2.1 Chapter 2 Ethics and the Legal System ? ? ? ? © 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

2.6 Codes of Responsibility and Ethics  Professional and industrial codes  Corporate codes of conduct  Legal effect of corporate codes of conduct  Corporate codes and 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

2.10 Characteristics 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 State Judicial System State Supreme Court State Courts of Appeals State Courts of Original Jurisdiction Inferior Courts Small Claims

2.12 The Federal Judicial System U. S. Supreme Court U. S. Court of Appeals Special Federal Courts Special Federal Courts Federal District Courts Federal District Courts

2.13 Jurisdiction  Jurisdiction  Jurisdiction 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