Download Twomey & Jennings BUSINESS LAW

BUSINESS LAW
Twomey • Jennings 1stEd.
Twomey & Jennings
BUSINESS LAW
Chapter 3
Business Ethics, Social Forces
and the Law
© 2004 West Legal Studies in Business
A Division of Thomson Learning
BUSINESS LAW
Twomey • Jennings 1stEd.
What is Business Ethics?
• Business ethics is the application of values and
standards to business conduct and decisions.
• When a business upholds basic ethical
standards, it will enjoy the competitive
advantage of a good reputation and, over the
long term, better earnings.
• When a business violates ethical standards,
social forces are set into motion, sometimes
leading to changes in the law.
© 2004 West Legal Studies in Business
A Division of Thomson Learning
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BUSINESS LAW
Twomey • Jennings 1stEd.
What is Business Ethics?
• Law as the Standard for Business Ethics.
– Positive Law: if an act is legal it is ‘moral.’
• Universal Standards for Business Ethics.
– Natural Law: higher standards for ethics.
– A law can be legal but unethical.
• Situational Business Ethics/Moral Relativism.
• Business Stakeholder Standard of Behavior.
© 2004 West Legal Studies in Business
A Division of Thomson Learning
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BUSINESS LAW
Twomey • Jennings 1stEd.
Why is Business Ethics
Important?
• Importance of Trust.
• Relationship to Financial Performance.
– Ford and Firestone.
– Johns-Manville.
• Good Reputation.
© 2004 West Legal Studies in Business
A Division of Thomson Learning
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BUSINESS LAW
Twomey • Jennings 1stEd.
Cycle of Social Interaction
Social Forces
Social
Environment
Ethics
Law
© 2004 West Legal Studies in Business
A Division of Thomson Learning
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BUSINESS LAW
Twomey • Jennings 1stEd.
Public Policy, Law & Ethics
• Protection:
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of the state, the person, public health, safety and morals.
of property and personal rights.
from exploitation, fraud, and oppression.
of creditors and rehabilitation of debtors.
• Enforcement of individual intent.
• Furtherance of trade.
• Stability and flexibility.
Mortenson Co. v Timberline (1999) The
‘One Click’ Warranty Waiver.
© 2004 West Legal Studies in Business
A Division of Thomson Learning
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BUSINESS LAW
Twomey • Jennings 1stEd.
How to Recognize and
Resolve Ethical Dilemmas
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Integrity and Truthfulness.
Promise-Keeping.
Loyalty: Avoiding Conflicts of Interest.
Fairness.
Doing No Harm.
Maintaining Confidentiality.
© 2004 West Legal Studies in Business
A Division of Thomson Learning
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BUSINESS LAW
Twomey • Jennings 1stEd.
How to Analyze
Ethical Dilemmas
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Define the problem.
Identify who could be injured.
Define the problem from opposing viewpoint.
Would you be willing to tell your family
about your decision?
• Would you be willing to tell the community?
• Reach a decision.
© 2004 West Legal Studies in Business
A Division of Thomson Learning
8
BUSINESS LAW
Twomey • Jennings 1stEd.
Resolving Ethical Dilemmas
• Blanchard and Peale Test.
– Is it legal?
– Is it balanced?
– How does it make me feel?
• Front-Page-of-the-Newspaper Test.
– Would I want my decision published?
• Laura Nash Test.
– Requires examination from all perspectives.
• Wall Street Journal Model (3 C’s model).
– Is my conduct compliant with the law?
– What contribution does this action make to others?
– What are the consequences?
© 2004 West Legal Studies in Business
A Division of Thomson Learning
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