Strategic Management and Law
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Course Introduction
This course explores the intersection of strategic management and legal principles, equipping students with the analytical skills necessary to make informed business decisions within a dynamic legal environment. Topics include the formulation and implementation of business strategies, the impact of regulations and legal frameworks on organizational objectives, corporate governance, risk management, and ethical considerations. Through case studies and real-world applications, students will develop the ability to identify legal risks and opportunities that shape competitive advantage, ensuring compliance while advancing strategic goals in both domestic and international contexts.
Recommended Textbook Managers and the Legal Environment Strategies for the 21st Century 8th Edition by Bagley
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24 Chapters
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Page 2
Chapter 1: Law, Value Creation, and Risk Management
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Q1) Discuss ways in which laws and regulations promote economic growth.
Answer: Laws and regulations promote economic growth by protecting private property rights; enforcing private agreements; allocating risks; facilitating the raising of capital; creating incentives to innovate; promoting liquid and skilled labor markets; providing subsidies,tax incentives,and infrastructure; and promoting free trade in global markets.
Q2) The entering into of nondisclosure agreements is an unethical practice that should not be tolerated by a legally astute manager.
A)True
B)False
Answer: False
Q3) Each activity in regard to "law and the value chain" referenced in the text has legal aspects.
A)True
B)False
Answer: True
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3
Chapter 2: Ethics and the Law
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Q1) According to __________,social policies developed behind the veil of ignorance would create a system benefiting the __________.
A) Rawls, majority
B) Rawls, minority
C) Rawls, least well off
D) Kant, most well off
Answer: C
Q2) Which of the following international organizations adopted a convention criminalizing bribes to government officials and recommending a prohibition on the tax deductibility of bribes?
A) The Foreign Corrupt Practices Consortium
B) The Organization of Economic Cooperation and Development
C) The International Business Legal and Ethical Revision Association
D) Transparency International
Answer: B
Q3) Utilitarianism seeks to equalize the benefit to everyone.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Sources of Law, Courts, and Dispute Resolution
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Q1) Assuming that more than one forum has jurisdiction over a lawsuit,the doctrine of __________ involves a determination of which forum is more appropriate.
A) jurisdiction non conveniens
B) convenient state proceeding
C) forum non conveniens
D) subject matter jurisdiction
Answer: C
Q2) In 2002 the European Union adopted the __________ to standardize the rules for determining where suits involving e-commerce may be brought.
A) Brussels Conventions
B) European E-commerce Rules
C) European Commerce Standards
D) French Conventions
Answer: A
Q3) A judge is always compelled to follow Restatements of law in making a decision.
A)True
B)False
Answer: False
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Chapter 4: Constitutional Bases for Business Regulation
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Q1) State Y is planning a new superhighway.The traffic in state Y does not require any new roads.However,the state wishes to be the first in the U.S.to have a wild animal park running down the center of its highway.This will require 40% more land than ordinary superhighways.Claiming the power of eminent domain,the State has attempted to take Greg's house.Greg has filed suit to prevent this.How will the court decide this case and why?
Q2) Which of the following was the result at the U.S.Supreme Court level in Citizens United v.Federal Election Commission regarding the constitutionality of the federal law providing that televised electioneering communications funded by anyone other than a candidate must include a disclaimer setting forth identifying information as to sponsorship?
A) That the law was unconstitutional only if a corporate entity, not an individual, sponsored the communication.
B) That the law was unconstitutional only if an individual, not a corporate entity, sponsored the communication.
C) That the law was unconstitutional in that it involved small expenditures as well as larger ones.
D) That the law was constitutional.
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Chapter 5: Agency
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Q1) Carl is a contractor that is building a home for Orel.Pam is one of Orel's neighbors.One day Pam was walking in the neighborhood.As she passed the construction site,a piece of lumber fell from the partially finished garage roof and hit her in the head,injuring her severely.The lumber was left negligently on the roof by Carl.Pam now wishes to sue Orel.Should Orel be held liable to Pam? Discuss.
