186463_1_Legal-and-Ethical-Business-Issues

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					                                               Legal & Ethical Business Issues



Legal Business Issues
For each scenario question, select the answer that is most correct and write a brief,
150-word essay to provide a rationale for your choice. This activity allows you to
demonstrate your understanding of major legal and ethical issues in business.

Scenario L-1
Joan has been a manager with Argos for the past 15 years. She is known to be
aggressive and tough and always gets results. She is demanding of her employees
and is often brusque with them. Last Thursday, she passed James in the hall and
remarked that he looked good in his new gray suit. James filed a sexual harassment
lawsuit naming Argos and Joan. Which of the following statements is most correct?
a) James has no chance of winning, based on the facts presented. Joan was simply
trying to make a positive comment and 'ease' her tough demeanor.
b) James could win the suit if he provided information that showed that Joan had
never made such comments to anyone before and had made them to him before.
c) James could win if Joan had winked at him when she made the comment.
d) James can win if he can show that he and Joan had had a relationship in the past.
e) He can win, but only if Joan has implied that she wants him to have sex with her
and offers a promotion if he will.
f) James can win if he shows that Joan makes such comments to him alone, although
he has said that he does not feel comfortable with such comments.

Rationale
Include your rationale essay here. (Please cite references to support your answer.)


Scenario L-2
Your company makes baby seats for cars and RVs. Your main product was designed
some time ago, and new and better engineering data are available, but your product
has a good record with very few quality problems. Even in most crashes, the seats
perform well. Still, the new information would allow you to upgrade the product
significantly (about a 7% improvement). However, changing the manufacturing
process would be a significant cost, which you are unlikely to recover because
competing products are already cheaper than yours. You have a legal fiduciary
responsibility to your company to maximize your profit. What should you do?
a) Do not make the improvements, because the buyer assumes the risk. Your product
is already safe and has a positive rating from the consumer reporting agencies. The
change would cost salary increases for your manufacturing personnel.




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                                               Legal & Ethical Business Issues

b) Make the data public information and put pressure on your competitors to also
improve their products, pushing up their costs as well.
c) Recognize that your company has an absolute duty to make your product as safe
as possible and institute the change. Freeze employee wages to pay for the
improvements.
d) Change your advertising program from "The Safest Baby Seat That Can Be Made"
to "One of the Safest Baby Seats Made," avoiding issues surrounding implied and
express warranties.
e) Attach a warranty sticker to the underside of the seat pad where few will see it,
stating that the product is reasonably safe but is not guaranteed to be completely safe.

Rationale

Include your rationale essay here. (Please cite references to support your answer.)


Scenario L-3
John has been working on developing a software program that will enable people to
construct very complex spreadsheets through simple voice commends (for example,
"Regress costs against revenue."). John does this work on his company laptop during
his lunch breaks at Mega Corporation, where he works as a systems analyst on
corporate payroll systems. He is very careful not to go over his standard lunch time.
He also asks his cubemate, Sheryl, who is a programming whiz, a technical question
from time to time. John makes a technical breakthrough and his product is impressive.
He approaches a venture capital firm and with their offer to back him, he quits Mega
Corporation to start and build his own company. Mega hears about John's new
company and sues to gain a portion of the new company. Mega contends that its
resources were used and that John used the training Mega had given him to create
the new product and therefore, it is Mega’s product as much as it is his. Mega
Corporation will:
a) Not prevail, as John did not use company time but his own personal time to develop
the product.
b) Be able to make a solid claim, because John used his training from Mega to
develop the product; he knew nothing about programming when he came to Mega.
c) Be able to make a good case, because John used his company's laptop computer
to design the product.
d) Be able to make a solid claim, because John asked Sheryl several questions and
used her ideas in the product while she was working on Mega company time.

Rationale
Include your rationale essay here. (Please cite references to support your answer.)


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                                                Legal & Ethical Business Issues

Scenario E-1
Sally has been in charge of the Atlanta division for Thomas Industries for several
years. She has decided to educate her people on the basic standards of ethical
behavior. She should start by:
a) Treating her own employees with the same respect and care reserved for the more
valued customers.
b) Listing the behaviors that she finds objectionable and creating an informative
memo.
c) Launching a promotional campaign throughout the facility that includes posters and
handouts.
d) Hold a series of lectures on ethical behavior.
e) Provide voluntary training sessions for all interested employees.

