Strategic Management and Law
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Course Introduction
Strategic Management and Law explores the intersection of business strategy and legal frameworks, examining how legal considerations influence organizational decision-making and competitive dynamics. The course covers topics such as corporate governance, regulatory compliance, intellectual property, contract law, and ethical requirements within both domestic and international contexts. Students analyze case studies, assess legal risks, and learn how to integrate legal insights into strategic planning processes, equipping them with the tools to navigate complex business environments while maintaining regulatory and ethical standards.
Recommended Textbook Managers and the Legal Environment Strategies for the 21st Century 6th Edition by Constance E.
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25 Chapters
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Page 2
Chapter 1: law, value creation, and risk management
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Sample Questions
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) As used in the text,the term "legal astuteness" refers to the ability of a manager to avoid situations making consultation with legal counsel necessary.
A)True
B)False
Answer: False
Q3) Which of the following was created by food advertisers in an attempt to halt government regulation aimed at stopping marketing preying on children's vulnerability?
A)The Children's Advertising Review Unit
B)The Minor's Board Unit
C)The Minor Protection Review Unit
D)The Children's Enhancement Board
Answer: A
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3
Chapter 2: Ethics ant the law
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Sample Questions
Q1) Your company has grown from a national to a multi-national entity.How have your ethical responsibilities changed? To whom do you owe these responsibilities?
Answer: As the text makes clear in the section titled "When Ethics Travel," practices regarded as ethically unacceptable in the United States may be common practice in foreign countries.Students should discus the fact that ethical responsibilities are owed to all affected including citizens and employees of a host country.
Q2) The Deontological theory focuses on the consequences of an action rather than on the motivation of the individual.
A)True
B)False
Answer: False
Q3) According to St.Thomas Aquinas,the only true laws were those that followed
A)reasoned law
B)customary law
C)eternal law
D)localized law
Answer: C
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4
Chapter 3: Courts, sources of law, and dispute resolution
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Sample Questions
Q1) Federal judges are appointed for life.
A)True
B)False
Answer: True
Q2) Explain in detail the discovery stage of a lawsuit.Describe the types of discovery.Explain the purposes of discovery.
Answer: Students should discuss the fact that, unless a privilege applies, parties may generally obtain discovery regarding any matter relevant to the lawsuit. Purposes of discovery are to eliminate the game elements in a trial and to prevent surprises. Types of discovery include depositions, interrogatories, and requests for production of documents.
Q3) A lawsuit may be resolved before trial by the judge granting a
A)judgment notwithstanding the verdict
B)declaratory judgment
C)motion to dismiss
D)request for production of documents
Answer: C
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Chapter 4: Constitutional bases for business regulation
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Sample Questions
Q1) Under Supreme Court rulings,the protections granted in the Bill of Rights are applied to the States by the ________ Amendment.
A)Tenth
B)Eleventh
C)Thirteenth
D)Fourteenth
Q2) Refer to fact pattern 4-2.Which of the following sections of the U.S.Constitution should Wally reference when discussing the matter of the right to a jury trial with Rebecca?
A)The First Amendment
B)The Fifth Amendment
C)The Seventh Amendment
D)Article One,Section Eight
Q3) The division of power among the executive,legislative and judicial branches of government is typically referred to as
A)federalism
B)judicial review
C)separation of powers
D)the Supremacy clause
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Page 6
Chapter 5: Agency
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Sample Questions
Q1) Agency relationships can be created without a formal agreement.
A)True
B)False
Q2) Under the duty of ____________ an agent has a duty to act solely for the benefit of his or her principal in all matters directly connected with the agency undertaking.
A)loyalty
B)subservience
C)trust
D)obedience
Q3) Agency by estoppel creates an agency relationship where one does not actually exist.What elements are necessary for an agency by estoppel? What are the legal consequences to the principal,agent,and third party? Discuss.
Q4) An agent has a duty to act with due care and avoid mistakes.
