Instructor Manual: Roger E. Meiners, Al H. Ringleb, Frances L. Edwards, Meiners, 15e, 2027, 9798214056449; Chapter 01: Today’s Business
Environment: Law and Ethics
Instructor Manual
Roger E. Meiners, Al H. Ringleb, Frances L. Edwards, Meiners, 15e, 2027,
9798214056449; Chapter 01: Today’s Business Environment: Law and Ethics
TABLE OF CONTENTS
Purpose and Perspective of the Chapter......................................................................2
Chapter Objectives........................................................................................................2
What’s New in This Chapter........................................................................................2
Chapter Outline.............................................................................................................2
Discussion Question......................................................................................................7
Appendix.......................................................................................................................8
Generic Rubrics......................................................................................................................................... 8
Standard Writing Rubric............................................................................................................................ 8
Standard Discussion Rubric.......................................................................................................................9
a
© 2027 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 1
accessible website, in whole or in part.
, Instructor Manual: Roger E. Meiners, Al H. Ringleb, Frances L. Edwards, Meiners, 15e, 2027, 9798214056449; Chapter 01: Today’s Business
Environment: Law and Ethics
PURPOSE AND PERSPECTIVE OF THE CHAPTER
The purpose of this chapter is to provide an overview of the modern business environment, highlighting
how managers face increasing ethical, legal, social, political, and international challenges that add
complexity to decision-making. It defines law as a system of rules that regulates behavior, maintains
order, resolves disputes, and reflects societal values, while explaining its key functions and major sources,
including constitutions, legislation, administrative agencies, and the judiciary.
The chapter also emphasizes the importance of ethics in business, distinguishing it from legal obligations
and noting that ethical standards often extend beyond the law. It discusses the role of codes of ethics,
compliance programs, and corporate social responsibility in promoting responsible conduct, preventing
misconduct, and strengthening organizational trust and reputation in a complex business environment.
CHAPTER OBJECTIVES
The following objectives are addressed in this chapter:
1.1 Distinguish among the key areas of the legal system.
1.2 Describe how the courts use precedent in applying the rules of law.
1.3 List the primary sources and functions of public and private law.
1.4 Explain the difference between law and ethics.
[return to top]
WHAT’S NEW IN THIS CHAPTER
The following elements are improvements in this chapter from the previous edition:
Pi Data Centers case on company ethics codes and the general irrelevance to law as applied to a
company. The Lamson v. Crater Lakes Motors case was deleted.
[return to top]
CHAPTER OUTLINE
The following outline organizes activities (including any existing discussion questions in PowerPoints or
other supplements) and assessments by chapter (and therefore by topic), so that you can understand how
all the content relates to the topics covered in the text.
I. Law and the Key Functions of the Legal System (LO 1.1; Slide 4-8)
Law is a broad concept with multiple definitions. Scholars such as Holmes and Cardozo describe
law as a set of rules governing conduct that are enforced by courts. In addition, Black’s Law
Dictionary provides modern definitions of law as a body of rules prescribed by a controlling
a
© 2027 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 2
accessible website, in whole or in part.
,Instructor Manual: Roger E. Meiners, Al H. Ringleb, Frances L. Edwards, Meiners, 15e, 2027, 9798214056449; Chapter 01: Today’s Business
Environment: Law and Ethics
authority and as standards of conduct that must be followed by members of a society, backed by
legal consequences. Together, these perspectives highlight that law consists of both formal rules
and informal norms derived from culture, customs, and ethics. The most important functions
include:
(1) influencing the behavior of the members of a society,
(2) resolving disputes within society,
(3) maintaining important social values, and
(4) providing a method for assisting social change.
a. Improving Social Stability by Influencing Behavior
Law and the legal system define acceptable human behavior and provide a means for
controlling unacceptable behavior. To encourage or discourage behavior, the legal system
needs some measure of “force”—the ability to threaten and impose sanctions, including
fines and imprisonment. What the “public interest” is varies a lot across countries. Selling
dope in Amsterdam is legal; it may result in execution in other countries.
