Science

Comprehensive Volume

ANDERSON’S BUSINESS LAW

And The Legal Environment 22e

DAVID P. TWOMEY Professor of Law

Carroll School of Management Boston College

Member of the Massachusetts and Florida Bars

MARIANNE MOODY JENNINGS Professor Emeritus of Legal and Ethical Studies

W.P. Carey School of Business Arizona State University

Member of the Arizona Bar ©

Sa m pl e N am

e, iS to ck

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Anderson’s Business Law

and The Legal Environment, 22e

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Jennings

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CONNECT for

SUCCESS For today’s – and tomorrow’s – business leaders, a solid

understanding of the legal environment of business is

crucial. Students must be equipped with the knowledge of

basic legal concepts and the skills to apply these concepts

to real-world examples in order to succeed in business.

Anderson’s Business Law and the Legal Environment,

a time-tested market leading textbook, continues the

tradition of providing crystal clear explanations of the

law, student-friendly examples, and vivid illustrations.

Perhaps the most exciting innovation to the new edition

is not what students learn but how they learn – the

cutting-edge 22nd edition continues with its proven

features and approaches for teaching and learning that are

integrated into every facet of the text and package.

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

CONNECT for LEARNING

SUCCESS The learning system introduced in the 21st Edition of Anderson’s Business Law

and the Legal Environment, proved to be an effective tool for students to make the

connection to what they are reading, what they are doing in class, and—ultimately—

what they will do in the real world as business managers and leaders. This new tool is

continued and refined for the 22nd edition.

Chapters open with a self-guided outline—helping students focus on key concepts.

Chapter content continues to provide just the right amount of detail, presented in

terminology students can grasp and relate to. As a learning and study tool, key

examples are highlighted in green throughout each chapter—spotlighting the

connection between chapter concepts and real-world experiences for students.

The self-guided outlines help students

focus on the key concepts presented in

the chapter.

Examples are emphasized in every paragraph with green highlights – spotlighting the connection between legal concepts and real-world experiences for students.

learningoutcomes After studying this chapter, you should be able to

LO.1 Define business ethics

LO.2 Discuss why ethics are important in business

LO.3 Describe how to recognize and resolve ethical dilemmas

A. What Is Business Ethics?

1. THE LAW AS THE STANDARD FOR BUSINESS ETHICS

2. THE NOTION OF UNIVERSAL STANDARDS FOR BUSINESS ETHICS

3. ETHICAL THEORIES AND STANDARDS

4. THE BUSINESS STAKEHOLDER STANDARD OF BEHAVIOR

B. Why Is Business Ethics Important?

5. THE IMPORTANCE OF TRUST

6. BUSINESS ETHICS AND FINANCIAL PERFORMANCE

7. THE IMPORTANCE OF A GOOD REPUTATION

8. BUSINESS ETHICS AND BUSINESS REGULATION: PUBLIC POLICY, LAW, AND ETHICS

C. How to Recognize and Resolve Ethical Dilemmas

9. CATEGORIES OF ETHICAL BEHAVIOR

10. RESOLVING ETHICAL DILEMMAS

CHAPTER 3 Business Ethics, Social Forces, and the Law

© Manuel Gutjahr/iStockphoto.com

36

ImportanImportant?t?

5.55.5.5.5. THETHETHETHETHEHE IMPORTANCEIMPORTANCEIMPORTANCEIMPORTANCEIMPORTANCEMPORTANC OFOFOFOFOF TRUSTTRUSTTRUSTRUSTRUSTUST

10. RESOLVING ETHICAL DILEMMAS

2. The Notion of Universal Standards for Business Ethics Another view of ethics holds that standards exist universally and cannot be changed or modified by law. In many cases, universal standards stem from religious beliefs. In some countries today, the standards for business are still determined by religious tenets. Natural law imposes higher standards of behavior than those required by positive law and they must be followed even if those higher standards run contrary to codified law. For Example, in the early nineteenth century when slavery was legally permissible in the United States, a positive law standard supported slavery. However, slavery violates the natural law principle of individual freedom and would be unethical. Civil disobedience is the remedy natural law proponents use to change positive law.