Q2) Agency is perhaps the most pervasive legal relationship in the business world.
A)True
B)False
Q3) Which of the following is NOT one of the factors the law looks at in distinguishing between employees and independent contractors?
A) The amount of experience of the worker
B) Whether the work is usually performed by a specialist without supervision
C) Whether the worker is paid hourly or by the job
D) The degree of skill the work requires
Q4) Principals may be held liable for the torts of independent contractors involving highly dangerous acts.
A)True
B)False
Q5) What is considered in determining the scope of an agent's implied authority?
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Chapter 6: Administrative Law
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Q1) Actions of administrative agencies often affect businesses but rarely affect individuals.
A)True
B)False
Q2) A formal administrative adjudication does not include the right to:
A) a jury trial.
B) an attorney.
C) present your evidence.
D) participate in the proceeding.
Q3) The U.S.Constitution does not specifically provide for administrative agencies.
A)True
B)False
Q4) Failure to comply with regulations set in place by agencies may result in the imposition of fines as well as the revocation of licenses and permits.
A)True
B)False
Q5) Administrative agencies are usually part of the legislative branch.
A)True
B)False
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Chapter 7: Contracts
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Q1) A third party beneficiary is someone who is not:
A) a legal and recognized type of beneficiary.
B) intended to benefit from the contract.
C) a party to the original contract.
D) intended to enforce the contract.
Q2) Many states have professional licensing statutes which provide that if a party to a contract does not have a required license,the other party must still pay and can sue in court for damages.
A)True
B)False
Q3) To which of the following does the statute of frauds apply?
A) A promise to pay the debt of another person
B) A contract that cannot be performed within the space of six months
C) Any contract of employment
D) Any contract involving commerce
Q4) Mutuality of obligation applies only to bilateral contracts.
A)True
B)False
Q5) What are the four basic elements necessary for a valid contract?
Q6) Define the term "consideration" as it is used in contract law.
Page 9
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Chapter 8: Sales, Licensing, and E-Commerce
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Q1) UCC Section 2-319 expressly authorizes the buyer and seller to allocate the __________ between them as they see fit.
A) damages
B) specific performance
C) modification
D) risk of loss
Q2) Which of the following is true regarding the UCC's Statute of Frauds?
A) The writing involved must be typed, not handwritten.
B) The writing must be signed by the party to be charged, not necessarily by all parties
C) Any warranties must be included in the writing in order to be enforceable
D) The UCC's requirements regarding a writing are strict and place significant burdens on the parties in regard to adequately including all terms of the agreement in the writing.
Q3) A contract for the sale of land is governed by Article 2 of the UCC.
A)True
B)False
Q4) Between merchants,what is the affect of an acceptance that includes additional terms without expressly making the contract subject to the offeror's agreeing to those terms?
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Chapter 9: Torts and Privacy Protection
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Q1) Refer to Fact Pattern 9-3.What would you tell Alex regarding whether he should sue Blake for committing an assault?
A) That it appears that the necessary elements are present for him to succeed in an action against Blake for assault so long as he can show apprehension of being struck.
B) That he could not win in an action for assault because he admitted that he was not afraid.
C) That he could not win in an action for assault because Blake did not actually strike him.
D) That he could not win in an action for assault because it appears that Blake's actions were justified.
Q2) In which of the following situations would the doctrine of res ipsa loquitur apply?
A) A truck backed into a fence.
B) A jar of jam fell on your foot.
C) A post operative x-ray showed a surgical sponge in your stomach.
D) A door slammed on your foot.
Q3) Define and explain the theory behind the economic loss rule.
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Chapter 10: Product Liability
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Q1) Which of the following is NOT true regarding product liability in the European Union according to the European Union product liability directive?
A) Both a statute of limitations and a statute of repose are available.
B) A manufacturer will not be liable if the defect was due to compliance of the product with mandatory regulations.