b. Conflict Resolution
The law and the legal system provide a formal mechanism and structure for the resolution
of disputes—the court system. Private and public disputes may be resolved within this
formal structure of the legal system, which provides substantive and procedural rules for
conflict resolution.
c. Social Stability and Change
The law and the legal system must work to preserve society’s values, customs, and
traditions. The legal culture and its acceptance are important in explaining the extent to
which laws are enforced, obeyed, avoided, or abused. The law and the legal system must
provide a means through which the governing authority can bring about important
changes in acceptable behavior. Racial discrimination used to be an accepted part of the
law and culture; that has changed significantly in the last 40 years. The laws and attitudes
about same-sex marriages are changing now.
II. Sources of Law in the United States (LO 1.2; Slide 9-20)
Law in the United States comes from a mix of common, or judge-made law, and statutory law.
a. Constitutions
A constitution is a fundamental source of law. In most countries, it forms the most
fundamental source of law, dictating the structure of government and limits on
governmental authority.
i. The U.S. Constitution
It is the oldest written constitution in force in the world, establishing the branches
of the US government and specifies their powers. Refer to Appendix C for the
full text.
ii. State Constitutions
State constitutions specify the structure of state governments, including their
court systems, limits on taxes, and the powers of various authorities. It may not
conflict with the U.S. Constitution.
b. Legislatures and Statutes
Legislatures are the key sources of statutory law. The powers of both Congress and the
state legislatures are restricted by constitutions.
i. United States Congress
a
© 2027 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 3
accessible website, in whole or in part.
, Instructor Manual: Roger E. Meiners, Al H. Ringleb, Frances L. Edwards, Meiners, 15e, 2027, 9798214056449; Chapter 01: Today’s Business
Environment: Law and Ethics
The Congress was created by the Constitution, which specifies its various
powers, including the powers to borrow money, declare war, and so forth.
Thousands of bills are introduced each year; about 200 are actually voted upon.
ii. State Legislatures
State legislatures are bicameral (in two parts, typically a house and a senate)
except in Nebraska. As in Congress, bills go through a committee system prior to
dual-house passage and signature by the governor. The National Conference of
Commissioners on Uniform State Laws provides text for state statutes, such as
the UCC, UPA, and other laws commonly adopted in part or in whole.
c. Administrative Agencies and Regulations
Administrative agencies are typically created by legislatures or the executive branch of
the government. Agencies are delegated the authority to act on certain matters. As
empowered under the applicable enabling statute, agencies pass regulations implementing
the statute. Those regulations have the same legal authority as a law passed by a
legislature. An agency may also have law enforcement authority.
d. The Judiciary and Common Law
Judge-made law, or the common law, dates to the colonial period and was derived from
English common law. English common law began with the establishment of the King’s
Courts (Curia Regis) after 1066. The King’s Courts were an integral part of William the
Conqueror’s efforts to unify England. They were supplemented by local courts and
church courts. Important sources of law within the judicial branch of the government now
include (1) the judge-made common law and (2) the judicial review of agency
administrative actions and activities.
i. Case Law
The King’s Courts helped to develop and apply a common and uniform set of laws
throughout the country. The decisions of the courts were written down (court
reporters) and then were expected to be followed in subsequent disputes; precedent
had been created. Now, judges look to other court decisions for guidance.
ii. Doctrine of Stare Decisis
The use of past cases (precedents) in deciding cases forms the doctrine of stare
decisis. Precedent has nearly the same force as a statute; judges are expected to
follow it.
iii. Value of Precedent
Stare decisis promotes several functions in our legal system:
1. Clarity and Consistency—businesses can have reasonable expectations
about the future enforcement of their agreements and the legal standards
to be applied.
2. Uniformity—encourages businesses to expand and foster economic
activity when they are confident of the legal environment, as it
encompasses economic activity.
3. Neutralize Judicial Prejudices—serves to neutralize the prejudices of
individual judges by pressuring them to follow precedent rather than
their own personal biases and beliefs. Judges who do not follow
precedent will likely observe their decisions overturned upon appeal.
iv. Reported Court Cases
a
© 2027 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 4
accessible website, in whole or in part.
