerating revenues of expenses with an aim of achieving financial goals, fraudulent financial reporting or even making intentional false entries to change the nature of a transaction. Firstly, the employees access the company’s performance by looking at the financial statement because they need to know if their hard is bearing fruits and to check the possibilities of getting a pay rise. If the financial statements are not as good as their performance it could demotivate them and result to poor performance whereas good results it might give them false hope of salary increment when the organization is not in a position to. This causes dissatisfaction in the employees. The owners and the management are also not left out on this because they also depend on the financial statements for evaluation and making decisions. Unethical practises would therefore lead to wrong decision making by owners and management. The stakeholders in the external environment like potential investors would also making wrong decision.

In the case of Enron Corporation scandal, so many stakeholders were affected. These included the employees who lost their jobs, Enron lost most prominent organizations (McRoberts, 2002) and was suspended by the Services Administration General. Organizations therefore need to observe if the standard business ethics are being applied accordingly and ensure that all the stakeholders are comfortable. The chances of conflict of interests should also be avoided because it contradicts many aspects of business ethics. Salesmen for example, should know how to balance their work because they might want to satisfy their managers and customers which according to Dubinsky, Nataraajan, Huang (2004) are two masters with different motives. This could breed unethical practices and that is why the salesperson is advised to be careful while executing his duties.

References

Compact Law 2010. Health & Safety At Work.  Retrieved on February 28 2010 fromhttp://www.compactlaw.co.uk/free_legal_articles/health_and_safety.html

Dubinsky, Nataraajan, Huang (2004). The Influence of Moral Philosophy on Retail Salespeople’s Ethical Perceptions. Retrieved on February 28 2010 from http://www.questia.com/googleScholar.qst;jsessionid=LKFPB3Wrz7FvzZmLtyHskLdTZrShYGNTfsVx2dnQ8FNQgLx1MTqQ!-2073591579!-797291915?docId=5008625659

Gsa.gov bill bearden, u.s. general service administration , 3-15-02

Npr.org brand, Madeleine  Loupai, enron’s elusive mystery man

Pulp.tc Flynn mcRoberts, Chicago tribune 2 8 02

Stouffer Foods Corporation, Docket No. 9250 (Sept. 26, 1994), slip op. at 3; Kraft, Inc., 114

F.T.C. 40, 120 (1991), aff’d and enforced,970 F.2d 311 (7th Cir. 1992), cert.denied, 113 S. Ct. 1254 (1993);