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Business Law and Ethics

Purpose of Course  showclose

Law, in its simplest form, is used to protect one party from another.  For instance, laws protect customers from being exploited by companies.  Laws protect companies from other companies.  Laws even protect citizens and corporations from the government.  However, law is neither perfect nor all encompassing.  Sometimes, societal ethics fill the voids that laws leave behind; other times, usually when societal ethics have been systematically violated by a group of the population, we write laws that are designed to require individuals to live up to certain ethical standards.  In the backlash of the Enron scandal (where Enron executives used accounting tricks to hide losses) for example, new accounting laws were passed.  Similarly, as a result of the financial crisis of 2008, legislators proposed new regulations designed to enforce a certain standard of ethical behavior within the financial services industry.

This course will introduce you to the laws and ethical standards that managers must abide by in the course of conducting business.  Laws and ethics almost always shape a company’s decision-making process: a bank cannot charge any interest rate it wants to charge—that rate must be appropriate.  Car manufacturers must install hardware and develop new technologies to keep up with regulations designed to reduce pollution.  By the end of this course, you will have a clear understanding of the legal and ethical environment in which businesses operate.

This course provides students the opportunity to earn actual college credit. It has been reviewed and recommended for 3 credit hours by The National College Credit Recommendation Service (NCCRS).  While credit is not guaranteed at all schools, we have partnered with a number of schools who have expressed their willingness to accept transfer of credits earned through Saylor. You can read more about our NCCRS program here.

Course Information  showclose

Welcome to BUS205 Business Law and Ethics.  Below, please find general information on this course and its requirements.
 
Course Designer: Kevin Moquin
 
Primary Resources: This course is comprised of a range of different free online materials.  However, the course makes primary use of the following materials:
Requirements for Completion: In order to complete this course, you will need to work through each unit and its assigned materials.  In order to pass this course, you will need to earn a 70% or higher on the final exam.  Your score on the exam will be tabulated as soon as you complete it.  If you do not pass the exam, you may take it again.
 
Note that you will only receive an official grade on your final exam.  However, in order to adequately prepare for this exam, you will need to work through the resources and assignments for each unit.
  
Time Commitment: This course should take you a total of 132.75 hours to complete.  Each unit includes a time advisory that lists the amount of time you are expected to spend on each subunit.  These should help you plan your time accordingly.  It may be useful to take a look at these time advisories and to determine how much time you have over the next few weeks to complete each unit, and then to set goals for yourself.
 
Tips/Suggestions: Be sure to do the assignment associated with each chapter and section of the text.  These are an important part of meeting the learning objectives of the course.  Also, it may be helpful to write down notes on important points, as they will help you review for the final exam.

 
A version of this course is also available in iTunes U.
Preview the course in your browser or view our entire suite of iTunes U courses.

Learning Outcomes  showclose

Upon successful completion of this course, the student will be able to:
  • Identify sources of law in the United States.
  • Describe the function and role of courts in the US legal system.
  • Differentiate litigation from methods of alternative dispute resolution, and discuss the process of each.
  • List the elements of the major torts.
  • List the essential elements of a valid contract.
  • Describe how a contract can fail.
  • Summarize the remedies available for breach of contract.
  • Distinguish between real and personal property.
  • Identify the various interests in real property and how they pass.
  • Identify the requirements to hold various rights under intellectual property laws.
  • Analyze the impact of the digital era on intellectual property rights.
  • Distinguish between at-will employment and contractual employment.
  • Identify laws that generally regulate the employer-employee relationship.
  • Identify criminal acts related to the business world.
  • Define and identify examples of white collar crime.
  • Describe the various forms of business organization.
  • Identify the major laws regulating business in the United States.
  • Identify major ethical concerns in business today.
  • Distinguish between Aristotle’s ethical theory, utilitarianism, and Kant’s ethical theory.
  • Distinguish Aristotle and Kant’s ethical theories, and utilitarianism, from cultural relativism and nihilism.
  • Analyze case studies that illustrate ethical dilemmas in business ethics.

Course Requirements  showclose

In order to take this course, you must:

√    Have access to a computer.

√    Have continuous broadband Internet access.

√    Have the ability/permission to install plug-ins or software (Adobe Reader, Flash, etc.).

√    Have the ability to download and save files and documents to a computer.

√    Have the ability to open Microsoft files and documents (.doc, .ppt, .xls, etc.).
 
√    Have competency in the English language.
 
√    Have read the Saylor Student Handbook.

