About the Book
The Legal Environment of Business and Ethics: An Integrated Approach
Gerald R. Ferrera
Professor Emeritus of Law, Taxation, and Financial Planning
Mystica M. Alexander
Assistant Professor of Law, Taxation, and Financial Planning
William P. Wiggins
Professor of Law and Taxation
Senior Lecturer in Law
Jonathan J. Darrow
Lecturer in Law
2014. 784 pages. ISBN: 978-1-4548-1520-4. With Teacher’s Manual.
About the Book
From the Authors
We are pleased to introduce this first edition of The Legal and Ethical Environment of Business: An Integrated Approach. The new approach taken in this textbook was developed in response to the realities of learning to do business in the contemporary global context. The book covers, comprehensively and crisply, all the topics traditionally found in the legal environment of business textbooks, presented in a readable, accessible writing style. But in addition, it integrates that law with two themes of paramount importance in today’s business world: the pursuit of ethical business practice and the understanding of the international dimensions of business and law.
To prepare students for the new realities of the workplace, regulatory and legal environment curricula must include meaningful ethics coverage. Current industry norms, practices, and legislation call for the incorporation of ethics into decision making and for a new approach to business structures that satisfies legal requirements and adopts and implements best practices. Most major corporations in the United States, for example, have adopted a Compliance and Ethics Program that includes a corporate Code of Ethics and mandates training for executives and managers in understanding legal compliance, corporate ethical codes, due diligence, risk assessment, and the resolution of ethical dilemmas. Many large companies now have chief ethics and compliance officers, reporting directly to the board or to the chief executive officer, who are responsible for protecting and enhancing the company’s reputation, oversight of legal compliance, complying with the company’s Code of Ethics, and maintaining ethical standards within the company. Legislative initiatives over the past decade, responding to high-level and widely publicized ethical infractions and criminal wrongdoings, have resulted in the passage of far-reaching initiatives such as the Sarbanes-Oxley Act of 2002 and the U.S. Sentencing Guidelines. Corporate boards increasingly include ethics committees charged with reviewing and approving major corporate initiatives, such as whistleblower protection, and compliance with the company’s internal code of ethics.
This high-level focus on ethics, both internally and externally, demands increased, thoughtful ethics coverage to prepare students for the business world they will encounter. Traditionally, ethical coverage in many legal environments of business texts has been limited to a single chapter, perhaps coupled with brief case questions on ethics scattered elsewhere in the book.
The Legal and Ethical Environment of Business takes a new approach. Here, a foundational chapter is devoted entirely to ethical theory and analysis, and ethics coverage is integrated throughout the book and featured in nearly every chapter. Ethical theory is interwoven with practical applications using several novel pedagogical tools we developed to promote focused, thoughtful inquiry and to highlight the interplay of ethics and law. We have found in our own teaching that these methods can help students learn to analyze judicial opinions more effectively and to achieve a deeper understanding of the legal environment of business:
•An Ethical Insight. Boxes throughout the text spotlight the thinking of selected ethicists and business executives, illustrating the basis of legal and business strategies in ethical theory, principle, or practice
•Manager’s Compliance and Ethics Meeting. Frequent simulations of managers’ meetings address ethical issues, along with applicable law, to help readers explore fundamental ethical dilemmas, often through multiple perspectives
•In-Depth Ethical Case Analysis. These extended case reviews identify the ethical issue in an appellate decision and review the case from an ethical perspective, applying classical ethical principles and theory to the judicial decision and case holding
Although a thorough and deep understanding of the ethical and legal environment of business in the United States is fundamental to this text and course, this knowledge has today an ever-widening applicability. Economic interdependence, advances in technology and transportation, liberalization of international trade law, and greater political freedom in many countries around the globe are just a few of the factors contributing to the enormous increase in and reliance on international business transactions. This book pursues two distinct approaches to international business. First, it integrates international coverage by including, in addition to a chapter devoted to international business transactions, relevant international law components at the ends of most chapters. Second, and more importantly, the international coverage offered goes beyond the usual comparative law topics. Instead, most chapters include substantial coverage of a central topic in international business law, such as bribery and the Foreign Corrupt Practices Act, key provisions of the Convention of Contracts for the International Sales of Goods, and a comparison of the Uniform Commercial Code and the UN Convention on Contracts for the International Sale of Goods. Selected for their relevancy, practicality, and importance, knowledge of these international topics will help prepare students to embark on a career in the expanding world of business.
The accreditation requirements of business schools reinforce the need for thorough ethical coverage within the Legal Environment of Business context. In April 2013, the Association to Advance Collegiate Schools of Business adopted new accreditation standards, and this textbook was written in part to help academic institutions comply with those new standards. In particular, the book addresses Standard 9: ‘‘Curriculum content is appropriate to general expectations for the degree program type and learning goals.’’ The standard further specifies:
•General Skill Area. Ethical understanding and reasoning (able to identify ethical issues and address the issues in a socially responsible manner)
•General Business and Management Knowledge Area. Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society and social responsibility, including sustainability, and ethical behavior and approaches to management [Emphasis added.]
This textbook is also an ideal choice for schools holding or aspiring to achieve EQUIS accreditation from the European Foundation for Management Development. It provides the comprehensive coverage of international law expected of schools holding EQUIS accreditation.
Our objectives in writing this book were to provide comprehensive legal and ethical coverage of the business environment, to convey information clearly and concisely, to integrate ethical and international perspectives throughout the book, to develop an appreciation of the engaging nature of law and ethics, and to share with students the insights we have gained from our many cumulative years of study and experience in the field. We welcome instructors and students to this text and to the fascinating and challenging journey it represents: pursuit of a deep understanding of and appreciation for the productive integration of law, ethics, and global issues in the twenty-first-century legal and ethical environment of business.
Preface / Sample Chapters