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Law Ethic and Csr

In: Philosophy and Psychology

Submitted By s818014
Words 1876
Pages 8
CRITICALLY ASSESS THE VIEW THAT
BUSINESSES HAVE A MORAL DUTY TO PUT THEIR CONSUMERS FIRST

1.0 Introduction
Nowadays, Malaysia has become one of the develop countries in the world. Many new things have been developed and improved in terms of business administration, economy, facility, technology, culture, education system, and so on. All of these things have a significant relationship with the law. People or organization has the right to be protected and the law have been created to make people’s lives more comfortable and peacefully.

Laws have been used to protect consumers for centuries. These laws have been designed in a variety of legal forms, including criminal law, tort, contract, intellectual property, etc. In addition to those laws that specify consumer protection and product liability as their primary concern, numerous other provisions have the effect of protecting the consumer, for example by streamlining the prosecution of fraud, protecting property or facilitating litigation.

This study will examine the critically assess the view that businesses have a moral duty to put their consumers first. Legislation of consumer protection in Malaysia now is entering to the new era with the recent introduction of the Consumer Protection Act 1999.

2.0 Business moral duty and consumer protection
2.1 Business moral duty
A duty is an obligation to act in a certain way. When the obligation is based on moral and ethical consideration, it is a business moral duty. Often we think about moral duties in term of rules that restrain us, the “don’ts,” as in don’t lie, don’t cheat, and don’t steal. In business, we need moral duty to build some of respect or trusted from consumer.
Connecting with community has often been viewed as a charitable thing to do and not necessarily core to ‘real’ business.
There is a natural tension between the profit motive and social impact. However, when we consider that companies sit within the broader community and that the relationship is one of inter-dependence rather than independence, then there is a strong case for putting social strategies high on the corporate agenda.
As management thinking continues to evolve, we are entering what many call a ‘third wave’ in the way that companies and communities interact. Corporate philanthropy was the first wave. A range of measures including strategic philanthropy and community investment formed the second wave – which is often grouped under the banner of corporate social responsibility.
The moral obligation of business is not separate from the profit-maximization objective - they go hand in hand and, if harnessed, can produce powerful outcomes. The reward for those who get it right lies in the competitive advantage and enduring business value that is created. It is, primarily, a business proposition.

2.2 Consumers protection
Consumer is an individual or group of people who buy a products or services for personal use and not for manufacturer or resale. According to Gerald N. Hill and Kathleen T. Hill (1981-2005), consumer is someone who can make the decision whether want or not to purchase an item at the store, and someone who can be influenced by marketing and advertisements Any time that someone goes to a store and purchases a toy, shirt, beverage, or anything else, they are making decision as a consumer.

Based on the Section 3 of the Consumer Protection Act 1999, consumer can be defined as a:
“Person who acquires or uses goods and services of a kind ordinarily acquired for personal, domestic or household purpose, use or consumption”

It is clearly stated that consumer use the goods or services for their personal use, not for commercial or business purpose. Nevertheless, under the Section 3 of the Interpretation Act 1948 and 1967 states that consumer is a person includes corporation, partnerships and unincorporated bodies. But in most of contemporary cases of consumer protection is due to the people who use the products for personal purposes and the case generally refers to Consumer Protection Act 1999.

Consumer protection consists of laws and organizations designed to ensure the rights of consumers as well as fair trade competitions and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional protection for the weak and those unable to take care of themselves.
Many issues involve in consumer protection that can give a lot of bad effect to the consumer. For example, the issues such as product safety, wrong product information, fraud agreement between both sides, uncertainty of time and price, misrepresentation, buyer and seller interaction, delivery and acceptance, guarantees, and so on. In many country as well, a government play an important role in avoiding a consumer become a victim in daily transaction. A variety of law is regulated to protect consumer affairs according to current needs in every country. In Malaysia for instance, halal and health is an issues that are concern by the community in this country. So, the government and non-government parties will responsible in searching for information about the product or service such as about the manufacturing information, ingredients of product, labeling, packaging, delivering and so on.