A)True
B)False
Q5) A master-servant agency is a type of agency that is illegal.
A)True
B)False
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Chapter 6: Administrative Law
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Sample Questions
Q1) The requirement of exhaustion of administrative remedies is waived when A)exhaustion would result in irreparable harm.
B)exhaustion would be futile.
C)the plaintiff asserts a colorable constitutional claim collateral to the substantive issues of the administrative law proceeding.
D)all of the responses are correct.
Q2) Refer to fact pattern 6-2.Which of the following is the best defense the city has against the lawsuit brought by Tony?
A)That Tony lacks standing to sue.
B)That courts have no authority to determine the validity of agency rules.
C)That Tony lacks permission of the agency to sue since authorization of the agency is required prior to a lawsuit challenging the validity of an agency regulation.
D)That Tony has not lived in the jurisdiction for at least a year since residence in the jurisdiction for at least a year is required in order to challenge the validity of a local regulation.
Q3) Agencies lack the authority to conduct formal adjudications.
A)True
B)False
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Chapter 7: Contracts
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Sample Questions
Q1) Refer to fact pattern 7-1.What damages,if any,could Danny likely collect against Prudence in litigation over the car?
A)None
B)Reliance damages consisting of $500
C)Incidental damages consisting of $50
D)Compensatory damages consisting of $500
Q2) Liquidated damages are damages that A)punish the breaching party.
B)fluctuate with the market conditions.
C)are an estimate of the damages likely to be sustained from the breach. D)none of the above
Q3) In a unilateral contract,a promise is given in exchange for another promise.
A)True B)False
Q4) Consequential damages are compensation for losses that occur as a foreseeable result of the breach.
A)True
B)False
Q5) What are the elements necessary for a valid contract? Define and discuss these elements.
9
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Chapter 8: sales, licensing, and e-commerce
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Sample Questions
Q1) To which of the following does article 2 of the UCC apply?
A)The sale of goods.
B)The rendering of services.
C)The sale of land.
D)Both the sale of goods and the rendering of services.
Q2) Which of the following is an example a statement made by a salesperson that would be considered "puffing"?
A)This car will get 35 miles per gallon.
B)This is a genuine diamond ring.
C)This is an original work of art.
D)This copier is the best in the business.
Q3) Sales at Internet auctions compromise only a small amount of Internet fraud.
A)True
B)False
Q4) Which of the following statements best describes an offer under the UCC?
A)An offer is not defined by the UCC.
B)An offer is an invitation to buy or sell between merchants.
C)An offer is any writing sufficient to describe the goods.
D)An offer is contained in the standard business forms.
Q5) What does Section 201 of the UCC provide regarding a statute of frauds?
Page 10
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Chapter 9: Torts and Privacy protection
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Sample Questions
Q1) The U.S.Supreme Court has held that in order for a public official or public figure to recover damages for defamation by a media defendant,there must be a showing of A)intent.
B)negligence.
C)actual malice.
D)invasion of privacy.
Q2) Which of the following is true regarding assault?
A)Assault is an intentional,nonconsensual act that gives rise to the apprehension that a harmful or offensive contact is imminent.
B)Assault is an intentional,nonconsensual act that gives rise to the fear that a harmful or offensive contact is imminent.
C)Assault is a negligent,nonconsensual act that gives rise to the apprehension that a harmful or offensive contact is imminent.
D)Assault is a negligent,nonconsensual act that gives rise to the fear that a harmful or offensive contact is imminent.
Q3) What are the requirements for the application of res ipsa loquitur?
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Chapter 10: product liability
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Sample Questions
Q1) Who are the potential defendants under a strict product liability action? What must be shown to recover against each? Would the same defendants be liable if plaintiff had sued on the basis of negligence? Discuss fully.
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) What was the result in James v.Meow Media Inc.,the case in the text addressing whether a video game manufacturer was strictly liable for a teenager's shooting spree?
