Ch.1BusinessandItsLegalEnvironment

Ch.1BusinessandItsLegalEnvironment - Chapter 1 Business and...

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Chapter 1 Business and Its Legal Environment Law - a body of enforceable rules governing relationships among individuals and between individuals and their society. No matter how rules are created, they all have one feature in common: They establish rights, duties, and privileges that are consistent with the values and beliefs of a society or its ruling group. An important question discussed in this chapter: How do business law and the legal environment affect business decision making? Business Activities and the Legal Environment Laws and government regulations affect all business activities (hiring and firing decisions, workplace safety, the manufacturing and marketing of products, and business financing, etc.) Liability - the state of being legally responsible (liable) for something, such as a debt or obligation. Many Different Laws May Affect a Single Business Transaction 3 Steps to Effective Business Decision Making Identify the various Legal Issues Apply the Laws that you learn about Arrive at a Conclusion Breach - failure to perform a legal obligation Exhibit 1-1 page 5 Areas of the Law That May Affect Business Decision Making Linking Business Law to the 6 Functional Fields of Business Functional Fields of Business Corporate Management Production and Transportation Marketing Research & Development Accounting & Finance Human Resource Management The Role of the Law in a Small Business Small business owner/operator is the most general of managers. Seek additional financing - Finance Manager “Go over the books” with your bookkeeper - Accountant Decide on a new advertising campaign - Marketing Manager Hire employees & determine their salaries/benefits - Human Resource Manager Exhibit 1-2 page 7 Linking Business Law to the Management of a Small Business Sources of American Law Primary Source of Law - sources or documents that establish the law on a particular issue such as the following: The U.S. Constitution and the constitutions of the various states.
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Statutes, or laws, passed by Congress and by state legislatures. Regulations created by administrative agencies (such as the federal Food & Drug Administration) Case law (court decisions) Secondary source of law - books and articles (publications) that summarize and clarify the primary sources of law such as: Legal encyclopedias Compilations ( Restatements of the Laws ) Official comments to statutes Legal treatises Articles in law reviews published by law schools Articles in other legal journals Courts often refer to secondary sources of law for guidance in interpreting and applying the primary sources of law. Constitutional Law Constitutional law - the body of law derived from the U.S. Constitution and the constitutions of the various states.
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