1. Business Law with UCC Applications,13e
Ethics, Social Responsibility, and the Law
Chapter 1
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Learning Objectives Define law and morality.
Distinguish among natural law, positive law, and negative rights theory
Explain ethical relativism.
Describe social contract theory.
Outline the steps in applying utilitarianism.
Define rational ethics.

3. Learning Objectives (cont.)
Explain the dual nature of ethics in government.
Outline the arguments supporting social responsibility.
Explore the need for law in our society.
Clarify how the law and ethics are usually in harmony with one another.

4. The Law and Morality The Law
consists of rules of conduct established by the government of a society to maintain harmony, stability, and justice

5. Question? What defines the legal rights and duties of the people?
Ethics
Values
Morals
Law
The correct answer is “D” – see next slide.

6. The Law and Morality The Law
defines the legal rights and duties of the people
provides a way to protect the people by enforcing these rights and duties
a means of civil management
Teaching Tips The use of fetal tissue for medical treatment is at the center of a fiery debate. Discuss the topic in class. Then ask
the students to analyze it from a viewpoint of subjective ethics.

7. Question?
What are values that govern a society’s attitude toward right and wrong?
Morals
Ethics
Societal values
Law
The correct answer is “A” – morals. See next slide.

8. The Law and Morality Morals
values that govern a society’s attitude toward right and wrong and toward good and evil
serves as a guide for those bodies that make, interpret, and enforce the law

9. Values and Ethics Ethics
the attempt to develop a means of determining what fundamental values ought to be and for formulating and applying rules that enforce those values
Background Information
The tendency to complicate moral decision making is nothing new. In her essay, “The Moral Life,” Bonnie Kent, a professor
of philosophy at the University of California, Irvine, reminds us that even medieval philosophers tended to complicate the rules of
moral judgment.

10. Question?
Which theory says that human intuition will always give rise to positive moral laws?
Natural law
Positive law
Law of humanity
Law of peoples
The correct answer is “D” – law of peoples. See slide 1-13.

11. Natural Law Theory Natural law
sees law as originating from some objective, superior force that stands outside the everyday experience of most people
exists an unbreakable link joining morality to the law inn a fundamental way

12. Positive Law Theory Positive Law
legal theory that says that the law originates from an outside source that has emerged from within society
social institutions

13. Positive Law Theory Law of Peoples
human intuition will always give rise to positive moral laws that are global in scope
common to everyone

14. Negative Rights Theory
“Rights" are a human invention designed to help people escape moral law.
“Rights" themselves do not create the escape from responsibility that they permit.
Rather, these so-called rights give people an escape clause when they are caught doing something shameful.

15. Question?
Which ethical theory calls for the greatest good for the greatest number?
Totalitarianism
Utilitarianism
Unilateralism
Multiplicity
The correct answer is “B” – utilitarianism. See slide 1-#.

16. Ethical Theories Ethical relativism
there are no objective or absolute standards of right and wrong
standards change from circumstance to circumstance
also called subjective ethics
Teaching Tips Discuss examples from recent events that involve moral atrocities committed by individuals whose moral
code should have forbidden such actions. Ask the following question: What brings about dishonorable
actions, such as the shameful treatment of Arab prisoners at Abu Ghraib prison in Iraq during Gulf War II?

17. Question?
Which ethical theory calls for individuals to give up certain freedoms?
Ethical relativism
Social contract theory
Situational ethics
Utilitarianism
The correct answer is “B” – social contract theory. See slide 1-19.

18. Ethical Theories Situational ethics
argues that each of us can judge a person’s ethical decisions only by initially placing ourselves in the other person’s situation
encourages people to look at others with tolerance and patience
Teaching Tips Discuss examples of social systems from which ethical systems appear absent or in which they seem highly
flawed. Ask students to address the following questions: What brings about atrocities such as Saddam Hussein’s use of
poison gas at Halabja; the genocide in Rwanda, the war crimes of former Yugoslav president Slobodan Milosevic; the invasion of
Kuwait by Saddam Hussein’s military forces; the beheadings carried out by terrorists in Iraq, and the war crimes of Radovan
Karadzic, former Bosnian Serb president? How do individuals victimized by such horrors respond to a lack of morality in their society
or government? How do individuals act morally amid such widespread corruption or lawlessness?

19. Ethical Theories Social contract theory
holds that right and wrong are measured by the obligations imposed on each individual by an implied agreement among all individuals within a particular social system
people must give up certain freedoms
Teaching Tips Consider using the following films to generate discussion about ethics and the application of ethical theories: Crash
(starring Sandra Bullock and Matt Dillon), Babel (Cate Blanchett), Bobby (Emilio Estevez, Anthony Hopkins, and Martin
Sheen), The Good Shepherd (Matt Damon and Robert DeNiro), Hoax (Richard Gere), Hollywoodland (Ben Affleck and Diane
Lane), The Pursuit of Happyness (Will Smith), The Queen (Helen Mirren), and Syriana (George Clooney). Create a list of
study questions for each film to make sure students focus on relevant issues.

20. Ethical Theories Utilitarianism
the morality of an action is determined by its ultimate effects
Greatest good for the greatest number

21. Ethical Theories Rational ethics
ethical values can be determined by a proper application of human reason
Should establish universal rules of behavior that apply to all people at all times
Also called objective ethics

22. Ethics and the Government
The government of a nation-state has two objectives that simultaneously justify its power and enable the proper exercise of that power
to protect its own existence and
to protect the lives, health, and wellbeing of its own citizens.

23. Ethic of Ultimate Ends Ethic of ultimate ends
asserts that the action itself is right or wrong in and of itself, regardless of the consequences of the action.
often referred to as the ethic of benevolence.
an individual must do the right thing because it is right in and of itself.

24. Ethic of Responsibility
demands that the moral actor, in this case a national leader, consider his responsibilities to those people who depend on that leader for protection, safety, and sometimes even for their very lives.

25. Social Responsibility in the Business Sector
The traditional view of corporate culture says that privately owned corporations are created solely to make a profit for their shareholders
The foremost job of any manager is to maximize profits

26. Reasons for Social Responsibility
Corporation offers limited liability to owners
Corporation is considered an artificially created person
Corporation can own property and bring lawsuits
Teaching Tips Explain to students that communication between an attorney and a client is strictly confidential. There is one exception:
When a client confides in his or her lawyer that he or she is about to commit a crime, the attorney has a legal duty to
disclose this information to the police. Lead the class in a discussion of how serious a crime would have to
be before the attorney has an ethical duty to act. Would the attorney–client privilege benefit proportionately if this exception
were not in place?

27. Reasons for Social Responsibility
Because corporations have these rights they owe an obligation to the public to act responsibly
Decisions of corporate managers should not be narrowly focused on profits
Accepting social responsibility is in the long-term interest of the corporation

28. Efforts to Promote Social Responsibility
Statutes now permit managers to consider factors other than profit in making decisions
Economic well-being of the nation, the state, and the local community
Interests of employees, consumers, and suppliers
The betterment of the environment, the economy, and the overall social structure

29. The Relationship Between Law and Ethics
The law is needed because, although people know better, they do not always follow ethical principles
Ethical principles can tell us what is right, but cannot stop us from doing wrong
The law can punish us if we choose to do wrong