An introduction to the fundamentals of dynamic business law and business ethics chap001

Chapter 1
An Introduction to the Fundamentals
of Dynamic Business Law and
Business Ethics


Chapter 1 Case Hypothetical and Ethical Dilemma
John Harrison is the owner of Harrison Enterprises, Inc., a small metal fabrication shop located in
Poughkeepsie, New York. Andrew Jameson, an employee of Harrison Enterprises, has approached
John with a request. Andrew is the proud parent of a newborn son, and he would like to take the
next two (2) weeks off from work in order to “bond” with his new child. John knows that Andrew
does not have any accrued vacation time (shortly before his son was born, Andrew had taken a
final “two-person family” trip to Florida with his wife, Sara). He also knows that Harrison
Enterprises is not legally required to comply with the Family and Medical Leave Act (FMLA), since
the company only has seventeen (17) employees (FMLA mandates that businesses employing
more than fifty people provide their workers with up to twelve weeks’ unpaid leave every year for
a host of specified reasons, including the birth of a child).
John wonders whether his company has an ethical obligation to comply with the “spirit” of the
Family and Medical Leave Act, even though he does not have a technical, legal obligation of
compliance. Advise John whether his company has such an ethical obligation. Should John
Harrison allow Andrew Jameson to take his requested two (2) weeks of leave from work?


Chapter 1 Case Hypothetical
A group of attorneys, judges and law professionals have collaborated to write a
uniform criminal code. The code would create uniformity in criminal law across the
United States, defining what constitutes a misdemeanor, what constitutes a felony,
how crimes are defined, and what the punishment for particular crimes will be. The
code also proposes that the death penalty be abolished, and that the maximum
punishment for murder be life imprisonment.
Would you favor the adoption and implementation of such a code? What advantages

would result from a uniform criminal code? What disadvantages would result? What is
the likelihood that all states would favor its adoption and implementation, as opposed
to the traditional practice of each state defining criminal law within its own
jurisdiction?
(Reference: />

Chapter 1 Case Hypothetical and Ethical Dilemma
As hiring coordinator for Hennessey Networking Solutions, Inc., (Hennessey) Andrea Templeton knew that her
position was of utmost importance to her company in terms of hiring candidates who were well-qualified, and
who would best contribute to the company’s overall success. On her desk was the employment application and
resume of Timothy Carraway. Andrea had just finished her interview of Timothy, who was the last in a long line
of interviewees who had applied for an entry-level information technology (IT) position at Hennessey.
Hennessey only had one (1) opening available. During Timothy’s interview, the candidate revealed that seven
(7) years ago, he had been tried and convicted in federal court for selling a significant amount of cocaine.
Timothy had also revealed the conviction on his employment application. Timothy went to great lengths to
explain to Andrea that he sincerely regretted the indiscretions of his youth, and that he had spent the last seven
(7) years of his life “paying penance,” and reforming his life. After serving three (3) years in federal penitentiary,
Timothy had earned his bachelor’s degree in Information Technology, graduating with honors
.
Timothy’s interview had gone very well. In fact, Andrea felt that in terms of his personality and education, he
was the best “fit” for the position. Andrea was obviously concerned about Timothy’s criminal background, but
she was also concerned about the young man should he not find an employment opportunity after graduating
from college. Without a legitimate employment option, would Timothy revert back to his “criminal ways? Does
Andrea Templeton and Hennessey Networking Solutions, Inc. have an ethical obligation to hire Timothy
Carraway? Should Andrea’s “hire” decision be based exclusively on Timothy’s qualifications for the job? Why or
why not?


Chapter 1 Ethical Dilemma
What is the best source for ethical business practices: The

individual employee, or the business organization itself? To what
extent should individual employees be allowed to lend input in
the creation of a code of ethics for a business organization? In
the event that an individual employee’s ethical standards differ
from his/her employer’s code of ethics, what can/should be
done to resolve those differences?


