2.1

Chapter 2

Ethics and the Legal System

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© 2003 by West Legal Studies in Business/A Division of Thomson Learning

2.2

Relationship Between Law and Ethics

Some unethical actions may be legal, and some illegal actions may be ethical.

Some argue that in certain circumstances, doing what is ethical must involve breaking the law.

Law is determined by society; ethics is determined by individual or institutional standards.

2.3

Ethical Analysis

Utilitarian Theory

• Examines consequences of given action and defines the action as morally right and ethical

• Goal is the greatest good for greatest number of people

Utilitarian Theory

• Examines consequences of given action and defines the action as morally right and ethical

• Goal is the greatest good for greatest number of people

Universal Theory

• Does not look at consequences but to universal principles (categorical imperative)

• Actions should be based on whether conduct could be a standard for universal conduct

Universal Theory

• Does not look at consequences but to universal principles (categorical imperative)

• Actions should be based on whether conduct could be a standard for universal conduct

2.4

Problems Arising in Business Ethics

Identifying common values within a firm

Deciding how much emphasis to place on collective benefits

Projecting side effects Defining the extent of a firm’s

responsibilities to outside groups

2.5

Corporate Social Responsibility

Corporate stakeholders Expectations and influence

Campaign finance laws The FECA establishes campaign finance

laws requiring disclosure

Political action committees Formed by individuals, labor unions,

corporations, trade associations and other special interest groups

Corporate philanthropy

2.6Codes of Responsibility and

Ethics Professional and industrial codes

Corporate codes of conduct

Legal effect of corporate codes of conduct

Corporate codes and e-mail and internet usage

Legal standards as ethical norms

2.7

Tasks Of A Legal System

To maintain order To provide a forum for the resolution

of disputes Other tasks

Protects expectations while maintaining political authority and promoting social change

Maintains dominant political authority

Can also bring about social change

2.8

Legal Systems

Common law Stare decisis

Adversary process

 Civil law Code law

Investigatory process

2.9

Legal Systems – Islamic Law

The Quran (Koran) – not a code of law but an expression of moral and ethical standard

The Sunna – traditions based on speeches or deeds of the Prophet Muhammad

Differences in interpretations - different countries and political systems differ somewhat in their interpretation of Islamic law

2.10Characteristics Of The U.S. Legal

System Federalism

The Constitution determines whether state or federal law-making powers apply

Separation of powers Governmental powers are

separated into the executive, legislative, and judicial branches

2.11

The StateJudicial System

State Supreme CourtState Supreme Court

State Courts of AppealsState Courts of Appeals

State Courts of Original JurisdictionState Courts of Original Jurisdiction

Inferior CourtsInferior Courts Small ClaimsSmall Claims

2.12

The FederalJudicial System

U. S. Supreme CourtU. S. Supreme Court

U. S. Court of AppealsU. S. Court of Appeals

Special Federal Courts

Special Federal Courts

Federal District Courts

Federal District Courts

2.13

Jurisdiction

JurisdictionJurisdiction is defined by Type of work done in court, such as original

(trial) or appellate (review) Type of dispute, such as tax law or bankruptcy The person bringing the action, such as adult or

minor

Jurisdiction and e-commerce New area of legal concern Courts look at different uses to which

businesses put their web sites and use a “sliding scale” approach