Preliminary Information

Unit Outline show close


Expand All Resources Collapse All Resources
  • Unit 1: Nature and Sources of Law  

    This unit will ask a series of broad questions about the law.  How does a law come into being?  (Legislators pass them, of course, but how do regulating bodies and judicial precedent contribute to the process as well?)  In a broader sense, why do we have laws at all?  Is it possible for us to govern ourselves? 

    In this introductory unit, we will explore the historical events that have shaped business law in the United States.  We will also review U.S. court systems, discussing the roles they play in shaping the business law of the country and learning how they enforce those laws.

    Time Advisory   show close
    Learning Outcomes   show close
  • 1.1 Introduction to Law  
  • 1.1.1 What is Law?  
  • 1.1.2 The Role of Law in Business in the United States  
  • 1.2 Sources of Law  
  • 1.2.1 Legislative Law  

    Note: This topic is covered by Section 2 of Chapter 1, which you previously read in subunit 1.2.  Focus on the role of Congress and state legislatures in the United States in making law.

    • Lecture: C-SPAN’s “How a Bill Becomes a Law”

      Link: C-SPAN’s "How a Bill Becomes a Law" (Adobe Flash)
       
      Instructions: Please click on the link above and view this video (9:11) to get a sense of the legislative process.  In tandem with the information you read in Section 2 of The Legal and Ethical Environment of Business, this video will give you a more detailed understanding of just how a bill makes it through Congress to become a law.  Note the important role played by the executive in making law in the United States.
       
      Terms of Use: Please respect the copyright and terms of use displayed on the webpage.

      See a broken link? Please let us know!

  • 1.2.2 Regulatory Law  

    Note: This topic is covered by Section 2 of Chapter 1, which you previously read in subunit 1.2.  Toward the end of the section is a brief discussion of the role of administrative agencies in lawmaking.  Why would a legislator would give an administrative agency the authority to engage in limited lawmaking?

  • 1.2.3 Common Law  

    Note: This topic is covered by Section 2 of Chapter 1, which you previously read in subunit 1.2.  The British legal system and legal systems in former British colonies—such as the United States, Canada, Australia, Pakistan, India, and South Africa—are characterized as common law legal systems.  As you read the part of this section dealing with common law, ask yourself how common law systems are different from civil law systems.

  • 1.2.4 Civil Law  
  • 1.3 The Judicial System  
  • 1.3.1 US Court System  
  • 1.3.2 Jurisdictions  
  • Unit 2: Litigation vs. Alternative Dispute Resolution  

    In general, legal problems between private parties can be addressed in two basic ways—through the courts or through less formal alternatives.  In this unit, we will look at both the court process of litigation and alternative methods of handling conflicts, known as Alternative Dispute Resolution, or ADR.  Going to court is usually an expensive and time-consuming prospect.  Businesses, which are always looking for ways to more effectively manage costs and other resources, can conserve both by first considering other ways to resolve disputes.  For example, before going to court over the failure of a business to properly install equipment, a business might first consider entering into informal negotiations with the installer to reach a conclusion that is satisfactory to both sides.  If this fails, the business might propose the use of a mediator to reach a mutually beneficial result.  Often, contracts contain a provision requiring issues be submitted to arbitration with a non-governmental official or organization that acts, in essence, as judge and jury in the matter.  If these efforts fail or it is apparent that ADR would be unworkable from the beginning, then businesses need to consider whether a dispute is best resolved in court, with all of its formal requirements and protections.  This unit will begin by looking at the process by which businesses litigate disputes and ask who is involved in litigation and what procedural requirements must be met in order to successfully litigate a dispute.  You will then study the various methods of ADR available to businesses and consider how these can be effectively used to deal with disputes.

    Time Advisory   show close
    Learning Outcomes   show close
  • 2.1 Litigation  
  • 2.1.1 The Parties  
  • 2.1.2 Standing and Jurisdiction  
  • 2.1.3 Pretrial Procedures  
  • 2.1.4 Trials and Appeals  
  • 2.2 Alternative Dispute Resolution (ADR)  
  • 2.2.1 Negotiation  
    • Reading: The Legal and Ethical Environment of Business: Chapter 4: Section 1: “Negotiation”

      Link: The Legal and Ethical Environment of Business: Chapter 4: Section 1: “Negotiation” (PDF)
       
      Instructions: Please click on the link above and read Section 1.  You will have noticed from Figure 4.1 in the introduction to Chapter 4 that negotiation is the most informal and full consensual of the main ADR methods.  Note that while negotiation helps avoid the costs of litigation, it also has certain drawbacks.  This will be apparent when you review the material and click in “Hyperlink: Rubbermaid's Unequal Bargaining Power.”  Pay attention to the concepts of BATNA and WATNA and how they fit into the “bargaining zone.”  Finally, remember to do the exercises at the end of the selection.