A)That the shooting was so aberrant as to be unforeseeable by the video game producer.
B)That the products were defective.
C)That the video game manufacturer was liable for the shooting.
D)That the shooting was so aberrant as to be unforeseeable by the video game producer and also that the products were defective.
Q5) Set forth the elements of a strict liability claim.
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Chapter 11: Intellectual property
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Sample Questions
Q1) Terms that were once enforceable trademarks may become generic and thereby not protected.
A)True
B)False
Q2) Arbitrary marks are real words whose ordinary meaning has something to do with the color or shape of the trademarked product.
A)True
B)False
Q3) A defendant is not liable for trademark infringement if his or her use is a _________,where the defendant uses the mark to talk about the mark itself.
A)nominative use
B)competitive use
C)genericity
D)fair use
Q4) After a patent expires,the invention is dedicated to the public.
A)True
B)False
Q5) Explain in detail the process for obtaining a patent.
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Chapter 12: The employment agreement
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Sample Questions
Q1) The Employee Polygraph Protection Act generally makes it unlawful for employers to
A)Request an employee to take a polygraph test.
B)Inquire about the results of an employee's polygraph test.
C)Take any action against an employee for refusing to take a polygraph test.
D)All of the responses are correct.
Q2) Employers must complete a(n)_________ form showing verification of the identity and employment eligibility of all persons hired.
A)A-12
B)I-9
C)Imm.1
D)A1
Q3) Which of the following is a type of OSHA violation?
A)De minimis.
B)Nonserious
C)Unwillful
D)Both de minimis and nonserious
Q4) Union contracts almost universally require just cause for employee termination.
A)True
B)False
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Chapter 13: civil rights and employment discrimination
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Sample Questions
Q1) Set forth the categories of individuals classified as disabled under the Americans with Disabilities Act.
Q2) The Age Discrimination in Employment Act of 1967 protects all persons over 35.
A)True
B)False
Q3) What has the U.S.Supreme Court ruled regarding the ability of a state employee to sue a state employer for a violation of the Family and Medical Leave Act?
A)That the Eleventh Amendment bars a lawsuit against a state employer.
B)That a state employee can sue a state employer for a Family and Medical Leave Act violation.
C)That the due process clause bars a lawsuit against a state employer.
D)That a state employee can sue a state employer for a Family and Medical Leave Act violation only if some type of discrimination barred by Title VII is also present.
Q4) Title VII has been successfully used to challenge English-only workplace rules.
A)True B)False
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15
Chapter 14: executive compensation and employee benefits
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Sample Questions
Q1) To receive favorable tax treatment when buying shares in an employee stock purchase plan,an employee can own no more than ____ of the voting power of the employer or ____ of the value of all shares of stock of the employer.
A)5%,5%
B)5%,10%
C)3%,8%
D)9%,4%
Q2) For growth-oriented smaller companies,stock options are an ineffective way to preserve cash.
A)True
B)False
Q3) ERISA provides that officers and trustees of a pension plan are
A)public executives.
B)public administrators.
C)public employees.
D)fiduciaries.
Q4) What is the meaning of the term "restricted stock" in the context of executive compensation?
Page 16
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Chapter 15: Criminal law
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Sample Questions
Q1) A(n)________ state of mind is the least culpable type of mens rea.
A)negligent
B)reckless
C)intentional
D)willful
Q2) _________ liability is the imposition of liability on one party for the wrongs of another.
A)Vicarious
B)Validity
C)Relator
D)None of the above
Q3) The Fifth Amendment protects a defendant from being required to produce
A)compelled testimony
B)blood samples
C)handwriting samples
D)all of the responses are correct
Q4) The Racketeer Influenced and Corrupt Organizations Act (RICO)was originally designed to combat corporate crime.
A)True
B)False
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Chapter 16: Environmental law
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Sample Questions
Q1) The Office of Environmental Justice was created to integrate environmental justice into the EPA's policies,programs and activities.