C) The directive applies to services as well as products.
D) A supplier or wholesales is not strictly liable unless the injured party is unable to identify the manufacturer.
Q2) Strict liability in tort applies only to products,not to services.
A)True
B)False
Q3) The European Union applies strict liability to services.
A)True
B)False
Q4) Most states in the United States have adopted strict product liability whereby an injured person may recover damages by showing that a defendant was negligent.
A)True
B)False
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Chapter 11: Intellectual Property
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Q1) A patent holder must personally make use of the invention.
A)True
B)False
Q2) A descriptive mark that is initially unavailable for protection can still become protectable if it acquires __________ meaning.
A) descriptive
B) geographic C) personal
D) secondary
Q3) As a matter of law,a combination of two inventions cannot be considered nonobvious.
A)True
B)False
Q4) The Uniform Trade Secrets Act is a federal law.
A)True
B)False
Q5) Constructive abandonment of a trademark can occur through the trademark lapsing into genericism.
A)True
B)False
Page 13
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Chapter 12: The Employment Agreement
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Q1) In 1938,the FLSA set the first minimum wage at:
A) $1.00 per hour.
B) $2.50 per hour.
C) fifty cents per hour.
D) twenty-five cents per hour.
Q2) Which of the following is true regarding employment laws within the European Union?
A) The European Union has attempted to bring uniformity to the laws related to termination of employment.
B) No member states of the European Union recognize the U.S.concept of employment at will.
C) The European Union has attempted to bring uniformity to the laws related to termination of employment, but laws of the United Kingdom provide significantly more benefits and legal protection to employees than do the employment laws of France.
D) In order to facilitate trade, the European Union has mandated that all member states apply the same laws regarding employment.
Q3) List exceptions,if any,to the Employee Polygraph Protection Act's ban on polygraph testing.
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Chapter 13: Civil Rights and Employment Discrimination
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Q1) Trudy,a female manager at ABC Company,was surprised to learn that one of her male employees had accused her of sexual harassment.Trudy denied all charges.After a long and expensive battle in court,the jury ruled in favor of ABC Company on all charges.A few days after the trial,Trudy's supervisor fired her for no apparent reason.Trudy obtained evidence in the form of interoffice memos that she was fired because of the charges brought against her.Trudy thought that was unfair because she was completely vindicated by the jury.Are any remedies available to her under Title VII?
A) No remedies are available to her under Title VII because it only protects victims of discrimination and harassment along with witnesses testifying in support.
B) Trudy can sue under Title VII only if she can establish that men had been treated differently when accused of harassment.
C) Trudy can sue under Title VII only if she can establish the existence of an employment contract whereby she can only be discharged for just cause.
D) At least one court has ruled that Trudy has a cause of action under Title VII based upon retaliation.
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Page 15
Chapter 14: Criminal Law
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Q1) Set forth five of the nine factors used by the Department of Justice to decide whether to indict a corporation.
Q2) Benji,a truck driver,is told by his boss,Penny,to quickly deliver a load of steel and to get to the location within an hour regardless.Benji replied,"That's impossible-I'd have to go 90 miles per hour to do that." Penny said,"Well,you'd best get started." Not surprisingly,Benji was stopped by a highway patrol officer and fined for both speeding and reckless driving.When he went to court,Benji told the judge that he should be found innocent because he was only acting upon orders of his boss,Penny.Is Benji correct?
A) Yes.
B) No.
C) Yes, but only if he can establish that he had a written contract obligating him to follow Penny's orders.
D) Yes, but only if he has no previous record of speeding.
Q3) Under strict liability,a defendant can be guilty of a crime regardless of his or her state of mind.
A)True
B)False
Q4) Fully discuss limitations on the protection against double jeopardy.
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Page 16
Chapter 15: Environmental Law and Sustainability
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Q1) CASE 15.1 Utility Air Regulatory Group v.EPA (2014),involved a question of whether the EPA's regulation of __________ for passenger vehicles triggered permits for __________ that emit greenhouse gases.