      Terms of Use: The text was adapted by The Saylor Foundation under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensee. 

      See a broken link? Please let us know!

  • 2.2.2 Mediation  
    • Reading: The Legal and Ethical Environment of Business: Chapter 4: Section 2: “Mediation”

      Link: The Legal and Ethical Environment of Business: Chapter 4: Section 2: “Mediation” (PDF)
       
      Instructions: Please click on the link above and read Section 2.  You should have seen from Figure 4.1 that mediation is further along the continuum from negotiation to litigation in terms of being somewhat more adjudicative and formal.  Note that with mediation, we introduce a neutral third party; litigation also has a neutral third party: the judge.  However, a mediator's authority is much more limited.  The parties still need to agree on a resolution.  Keep in mind that the voluntary nature of mediation can be both a strength and a weakness.  After reading this selection, remember to do the exercises at the end.

      Terms of Use: The text was adapted by The Saylor Foundation under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensee. 

      See a broken link? Please let us know!

  • 2.2.3 Arbitration  
    • Reading: The Legal and Ethical Environment of Business: Chapter 4: Section 3: “Arbitration”

      Link: The Legal and Ethical Environment of Business: Chapter 4: Section 3: “Arbitration” (PDF)
       
      Instructions: Please click on the link above and read Section 3.  Arbitration is the method of ADR that looks most like litigation.  While initial submission to arbitration may be voluntary, parties are generally bound by the decision of the arbitrator or arbitrators.  Note the preference that federal and state governments in the United States often have for arbitration, particularly as a way of resolving contract disputes.  Again, as you read, try to identify the relative strengths and weaknesses of arbitration.  Lastly, complete the exercises at the end of the selection.

      Terms of Use: The text was adapted by The Saylor Foundation under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensee. 

      See a broken link? Please let us know!

    • Assessment: The Saylor Foundation’s “Subunit 2.2.3 Quiz”

      Link: The Saylor Foundation’s “Subunit 2.2.3 Quiz” (HTML)

      Instructions: Please click on the link above and complete the quiz. You must be logged into your Saylor Foundation School account in order to access this quiz. If you do not yet have an account, you will be able to create one, free of charge, after clicking the link. These short quizzes are designed to reinforce key terms and concepts that you will practice in the course project components. The correct answers will appear when you click “Submit.”

      See a broken link? Please let us know!

    • Assignment: The Saylor Foundation’s Assessment 3: “Questions for Reflection – ADR v. Litigation”

      Link: The Saylor Foundation’s Assessment 3: “Questions for Reflection – ADR v. Litigation” (PDF)
       
      Instructions: Please click on the link above and answer the questions, using the “Guide to Responding” to help you formulate and assess your responses.  This assignment focuses on which situations call for litigation and which call for ADR.  When you are done, please check your work against The Saylor Foundation's “Assessment 3: Guide to Responding” (PDF). 

      Please dedicate approximately 30-45 minutes to answering these reflection questions.

      Terms of Use: This resource is licensed under a Creative Commons Attribution 3.0 License (HTML).  It is attributed to The Saylor Foundation. 

      See a broken link? Please let us know!

    • Assessment: The Saylor Foundation’s Assessment: “Unit 2 Multiple Choice Quiz”

      Link: The Saylor Foundation’s Assessment: “Unit 2 Multiple Choice Quiz” (HTML)

      Instructions: Please click on the link above and complete the quiz.  You must be logged into your Saylor Foundation School account in order to access this quiz.  If you do not yet have an account, you will be able to create one, free of charge, after clicking the link.  These end-of-unit quizzes are designed to reinforce key terms and concepts that you will practice in the course project components.  Completing these quizzes will also reinforce your learning and will prepare you for the course final exam.  Each unit quiz focuses on the material presented specifically in this individual unit of study.  The correct answers will appear when you click “Submit.”

      Terms of Use: Please respect the copyright and terms of use displayed on the webpage.

      See a broken link? Please let us know!

  • Unit 3: Torts  

    Tort is a branch of law that involves the enforcement of civil wrongs in the absence of contracts.  For example, if you are hit by another vehicle and want to sue for medical costs, there is no contract between you and the driver.  This lawsuit it carried out within the tort system.  (When the terms of an existing contract are violated, enforcement must be carried out outside the tort system.)  Tort law allows individuals and businesses that have been wronged to receive compensation for that wrongdoing.  Tort law is frequently used in situations involving medical negligence.  If your doctor accidentally removed the wrong arm and you wish to sue, you would sue based on tort law.  There are a number of different types of torts, but the most common is negligence, which involves a breach of the “duty of care.”  In other words, in order to sue on negligence, you must be able to prove that somebody that was responsible for something violated that responsibility.