Business Law
Definition: Enforceable rules of
conduct that govern commercial
relationships


Functional Areas of Business
Affected By Business Law
•
•
•
•
•
•

Corporate Management
Production and Transportation
Marketing
Research and Development
Accounting and Finance
Human Resource Management

Purposes of the Law
• Providing order
• Serving as an alternative to altercation
• Facilitating a sense that change is
possible
• Encouraging social justice
• Guaranteeing personal freedoms
• Serving as a moral guide


Classification of Law
• Private Law: Involves
disputes between
private individuals or
groups

• Public Law: Involves
disputes between
private individuals or
groups and their
government


Classification of Law
• Civil Law: Involves the
rights and
responsibilities involved
in relationships
between persons and

between persons and
their government

• Criminal Law: Involves
incidents in which
someone commits an
act against the public as
a whole


Sources of Business Law
•
•
•
•
•
•

Constitutions
Statutes
Cases
Administrative Law
Treaties
Executive Orders


Major Federal Administrative Agencies
(Independent)
•
•

•
•
•
•
•
•
•
•

Commodity Futures Trading Commission
Consumer Product Safety Commission
Equal Employment Opportunity Commission
Federal Trade Commission
Federal Communications Commission
Interstate Commerce Commission
National Labor Relations Board
National Transportation Safety Board
Nuclear Regulatory Commission
Securities and Exchange Commission


Major Federal Administrative Agencies (Executive)
•
•
•
•
•
•
•
•

•

Federal Deposit Insurance Corporation
Occupational Safety and Health Administration
General Services Administration
National Aeronautics and Space Administration
Small Business Administration
International Development Cooperative Agency
National Science Foundation
Veterans Administration
Office of Personnel Management


Schools of Legal Interpretation
•
•
•
•
•
•

Natural Law
Legal Positivism
Identification with the Vulnerable
Historical School: Tradition
Legal Realism
Cost-Benefit Analysis


Business Ethics and Social

Responsibility


Business Ethics and Social Responsibility
• Ethics: The study and practice of decisions
about what is good or right
• Business Ethics: The application of ethics to the
problems and opportunities experienced by
businesspeople
• Ethical Dilemma: A problem about what a firm
should do for which no clear, right decision is
available
• Social Responsibility of Business: Expectations
that the community imposes on firms doing
business inside its borders


The “WPH” Process of Ethical Decision
Making: W—WHO (Stakeholders)
•
•
•
•
•
•

Consumers
Owners or Investors
Management
Employees

Community
Future Generations


The “WPH” Process of Ethical Decision
Making: P—PURPOSE (Values)
•
•
•
•

Freedom
Security
Justice
Efficiency


Primary Values and Business Ethics:
Freedom
• To act without restriction from
rules imposed by others
• To possess the capacity or
resources to act as one wishes
• To escape the cares and demands
of this world entirely


Primary Values and Business Ethics:
Security
• To possess a large enough supply of

goods and services to meet basic needs
• To be safe from those wishing to
interfere with your property rights
• To achieve the psychological condition
of self-confidence such that risks are
welcome


Primary Values and Business Ethics: Justice
• To receive the products of your labor
• To treat all humans identically,
regardless of race, class, gender, age,
and sexual preference
• To provide resources in proportion to
need
• To possess anything that someone else
was willing to grant you


Primary Values and Business Ethics:
Efficiency
• To maximize the amount of wealth
in society
• To get the most from a particular
output
• To minimize costs


The “WPH” Process of Ethical Decision
Making: H—HOW (Guidelines)

• The Golden Rule
• Public Disclosure Test
• Universalization Test


Six Ways To Interpret “The Golden Rule”
• Do to others as you want them to gratify you
• Be considerate of others’ feelings as you want them to
be considerate of yours
• Treat others as persons of rational dignity like you
• Extend brotherly or sisterly love to others, as you would
want them to do to you
• Treat others according to moral insight, as you would
have others treat you
• Do to others as God wants you to do to them