Environment: Law and Ethics
Instructor Manual
Roger E. Meiners, Al H. Ringleb, Frances L. Edwards, Meiners, 15e, 2027,
9798214056449; Chapter 01: Today’s Business Environment: Law and Ethics
TABLE OF CONTENTS
Purpose and Perspective of the Chapter......................................................................2
Chapter Objectives........................................................................................................2
What’s New in This Chapter........................................................................................2
Chapter Outline.............................................................................................................2
Discussion Question......................................................................................................7
Appendix.......................................................................................................................8
Generic Rubrics......................................................................................................................................... 8
Standard Writing Rubric............................................................................................................................ 8
Standard Discussion Rubric.......................................................................................................................9
a
© 2027 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 1
accessible website, in whole or in part.
, Instructor Manual: Roger E. Meiners, Al H. Ringleb, Frances L. Edwards, Meiners, 15e, 2027, 9798214056449; Chapter 01: Today’s Business
Environment: Law and Ethics
PURPOSE AND PERSPECTIVE OF THE CHAPTER
The purpose of this chapter is to provide an overview of the modern business environment, highlighting
how managers face increasing ethical, legal, social, political, and international challenges that add
complexity to decision-making. It defines law as a system of rules that regulates behavior, maintains
order, resolves disputes, and reflects societal values, while explaining its key functions and major sources,
including constitutions, legislation, administrative agencies, and the judiciary.
The chapter also emphasizes the importance of ethics in business, distinguishing it from legal obligations
and noting that ethical standards often extend beyond the law. It discusses the role of codes of ethics,
compliance programs, and corporate social responsibility in promoting responsible conduct, preventing
misconduct, and strengthening organizational trust and reputation in a complex business environment.
CHAPTER OBJECTIVES
The following objectives are addressed in this chapter:
1.1 Distinguish among the key areas of the legal system.
1.2 Describe how the courts use precedent in applying the rules of law.
1.3 List the primary sources and functions of public and private law.
1.4 Explain the difference between law and ethics.
[return to top]
WHAT’S NEW IN THIS CHAPTER
The following elements are improvements in this chapter from the previous edition:
Pi Data Centers case on company ethics codes and the general irrelevance to law as applied to a
company. The Lamson v. Crater Lakes Motors case was deleted.
[return to top]
CHAPTER OUTLINE
The following outline organizes activities (including any existing discussion questions in PowerPoints or
other supplements) and assessments by chapter (and therefore by topic), so that you can understand how
all the content relates to the topics covered in the text.
I. Law and the Key Functions of the Legal System (LO 1.1; Slide 4-8)
Law is a broad concept with multiple definitions. Scholars such as Holmes and Cardozo describe
law as a set of rules governing conduct that are enforced by courts. In addition, Black’s Law
Dictionary provides modern definitions of law as a body of rules prescribed by a controlling
a
© 2027 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 2
accessible website, in whole or in part.
,Instructor Manual: Roger E. Meiners, Al H. Ringleb, Frances L. Edwards, Meiners, 15e, 2027, 9798214056449; Chapter 01: Today’s Business
Environment: Law and Ethics
authority and as standards of conduct that must be followed by members of a society, backed by
legal consequences. Together, these perspectives highlight that law consists of both formal rules
and informal norms derived from culture, customs, and ethics. The most important functions
include:
(1) influencing the behavior of the members of a society,
(2) resolving disputes within society,
(3) maintaining important social values, and
(4) providing a method for assisting social change.
a. Improving Social Stability by Influencing Behavior
Law and the legal system define acceptable human behavior and provide a means for
controlling unacceptable behavior. To encourage or discourage behavior, the legal system
needs some measure of “force”—the ability to threaten and impose sanctions, including
fines and imprisonment. What the “public interest” is varies a lot across countries. Selling
dope in Amsterdam is legal; it may result in execution in other countries.
b. Conflict Resolution
The law and the legal system provide a formal mechanism and structure for the resolution
of disputes—the court system. Private and public disputes may be resolved within this
formal structure of the legal system, which provides substantive and procedural rules for
conflict resolution.
c. Social Stability and Change
The law and the legal system must work to preserve society’s values, customs, and
traditions. The legal culture and its acceptance are important in explaining the extent to
which laws are enforced, obeyed, avoided, or abused. The law and the legal system must
provide a means through which the governing authority can bring about important
changes in acceptable behavior. Racial discrimination used to be an accepted part of the
law and culture; that has changed significantly in the last 40 years. The laws and attitudes
about same-sex marriages are changing now.