    Time Advisory   show close
    Learning Outcomes   show close
  • 3.1 Tort Law  
  • 3.2 Background of Torts  
  • 3.3 Negligence  
  • 3.4 Intentional Torts  
    • Reading: The Legal and Ethical Environment of Business: Chapter 7: Section 1: “Intentional Torts”

      Link: The Legal and Ethical Environment of Business: Chapter 7: Section 1: “Intentional Torts” (PDF)
       
      Instructions: Please click on the link above and read Section 1.  Intentional torts involve the kind of wrongful action is most recognizably wrong.  These are torts in which a person or persons has done an act purposefully.  Note the wide variety of intentional torts that are recognized.  Some of these even have the potential for criminal liability.  It is also important to recognize that while many intentional torts are committed by one person against another, some involve damaged property.  Finally, do the exercises at the end of the selection.

      Terms of Use: The text was adapted by The Saylor Foundation under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensee. 

      See a broken link? Please let us know!

  • 3.5 Strict Liability  
  • Unit 4: Contracts  

    Contracts come in all shapes and sizes.  You enter into a contract with a broker and seller when you purchase a house.  Businesses enter into contracts with other businesses to set prices and solidify relationships.  And if you want reliable work done on your house, you will have a contract with your contractor (hence the name).

    Contracts are legally-binding relationships.  In most circumstances, a contract involves an agreement to deliver a product or service at a specified time on a specified date.  Violating a contract can result in a lawsuit or some kind of settlement.  While courts can be involved in this process, these situations can also be settled outside of the judicial system.  Laws regarding contracts vary from state to state, so it is always important to know the contract law in your area.  This unit will discuss contracts in great detail, but it will not cover everything.  By the end of this unit, you should have a general familiarity with how most contracts are written and enforced.

    Time Advisory   show close
    Learning Outcomes   show close
  • 4.1 Nature and Classification of Contracts  
  • 4.1.1 Bilateral Contracts  
  • 4.1.2 Unilateral Contracts  

    Note: This topic is covered by Section 1 of Chapter 6, which you previously read in subunit 4.1.1.  Note the definition of a unilateral contract and make sure you can distinguish it from a bilateral contract.  Note how an action, rather than words, constitute the acceptance of an offer in a unilateral contract.

  • 4.1.3 Contractual Terms  

    Note: This topic is covered by Section 1 of Chapter 6, which you previously read in subunit 4.1.1.  In the United States, statutes known as the Uniform Commercial Code, or UCC, help prevent the unfair and inefficient results that can occur when terms are either too strictly interpreted or there is a deviation in the understanding of contract terms.  Because the common law has strict rules related to contract formation, particularly when defining the terms of a contract, lawyers and lawmakers agreed to new laws which would prevent contract law from bogging down modern commerce.

  • 4.1.4 Negotiable Instruments  
  • 4.2 Contract Formation  

    Note: This topic is covered by Section 1 of Chapter 6, which you previously read in subunit 4.1.1.  Pay close attention to all of the “elements” that are required in order to make a promise legally enforceable.

  • 4.2.1 Offer and Acceptance  

    Note: This topic is covered by Section 1 of Chapter 6, which you previously read in subunit 4.1.1.  Note the importance of timing in determining when and whether and offer has been accepted.  When an offer is made, a promise is made.  However, an offer cannot be enforced until it is accepted.  Oftentimes, there is a delay between the offer by one party and the acceptance by another.  Ask yourself what happens if during that delay the person making the offer changes his or her mind?  Also, note that what appears to be an offer may only be an “invitation to bargain” rather than an offer that can be accepted.

    • Assessment: The Saylor Foundation’s “Subunit 4.2.1 Quiz”

      Link: The Saylor Foundation’s “Subunit 4.2.1 Quiz” (HTML)

      Instructions: Please click on the link above and complete the quiz. You must be logged into your Saylor Foundation School account in order to access this quiz. If you do not yet have an account, you will be able to create one, free of charge, after clicking the link. These short quizzes are designed to reinforce key terms and concepts that you will practice in the course project components. The correct answers will appear when you click “Submit.”

      See a broken link? Please let us know!

  • 4.2.2 Consideration  

    Note: This topic is covered by Section 1 of Chapter 6, which you previously read in subunit 4.1.1.  Make sure you understand that consideration is not the same as money or payment.  By saying that a contract requires consideration, the law is simply requiring that a party give up something to which it is otherwise entitled.

