Business Law and Ethics BUS 3013

Summer 2023 Professor Joseph Henderson

[email protected]

Agenda for Week 1:

Topics for This Week – Who am I? How will the course be structured? What are the course expectations?

Review syllabus Discuss recurring assignments Discuss Research Paper

Refresher Overview of Legal System Chapter 1 Highlights

Who am I?

I am an Adjunct Professor at TWU for the College of Business and the History and Political Science Department.

I also am an Associate Judge for the City of Fort Worth’s Municipal Court.

Further, I am an attorney and have a J.D. and an L.LM. in International Financial Law. My undergraduate degree was in business administration with a major in Accounting.

How will this course be structured?

• This is an online course where you will be expected to do most of the work on your own.

• The class is divided into five (5) weeks. • Each week you will be expected to complete your assigned

responsibilities for that week. This class has a very fast pace so please be sure to complete the readings and assignments.

• If you are not familiar with Canvas, then please take part of this week to become comfortable with it.

• You will be graded for your responses to the recurring Weekly Assignments, and Examinations as set forth in the syllabus.

What book is needed?

Business: Its Legal, Ethical, and Global Environment (11th Edition); Marianne M. Jennings; ISBN-13: 978-1337103572 It should be available through the local bookstores, or online.

It does not matter if you obtain a hard copy or an electronic copy of the book.

I will likely also post articles to Canvas as the semester progresses. Ensure that you are familiar with the articles and other material posted as it may appear in other assignments or on the examinations.

What You Need to Do:

• Stay on top of the weekly reading and assignments; • This includes reviewing the slides. They are intended to clarify the important

points of the material that week and sometimes will include helpful information to complete an assignment or obtain some extra credit.

• Email me if you are confused or have any questions (I am here for this, do not hesitate to contact me);

• When emailing me, please use your TWU account so I know that I am in fact talking with the appropriate student;

• When contacting me – utilize email ([email protected]). If a longer time, or an in-person/Zoom meeting is necessary then we can schedule it through email.

• Keep in mind that there are some topics that I cannot discuss through email such as final grades.

Assignments / Exams:

Weekly Assignments: Every week, you will be asked to complete a discussion board assignment. They will relate to the material covered that week and may take different forms throughout the semester. These assignments are not merely pass/fail. You will be graded on the quality of your responses when the assignment calls for more than short answer responses.

Assignments / Examinations:

Examinations: There will be five weekly examinations during the semester. They may consist of: True/False; Multiple Choice; Essay and Short Answer questions. The material covered on the examinations will be what is found in the readings, the lecture notes, and class discussion. The Examinations will be conducted online and are open note and book, but do not work together or utilize answer services or websites. The Examinations are to be completed individually.

Legal Studies Overview:

During the course of the semester, you may want to cite a case when writing a response to a question. Do not stress out too much about this, but please be aware that citing to a case is different than citing to an article, or book. Generally, the United States Supreme Court will periodically release an updated style guide that address this. However, all you need to do for this class is: (1) Cite the abbreviated name of the case and either italicize or underline it; (2) Give the volume of the reporter where it can be found; (3) Identify the appropriate reporter; (4) Indicate the page where the case may first be found within the reporter; (5) Identify the Court issuing the opinion; and (6) The year the opinion was given.

Legal Studies Overview:

So what does a citation look like? In the first chapter on p.10 there is a case referenced – if you were to discuss it in your writing, then the citation should roughly look like:

Yates v. US, 135 S.Ct. 1074 (2015).

You could use this cite to quickly find the source in an online legal database. For all other sources please follow the appropriate citation guidelines

Legal Studies Overview:

So when we say the legal system in the United States, what do we mean?

This is the framework of government agencies and private actors who work to resolve disputes and other legal matters.

Is there just one? No – there are a number of different systems. For example, each state has its own legal system.

What is the most important one? Generally, the federal system is acknowledged as the most important in the United States.

Legal Studies Overview:

See if you can answer these questions by yourself. If you have any questions, then please let me know.

Why do courts issue opinions?

What is precedent?

What is Stare Decisis?

Introduction to Law

Chapter 1 Now let’s briefly talk about some of the most important points of Chapter 1…..

Introduction to Law

What is a “law”? As the book notes, there are many different ways to explain what a law is and a multitude of people who have published their take on it. For the purposes of this course, we will stick to the simple explanation. A law is simply a rule governing an individual’s behavior. (Meaning either compelling or precluding some behavior.) As we progress through this course, think about what is meant by the concepts of justice and right v. wrong in your lives.

Introduction to Law

While companies can find themselves involved in criminal matters, it is more likely that they will work in the civil side of the legal system on a day-to-day basis. Question – So what is meant by civil law? In the United States, this means the case is between two or more parties who are alleging a wrong between them. There are times when a government can be a party to a civil matter, but generally such matters fall between individuals or corporations. In the context of business, common civil matters are: contract disputes or personal injury matters.

