Moral management is regarded as a key factor for the corporate competitive power and the foundation of their survival. Companies, which put the moral management in practice, could enhance their competitive power and as a result prosper in high profits and growth, while the other companies, which do not, would lose their own competitive power and inevitably be weeded out. Recently, there are increasing number of Korean companies which adapt themselves to these environmental changes and announce and practice their own charter of ethics. In spite of those efforts, however, the moral management in Korea is still unsatisfactory. Korean companies have to establish the foundation of law observance first before they could actualize the next stage objective of moral management.
The most effective way to establish law observance in management is to remove the environmental factors which make management break the law or enforce management to make illegal decisions. This paper researches and analyzes related literature, laws and regulations, and real world cases. We address examination of financial management systems, implementation of righteous industrial relations, realization of corporate culture of co-existence, and protection of intellectual properties for the law observance. In addition, we suggest, as a practical method for the law observance, improvement of liability structure, restructuring of corporate ownership, opening of corporate financial information, ethical human resource management, regulation of monopoly and oligopoly, and protection of trade secrets and copyrights.