  • 4.2.3 Intention  

    Note: This topic is covered by Section 1 of Chapter 6, which you previously read in subunit 4.1.1.  Simply put, in general the law of contracts requires that there be a meeting of the minds between parties to a contract.  This relates closely to the discussion of offer and acceptance in 4.2.1.  Keep in mind that for a contract to be valid, the mutual assent discussed in relation to offer and acceptance means that the parties must appear to be agreeing to the same thing.

  • 4.2.4 Legal Capacity  
  • 4.2.5 Formalities  
  • 4.3 End of Contract and Enforcement  
  • 4.3.1 Breach of Contract  
  • 4.3.2 Unenforceable Contracts  
  • 4.3.3 Third-Party Rights  

    Note: This topic is covered by the YouTube lecture you viewed in subunit 4.3.1.  While one party's breach of a contract may result in damages, it may have defenses against the claim.  You should be aware of these defenses.  Lastly, it is important to be aware of the remedies available for a party that is the victim of a breach of contract.

  • 4.3.4 Remedies and Damages  

    Note: This topic is covered by Section 2 of Chapter 6, which you previously read in subunit 4.3.1.  While one party's breach of a contract may result in damages, it may have defenses against the claim.  You should be aware of these defenses.  Lastly, it is important to be aware of the remedies available for a party that is the victim of a breach of contract.

  • 4.3.5 Discharge of Contracts  

    Note: This topic is covered by Section 2 of Chapter 6, which you previously read in subunit 4.3.1.  While one party's breach of a contract may result in damages, it may have defenses against the claim.  You should be aware of these defenses.  Lastly, it is important to be aware of the remedies available for a party that is the victim of a breach of contract.  As noted in subunit 4.3.1, once a contract is formed and the parties are bound by the contract, the parties generally have a legal obligation to perform according to the terms of the contract.  This is why it is so important to determine when and if performance has occurred.  For this subunit, focus on the material describing how performance is determined.  Be sure to do the exercises at the end of the selection.

  • 4.3.6 Oral Contracts  
  • 4.4 Assignment and Delegation  

    Note: This topic is covered by Section 2 of Chapter 6, which you previously read in subunit 4.3.1.  Valid contracts give the parties rights and impose obligations.  For example, a business may have the right to receive payment for the delivery of products.  Conversely, the business has a duty to deliver the products.  Under some circumstances, the parties to a contract can assign its rights under the contract (such as receipt of payment) to a third party.  Alternatively, a party may be able to delegate its duties under the contract (such as delivery of products) to a third party.  But what if one party to a contract wants only the other party to perform under the contract, instead of a third party?  Ask yourself what a party can do if it objects to an assignment or delegation.  Also, be aware of the other common clauses found in contracts.  Lastly, make sure you do the exercises at the end of the selection.

  • Unit 5: Property Law  

    The idea of property usually strikes people as a fairly simple concept.  However, the law recognizes that the interests in various types of property are often anything but simple and can sometimes result in highly complex problems.  For example, if you sell your house to someone, what stays as part of the house and what can you take with you when you leave?  Certainly you would have an automatic right to take your clothes, your furniture, and hanging photographs and artwork.  But what about a favorite chandelier?  How about a built-in island in the kitchen?  Can you take the windows?  The law recognizes two categories of property.  There is real property, which is land and anything attached to it, such as a house and items attached to it.  Alternatively, there is personal property, which is everything else.  As you work through this unit, ask yourself when is it one item can be personal property in one situation and real property in another.

    Time Advisory   show close
    Learning Outcomes   show close
  • 5.1 Personal Property  
    • Reading: The Legal and Ethical Environment of Business: Chapter 8: Section 1: “Personal Property”

      Link: The Legal and Ethical Environment of Business: Chapter 8: Section 1: “Personal Property” (PDF)
       
      Instructions: Please click on the link above and read Section 1.  Books, cars, shares of stock, and accounts receivable are all personal property.  Ask yourself how these things are the same.  How are they different?  Note also that some items that are personal property can be considered real property under certain circumstances.  What are these circumstances?  We all know that property can be transferred.  Make sure you understand the various ways that ownership of personal property can be transferred.  The text box entitled “Hyperlink: Finders Keepers?” and the associated links will help you understand these concepts.  It is also important to know what legal rights and obligations are at stake when possession rather than ownership in personal property is transferred.  The exercises at the end of the section should help confirm your understanding of this section.