Introduction to Law In the United States, laws can be passed by legislative bodies (statutes), governmental agencies (regulations), found by the courts (common law) and/or be determined by individuals (commonly through contracts). There is a hierarchy associated with these sources. From highest to lowest, it generally looks like:

U.S. Constitution Federal Legislative Enactments

Federal Administrative Regulations State Constitutions

State Legislative Enactments State Administrative Regulations

County Ordinances City Ordinances

Private Law

Introduction to Law

Purpose of the Law: Keeping Order – courts are the proper means for the redress of grievances by private parties Influencing Conduct – if people know the law then they will behave within the boundaries of it Honoring Expectations – obligations are important and people should be able to rely on the promises of another Promoting Equality – is it fair to have a government/society that only favors certain people?

Introduction to Law

Characteristics of Law in the United States: Flexible – computers, the internet, space Consistent – ex post facto, stare decisis Pervasiveness – legal boundaries that allow for innovation while still promoting the purpose of law.

Do you think other countries operate more or less the same? Let’s look at the case brief for the case found in Case 1.1 next….

Introduction to Law

Yates v. U.S., 135 S.Ct. 1074 (2015) Facts: Yates was fishing in the Gulf of Mexico when he caught an undersized Red Grouper. He ordered a crewman on his boat to toss the fish back into the Gulf in order to prevent anyone from finding out that he harvested an undersized fish. A federal officer learned of the event and charged Yates with obstruction of justice by claiming that the order resulted in the destruction of evidence. Issue: Did the order fall and actions of the fishermen fall within the scope of the statute that defines obstruction of justice? Holding: No Rationale: A review of the construction of the statute shows that it was enacted to prevent criminals from destroying files – both electronic and paper. Fish are not intended to fall within the definition of tangible things and therefore it is inapplicable to the actions of Yates. Accordingly, his conviction is reversed which means the charges are dismissed.

Introduction to Law

Theory of Law: Question – If you know law’s purpose and what it is, then why do laws change over time?

Answer – Society changes and as it does, what was once considered acceptable behavior might no longer be accepted. An example of this could be sexually harassing behavior found on period television shows – like Mad Men – that would not be tolerated today.

The application of societal values, or theories, to law is known as jurisprudence and it helps to determine how laws are applied and what they mean. Look at the various theories, which one makes the most since to you?

Introduction to Law

Sources of Law: There are many different sources of law in the United States and it can be quite confusing to study all of them as we will do going forward. It is important that you understand that there is a hierarchy associated with the sources as we previously covered above. For example, the U.S. Constitution is the highest source of law in the United States – right? What can you think of that might be a lower source of law?

(hint – read the chapter) Note that Court decisions like the one discussed above are important, we will look at them repeatedly throughout the semester.

Conclusion:

Ensure you read the entire chapter.

Please do not hesitate to email me with questions.

Thank you.

Business Law and Ethics BUS 3013

Summer 2023 Professor Joseph Henderson

[email protected]

Chapter 2

The following are some of the high points and concepts that are important from the reading.

Again, these slides are meant to supplement, not replace the reading.

With that said, let’s dive in……

Chapter 2

Briefly, think a little more about law. What does a law do in terms of behavior?

It sets the boundaries of acceptable behavior and is backed by a means to enforce it.

Does this mean that a law will always set such standards at the highest level?

No – of course not. In fact, laws usually set a minimum standard of behavior.

So how do people know what the best way to behave is? Ethics are one of the ways used to provide such guidance

Chapter 2

Ethical Behavior: Question – So what are ethics? It is a standard of normative behavior that provides guidance as to the best way to behave in a given situation based on the relevant ethical system. The standard can come from a variety of places. There are numerous schools of thought on ethical systems. For example, a person might look to their idea of the idyllic person and use that as a standard to determine their behavior in a given situation. (This is known as Virtue Ethics)

Chapter 2

Ethical Behavior: Again, so are ethics the same as the law?

No. Positive law (written laws made by the appropriate body) is the minimum standard, not an ethical standard. Further, it is common for there to be no law governing a situation while a system of ethics could still apply to it.

Do you see how the two are different? Let’s turn towards some of the various standards and look at them in more depth…

Chapter 2

Ethical Standard Sources: Natural Law: The easiest way to think of this standard is that there are rules of behavior that are naturally binding by nature (or divine guidance) and that they are universally understood by all human beings and generally relate to the idea that humans should live good and happy lives. Under this theory, what is “right” and what is “wrong” is the same for everyone and are inherently known – i.e. natural.

