Business Law Overview

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Questions and Answers

What did the Fair Labor Standards Act of 1938 establish?

Retirement income for workers at age 60

Protection against racial discrimination in the workplace

The right to organize labor unions

Elimination of child labor and the establishment of 40-hour work weeks (correct)

Which act made it illegal to have different pay rates for the same jobs based on gender?

The Equal Pay Act (correct)

The Civil Rights Act of 1964

The National Labor Laws Act

The Occupational Safety and Health Act

What is the purpose of the Uniform Commercial Code (UCC)?

To provide a framework for social security benefits

To facilitate and regulate commercial transactions (correct)

To establish labor rights across industries

To regulate environmental protections

What created the Environmental Protection Agency (EPA)?

A combination of federal environmental laws Signup and view all the answers

Which law was enacted to protect the health and safety of workers?

The Occupational Safety and Health Act Signup and view all the answers

What does the Sarbanes-Oxley Act require from senior executives in publicly traded companies?

To take responsibility for the accuracy of financial reports Signup and view all the answers

Which of the following is NOT considered an internal factor that influences unethical behavior in business?

Culture of the organization Signup and view all the answers

Which approach prioritizes actions that yield the greatest good for the largest number of people?

Utilitarian approach Signup and view all the answers

Which entity regulates commercial banks based on capital requirements and credit ratings?

Securities and Exchange Commission (SEC) Signup and view all the answers

What is the first step in the ethical decision-making process according to the outlined framework?

Moral Awareness Signup and view all the answers

What was a key outcome of the National Labor Laws Act of 1935?

It granted workers the right to organize and strike. Signup and view all the answers

Which of the following acts primarily addresses gender discrimination in pay?

The Equal Pay Act Signup and view all the answers

Which law is associated with the regulation of commercial transactions across states?

The Uniform Commercial Code (UCC) Signup and view all the answers

What federal organization is tasked with enforcing environmental protection laws?

The Environmental Protection Agency (EPA) Signup and view all the answers

What was the purpose of the Clean Water Act?

To prevent water pollution in the U.S. Signup and view all the answers

Study Notes

Business Law

Businesses must follow various laws including labor laws, the Uniform Commercial Code (UCC), environmental protection laws, and industry-specific regulations.
The National Labor Relations Act (1935) gave private industry workers the right to organize, bargain collectively, and strike.
The Fair Labor Standards Act (1938) set the standard for a 40-hour workweek and prohibited child labor.
The Social Security Act (1935) established retirement income for workers aged 65 and older.
The Equal Pay Act (1963) made it illegal to pay different wages for the same job based on gender.
The Civil Rights Act (1964) made it illegal to discriminate in employment decisions based on race, color, religion, sex, or national origin.
The Occupational Safety and Health Act (1970) protects worker safety and health.
The UCC is a set of laws that regulate and facilitate commercial transactions.
The UCC was developed in 1952 by the American Law Institute and National Conference of Commissioners.
All 50 states have adopted the UCC, but can modify it to meet local needs.
States adopted the UCC to facilitate easier interstate commerce by reducing legal risk and complexity.
Environmental protection laws and regulations are in place to ensure businesses protect the environment.
There are 25 federal laws that protect the environment such as the Clean Air Act, The Clean Water Act, and the Noise Control Act.
The Environmental Protection Agency (EPA) enforces these laws and acts to ensure compliance by businesses.
Publicly traded companies must follow rules such as the Sarbanes-Oxley Act which requires senior executives to take responsibility for the accuracy of their financial reports.
The oil and gas industry is regulated by most states in regards to oil exploration and production.
The Securities and Exchange Commission (SEC) and various bank regulations establish rules that specifically apply to stock exchanges, investment banks, commercial banks, and insurance companies.
Commercial banks are regulated based on capital requirements, reserve requirements, corporate financial disclosures, and credit ratings.
Professional baseball is exempt from the Sherman Antitrust Act.

Ethical Decision Making

Unethical behavior in business is prevalent such as the WorldCom scandal and Bridgestone tire blowouts.
The factors that contribute to unethical behavior include internal factors such as an individual's moral development, willingness to accept authority, ability to control behavior, and relationships with others who influence behavior.
External factors that contribute to unethical behavior include an organization's culture, consequences for unethical behavior, the ease of opportunity, and the characteristics of the work.
Moral Awareness is the realization of a moral issue.
Moral Judgement is the ability to decide what should be done and take appropriate moral action.
Moral Intention is prioritizing moral values.
Action or Implementation executes plans based on the strength of conviction and overcomes all obstacles to achieve the "right" thing.
The utilitarian approach is the choice that produces the greatest good for the greatest number of people.
The individualism approach chooses the option that promotes individual's long-term interests.
The moral rights approach chooses actions that do not violate any moral rights.
The justice approach is based on distributive, procedural, and compensatory justice.
An impartial opinion can be obtained by discussing a situation with an independent, objective, knowledgeable, and respected third party for an unbiased view.
Full disclosure is openly presenting a decision to the public.