      Terms of Use: The text was adapted by The Saylor Foundation under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensee. 

      See a broken link? Please let us know!

    • Assessment: The Saylor Foundation’s “Subunit 5.1 Quiz”

      Link: The Saylor Foundation’s “Subunit 5.1 Quiz” (HTML)

      Instructions: Please click on the link above and complete the quiz. You must be logged into your Saylor Foundation School account in order to access this quiz. If you do not yet have an account, you will be able to create one, free of charge, after clicking the link. These short quizzes are designed to reinforce key terms and concepts that you will practice in the course project components. The correct answers will appear when you click “Submit.”

      See a broken link? Please let us know!

  • 5.2 Real Property  
    • Reading: The Legal and Ethical Environment of Business: Chapter 8: Section 2: “Real Property”

      Link: The Legal and Ethical Environment of Business: Chapter 8: Section 2: “Real Property” (PDF)
       
      Instructions: Please click on the link above and read Section 2.  You have just learned about personal property.  Recall from subunit 5.1 what distinguishes real property from personal property.  Real property includes land and everything “attached” to the land.  This concept is critical to whether we apply concepts related to personal property or to real property.  Note also the unique requirements involved in the transfer of ownership of real property and the various ways in which such a transfer can be evidenced.  Become familiar with the concept of “adverse possession.”  Does adverse possession seem fair to you?  When might it be fair, and when might it be unfair?  Familiarize yourself with the various interests and duties that may go with the ownership of real property.  Also, be aware of the scope of interests in real property.  Lastly, as with personal property, possession of real property may be transferred without transferring ownership.  Make sure you are informed about the various possessory interests in real estate.  Finish the section by doing the concluding exercises.
       
      Terms of Use: The text was adapted by The Saylor Foundation under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensee. 

      See a broken link? Please let us know!

    • Assessment: The Saylor Foundation’s “Subunit 5.2 Quiz”

      Link: The Saylor Foundation’s “Subunit 5.2 Quiz” (HTML)

      Instructions: Please click on the link above and complete the quiz. You must be logged into your Saylor Foundation School account in order to access this quiz. If you do not yet have an account, you will be able to create one, free of charge, after clicking the link. These short quizzes are designed to reinforce key terms and concepts that you will practice in the course project components. The correct answers will appear when you click “Submit.”

      See a broken link? Please let us know!

    • Assignment: The Saylor Foundation’s Assessment 10: “Questions for Reflection – Protection of Property Rights”

      Link: The Saylor Foundation’s Assessment 10: “Questions for Reflection – Protection of Property Rights” (PDF)
       
      Instructions: Please click on the link above and complete the assignment, using the “Guide to Responding” to help you assess your responses.  This assignment focuses on the value of government protection of private property rights and whether those rights may appropriately be restricted by government.  When you are done, please check your work against The Saylor Foundation's “Assessment 10: Guide to Responding” (PDF).

      Please dedicate approximately 30-45 minutes answering these reflection questions.

      Terms of Use: This resource is licensed under a Creative Commons Attribution 3.0 License (HTML).  It is attributed to The Saylor Foundation.

      See a broken link? Please let us know!

    • Assessment: The Saylor Foundation’s Assessment: “Unit 5 Multiple Choice Quiz”

      Link: The Saylor Foundation’s Assessment: “Assignment: Unit 5 Multiple Choice Quiz” (HTML)
       
      Instructions: Please click on the link above and complete the quiz.  You must be logged into your Saylor Foundation School account in order to access this quiz.  If you do not yet have an account, you will be able to create one, free of charge, after clicking the link.  These end-of-unit quizzes are designed to reinforce key terms and concepts that you will practice in the course project components.  Completing these quizzes will also reinforce your learning and will prepare you for the course final exam.  Each unit quiz focuses on the material presented specifically in this individual unit of study.  The correct answers will appear when you click “Submit.”

      Terms of Use: The resource above is licensed under a Creative Commons Attribution 3.0 License (HTML).  It is attributed to The Saylor Foundation.

      See a broken link? Please let us know!

  • Unit 6: Intellectual Property  

    How many people have the recipe for Coca-Cola?  Probably only a few high-level executives within the company.  The recipe gives Coca-Cola a distinctive taste that is known the world over.  If the recipe became public knowledge, Coca-Cola might lose its advantage; therefore, this recipe is one of the most closely guarded trade secrets in the US. 

    Trade secrets are one type of intellectual property (property that is not tangible, but has an owner).  Most forms of intellectual property are protected by the government.  When a famous author publishes a book, you can’t go and copy the text and publish it under your name.  The author and publisher have a copyright on the text of the book.  If you did try to copy the book, you would be sued quickly.  In this unit, we will look at the ways in which intellectual property is leveraged in business and study firms that rely solely on licensing their intellectual property for income.