A) pollution, stationary sources
B) greenhouse gas emissions, statutory sources
C) greenhouse gas emissions, commercial trucking vehicles
D) greenhouse gas emissions, stationary sources
Q2) Most environmental laws are administered by the:
A) Council on Environmental Quality.
B) Environmental Protection Agency.
C) National Environmental Policy Commission.
D) Resource Conservation and Recovery Agency.
Q3) Environmental law does not cover land-use regulation.
A)True
B)False
Q4) The management of hazardous waste is governed by the __________ as amended.
A) Clean Air Act
B) Clean Water Act
C) Solid Waste Disposal Act
D) Federal Superfund Law
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Chapter 16: Antitrust
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Q1) With a(n)__________ distributorship,a manufacturer limits itself to a single distributor in a given territory.
A) dual
B) exclusive
C) franchise
D) market-power
Q2) Vertical market division between a franchisor and a franchisee may be lawful when interbrand competition is enhanced by the limitation on intrabrand competition.
A)True
B)False
Q3) Predatory pricing is the attempt to eliminate rivals by undercutting their prices to the extent that their competitors lose money and go out of business.
A)True
B)False
Q4) Section 5 of the Federal Trade Commission Act is broader than the other antitrust laws.
A)True
B)False
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Page 18
Chapter 17: Consumer Protection
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Q1) In the Thompson v.W.States Medical Centercase referenced in the text,the U.S.Supreme Court ruled that compounded drugs are illegal.
A)True
B)False
Q2) Which of the following is true regarding the 2011 Food Safety Modernization Act?
A) It developed an electronic tracking system to follow food from the farm to the dinner table.
B) It is one of several major overhauls of the FDA in the last several years.
C) It recognizes that importers are not required to verify food safety in regard to food from other countries.
D) It is one of several major overhauls of the FDA in the last several years, and it recognizes that importers are not required to verify food safety in regard to food from other countries.
Q3) The FTC now requires used car sellers to affix a __________ to the cars that they sell.
A) fixed price
B) buyer's guide
C) base price
D) discount price
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Page 19
Chapter 18: Real Property and Land Use
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Q1) In the Stevens v.Premier Cruises,Inc.(2000)case referenced in the text,the plaintiff-who was confined to his wheelchair-sued Premier Cruises under the __________ Act,claiming that the portions of the ship that were considered "__________" were not in-fact wheelchair accessible.
A) Title III of the Civil Rights, public accommodations
B) Americans With Disability, public accommodations
C) Department of Justice Disability, public accommodations
D) Americans With Disability, private accommodations
Q2) Sales of real property interests to nonresident aliens may be regulated by the state but are not regulated by the federal government.
A)True
B)False
Q3) Describe in detail the three basic types of deeds including any warranties or guarantees the deeds provide.
Q4) In the simplest type of ownership,property is owned by a partnership.
A)True
B)False
Q5) What must a person do to acquire a parcel of land by adverse possession?
Q6) Compare and contrast joint tenancy and tenancy by the entirety.
Page 20
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Chapter 19: Forms of Business Organizations
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Q1) Any corporation not meeting the requirements for an S corporation is automatically a C corporation.
A)True
B)False
Q2) A member of the board who also serves as an officer is a(n)__________ director.
A) inside
B) interested
C) outside
D) employed
Q3) An S corporation would likely be used as the corporate form for a business intending to raise money from venture capitalists.
A)True
B)False
Q4) Which of the following statements is not true regarding the characteristics of a corporation?
A) A corporation is a legal entity distinct from its owners.
B) A corporation is owned by shareholders.
C) The corporation itself is responsible for its liabilities.
D) The board of directors implements the decisions of the officers.
Q5) Explain requirements for formation of an S corporation.
Page 21
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Chapter 20: Directors, Officers, and Controlling Shareholders
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Q1) Define and explain the purpose of the business judgment rule.Under what circumstances would the rule apply? When would the protection not apply? Discuss fully.