A)True
B)False
Q2) When can a corporate officer be held civilly liable under the Clean Water Act?
A) Corporate officers are strictly liable whenever a violation by their company is established.
B) Only if the corporate officer specifically ordered the unlawful discharge.
C) If the corporate officer had the authority to exercise control over the activity that caused the unlawful discharge or if the officer knowingly violated the act.
D) Corporate officers may never be held liable in an individual capacity.
Q3) What does the Superfund Recycling Equity Act do?
A)It exempts recyclers from liability in private-party actions under CERCLA.
B)It exempts recyclers from suits brought by the state or federal government.
C)It provides a 10% federal rebate for recycling expenses incurred by corporations engaged in recycling activities.
D)It provides a 5% federal rebate for recycling expenses incurred by corporations engaged in recycling activities.
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Chapter 17: Antitrust
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Sample Questions
Q1) Firms can incur liability under Section 2 of the Sherman Act by acquiring monopoly power through corporate mergers or acquisitions.
A)True
B)False
Q2) Section 5 of the Federal Trade Commission Act is broader than the other antitrust laws.
A)True
B)False
Q3) In order to avoid an unworkable construction of the Sherman Act,the courts have construed Section 1 to prohibit only those restraints of trade that unreasonably restrict competition.
A)True
B)False
Q4) The Robinson-Patman Act prohibits
A)price discrimination.
B)monopolies and attempts to monopolize.
C)every contract,combination or conspiracy in restraint of trade.
D)mergers that threaten competition.
Q5) What types of price-fixing agreements are considered horizontal price-fixing?
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Chapter 18: Consumer Protection
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Sample Questions
Q1) Refer to fact pattern 18-1.Which of the following is true regarding the legality of Dr.Glover prescribing Cream X for the elimination of wrinkles and cellulite?
A)It is legal,and the Food and Drug Administration would take no action against him.
B)It is legal only because the cream is not ingested.
C)It is legal only if Dr.Glover refrains from advertising his use of the drug.
D)It is illegal.
Q2) ________ is the legal procedure by which a creditor may collect a debt by attaching a portion of a debtor's weekly wages.
A)Rescission
B)Garnishment
C)Joinder
D)Attachment
Q3) The Truth-in-Lending Act (TILA)is intended to assure a truthful loan application by the consumer.
A)True
B)False
Q4) When does an advertiser violate the Federal Trade Commission bait and switch advertising rules?
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Page 20
Chapter 19: real property and land use
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Sample Questions
Q1) In a(n)________ listing,the broker has the right to sell the property,and any sale of the property during the term of the listing will entitle the broker to a commission.
A)exclusive
B)open
C)net listing
D)broker
Q2) A(n)________ is an agreement by a lender to replace a construction loan with a permanent loan,usually after certain conditions,such as the timely completion of the project,have been met.
A)substitution agreement
B)interim agreement
C)development commitment
D)take-out commitment
Q3) Separate property is converted into community property when
A)one spouse gifts separate property to the other spouse.
B)the separate and community property have been commingled.
C)the parties treat the separate property in such a manner that a presumption of a gift arises.
D)all of the responses are correct
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Chapter 20: Forms of business organizations
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Sample Questions
Q1) In what five categories does the Franchise Rule require a franchisor to make material disclosures?
Q2) A corporation that is technically defective but that is formed in good faith and exercises corporate power is known as a de jure corporation.
A)True
B)False
Q3) During the winding up of a partnership,the partners' fiduciary duties to each other are suspended.
A)True
B)False
Q4) In a ______________,one person owns all of the assets of the business and is liable for all of its debts.
A)sole proprietorship
B)general partnership
C)limited partnership
D)C corporation
Q5) C corporations are taxed as a pass-through entity.