    Time Advisory   show close
    Learning Outcomes   show close
    • Reading: The Legal and Ethical Environment of Business: Chapter 9: “Intellectual Property”

      Link: The Legal and Ethical Environment of Business: Chapter 9: “Intellectual Property” (PDF)
       
      Instructions: Please click on the link above and read the introductory materials for Chapter 9.  As a review, ask yourself what kind of property interest discussed in Unit 5 an intellectual property right is.  Is it tangible or intangible?  Ask yourself what the importance of intellectual property rights is for contemporary business.  Note that while patents or copyrights are the often the first examples to come to mind when discussing intellectual property, there are other important intellectual property rights.  Lastly, pay attention to the discussion of reverse engineering of an Apple iPhone.

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  • 6.1 Trademarks  
    • Reading: The Legal and Ethical Environment of Business: Chapter 9: Section 4: “Trademarks”

      Link: The Legal and Ethical Environment of Business: Chapter 9: Section 4: “Trademarks” (PDF)
       
      Instructions: Please click on the link above and read Section 4.  Trademark laws allow companies to secure a claim to a specific identifying item, such as a name or design.  Think of trademarked items you might be familiar with: those used by international restaurant chains, software companies, and mobile phone manufacturers.  Trademarks set a company apart from similar companies and allow consumers of the companies’ products and services to readily identify the company.  The government of the United States has adopted a specific regimen of laws to protect trademarks.  As you read, note the many identifying categories that can be trademarked, including even the shape of a bottle.  Be aware, too, of what cannot be trademarked under US law.  Lastly, be aware of what remedies are available for infringement or dilution of a trademark and the defenses against these claims.  Please complete the exercises at the end of the section.

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  • 6.2 Patents  
  • 6.3 Copyrights  
    • Reading: The Legal and Ethical Environment of Business: Chapter 9: Section 5: “Copyrights”

      Link: The Legal and Ethical Environment of Business: Chapter 9: Section 5: “Copyrights” (PDF)
       
      Instructions: Please click on the link above and read Section 5.  Copyright is another area of intellectual property law that has grown more controversial over the last twenty years, particularly with the rise of the World Wide Web.  The Web has astronomically increased the availability of original written and creative material to the general public.  For some, this easy access can cause confusion, creating the assumption that such material can be used by any person for any reason.  Others have intentionally sought to bypass the protections available to such material.  Some see the copyright protections available to creative work to be excessively restrictive; through various efforts, they attempt to promote the availability of creative works through open copyright licenses.  In this section, familiarize yourself with the protections that US law provides to copyright holders.  Note also how digital copyright licenses can further restrict the use of digital media.  As always, pay attention to the remedies for copyright infringement and the defenses to such a claim.  Finish with the exercises at the end of the section.

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    • Assessment: The Saylor Foundation’s “Subunit 6.3 Quiz”

      Link: The Saylor Foundation’s “Subunit 6.3 Quiz” (HTML)

      Instructions: Please click on the link above and complete the quiz. You must be logged into your Saylor Foundation School account in order to access this quiz. If you do not yet have an account, you will be able to create one, free of charge, after clicking the link. These short quizzes are designed to reinforce key terms and concepts that you will practice in the course project components. The correct answers will appear when you click “Submit.”

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  • 6.4 Trade Secrets  
    • Reading: The Legal and Ethical Environment of Business: Chapter 9: Section 3: “Trade Secrets”

      Link: The Legal and Ethical Environment of Business: Chapter 9: Section 3: “Trade Secrets” (PDF)
       
      Instructions: Please click on the link above and read Section 3.  Trade secret laws generally protect businesses that wish to maintain the confidentiality of such things as formulas, processes, or client lists because of the important economic value these things provide.  Unlike trademark, patent, or copyright law, trade secret laws in the United States are dealt with in state, not federal, legislation.  Be aware of both the civil and criminal penalties that go with stealing a trade secret, as well as potential defenses against such claims.  Be sure to do the short exercise at the end of the section.

      Terms of Use: The text was adapted by The Saylor Foundation under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensee. 

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  • 6.5 Intellectual Property in the Digital Age  
  • Unit 7: Employment Law  

    This unit will introduce you to employment law, also known as labor law, regulations that are typically designed to protect the employee from the employer.  For example, though a number of Constitutional amendments give equal rights to all races, religions, and genders, issues pertaining to diversity still plague the workforce.  Employment law looks at these issues. 

