Legal Environment of Business
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Course Introduction
The Legal Environment of Business explores the fundamental legal concepts and frameworks that influence business operations. This course examines the structure and function of the U.S. legal system, the nature and sources of law, and the regulatory environment affecting businesses. Key topics include contracts, torts, agency, business organizations, intellectual property, employment law, and government regulation. Students will learn how legal considerations shape strategic and operational decisions, develop the ability to analyze legal risks, and gain practical insights into compliance and ethical issues in a business context.
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Business Government and Society 13th Edition by
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John F. Steiner
Page 2
Chapter 1: The Study of Business, Government, and Society
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Sample Questions
Q1) The countervailing forces model states that society is governed primarily by economic forces.
A)True
B)False
Answer: False
Q2) Institutions are formal patterns of relations that link people together to accomplish a goal.
A)True
B)False
Answer: True
Q3) Which of the following statements about social contracts is true?
A) Businesses are not obligated to fulfill social contracts.
B) It codifies the expectations of business from society and other stakeholders.
C) It is as clear-cut as the economic forces a business faces.
D) It is partly expressed in law,but also resides completely in social values.
Answer: D
Q4) A business uses society's resources to create new wealth.
A)True
B)False
Answer: True
Page 3
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Chapter 2: The Dynamic Environment
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Sample Questions
Q1) Great Britain was the first society to usher in the Industrial Revolution.
A)True
B)False
Answer: True
Q2) The employees of a business are a part of its external environment.
A)True
B)False
Answer: False
Q3) _____ is the belief that sacred authority called for hard work,saving,thrift,and honesty as necessary for salvation.
A) Positivism
B) Protestant ethic
C) Functionalism
D) Confucian ethic
Answer: B
Q4) Although the global population growth is slowing,it will be the highest in the most developed regions.
A)True
B)False
Answer: False
Page 4
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Chapter 3: Business Power
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Sample Questions
Q1) At the _____ level of corporate power,society encounters an intangible realm of social networks,time,and physical space,a realm crossed by complex chains of cause and effect that converge and interact,shaping and reshaping the society.
A) apparent
B) exterior
C) deep
D) surface
Answer: C
Q2) On the surface level,corporate power shapes society over time through the aggregate changes of industrial growth.
A)True
B)False
Answer: False
Q3) Corporate actions have an impact on society at two levels.What are they?
Answer: The two levels at which corporate actions impact the society are the surface level and the deep level.On the surface level,business power is the direct cause of visible,immediate changes,both great and small.On the deep level,corporate power shapes society over time through the aggregate changes of industrial growth.
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5
Chapter 4: Critics of Business
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Sample Questions
Q1) The term Chicago School is synonymous with:
A) Keynesianism.
B) neoliberalism.
C) ordoliberalism.
D) imperialism.
Q2) What was the populist movement?
Q3) Define utopia.
Q4) Milton Friedman,his colleagues,and their free market ideas came to be called the Chicago School.
A)True
B)False
Q5) What is an agrarian society?
Q6) Thomas Jefferson believed that an agrarian economy would prevent the rise of subservience to the wealthy and bring a state of equality,basic justice,and concern for the common good.
A)True
B)False
Q7) What is just price?
Q8) Discuss the progressive reform movement in America.
Q9) Discuss Plato's and Aristotle's views on commercial activity. Page 6
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Page 7
Chapter 5: Corporate Social Responsibility
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Q1) According to the doctrine of neo-Darwinism,charity interferes with the natural evolutionary process in which society sheds its less fit to make way for the better adapted.
A)True
B)False
Q2) _____ actions are initiatives required either by government regulation or civil regulation.
A) Voluntary
B) Mandated
C) Market
D) Profit
Q3) Civil regulation is also known as:
A) private regulation.
B) self-regulation.
C) state regulation.
D) voluntary regulation.
Q4) Corporate social responsibility has a definite,universal meaning.
A)True
B)False
Q5) How did the concept of corporate social responsibility evolve from 1950 to 1970?
Page 8
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Chapter 6: Implementing Corporate Social Responsibility
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Sample Questions
Q1) Companies can manage their responses to social pressures by moving through a process of:
A) hiring and firing.
B) customer service.
C) expanding their product lines.
D) CSR implementation.
Q2) The most effective assurance that information in a corporate sustainability report is correct is provided by independent,external auditors.
A)True
B)False
Q3) The two elements that determine the CSR orientation of a firm are its business model and its:
A) strategic alliances.
B) leadership.
C) investor relations.
D) philanthrocapitalism.
Q4) Distinguish between the progressive business model and the traditional model as they relate to corporate responsibility.
Q5) Discuss cause marketing.What are the criticisms of cause marketing?
