Posted: September 16th, 2017

Business Law Midterm

Business Law Midterm

TREVINO and NELSON, Managing Business Ethics: Straight Talk About How To Do it Right (5th Edition, 2011) Published by John Wiley & Sons, Inc.

Answer each question below and reference course materials to explain your answers.  No independent research is expected  or necessary.  This exam requires 4-5 double

spaced typed pages plus a cover page with your name, the date and BLE 215 and Section.  Required font:  Times New Roman 12 with one inch margins.  Staple your pages

together.  You should avoid excess spacing.  Folders or covers are not required.  Bolding of course materials used is very helpful and recommended.  Number each

question using Roman Numerals and a) b), etc. for any sub-parts.  There is no need to restate the questions.
When you refer to course materials, simply include the author’s name, if applicable, in parenthesis.  A reference page is not required.  When using Trevino, also give

a page no. after her name.  For example, (Trevino, p. 25).  Use an assortment of text, articles, cases, films and ethics concepts to explain your answers. There are

many course materials on BB that you can use in addition to the text, class notes and anything presented in class such as films.  Also, you should reference your CSR

team project.  The questions are not cumulative, i.e. answer each one independently of the other.  You may repeat class materials in each answer but also strive for

some variety.  You have many  course resources available for use to help you answer the questions.

I.     Question 1 (25 points)
Joseph Johnson argues in his article, Natural Law and the Fiduciary Duties of Business Mangers that “simply put, stakeholder theory sounds good in social

theory but will not work in practice.”
a)     Explain his reasoning in terms of fiduciary duty, profits and stakeholders.
b)     Do you agree or disagree?
c)    Would Milton Friedman agree or disagree and why or why not?  Would  Edward Freeman agree or disagree and why or why not?
d)    Does stakeholder theory and corporate social responsibility conflict with the fiduciary duties of management and the board of directors to maximize shareholder

wealth?
II.    Question 2 (25 points)
Steve Kelman provides a critique of the cost-benefit analysis and whether it leads to a “flawed ethical result.”
a)     Do you agree or disagree with his analysis?
b)     Is cost-benefit analysis sustainable?
c)    What other ethics concepts may yield more sustainable results?
d)    Which is most appropriate for business?
III.     Question 3 (25 Points)
In regard to the Ford Pinto Case, apply the Hosmer Model of Moral Analysis and
assess the economic outcomes, legal requirements and ethical duties.  Express the moral problem so that everyone involved will believe that their particular interests

have been recognized and included.
IV.     Question 4 (25 points)
You have been hired by Multi-LimbTech, International, Inc.,(MLTI) a cutting edge designer and seller of artificial limbs.  You are excited about this job since it not

only pays well but the company also provides a valuable service to humanity that results in amazing scientific advances that enhance peoples’ lives.  However, after

several months, you discover that one of the top selling leg prosthesis has a design defect.  You are told not to be concerned since the product is not regulated by

the government.  Another inquiry is met with no response.  You learn that the company has donated $100,000 to a local medical board that endorses this product.  In one

country where this product is distributed, gifts are very common to secure business transactions.  Use course materials as you answer the following questions:
a)     Can you identify conflicts and pressures?
b)    What kinds of questions should you ask?
c)    What are the various stakeholder interests?
d)    Is what is legal here also ethical?
e)    How can this company “do good and make a profit” (synergies of ethics and earnings)?
f)    Do ethical norms vary across cultures?

Note:  This case is fictional and intended for classroom instruction only.