Rationale
Include your rationale essay here. (Please cite references to support your answer.)


Scenario E-2
You have been a purchasing director for your company for several years. A supplier
has asked you to fly to its Florida plant for 3 days and spend some time observing
their new manufacturing process. The supplier offers to pay for the entire trip. The
person who invites you also winks at you and says we may also be able to fit in a
round of golf or two. Your company has been clamping down on expenses in an
attempt to increase profits to avoid a shut down. What should you do?
a) Take the trip, because the new process has real application for your company and
you will need to determine how to integrate the new products into your own products.
b) Insist that your company pay for the trip, but otherwise go and end up “playing a
round of golf or two.”
c) Refuse the trip and ask that your supplier provide a video tape of the process,
knowing that your knowledge of the new process may be impaired.
d) Refuse the trip and travel at company expense to review the process, knowing that
the expense will exceed your budget.

Rationale

Include your rationale essay here. (Please cite references to support your answer.)




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                                               Legal & Ethical Business Issues


Scenario E-3
Your division has seen a relatively sharp drop in revenue due to market
circumstances. You manufacture house materials, specifically plumbing, and new
house construction has fallen substantially. The division must shrink to fit its new
revenue stream. Personnel is the highest cost factor for your division. Unfortunately,
you and the management team decide to layoff a substantial number of your
manufacturing personnel. You are a non-union company, but you do have to design a
layoff strategy. What do you do?
a) Lay people off in the reverse order that they were hired.
b) Lay people off, starting with those who have been with the company the longest,
because those people are at higher wage rates than the newer people. This will allow
you to preserve more jobs overall.
c) Lay off the least productive workers and administrators.
d) Lay off those who have the lowest evaluation scores.

Rationale
Include your rationale essay here. (Please cite references to support your answer.)


Scenario E-4

You overhear your supervisor talking with her boss, who is a corporate officer,
about a possible acquisition. You do not overhear the name, but you are pretty
sure that you know which company it is. No one knows that you overheard this
conversation, and your company has a history of acquisitions in the same
market as the company you suspect. A recent story on the local news station
mentioned several companies that were rumored to be acquired by your
company. Your daughter has applied to a fancy prep school that would really
give her an advantage in college admissions. Unfortunately, the school is
beyond your financial capabilities. What should you do?
a) Invest in the company you suspect, as you did not hear the name. Some have
speculated that this company was a target anyway.
b) Tell your spouse or partner that you have heard that your company will buy yet
another company soon.
c) Discuss your suspicions with your brother-in-law, who is a paralegal, and ask his
advice as to whether or not you should invest.
d) Call your broker and ask if any unusual activity has occurred in the stock of the
company you suspect is the acquisition target. Because you have known the broker
for several years, you trust his advice.



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                                                 Legal & Ethical Business Issues

Rationale
Include your rationale essay here. (Please cite references to support your answer.)



Scenario E-5
Your company manufactures a wood product that requires the application of a
chemical to the wood prior to the shaping process. Your company vents the chemical
vapors to the outside air through a series of pipe openings. You have been told that
the low concentrations of the chemical make it perfectly safe for humans, but the
chemical can act as a herbicide in higher concentrations. The chemical is quite cheap
and your product is not that profitable. Increases in manufacturing costs might result in
a plant shut down, which would seriously harm the local economy, as you are the
largest employer in the area by far. What should your company do?
a) Discontinue manufacturing until an equally cheap alternative chemical is found.
Lay off all plant personnel until then.
b) Meet with local farmers and discuss the potential impact of the chemical in the
event of rain concentrating the vapors and then falling on their fields. Set up a liability
on your balance sheet to ensure that funds are available should the farmers be
damaged, even if this liability may make your company think about shutting down the
plant.
c) Because you are complying with the relevant laws and there is only a small chance
that your product might create a problem, ignore the issue. The employment of so
many local people is vital to the local economy.
d) Meet with the local government and ask for their advice, recognizing that this may
place your company in a greater legally and financially vulnerable state. Allow the
local government to make the decision.
e) Meet with the farmers immediately surrounding your plant and ask them to sign a
waiver for “anything” that might happen as a negative consequence of the
manufacturing process. Remind them that the local economy depends on their signing
the waivers.

Rationale
Include your rationale essay here. (Please cite references to support your answer.)




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