Core values are the norms of behavior and actions expected of all employees in an organization.
Core values are essential for a company to do the "right" thing.
CSR is an organization's proactive response to the needs and expectations of all stakeholders.
CSR is now a requirement, unlike in the past.
CSR is viewed as a tool to enhance reputation and create value for an organization.
Leaders proactive in CSR:
- Change their mindset to act as role models in daily decisions.
- Use empathy to find common ground and win-win solutions
- Create a broader vision that points towards meaning.
J&J's Credo, etched in their corporate headquarters, is a good example of doing what's "right".
It articulates the company's responsibilities to customers, employees, communities, and stockholders.
An example of J&J's commitment to their Credo is when CEO James Burke, in the 1980s, decided to remove all Tylenol from the shelves due to product tampering.

Business Laws

Businesses are subject to various laws including labor laws, the Uniform Commercial Code (UCC), environmental protection laws, industry-specific regulations
Labor Laws protect workers' rights and have evolved since the industrialization era
- The National Labor Relations Act (1935) granted private industry workers rights to organize, bargain collectively, and strike
- The Fair Labor Standards Act (1938) established 40-hour workweeks and outlawed child labor
- The Social Security Act (1935) provided retirement income for workers aged 65+
- The Equal Pay Act prohibited wage discrimination based on gender
- The Civil Rights Act (1964) prohibited employment discrimination based on race, color, religion, sex, or national origin
- The Occupational Safety and Health Act (1970) ensured worker safety and health
The Uniform Commercial Code (UCC) regulates and facilitates commercial transactions, serving as a standard for business dealings and dispute resolution
- Adopted by all 50 US states in 1952, it was developed by the American Law Institute and National Conference of Commissioners
- States could modify or keep the UCC as it was to suit local needs
- The uniformity facilitates interstate commerce by reducing legal risks and complexities
Environmental Protection Laws and Regulations ensure business responsibility towards environmental protection
- Over 25 federal laws, including the Clean Air Act, Clean Water Act, and Noise Control Act, govern environmental practices
- The Environmental Protection Agency (EPA) enforces these regulations, ensuring compliance by businesses
Industry-Specific Regulations target specific industries and their activities
- Publicly Traded Companies must adhere to rules like the Sarbanes-Oxley Act, which holds executives accountable for financial report accuracy
- Oil and Gas Industry is subject to state regulations on oil exploration and production
- Financial Services industry is regulated by the Securities and Exchange Commission (SEC) and bank regulations, governing stock exchanges, investment banks, commercial banks, and insurance companies
- Professional Baseball is exempt from the Sherman Antitrust Act, a law applicable to all other industries

Ethical Decision-Making

Unethical practices are prevalent in businesses, with examples including the Worldcom scandal and Bridgestone Tire blowouts
Understanding the 'what happened' requires examining both internal and external factors contributing to unethical behavior:
- Internal factors include:
  - Moral development of the individual
  - Acceptance and obedience of authority
  - Ability to control one's behavior
  - Relationships with others influencing the perpetrator's behavior
- External factors include:
  - Organizational culture
  - Consequences of unethical behavior
  - Ease of opportunity for unethical actions
  - Characteristics of the work environment
The 'what should happen' involves a systematic approach to ethical decision making:
- Moral Awareness: recognizing the existence of a moral issue
- Moral Judgement: determining the appropriate action and its ethical implications
- Moral Intention: prioritizing moral values in decision-making
- Action or Implementation: putting the moral plan into action, overcoming obstacles to do the 'right' thing
Moral Course of Action Strategies:
- Utilitarian: Choosing the option that benefits the most people
- Individualism: Choosing the option that benefits the individual's long-term interests
- Moral Rights: Avoiding any actions that violate moral rights
- Justice: Applying principles of distributive, procedural, and compensatory justice
- Impartial Opinion: Seeking an unbiased view from a knowledgeable and respected third party
- Full Disclosure: Openly presenting the decision to the public

Core values are essential norms and expected behaviors for all employees, enabling organizations to do the 'right' thing
Corporate Social Responsibility (CSR) refers to organizational actions that acknowledge and proactively respond to stakeholder needs and expectations
- CSR is currently expected from businesses, unlike in the past
- It's considered a tool for creating value by enhancing an organization's reputation
- Leaders proactively engaging in CSR should consider:
  - Role modeling ethical behavior in daily decisions
  - Empathy to find common ground and win-win solutions
  - Broader vision encompassing a greater purpose

Example of Doing What's "Right" - J&J's Credo

J&J's Credo, etched in their headquarters lobby, articulates their responsibilities to customers, employees, communities, and stockholders
Example: In the 1980s, CEO James Burke took all Tylenol off the shelves due to contamination with a deadly substance, demonstrating their commitment to their credo and customer safety.

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Description

Explore the key principles and legislation that govern business law, including the National Labor Relations Act, Fair Labor Standards Act, and the Uniform Commercial Code. This quiz covers essential laws affecting labor, employment, safety, and anti-discrimination. Test your knowledge on how these laws shape the business landscape.