Legal and Ethical Issues in Organizations

579 Words2 Pages
Legal and ethical issues are closely interlinked, mainly because the legal framework of a society is usually based on its moral and ethical norms, in the sense in which it is built on the norms that the people in that society believe in. When it comes to an organization, there are several levels of interest. First, the overall legal framework of the country in which the organization is operating trumps all other legal or ethical norms. In many situations, companies that have foreign subsidiaries need to abide by the local legislation, including when it comes to taxation or employment matters, even if this legislation is different than the one in the country of origin. Strictly linked to the legal norms are the ethical norms. The reverse situation from the one described in the previous paragraph occurs. Even if the legislation may be sufficiently flexible in some cases to allow an unethical situation, the companies need to be aware of this fact and judge accordingly. There are so many notorious situations of companies that have opened production facilities and factories in developing countries to benefit from flexible employment legislation for example. Nike or some of the apparel and clothing companies are good example in this case. The motivation for such an action was related to cost: a more flexible legislation implied lower wages, longer working hours and different working conditions, as imposed by the law, than in the country of origin. However, it is interesting to
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