Q2) Companies listed on the New York Stock Exchange must have compensation committees composed entirely of independent directors.
A)True
B)False
Q3) Refer to Fact Pattern 20-1.Did Tonya violate any duties owed to the corporation?
A) Yes, by buying the land for herself without disclosure to the corporation, she violated the corporate opportunity doctrine.
B) Yes, by buying the land for herself without disclosure to the corporation, she violated the duty of responsible decision making.
C) Only if the land involved was worth over $50,000 did she violate any duties because any smaller amount would be considered de minimus.
D) No.
Q4) Termination fees are sometimes characterized as liquidated damages.
A)True B)False
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Chapter 21: Public and Private Offerings of Securities
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Q1) If an issuer makes successive sales within a limited period of time,the SEC may __________ the successive sales,resulting in the loss of a private-offering exemption.
A) restrict
B) register
C) integrate
D) qualify
Q2) In CASE 21.1 Lawson v.FMR,LLC (2014),the question before the U.S.Supreme Court was whether the __________ Act whistleblower protections extended to __________ of __________ contractors of __________ corporations.
A) Sarbanes-Oxley, employees, private, public
B) SEC 1934, employers, public, private
C) Private Securities Litigation Reform Act, employees, private, public
D) SEC 1933, employers, private, public
Q3) The Securities Act of 1934 requires continuous disclosure of certain information regarding publicly traded securities.
A)True
B)False
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23
Chapter 22: Securities Fraud and Insider Trading
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Q1) InStoneridge Investment Partners,LLC v.Scientific-Atlanta,Inc.referenced inthetext,the U.S Supreme Court analyzed the question ofwhether customer / supplier companies that agreed to arrangements allowing an issuer to mislead its auditor are liable in a private action under section 10(b)of the 1934 Act.The Court ruled:
A) that based on "scheme liability," the customer / supplier companies could be held liable although no public statement was made.
B) that based on "transaction causation" the plaintiffs could establish reliance and that the plaintiffs were, therefore, entitled to proceed.
C) that plaintiff investors had no private right of action because they did not rely upon the statements or representations at issue.
D) that the plaintiff investors had no private right of action because the defendants were not aiders and abettors and, instead, acted primarily on their own behalf outside the realm of securities regulation.
Q2) Research shows that because of the severe penalties involved,insider trading in China is very rare.
A)True
B)False
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Page 24
Chapter 23: Debtor-Creditor Relations and Bankruptcy
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Q1) Which of the following is NOT true regarding remedies for default of a security agreement?
A) After default, the secured party has the right to take possession of the collateral so long as judicial process is followed.
B) After properly taking possession of the property, the secured party may then dispose of the collateral at a public or private sale.
C) If there is a surplus from the sale of collateral, the secured parry is required to return it to the debtor.
D) If there is a deficiency from the sale of collateral, the debtor remains liable for that amount
Q2) National banks acting as lenders are subject to state usury laws. A)True B)False
Q3) Under a guaranty of collection,the guarantor becomes obliged to pay only after the lender has attempted unsuccessfully to collect the amount due from the primary debtor. A)True
B)False
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Chapter 24: International Law and Transactions
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Q1) The traditional Islamic rules and laws that regulate Muslim life are called Sharia.
A)True
B)False
Q2) The principle that each World Trade Organization member must accord to all other member countries tariff treatment no less favorable than it provides to any other country is known as the __________ principle.
A) most favored nation
B) preference
C) bound nation protection
D) product enhancement
Q3) The antidumping law is the most frequently used U.S.import-relief law.
A)True
B)False
Q4) Set forth the seven principle European Institutions primarily responsible for governing the European Union.
Q5) TheGulf Oil Corp.v.Gilbertdiscussed the text,addressed the question of forum non conveniens.What factors did the U.S.Supreme Court set forth that courts should consider in deciding whether to dismiss a case based on forum non conveniens?
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