3.0 Business relationship and Customer treatment Under Malaysia Law
One of the factor of in being a successful company or organization is by the way in how they treated their customers. Loyalty of the consumer towards goods and services or brand is a great achievement for the organization that shows by the amazing performance and quality that they offered. Consumers necessarily want to purchase a quality product and the product definitely free from the defects and prohibited materials. A product that distributed by the manufacturer or retailer sometimes has low product liability and does not meet the criteria as desired by the consumer. That is why the consumer protection towards liability of the product or service is always be a matters that need to be concern nowadays.
In general terms, law is requires a product that is produced and sold have meet the ordinary expectation of the consumer in every aspect. When the product has an unexpected defect or damage and dangerous to the user, the product cannot be said has been meet the desires and expectation of the consumer. A product that distributed by the manufacturer or retailer sometimes has low quality and does not meet the criteria as desired by the consumer. Low quality may cause by the defective of product. Product defective is a product that produced and distributed but unfit for its intended use, dangerous and harmful for normal use, does not carry adequate instructions for its use. Defectiveness becomes the key concept of the new product liability regime. A profound meaning of product defect has been specified under the Section 67 (1) of CPA 1999, which stated:

“Subject to subsections (2) and (3), there is a defect in a product for the purposes of this Part if the safety of the product is not such as a person is generally entitled to expect”.

The relationship between consumer and the product has been occurred for a long time. As a consumer, protection should be given to them when dealing with the business transaction involving the sale and purchase of products or services every day. It is cannot be avoided by any individual or organization because the stability and quality of economy is due to the consumers loyalty and responsiveness of the product in the marketplace.
Businesses have at least the following two general ethical duties to consumers, according to any theory of justice or morality that recognizes (a) that contractual relationships give us obligations and (b) that we have a right to non-injury: 1. Businesses must give us what we pay for. Whenever we trade, we are exchanging goods and services within an implicit or explicit contract. One person is obligated to give one thing in exchange for another. People should not be deceived about what they are buying. For example, when we buy a TV set we expect (i) to get the TV set, (ii) that the TV set will function, (iii) that the TV set has minimally sufficient quality, and (iv) that the TV set will not harm us when used in ordinary ways. 2. Businesses must not harm anyone, including consumers. 3. Companies should investigate consumer complaints. Consumers are a good source of product safety testing that can go beyond a company’s expectations, and complaints can be a good source of information concerning safety standards and misuse of products.
The primary law covering the sales of goods is Sales of Good Act (SOGA) 1957. SOGA 1957 is based on common law which is has been applied in England. State in Peninsular Malaysia except Penang and Malacca uses Sales of Goods Ordinance 1957, but Penang and Malacca applied SOGA 1893. For state Sabah and Sarawak also used SOGA 1893 (an English act). In 1989, the ordinance upgraded to be an act and called SOGA 1987 which applied to state Penang and Malacca, leaving Sabah and Sarawak. The main purpose of SOGA is to regulate the transaction between buyer and seller. The breach of contract will entitle to terminate the contract and claim for damages. The act introduce of implied condition and warranty. There are four implied conditions imposed by the act which is section 14, 15, 16 and 17. * Section 14: In this section, the seller must have the goods title to the goods. If the contract of sales between buyer and seller review that the seller not has a title to a goods, then the seller has breach the contract. * Section 15: This section state that the goods sold must conform to the description given. Implied condition to description due to transaction based on description given by seller like catalogs, internet, brochure. * Section 16: There are two implied condition in this section which is merchantable quality and fitness for purpose. * Section 17: The goods sold must correspond to the sample.

4.0 Conclusion
In conclusion, a relationship between "Business moral duty" and "consumer protection" is much closed. Each description will be based on strong evidence through the cases occur in Malaysia. It was further supported by the facts and sections contained in the Consumer Protection Act 1999, which slightly by can explain how important the relationship between the dealer and consumer protection in the country.
Consumers have a reasonable expectation that they will not be harmed by their purchases, and if they are, they will likely seek recourse. Manufacturers, distributors, suppliers, and retailers are held liable for any injury or damage caused by their products. Consumers have a very strong power to boycott any product defects occur, suppose that the manufacturers do not want to be responsible for all their negligence.

5.0 References
Book
1. Greville Janner (1988), Type of Defects (pg. 88), The Consumer Protection Act 1987, Janner’s Complete Product Liability
Statutes
1. Consumer Protection Act 1999 (Malaysia)
Websites
1. Gerald N. Hill, Kathleen T. Hill (1981-2005), Product Liability, Legal Term and Definition, People’s Law Dictionary dictionary.law.com/Default.aspx?selected=1630 2. Gerald N. Hill, Kathleen T. Hill (1981-2005), Consumer Products and Safety, Consumer Information, Breach of Warranty and Negligence
gomestic.com/consumer-information/consumer-products-and-safety…...

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