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BC/U2 Topic 6 Ethical and  Legal issues in Business communication

ETHICAL ISSUES IN BUSINESS

In the complex global business environment of the 21st century, companies of every size face a multitude of ethical issues. Businesses have the responsibility to develop codes of conduct and ethics that every member of the organization must abide by and put into action. Fundamental ethical issues in business include promoting conduct based on integrity and that engenders trust, but more complex issues include accommodating diversity, empathetic decision-making, and compliance and governance consistent with a company’s core values.

(i) Fundamental Issues

The most fundamental or essential ethical issues that businesses must face are integrity and trust. A basic understanding of integrity includes the idea of conducting your business affairs with honesty and a commitment to treating every customer fairly. When customers think a company is exhibiting an unwavering commitment to ethical business practices, a high level of trust can develop between the business and the people it seeks to serve. A relationship of trust between you and your customers may be a key factor in your company’s success.

(ii) Diversity Issues

Your current and potential employees are a diverse pool of people who deserve to have their differences respected when they choose to work at your business. An ethical response to diversity begins with recruiting a diverse workforce, enforces equal opportunity in all training programs and is fulfilled when every employee is able to enjoy a respectful workplace environment that values their contributions. Maximizing the value of each employees’ contribution is a key element in your business’s success.

(iii) Decision-Making Issues

A useful method for exploring ethical dilemmas and identifying ethical courses of action includes collecting the facts, evaluating any alternative actions, making a decision, testing the decision for fairness and reflecting on the outcome. Ethical decision-making processes should center on protecting employee and customer rights, making sure all business operations are fair and just, protecting the common good, and making sure the individual values and beliefs of workers are protected.

(iv) Compliance and Governance Issues

Businesses are expected to fully comply with environmental laws, federal and state safety regulations, fiscal and monetary reporting statutes and all applicable civil rights laws. For example, the Aluminum Company of America’s approach to compliance ensures no one at the company may ask any employee to break the law or go against company values, policies and procedures. The company’s commitment to compliance is shored up by its approach to corporate governance: the company expects all ALCOA directors, officers and executives to conduct business in accordance with its business conduct policies.

LEGAL ISSUES IN BUSINESS

Business communication can take many forms, including sales pitches, marketing messages, press releases and even company meetings, depending on the audience and communication medium. Business communication competencies tend to focus on building relationships and achieving productive results, but the legal aspect must also be considered. Certain areas of business communication are strictly regulated by law, while others can lead to potentially harmful civil litigation. Understanding the legal framework in which business communicators work is essential for entrepreneurs, managers and front-line employees alike.

(i) Disclaimers

Product and service disclaimers protect businesses from potentially harmful litigation in the event of misuse or misunderstanding by customers. Disclaimers can be used in court to prove that customers were warned about dangers and risks before using a product or service. Disclaimers can be found on a variety of media, including product packaging and commercial advertisements, or even in sales conversations. Most disclaimers are preventive measures, but some are legally mandated by regulatory bodies. Financial advisers must include disclaimers related to the risks inherent in following their advice, for example, while healthcare products are required to list potentially harmful side effects.

(ii) Disclosures

Legal disclosures are similar to disclaimers, but less specific. Although disclaimers are a type of disclosure, other types of disclosures can be legally significant as well. Conflict-of-interest disclosures for stock analysts and financial advisers are one example, as are references for research-based claims in marketing. Non-disclosure agreements approach the issue of legal disclosure from another angle. In non-disclosure agreements, one party agrees to refrain from sharing proprietary information outside of a contractual relationship.

(iii) Marketing Communications

Advertising and sales communications must follow legal guidelines for honesty and accuracy. According to the Small Business Administration’s overview of advertising and marketing law, advertising claims must be honest, non-deceptive and based on factual evidence. According to the same overview, advertising and marketing law extends to regulate testimonials, product endorsements, advertising to children, claims of environmental responsibility and claims of domestic production. The Federal Trade Commission also strictly regulates direct marketing activities, including telemarketing and email marketing.

(iv) Reporting

Financial reporting can be considered a form of business communication, since it involves formally presenting information to investors, regulators and the general public. Using deceptive accounting practices to misrepresent company finances is a weighty legal matter potentially resulting in lawsuits, fines or even criminal charges, not to mention damage to a company’s brand reputation. This is one of the most closely regulated areas of business communications and is especially important for publicly traded corporations.

(v) Internal Communications

Business communication deals just as much with internal dialogs as communication with outside stakeholders. The Equal Opportunity Employment Commission and the Department of Labor regulate such issues as harassment, threats, hostile work environments and dishonest communication with employees. Individual states further enforce their own internal communications regulations via state agencies, such as the California Department of Fair Employment and Housing.

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