Legal Issues for Managers

664 words | 3 page(s)

Question 1
The relationship between Smith and Jason amounts to conflict interest as defined by the RH business code of conduct. According section 5.1 of the code of conduct dealing with competition, Smith’s dealing with Jason amounts to dealing an individual working for RH’s competitor thus exposing the company to great danger of losing it confidentiality aspect. Although Smith has not engaged Jason in any business dealing, it is important to take note of the fact that this kind of relationship can lead to important RH information leakage to the competitor. Additionally Jason may at some point in their relationship ask Smith to offer some information in favor his previous action. This terms the whole friendship and dealing unethical from a business perspective.

Although the RH stands to gain in terms getting to what it competitor does, the whole move is unethical since it is provides information from unauthorized or illegal source which land RH into legal battles with its competitor. Based on this, it was wise of Mr. Smith to decline the information offered to him by Jason in order to keep the company away from wrangles with its competitor. It is also imperative to take note of the fact RH as a company operating on ethical basis should not get involved into illegal information from its competitors. It is therefore wise for Smith to avoid relationships which cans expose RH to such dangers.

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Question 2
Alley Beal’s scenario touches on one of the most important section of RH which is finance. RH business conduct clear expresses the need for accurate and well established accounting and other financial records. However, the audit carried by Alley a junior accountant reveals numerous malpractices or fraudulent operations which are a clear indication of the unethical character of the senior accountants in the section. However, Alley is also trapped into the unethical behavior of the senior accountants by getting convinced to conceal the fraud. This clearly violates the business code of conduct which requires employees at RH to report any unethical behaviors. Additionally the poor accounting and audit records practiced by senior accounts ahead of Alley is a total violation of international accounting and business standards (Turner, 2012).

Question 3
Linda Plant is an agent of RH, based on the business code of conduct, any agent of RH is part or family member of the company. Accepting gifts from RH’s main supplier is an indication of a member of the company doing business with other bodies without the knowledge of RH. This is a clear breach of the code conduct which clearly stipulates that this kind of businesses should not exist. It is important to take note of the fact that the all expense paid trip is of greater magnitude which can influence the decisions made by Linda. Based on this, Linda acted inappropriately by accepting such gifts, from a business perspective this can result into the RH losing one of its major agents leading to massive business loss.

Question 4
Business ethics is a major tool towards ensuring rightful thinking and operation of employees within any organization. In organization with clear business code ethics, employees adhere to such codes leading high levels of professionalism and concern for others. Business ethics is also important to promote peaceful coexistence of companies within the market. It also promotes peaceful operation with any concerned bodies or authorities.

Question 5
Protection of shareholder’s interest is the motivation towards the business code of ethics established by RH. RH aims to achieve legal and ethical business operations to help raise it standard both internal and external and ensure growth of its net worth leading to positive interest and other earnings for its shareholders. Additionally business ethics keeps RH away from legal battles which might result into big losses leading to loss of value in the share held by the shareholders. It is consequently imperative for any corporation to operate ethical to ensure shareholders interest is safeguarded.

  • Turner, C (2012). Business Law for Managers, Thomson Reuters

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