Chapter 1: Introduction to Business Law - ️️Chapter 1: Introduction to Business
Law
Stakeholders of a firm are the many groups of people affected by the firm's decisions,
including but not limited to (6): MECCOF - ️️FACE-COM
1. *M*anagement
2. *E*mployees
3. *C*ustomers
4. *C*ommunit...
BUL 4421-Midterm FAU Gendler
Chapter 1: Introduction to Business Law - ✔️✔️Chapter 1: Introduction to Business
Law
Stakeholders of a firm are the many groups of people affected by the firm's decisions,
including but not limited to (6): MECCOF - ✔️✔️FACE-COM
1. *M*anagement
2. *E*mployees
3. *C*ustomers
4. *C*ommunity where the firm operates
5. *O*wners/shareholders
6. *F*uture generations
Business Ethics include (but are not limited to) (3): P,C, SR - ✔️✔️1. Decisions in
choosing a method of *production.*
2. Decisions regarding how to *compete* with competing firms.
3. *Social responsibilities* of the firm
This type of law regulates disputes between private individuals or groups.
(Ex: dispute between landlord and tenant governed by private law). - ✔️✔️Private law
This type of law regulates disputes between private individuals and government.
(Ex: dumping in violation of state or federal environmental laws). - ✔️✔️Public law
This type of law delineates the rights and responsibilities implied in relationship between
persons, or between person and their government. - ✔️✔️Civil law
This type of law regulates incidents in which someone commits an act against the public
as a whole, such as by conducting insider trading on the stock exchange.
- Government is plaintiff - ✔️✔️Criminal law
Put these laws in order of Hierarchy of Laws: States Statutes, U.S. Constitutions,
Common Law, state constitution, and Federal Statutes - ✔️✔️- U.S. Constitutions
- Federal Statutes
- State Constitution
- State Statutes
- Common Law
Collection of legal interpretations made by judges, and are law unless revoked by new
statutory law. - ✔️✔️Common Law (aka Case Law)
,Past decisions in similar cases that guide later decisions thereby providing greater
stability and predictability to the law. - ✔️✔️Precedent
A principle stating that rulings made in higher courts are binding precedent for lower
courts. Latin for "standing by the decision." - ✔️✔️Stare Decisis
1. Summaries of common law rules in a particular area of the law that have been
enacted in most states.
2. They do not carry the weight of the law but guide interpretations of certain principles.
- ✔️✔️Restatements of the Law
Certain habits of mind and specific beliefs about human nature. Beliefs are deeply
rooted within a person's emotions and habits, and thus they are sure to guide one's
opinions and decisions. Such beliefs may be commonly held and create much larger
schools of thought thus they are more common guides to legal interpretation. -
✔️✔️Schools of Jurisprudence
Name the (5) Schools of Jurisprudence: *CH*i*LL*i*N* - ✔️✔️1. Cost benefit analysis
2. Historical School
3. Legal Positivism
4. Legal Realism
5. Natural Law
The school of jurisprudence that recognizes the existence of higher law, or law that is
morally superior to human laws. - ✔️✔️Natural Law
Relevant areas of business law applicable to human recourse management involve (4):
- ✔️✔️1. Agency law
2. Contracts
3. Employment and labor laws
4. Employment discrimination
The school of jurisprudence which holds that because society requires authority, a legal
and authoritative hierarchy should exist. When a law is made, therefore, *obedience is
expected because authority created it.*
1. Must abide by duly authorized law
2. Law is distinct from morality
3. Moral questions about the law should not interfere with our inclination to obey it.
4. A judge may write that she is deciding to enforce the law in question but that her
decision does not necessarily mean she sees the law as the morally correct rule. -
✔️✔️Legal Positivism
A school of jurisdiction that:
1. Follows tradition or custom to shape the law
, 2. Is closely linked with the doctrine of stare decisis
3. We assume past practice was the product of careful thought. - ✔️✔️Historical
School (aka tradition or custom)
Judges who follow this school of thought are more likely to depart from past court
decisions to account for the fact that our *society is constantly shifting and evolving.*
1. Judges should consider more than just the law
2. Judges should consider factors such as social and economic conditions
(Ex: The law protects pregnant women) - ✔️✔️Legal Realism
An economic school of jurisprudence in which all costs and benefits of a law are given
monetary values. Those laws with the highest ratios of benefits to costs are then
preferable to those with lower ratios.
(Ex: (i) Polluted land is an economic loss, as it cannot be used for farming or recreation.
Polluted water can be toxic for fish and cannot be used for drinking (ii) the price of
environmental cleanup and lost productivity in the economy as a whole may be even
greater. - ✔️✔️Cost Benefit Analysis
Chapter 2: Business Ethics - ✔️✔️Chapter 2: Business Ethics
The use of ethics and ethical principles to solve business dilemmas. - ✔️✔️Business
Ethics
Example of bad Business Ethics: - ✔️✔️Ex: Accutane
- Is a company doing the right thing when it attempts to reduce the costs of advertising
by not listing all possible complications of the medicine for the consumer?
Decisions in choosing a method of production (example: bribes): - ✔️✔️1. Dealing with
bribes
2. Some companies only work on bribes in order to supply it.
3. Siemens AG is now forced to restructure itself to do business ethically and legally.
WPH Framework for Business Ethics (3): - ✔️✔️1.* Who* the decision impacts
(stakeholders)
2. *Purpose* of the decisions
3. *How* to make the decisions (i.e. guidelines)
How should we think about the *future generation* stakeholders? - ✔️✔️Think more
broadly about additional stakeholders who may be affected just as much in the long run.
Then we will be less likely to make decisions that have unintended negative ethical
impacts.
The basic unit of business ethics is ____________. - ✔️✔️values
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