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Chapter 7: Business Ethics
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Sample Questions
Q1) The tendency of an individual to use self-centered,immoral,manipulative behavior in a group is known as:
A) psychoticism.
B) narcissism.
C) Machiavellianism.
D) neuroticism.
Q2) Which of the following believed that both good and evil were a natural part of human nature?
A) The realist school
B) The school of ethical relativism
C) The school of ethical universalism
D) The legalist school
Q3) Rights to life are an example of:
A) master morality.
B) reciprocity.
C) hypernorms.
D) slave morality.
Q4) Discuss the difference,if any,between ethics and business ethics.How are they similar and different from one another?
Q5) What is an ethics and compliance program? Is it being followed by companies?
Page 10
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Chapter 8: Making Ethical Decisions in Business
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Q1) Explain what is meant by the conventionalist ethic and give a business example of the application of this concept.
Q2) There is no specific part of the brain that makes ethical decisions.
A)True
B)False
Q3) A manager faced with an ethical dilemma asks herself how it would feel to explain the decision to a wider audience by using this ethical principle.
A) The ends-means ethic
B) The principle of proportionality
C) The Doctrine of the Mean
D) The disclosure rule
Q4) What is meant by the theory of justice in ethical decision-making? Distinguish between distributive,retributive,and compensatory justice.
Q5) Explain what is meant by the might-equals-right ethic in ethical decision-making and give a business example of the application of this concept.
Q6) Explain what is meant by the ends-means ethic in ethical decision-making and give a business example of the application of this concept.
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Page 11
Chapter 9: Business in Politics
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Sample Questions
Q1) _____ occurs when a lawmaker or official asks for,is offered,or receives something valuable in return for being influenced to perform an official act.
A) Lobbying
B) Bribery
C) Illegal gratuity
D) Rigging
Q2) Immediately after the U.S.Civil War,big business dominated both the federal government and the state governments to an extent that has not been seen since that time.
A)True
B)False
Q3) A governmental committee formed by a company that makes campaign contributions by getting money from individual employees,not the corporate treasury,is called a:
A) political action committee.
B) subcommittee.
C) progressive change committee.
D) joint committee.
Q4) Define lobbying.
Q5) What is meant by separation of powers?
Page 12
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Chapter 10: Regulating Business
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Sample Questions
Q1) What was the scenario during the first wave of federal regulation of business?
Q2) What is an executive agency?
Q3) Which of the following is true about guidance?
A) It is legally binding.
B) It is issued exclusively by Congress.
C) It is intended to clarify official regulations.
D) It does not affect existing rules.
Q4) During the first wave of regulation,most of the offices that were set up to perform regulatory functions were primarily promotional in nature.Which of the following was an exception?
A) Copyright Office
B) Bureau of Fisheries
C) Comptroller of the Currency
D) Patent and Trademark Office
Q5) If dominating companies in an industry cut prices until competitors leave the market,and then raise prices again,they are engaging in:
A) destructive competition.
B) pure competition.
C) monopolistic competition.
D) perfect competition.
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Chapter 11: Multinational Corporations
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Sample Questions
Q1) These are aspirational statements of principles,policies,and rules for foreign operations that a multinational corporation voluntarily agrees to follow.
A) Industrial codes of conduct
B) Professional codes of conduct
C) International codes of conduct
D) Corporate codes of conduct
Q2) The treaty that requires nations to preserve biological diversity by promoting sustainable economic activity is known as the:
A) Convention on Biological Diversity.
B) 2010 Biodiversity Target.
C) Global Biodiversity Information Facility.
D) Pacific Biodiversity Information Forum.
Q3) Each of the five tiers of internationalization is seen as all of the following EXCEPT:
A) a theory.
B) an ideal.
C) a model.
D) a policy.
Q4) Explain what is meant by foreign direct investment.
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Chapter 12: Globalization, Trade, and Corruption
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Q1) The Foreign Corrupt Practices Act (FCPA):
A) can fine individuals up to $2 million and five years in prison for violations of the law's bribery provisions.
B) makes it a criminal rather than a civil offense to bribe an official of a foreign government.
C) makes it legal for bribes paid by managers of one corporation to managers of another.
D) contains an exception for facilitating payments intended only to restrict "routine governmental action."
Q2) Transportation is an example of which force in globalization?
A) Capital
B) Ideas
C) NGOs
D) Technology
Q3) Discuss the free trade responses to protectionism.
Q4) What is globalization?
Q5) What are the Bretton Woods institutions?
Q6) Discuss the major forces that have stimulated the growth of globalization in recent years.
Page 15
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Chapter 13: Industrial Pollution and Environmental Regulation
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Sample Questions
Q1) One disability-adjusted life year (DALY)equals one lost year of healthy life.