Former Supreme Court Justice Sandra Day O’Connor, who was second in her class at Stanford Law School (the late Chief Justice William Rehnquist was first), was offered a job as a receptionist for a law firm while her male classmates were hired as attorneys. At that time, no law prohibited discrimination against women, so law f h l l d d h l f

natural law– a system of principles to guide human conduct independent of, and sometimes contrary to, enacted law and discovered by man’s rational intelligence.

civil disobedience– the term used when natural law proponents violate positive law.

38 Part 1 The Legal and Social Environment of Business

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

Maximizing student success, the Make the Connection section found at the end of each chapter begins with a revised and more thorough chapter summary recapping key chapter topics. Action-oriented Learning Outcomes direct students to utilize the existing text pedagogy by serving as a direct reference point for selected For Example callouts, case summaries, and feature boxes. A list of Key Terms gives students further opportunity to check their understanding of commonly-used business law terminology. The Questions and Case Problems offer students additional opportunities for students to connect legal concepts to real-world issues. And the CPA Questions provide excellent review for the CPA Exam.

Make the Connection helps students understand and retain legal concepts by explaining them in the context of real-world examples. The result: Students are better prepared to have success in class—and in their careers as business leaders.

End-of-chapter material has been thoroughly revised and expanded! The cases, new “Thinging Things Through” examples, new ethics examples, and new “Sports and Entertainment Law” sections offer students up-to-date examples that help them understand the chapter concepts and laws covered.

MAKE THE CONNECTION

SUMMARY

Business ethics is the application of values and standards to business conduct and decisions. These values originate in various sources from positive (codified) law to natural law to ethical theories and standards and on to stakeholder values. Business ethics is important because trust is a critical component of good business relationships and free enterprise. A business with values will enjoy the additional competitive advantage of a good reputation and, over the long term, better earnings. When businesses make decisions that violate basic ethical standards, they set into motion social forces and cause the area of abuse to be regulated, resulting in additional costs and

restrictions for business. Voluntary value choices by businesses position them for a competitive advantage.

The categories of ethical values in business are truthfulness and integrity, promise keeping, loyalty and avoiding conflicts of interest, fairness, doing no harm, and maintaining confidentiality.

Resolution of ethical dilemmas is possible through the use of various models that require a businessperson to examine the impact of a decision before it is made. These models include stakeholder analysis, the Blanchard and Peale test, the front-page- of-the-newspaper test, and the Laura Nash model.

LEARNING OUTCOMES

After studying this chapter, you should be able to clearly explain:

A. What Is Business Ethics? LO.1 Define business ethics

See the discussion of the definition, balancing the goal of profits with the values of individuals and society, on p. 41–42.

B. Why Is Business Ethics Important? LO.2 Discuss why ethics are important in

business See “The Importance of Trust” on p. 42. See “Business Ethics and Financial Performance” on p. 43. See “The Importance of a Good Reputation” on p. 44.

The Family Man (2000) (PG-13)

Nicolas Cage plays a Wall Street billionaire who is suddenly given a suburban life in New Jersey with all of its family life and financial constraints. He is forced to examine who he really is and what is important.

LawFlix Continued

54 Part 1 The Legal and Social Environment of Business

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

CONNECT for TEACHING

SUCCESS Instructor resources also integrate the text’s Make the Connection learning system.

The Instructor’s Manual includes a thorough explanation of the system as well as

tips for implementation. Expanded PowerPoint® presentations incorporate Learning

Outcomes into every chapter, enabling instructors to talk through examples step

by step in class. In addition, the Test Bank includes questions from the Learning

Outcomes sections.

Instructor’s Manual: This manual provides instructor

insights, chapter outlines, and teaching strategies for each chapter. Chapter overviews

and transparency integration notes ease lecture preparation.

Discussion points are provided for the textbook’s “Thinking

Things Through” and “Ethics & the Law” vignettes. Also included

are answers to CPA questions.

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