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Business ethics and the law
Surely the law is also about issues of right and wrong. The law is essentially an institutionalization or codification of ethics into specific social rules, regulations, and proscriptions. The law might be said to be a definition of the minimum acceptable standards of behavior. However, many morally contestable issues, whether in business or elsewhere, are not explicitly covered by the law. For example, just as there is no law preventing you from being unfaithful to your girlfriend or boyfriend (although this is perceived by many to be unethical), so there is no law in many countries preventing businesses from testing their products on animals, selling landmines to oppressive regimes, or preventing their employees from joining a union – again, issues which many feel very strongly about.
It is often said that business ethics is about the “grey areas” of business, or where, as Trevino and Nelson (2003) in Crane and Matten (2010) put it, “values are in conflict”.
The problem for companies that use a legal basis for ethical behavior is that laws vary among countries. Not common values are common to every culture. In addition, strong home-country governments may try to extend their legal and ethical practices to the foreign subsidiaries of domestically headquartered companies – an action known as extraterritoriality. In some cases, such as with health and safety standards, extraterritoriality should not cause problems. In other cases, such as with restrictions on trade with enemies of home country, extraterritoriality may cause tension between the foreign subsidiary and the host- country government.
In spite of the problems, the law is still a good place to start. (Daniels, Radebaugh, Sullivan, 2007)

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2. The ethical code (Code of Conduct)

By focusing on behavioral level, the ethical conduct, for example, may be seen as a trainable set of competences. This is reflected in training and educational courses that seek to develop ethical awareness and competences. (Jackson, 2011)
The ethical code makes clear how members of the organization are expected to behave. It might specify that:

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  No gifts are to be accepted in any circumstances whether in the country of headquarters or elsewhere;
  
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  Gifts may be accepted up to a specified costs and not above this;
  
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  All gifts offered/or accepted are to be reported to the compliance manager;
  
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  Entertainment may be accepted up to a specified cost and must be reciprocated;
  

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  Gifts or entertainment may be accepted up to a specified cost in the country of the headquarters or entertainment may be accepted up to a specified cost in the country of the headquarters, to some other cost in Country X, and to some other cost in Country Y;
  
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  And so on (Mead, Andrews, 2010)
  

To specify the content of the ethical code, it should cover following areas:

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  Honesty
  

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  Adherence to the law
  
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  Product safety and quality
  
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  Health and safety in the workplace
  
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  Conflicts of interest
  
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  Employment practices
  
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  Selling and marketing practices
  
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  Financial reporting
  
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  Pricing, billing, and contracting
  
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  Trading in securities/using confidential information
  
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  Acquiring and using information about competitors
  
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  Security
  
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  Payments to obtain business
  
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  Political activities
  
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  Protection of the environment. (Rue, Byars, 2009)
  

A shared code has the advantage of protecting their employees against uncertainty. It also creates ethical uniformity which reduces the likelihood of conflict between members following different ethical priorities. It also projects a coherent message to the wider environment – suppliers, customers, competitors, and so on. The message says “this is how our members behave”. Thus the code acts as a mission statement and also reduces the uncertainity for a member of some other organization or culture doing business with you. The full code covers a range of other issues, including bans on offering bribes, dishonest reporting, sexual harassment, relationship, judged inappropriate, and any behavior judged likely to draw the organization into disrepute.
The code can specify fights and duties which are – so far as possible – complementary. For example, employees have rights to work quality (or job satisfaction), and duties to comply with the labor contract and to give loyalty to the firm. Correspondingly, employers have duties to improve the quality of work and the rights to demand certain specified levels of productivity and cooperation. But this specification of rights and duties is formal and legalistic, and typical of Anglo and European cultures. In cultures with other priorities, a bureaucratic approach may not be appropriate. (Mead, Andrews, 2010)
Codes of conduct in the international context can be set externally or internally. A definition of an external code of conduct is guidelines, recommendations and

rules issued by entities within society with the intent to affect the behavior of international business entities within society in order to enhance corporate responsibility. However, external codes of conduct are useful only insofar as they give companies guidance on how they should operate. The real challenge for a company is to become familiar with the codes of many different organizations and the codes may not be consistent with each other. However, armed with information about different codes of conduct as well as input from other stakeholders, companies must establish their own codes of conduct. There are four dimensions to creating such codes:

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   set a global policy that must be complied with everywhere the company operates
   
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   communicate the code of conduct to all employees within the organization and to all suppliers and subcontractors,
   
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   ensure that its policies are carried out, and
   
4. 
   report results to external stakeholders (Daniels, Radebaugh, Sullivan, 2007).
   

The questions that arise are how far ethical norms are determinate by the culture and how far they transcend culture.
There is an example of the Ethical code of the Czech Statistical Office: