SOLUTION MANUAL
SOLUTION MANUAL
Teaching Outline I. Introduction A. Why Law and Regulations Are Fundamental Foundations for Business (LO 1-1) Emphasize: That by studying the legal and regulatory environment of business, students will gain an understanding of basic legal vocabulary and gain the ability to identify problematic situations that could result in liability. That because of the positive role lawyers can play, they are increasingly being asked to join corporate boards. Sidebar 1.1 titled ‗Sustainability and Integrity: Cautionary Tales of Legal Liability.‘ II. Law, the Rule of Law, and Property A. Law Emphasize: The simple definition of law. It can be elaborated by observing that law is a rule-based, state-enforced formal ordering system with moral elements. That adequate law and legal institutes promote the certainty and trust necessary for complex, long-term business arrangements. In an economic sense, they lower the costs of transacting business. Additional Matters for Discussion: Discuss that law formalizes values and traditions and that law is more needed in a large, heterogeneous modern nation than in a smaller, homogeneous nation. Compare the U.S. and Japan. It is not too early in this chapter to ask students whether or not lack of law and strict regulation facilitated the economic crash and recession that began in 2008. Ask students to comment on how mistrust of law and lawmakers precipitated the ―Occupy Wall Street‖ and other ―Occupy…‖ movements that arose in 2011. Discuss how the law impacts the COVID 19 restrictions on businesses opening in 2020. B. The Rule of Law Emphasize: That under a rule of law, laws are generally and equally applicable. That lack of the rule of law internationally has produced hundreds of calls for it in the 1-2 Copyright ©2022 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
last several years by business and political leaders. Get students to search for rule-oflaw references in computer databases. That the complete rule of law is an ideal rather than a fact in even the most democratic societies.
Additional Matters for Discussion: Get students to discuss why the managing director of J.P. Morgan and Co. called the rule of law ―a cornerstone of free trade.‖ Ask students why the rule of law tends to produce rules that benefit everyone. Answer: Because laws apply generally and equally to everyone, the only way lawmakers can benefit themselves is by benefitting everyone. This answer is theoretical, of course. Lawmakers are often benefited individually for making laws that favor special interests. Ask students to imagine how society would be with no laws. What if the governor of one‘s state announced that tomorrow would be no-law day and that nothing would be penalized or enforced, no police would be present and no penalties would result from anyone‘s actions. What would the students do? One is likely to find that after a few fleeting and whimsical thoughts, they would agree that they would primarily act to protect their real and personal property. C. Property (LO 1-2) Emphasize: The two meanings of property. That property is not the resource or thing itself. It is a right (or series of rights). That the property right gives a major incentive to develop resources. That the exclusionary right of property provides a basis for the private market and modern business. Additional Matters for Discussion: Ask students to discuss the incentive to grow and prosper and the incentive to innovate and progress under a system with a right to private property ownership and a communist system where private ownership of property is greatly diminished for most. Would they even be in school if accumulation of property rights were not attainable? D. Property in its Broadest Sense Emphasize: How in its broadest sense ―property‖ is the central concept of Western legal systems. How property can be thought of as the hub of a wheel and the various legal topics studied in the text as spokes of the wheel. Law and the rule of law provide the unifying 1-3 Copyright ©2022 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.