II. Sources of Law in the United States (LO 1.2; Slide 9-20)
Law in the United States comes from a mix of common, or judge-made law, and statutory law.
a. Constitutions
A constitution is a fundamental source of law. In most countries, it forms the most
fundamental source of law, dictating the structure of government and limits on
governmental authority.
i. The U.S. Constitution
It is the oldest written constitution in force in the world, establishing the branches
of the US government and specifies their powers. Refer to Appendix C for the
full text.
ii. State Constitutions
State constitutions specify the structure of state governments, including their
court systems, limits on taxes, and the powers of various authorities. It may not
conflict with the U.S. Constitution.
b. Legislatures and Statutes
Legislatures are the key sources of statutory law. The powers of both Congress and the
state legislatures are restricted by constitutions.
i. United States Congress
a
© 2027 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 3
accessible website, in whole or in part.
, Instructor Manual: Roger E. Meiners, Al H. Ringleb, Frances L. Edwards, Meiners, 15e, 2027, 9798214056449; Chapter 01: Today’s Business
Environment: Law and Ethics
The Congress was created by the Constitution, which specifies its various
powers, including the powers to borrow money, declare war, and so forth.
Thousands of bills are introduced each year; about 200 are actually voted upon.
ii. State Legislatures
State legislatures are bicameral (in two parts, typically a house and a senate)
except in Nebraska. As in Congress, bills go through a committee system prior to
dual-house passage and signature by the governor. The National Conference of
Commissioners on Uniform State Laws provides text for state statutes, such as
the UCC, UPA, and other laws commonly adopted in part or in whole.
c. Administrative Agencies and Regulations
Administrative agencies are typically created by legislatures or the executive branch of
the government. Agencies are delegated the authority to act on certain matters. As
empowered under the applicable enabling statute, agencies pass regulations implementing
the statute. Those regulations have the same legal authority as a law passed by a
legislature. An agency may also have law enforcement authority.
d. The Judiciary and Common Law
Judge-made law, or the common law, dates to the colonial period and was derived from
English common law. English common law began with the establishment of the King’s
Courts (Curia Regis) after 1066. The King’s Courts were an integral part of William the
Conqueror’s efforts to unify England. They were supplemented by local courts and
church courts. Important sources of law within the judicial branch of the government now
include (1) the judge-made common law and (2) the judicial review of agency
administrative actions and activities.
i. Case Law
The King’s Courts helped to develop and apply a common and uniform set of laws
throughout the country. The decisions of the courts were written down (court
reporters) and then were expected to be followed in subsequent disputes; precedent
had been created. Now, judges look to other court decisions for guidance.
ii. Doctrine of Stare Decisis
The use of past cases (precedents) in deciding cases forms the doctrine of stare
decisis. Precedent has nearly the same force as a statute; judges are expected to
follow it.
iii. Value of Precedent
Stare decisis promotes several functions in our legal system:
1. Clarity and Consistency—businesses can have reasonable expectations
about the future enforcement of their agreements and the legal standards
to be applied.
2. Uniformity—encourages businesses to expand and foster economic
activity when they are confident of the legal environment, as it
encompasses economic activity.
3. Neutralize Judicial Prejudices—serves to neutralize the prejudices of
individual judges by pressuring them to follow precedent rather than
their own personal biases and beliefs. Judges who do not follow
precedent will likely observe their decisions overturned upon appeal.
iv. Reported Court Cases
a
© 2027 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 4
accessible website, in whole or in part.