A)True
B)False
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Chapter 21: Directors, Officers, and Controlling Shareholders
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Sample Questions
Q1) A poison pill is a defensive measure that would make any takeover not approved by the directors prohibitively expensive.
A)True
B)False
Q2) Refer to fact pattern 21-1.Which of the following is a right of the corporation if it is determined that an officer wrongfully takes an opportunity belonging to the corporation?
A)An absolute trust
B)A constructive trust
C)A 10% penalty based upon the value of the lost opportunity which is imposed by federal law
D)As imposed by most states,a 10% penalty based upon the value of the lost opportunity
Q3) In order to take advantage of the business judgment rule,directors must have made an informed decision and have no conflict of the interest with the corporation.
A)True
B)False
Q4) What is a poison pill? What factors favor keeping a poison pill in place?
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Chapter 22: Public and Private Offerings of Securities
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Q1) The SEC now requires that all documents filed under the Securities Act of 1933 be written in plain English.
A)True
B)False
Q2) A company that is registered with the SEC under Section 12 the 1934 Act is commonly referred to as a ________ company.
A)listed
B)reporting
C)registered
D)trading
Q3) A "red herring" is the popular name given to the final prospectus under the 1933 Act. A)True
B)False
Q4) Explain the meaning and scope of the term "security" under the Securities Act of 1933.Include in your answer a discussion of the Howey test,the family resemblance test,and the sale of business test.Discuss fully.
Q5) When have courts found a general partnership interest to be a security?
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Page 24
Chapter 23: Securities Fraud and insider trading
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Q1) Which of the following is true regarding bounties in insider trading prosecutions?
A)There are no bounties in insider trading prosecutions.
B)They may be as high as 5 percent of any revenues recovered from a defendant through penalties or settlement.
C)They may be as high as 10 percent of any revenues recovered from a defendant through penalties or settlement.
D)They may be as high as 15 percent of any revenues recovered from a defendant through penalties or settlement.
Q2) What is the duty of an independent public accountant if,in the course of an audit,the accountant detects information indicating that an illegal act has or may have occurred?
Q3) Which of the following is not considered a traditional insider?
A)officers
B)directors
C)attorneys
D)the corporation itself
Q4) List the seven elements of a Rule 10b-5 cause of action.
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Chapter 24: Debtor-Creditor Relations and Bankruptcy
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Q1) Molly got in over her head with credit card debt.She has been receiving phone call after phone call from creditors.She has also received notification from several creditors regarding lawsuits being filed against her.Her mailbox is filled with demands for payment each day.Molly regrets her excessive spending.She wants to pay as much as she can,but she is tired of the pressure from creditors.Is any option open to her?
A)Yes,the automatic stay that would be available upon a bankruptcy filing.
B)No,Molly got herself into this mess; and she will have to put up with demands from creditors even if she files for bankruptcy.
C)If Molly is allowed to file for Chapter 7 relied,an automatic stay will prevent the pressure from creditors; but if she proceeds under Chapter 13,the demands will continue.
D)If Molly is allowed to file for Chapter 7 relied,an automatic stay will prevent the pressure from creditors; but if she proceeds under Chapter 13,the demands will continue
Q2) Transnational insolvency involves an insolvency proceeding in one country with a creditor located in a second country.
A)True
B)False
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26
Chapter 25: International Business
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Sample Questions
Q1) ________ is the principal U.S.statute addressing unfair foreign practices affecting U.S.exports of goods or services.
A)Section 301 of the Trade Act of 1974
B)Section 502 of the Trade Act of 1990
C)The Unfair Export Limits Act
D)The International Control Act
Q2) Customary practice arises from legislative action.
A)True
B)False
Q3) The members of the European Parliament are elected by the ________ of the member states.
A)legislative branch
B)executive branch
C)citizens
D)Council of Ministers
Q4) There are no differences between the U.S.and English common law systems.
A)True
B)False
Q5) What is the commercial activity exception to the Foreign Sovereign Immunities Act?
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