Chapter 2

Ethical Standard Source Continued: Moral Relativism: This is the idea that there is no universal standard that dictates a behavioral standard for every person faced with the same situation. Rather, this theory holds that the situation dictates the correct standard of behavior and it could be different for different people. Under this theory, a person should look to the local culture to determine how to behave in a given situation. i.e. – “When in Rome, do as the Romans do.” Religion and Ethics: This is self-explanatory as a source. However, realize that not all religions preach the exact same behavioral norms. Can you see any limitations to this concept?

Chapter 2

Ethical Dilemmas: The number of possible ethical dilemmas is very large. The book does a good job of addressing this portion of the chapter directly and I do not have anything to add to it at this time.

Chapter 2

Resolution of Ethical Dilemmas: Blanchard and Peale: Three questions must be answered in an affirmative manner in order to resolve a dilemma under this model. They are: 1 – Is it legal?; 2 – Is it balanced?; and 3 – How do I feel about it? If a person is able to answer these questions positively, then the decision is ethical. If not, then it is not and they should not take the action, or should move to correct the situation.

Chapter 2

Resolution of Ethical Dilemmas Continued: Front-Page-of-the-Newspaper: Under this model, a person should ask how the action, and resulting consequences, will be written about by the press. This is also known as the headline test. If a person believes that the disclosure of the act would result in a negative public perception, then they should not do it. Laura Nash: This model uses a series of questions to force the decision maker to view the dilemma from more than one perspective. Using this model, a person should ask how other people who might be indirectly affected by the decision will feel. The questions might be: How would others views this?; Am I comfortable if the public knows I directed the company to take this action?; etc.…..

Chapter 2

Resolution of Ethical Dilemmas Continued: Wall Street Journal Method: Similar to the Blanchard and Peale model, this method requires the decision maker to evaluate a decision through three questions. They are: 1 – Is it compliant with the law?; 2 – How does it contribute to the business?; and 3 – Are the consequences of this decision positive, or negative?

Chapter 2

Ethical Failures: Do you think that people will always pick one of the models, use it, and then reach the best, most ethical, decision? If your answer is no, then why do you think that is?

People can use different rationalizations to ignore making an ethical decision.

Usually, a person will rationalize their actions in a number of ways. Sometimes, the person making the decision is indifferent, or just does not care about the consequences of their actions.

Chapter 2

Social Responsibility: Let’s start this section with a question: What do you think the role of a business is in society?

Is it to purely generate wealth?; Is it to purely benefit society?; or Is it to generate wealth and benefit society?

The answers to these questions determine how a company might view social responsibility when deciding on a course of action.

Chapter 2

Social Responsibility: The four perspectives discussed in the book – Inherence, Enlightened Self- Interest; Invisible Hand; and Social Responsibility – make it plain that really there are two viewpoints to this issue. They are: 1 – A company should only focus on profits and following the law. All other considerations are unimportant to the decision-making process; or 2 – The impact of a company’s actions on society are important and should be weighed before a company decides on a course of action. Can you see the positives and negatives of both schools of thought? How do you reconcile this with the article that I posted the first week of the semester?

Chapter 2

The Importance of Ethics: Regardless of your views up to this point, do you think a business having an ethical framework to make decisions is a good thing?

Sure, if a company acts in an ethical manner, then it might reap benefits above and beyond mere profits that still increase its profitability.

For example, Exxon employed a ship that was involved in a large, damaging oil spill in Alaska in the 1989. The spill impacted over 1,300 miles of shore and did millions of dollars in damage to the area effecting both commercial and natural interests. After the resulting investigation, Exxon was faulted for the spill and had terrible publicity. Calls to boycott the company lasted for decades and negatively impacted its sales long afterwards. Furthermore, substantial regulatory burdens were implemented after the disaster which increased Exxon’s operating costs. If Exxon had acted in an ethical manner then these negative consequences may not have happened.

Chapter 2

The Importance of Ethics: Using the previous example, it is obvious how properly implemented business ethics are important. As the book notes, they can positively impact profits, leadership, reputation, and strategy. So, how then does a company implement good ethical practices?

Chapter 2

Implementing Ethical Practices: Leadership Commitment: Senior leadership sets the tone for an entire company. If they are committed to ethical behavior then it will have an effect on the entire company. If the converse is true, then it will be much more likely that a company has ethical problems. Code of Ethics: This seems self-evident, but is important nonetheless. A company should adopt a set of ethical standards in order to guide its employees as they make decisions. This is important as doing so eliminates several of the typical rationales that people give when making an unethical decision. Reporting Hotlines: Assuming a company has done the first two, implementing a control process to ensure that ethical guidelines are followed is important. Something like a reporting hotline can serve to eliminate unethical conduct since employees know that their actions are being monitored and the company cares about compliance with its adopted code of ethics.

Chapter 2

That is it for this week.

Please let me know if you have any questions.

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