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: http://www.law.upenn.edu/fac/phrobins/intromodpencode.pdf)

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