The presented scenario in Milton Friedman’s lecture, “What is America?” raises numerous ethical issues as regards to the strategy formulation and day-to-day operations of business as well as social sphere. An ethical approach to business is vital in determining the corporate success and a positive corporate image. There are concerns of business ethics revolving around the corporate endeavor to make profits against the ethical costs and harms posed to consumers, employees and the environment. While the firm pledges to corporate social responsibility there is need to ensure that there is commitment to ethical sanity through formulation of codes of conduct and principles of operation that should be geared towards corporate accountability, corporate governance as well as corporate giving.
There are ethical issues pertaining production, human resources management, sales and marketing, corporate social responsibility as well as general business ethics. The ethics of production involves the obligations of an organization in ensuring their products and production processes are free from causing harm (Velentzas, et al., 2010). The business ethics of any enterprise can be evaluated from a wide spectrum of perspectives among then which are commercial initiative, employee and general public as large. The Milton’s presents a situation whereby there are number of conflicts arising from a lack of harmonizing and reconciliation of different stakeholders’ interest.
Besides ethics in business, the gist of the lecture revolves around government regulation. Regulation involves the imposing of certain requirements by the government on private firms and individuals in a bid to achieve set government’s purposes in the market. Regulation seeks to allow the provision of cheaper goods and services, protection of existing companies and firms from unfair competition, provision of safer products and workplaces among others. Regulation falls into two broad categories namely; economic and social regulation. Economic regulation deals the involvement of government in the national economic matters in setting prices and conditions on entry and practices of firms in an industry. These regulations include; control of business practices, industry rates, and services and transportation routes of businesses. Economic regulation is subject to the occurrence of significant market failure resulting from economies of scale and production scope, imperfections of information in market transactions, incomplete markets and effects of wealth and income distribution. Alternatively, social regulation involves the government’s lookout on the safety and quality of goods and products. In addition, social control deals with superintending the conditions under which the goods and services are manufactured.
Most of the United States Government regulations are overseen and implemented by independent commissions and agencies under the federal executive branch as well as state governments (Chu et, al., 2012). Appeals to regulatory legislations and the anti-trust laws can be made to the courts with the purpose of testing their constitutionality as well as ensuring that the regulatory commissions adhere to the due process in the execution and decision making. Federal Trade Commission acts to prohibit any unfair acts or deceptive practices in business and commerce. The Commission is mandated to issue cease and desist orders, and articulates on cases in federal and administrative courts. While the FTC lacks the punitive authority, it serves to protect the business rights as well as consumers by imposing restrictions that enhance fair business practices.
Monopoly can simply be considered as a market situation where a there is only one single seller of a valuable item. Owing to market failure emanating from monopoly theirs need for government intervention. A monopoly is characterized by output of products below efficient levels, loss of consumer surplus, transfer of surplus to producers and loss of efficiency in the economy. The formulation of anti-trust law was informed by the concern to control and regulate industry by a single corporation, loss of economic efficiency and unnatural monopoly. These economic issues had led to reduction in output and rise in products prices which was detrimental to the consumer and the national economy.
The anti-monopoly policies play a vital role in promoting economic efficiency and enhance entry as well as fair competition (Litan, n.d.) The set policies keep changing over time subject to changing economic and political environments. Over the years the award of triple damages in cases dealing with anti-trust has encouraged a good number of private firms to initiate cases. The major issues considered in anti-trust litigations include relevant market, barriers to entry such as capital cost and distribution chains, international competition, fair pricing, and effects of change in technology on the relevant market structure.
Social regulation deals with environmental control, labeling and advertising, and safety and health regulations. Social regulations are intended to promote ethical consumption of products, producer empowerment as well as certification of commodities. The fundamental elements of social regulation include; formulation of standards that will serve as benchmarks, making of rules that should govern behavior, and enforcing rules and regulations that administer sanctions for non-compliance (Taylor, n.d.). Social regulation is aimed at instilling good relations between civic values and economic practices. The modern trends of social regulation are taking the direction of market-oriented systems. Having started with the Reagan Administration, the policies and regulations are gearing toward market-like mechanisms such as pollution and emissions trading systems as well as negotiated rule-making. The enforcing and administration of social regulations reduce conflicts in the market, foster partnership and encourage Corporate Social Responsibility.