The Functions and Roles of Law in Business and Society

(For clarity, the concept of law discussed here is the explicit, systematic, coercive modern law, as imposed by a society upon itself, by way of a government.)

First, a definition of Law. Law is a collection of (ideally) agreed-upon rules and norms that either permit or prohibit certain behaviors of persons and groups (including businesses) . Its primary purpose is to guide human behavior so as to achieve justice. It is society’s way of ensuring that individuals and groups are protected from each other.

Since criminals are inevitable, the threat of punishment must exist to deter potential troublemakers. If people are to live together amicably, and conflicts are to be resolved peacefully, then the force of law must be an essential part of everyday life.  Another way of saying this is that law always compels, coerces, orders, demands, or rules.  It never asks nicely.

At its most basic, law is all about uniformity, consistency, and predictability.  Social progress, in fact, can be defined as the achievement of making good laws for future generations, for the common good.

The law addresses the different needs, desires, and ideologies of individuals and groups; law addresses disagreements, and ensures a trouble-free coexistence. Modern law is intended to ensure the impartial treatment of individuals and organizations. Laws play a major role in the development of a society.

Throughout history, the law has been considered to be a coercive device, ensuring cooperation through threats of punishment. This use of threat is actually the defining characteristic of the law. However, the law also provides a systematic way of contesting its own rules and adjusting according to the current perceptions and needs of society.

The law may be divided into three areas: judicial, legislative, and executive. The law has a judicial function, concerned with settling disagreements, which is what the law is all about. The legislation of the law determines the rules that will govern the process of judgment.  The executive function ensures that the disputing parties submit to the law’s judgment and that they comply with the settlement reached through the judicial process. This is where coercion becomes essential. Law generally authorizes the use of force by individuals or groups tasked to maintain order. Only these agents of the law are legally allowed to use force on others.

The concept of law usually implies the presence of a government. The basic functions of law can be summarized as the following (it must be noted that these are not mutually exclusive categories; there is a lot of overlap):

·       To resolve conflict. Disputes are natural and will occur. The law provides society with a safe means of arriving at justice.

·       To provide order. Order (predictability of the environment, as exemplified by the absence of violence). This creates and maintains a feeling of security in communities.

·       To protect persons and property. Laws define punishments for individuals who harm or trespass upon individuals or people.

General welfare. The idea is that all interests in society must be protected, and not just a narrow class of interests or some segment of the population. This applies to most modern societies. This also entails identifying problems that have the potential for becoming more serious problems.

To protecting individual rights. In most modern societies, no one is (supposed to be) above the law. The law prevents the oppression of the weak by the powerful.

The law regulates financial institutions and influences the economy. The law ensures that activities primarily concerned with the acquisition of wealth/property (eg. of businesses)  are rewarding and worthwhile. This is achieved through such devices as trademarks, patents, and fair business practice provisions. In the modern setting, law serves as a stabilizing factor in the economy.

The law’s function in the context of business is to organize, standardize and stabilize the monetary system. To ensure fair trading practices, to uphold intellectual property and copyrights, control prices.  The law encompasses such diverse business-related concerns such as advertising and fair copyright.

Societies today are more intricate and complex. Upholding order and discipline would have a wide implication on a society’s prosperity. Laws are made to protect the interest and ensure security of  individuals, properties, and businesses, and against such forces which threaten civil and personal rights. Some examples of these rights include the freedom of speech, free press, and the right to a fair trial.

Many societies also have laws that prevent lawlessness. This is important in order to prevent anarchy and disorder. Without the order and discipline being imposed by law, chaos would permeate everyday activities. The law also acts as a deterrent to evil and malicious behavior in humans.  However, the law could also be an agent in keeping people in unjust situations and it could also impose a restriction of some freedoms.

The law ensures that society is orderly and predictable. It acts as a venue for resolving disputes, a vanguard for protecting rights of individuals and properties. Law and the security it provides alone cannot guarantee us a safe world, but through it, an environment wherein people believe it is worthwhile to live and progress is possible.