A)True
B)False
Q2) Which Act was passed to take care of the thousands of abandoned toxic waste sites around the country?
A) The Toxic Substances Control Act
B) The Medical Waste Tracking Act
C) The Comprehensive Environmental Response,Compensation,and Liability Act
D) The Resource Conservation and Recovery Act
Q3) Discuss greenhouse gases and their effects.What is the Kyoto Protocol?
Q4) The Montreal Protocol set timetables to phase out worldwide:
A) elimination of leaded gasoline.
B) use of 96 ozone-depleting chemicals.
C) emission of greenhouse gases.
D) build-up of radon.
Q5) Ozone-depleting gases such as chlorofluorocarbons are tiny,tough molecules that defy natural breakdown processes.
A)True
B)False
Q6) How is indoor air pollution caused? Page 16
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Page 17
Chapter 14: Managing Environmental Quality
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Q1) Risk management decisions are based on the social sciences-law,economics,politics,and ethics.
A)True
B)False
Q2) The environmental management system is an asset of methods and procedures for aligning corporate strategies,policies,and operations with principles that protect ecosystems.
A)True
B)False
Q3) Which of the following is a carbon offset program set up under the Kyoto Protocol that allows developed countries to meet greenhouse gas reproduction pledges by paying for carbon offset projects in developing nations?
A) The Emissions Trading Mechanism
B) The Clean Development Mechanism
C) The environmental management system
D) ISO 14001
Q4) How are environmental taxes important as policy tools? What is main drawback of these taxes?
Q5) What does hazard assessment do?
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Chapter 15: Consumerism
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Q1) Laws that prohibit retail stores from being open for business on Sundays are called blue laws.
A)True
B)False
Q2) Define product liability.
Q3) _____ refers to a situation that arises when an individual sits on the board of directors of two or more corporations.
A) Collaborative leadership
B) Director interlock
C) Office sharing
D) Directorate formation
Q4) Economist Thorstein Veblen argued that in the new industrial society,people earned their status by conquest in warfare.
A)True
B)False
Q5) The principle of caveat emptor imposes on buyers the responsibility to inspect carefully and skeptically items they purchase.
A)True
B)False
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Chapter 16: The Changing Workplace
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Q1) Nonwage costs including payments for social security,health insurance,and payroll taxes that employers must pay to cover disability,unemployment,and similar benefits are known as externalities.
A)True
B)False
Q2) The four fundamental standards to protect basic worker rights set forth in international labor conventions are known as _____ standards.
A) core labor
B) agency worker
C) fair labor
D) second New Deal
Q3) Which of the following acts guaranteed union organizing and bargaining rights?
A) The Employee Free Choice Act
B) The National Labor Relations Act
C) The Norris-LaGuardia Anti-Injunction Act
D) The Worker Adjustment and Retraining Act
Q4) What are the three important noticeable trends in the American labor force?
Q5) What are the six environmental forces that create most of the turbulence in the workplace?
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Chapter 17: Civil Rights, Women, and Diversity
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Q1) According to which of the following is discrimination in favor of protected groups benevolent of intention?
A) Distributive justice
B) Compensatory justice
C) Ethical theories of rights
D) Utilitarian ethics
Q2) Following the Civil War,Congress passed three constitutional amendments designed to protect the rights of former slaves.What were they?
Q3) Which of the following is an example of quid pro quo?
A) The interviewer tells Brenda that her qualifications are excellent for a female employee.
B) Charles Inc. ,requires that all female employees wear high heels during work hours.
C) David is often asked to work overtime because he is a bachelor.
D) Ariana is denied a promotion because she refuses to go out with her boss.
Q4) What was the separate but equal doctrine?
Q5) Distinguish between natural rights and civil rights.
Q6) What is racism?
Q7) Define sexual harassment,quid pro quo,and hostile environment.
Page 21
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Chapter 18: Corporate Governance
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Q1) A proxy card:
A) is also called a proxy statement.
B) is a form stockholders mark giving management the right to vote their shares as indicated.
C) is an inventory of information sent to stockholders before annual votes on directors.
D) contains rules of corporate governance to be adopted by corporations.
Q2) The exercise of authority over members of a corporate community is called:
A) corporate performance management.
B) corporate sustainability.
C) corporate statism.
D) corporate governance.
Q3) With a restricted stock,the recipient receives dividends and can vote the shares but cannot sell them until the restriction is lifted.
A)True
B)False
Q4) Describe the typical duties of boards of directors for U.S.corporations.
Q5) What are the major shortcomings of CEO compensation?
Q6) Explain what is meant by "corporate governance" and what it includes.
Q7) Explain what a corporate charter allows a corporation to do.
Page 22
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