Why must businesses take into account ethical and legal considerations when designing their distribution process? Briefly describe what the distribution process would look like for a business that takes no ethical or legal considerations versus a business that heavily considers the legal and ethical parameters of distribution.

Ethical considerations are generally accepted standards that are founded on human principles that speak to what is right and what is not. One ethical question, for example, is: should a staff divulge his company's trade secrets to his wife who works in another business that is considered competition to his employer?"

Legal considerations on the other hand are factors that may or may not be ethical but are backed by Law and can be enforced in a law court.

The primary difference between legal and ethical standards is that while the former is backed up by written law, the latter is based on what has become generally accepted as right or wrong. Following from the above, it means that some factors will be unethical but cannot be reputed in the court of Law except it becomes encoded into Law as a crime or an offense that is punishable by Law.

So businesses must take into account ethical and legal considerations when crafting their distribution process because illegal and or unethical practices can by themselves destroy the reputation and or goodwill of a business. Where the law is concerned, breaking the law can attract major undesirable consequences such as:

This can invariably lead to the erosion of a company's bottom-line, a huge loss in brand equity garnered over the years, and in some cases outright demise of the organization.

The competition can also use information about unethical practices going on in a company or along its supply chain to bring down an otherwise thriving business in the "public court". When people get involved,  especially in the era of high-speed dissemination of information through social media, the government in many instances also gets involved.

Distribution processes are a very essential part of any business' operations and there are three main unethical practices that are prevalent in this space. They are:

It is also possible for organizations to be engaged in exclusionary tactics in its distribution process. An example of an exclusionary tactic is a tactic that prevents other businesses in the same trade or line of business from using a particular supply channel.

Explanation:

Many organizations that engage in unethical and illegal practices do so in order to cut costs and ultimately increase their bottomline.

In 2016 for instance, retailers such as ASOS, Uniqlo and Marks & Spencer were discovered to have cases of widespread and unchecked human right abuses within their supply chain.

Some of the companies were found to be associated with child labor (that is employment of minors in the factories situated along its supply chain) and cases of unsafe work environment etc. These are examples of businesses that were lax with ethical and legal factors.

Businesses that get it right will not only avoid such issues but report them when they are noticed.

Many businesses are not using the triple bottomline criteria as a measure of their success. The triple bottom line criteria speak to:

1. Profit: this is understandable. Every for-profit- entity needs to have its figures in black rather than in red in order to thrive and grow.

2. People: This factor answers the question about, how safe is the work environment for staff? are they well compensated according to industry standards as well as other best practices? is the company compliant with all labor laws?  are people happy to work with the company? etc

3. Plant: The biggest question here is, how are the operations of the company affecting its environment and earth in general? That is, does the company produce toxic waste? if yes how is it managed such that it has minimal if not zero impact on the environment?

Such is the picture of a company that is concerned about legal and ethical issues in order to stay on the right side of the law as well as to conform to international best practices.

Cheers

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