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  • 7.1 Employment at Will  
  • 7.2 Wage Law  
  • 7.2.1 Minimum Wage Laws  
  • 7.2.2 Prevailing Wage Laws  
  • 7.3 Discrimination  
  • 7.4 Occupational Safety and Health Administration (OSHA)  
  • 7.5 Collective Bargaining  
  • 7.5.1 Unions  

    Note: This topic is covered by the Center for Labor Education and Research article, which you previously read in subunit 7.5.  Work to understand the important role unions play in negotiating on behalf of employees and representing employees in disputes with employers.

    • Assessment: The Saylor Foundation’s “Subunit 7.5.1 Quiz”

      Link: The Saylor Foundation’s “Subunit 7.5.1 Quiz” (HTML)

      Instructions: Please click on the link above and complete the quiz. You must be logged into your Saylor Foundation School account in order to access this quiz. If you do not yet have an account, you will be able to create one, free of charge, after clicking the link. These short quizzes are designed to reinforce key terms and concepts that you will practice in the course project components. The correct answers will appear when you click “Submit.”

      See a broken link? Please let us know!

  • 7.5.2 Strikes  

    Note: This topic is covered by the Center for Labor Education and Research article, which you previously read in subunit 7.5.  Work, in particular, to understand the right of members of labor organizations to engage in legitimate “collective action.”

  • 7.5.3 Whistleblower Protections  
  • 7.6 Wrongful Termination  

    Note: This topic is covered by Section 2 of Chapter 50 from Business Law and the Legal Environment, which you previously read in subunit 7.1.  While this reading focuses on the employment at will doctrine, a large part of the section deals with specific bases for making a claim of wrongful termination, such as an employee’s refusal to violate a law and the exercise of a legal right by an employee.

  • Unit 8: Criminal Law and Business  

    Like torts, criminal law deals with what happens when an individual or group of individuals commits a wrong against another individual or group of individuals.  However, criminal laws are enforceable through prosecution by the state.  Criminal law pertains to the direct violation of an existing law.  In criminal law cases, there is a prosecution, a defense, and, in many cases, a jury of peers.  This unit will focus on criminal law in the business community.

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    • Reading: The Legal and Ethical Environment of Business: Chapter 10: “Criminal Law”

      Link: The Legal and Ethical Environment of Business: Chapter 10: “Criminal Law” (PDF)
       
      Instructions: Please click on the link above and read the introductory materials for Chapter 10.  Prior units dealing with civil law and informal alternatives have covered the most typical interactions a business person will have with the law.  Unfortunately, some businesses and business people do end up becoming involved in the criminal justice system.  The last decade in the United States has produced some very prominent examples, including the investment manager Bernie Madoff and Tyco International CEO Dennis Kozlowski.  White collar and other business-related crime can have a major impact on the public’s perception of a business and its executives and employees.  For ethical as well as economic reasons, it is very important for business leaders to be aware of the potential for crime in the business world and to take steps to guard themselves and their businesses against it.  The introduction to Chapter 10 will provide an overview of the issues businesspeople face relating to crime.

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  • 8.1 Burden of Proof  
  • 8.2 White Collar Crime and Other Business-Related Crimes  
  • Unit 9: Business Organizations  

    Corporations are legal entities that protect shareholders from certain legal liabilities.  For example, if you start a sole proprietorship and take out a small business loan to get started, you are personally liable for that loan.  If you do not repay the loan, the bank can pursue your personal assets.  If you are a shareholder in a corporation that fails to pay its loans, however, the bank cannot pursue your personal assets.
     
    Being a corporation has its own caveats.  For example, corporations are subject to more regulations and fees.  This unit will look into the various types of business entities in the United States and weigh the pros and cons of each.  We will emphasize corporations because most of us will end up working for them.

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  • 9.1 Sole Proprietor  
    • Reading: The Legal and Ethical Environment of Business: Chapter 11: Section 1: “Sole Proprietorships”

      Link: The Legal and Ethical Environment of Business: Chapter 11: Section 1: “Sole Proprietorships” (PDF)
       
      Instructions: Please click on the link above and read Section 1.  Sole proprietorships are the most common form of business organization, with good reason.  There are no formal requirements to start a sole proprietorship.  What other advantages are there to starting a business as a sole proprietorship?  Note also the disadvantages that go with a sole proprietorship.  The link in the textbox “Hyperlink: Small Businesses Squeezed as Banks Limit Lending” will give you insight into the challenges of borrowing money as a sole proprietor.  Be sure you understand the issue of liability in sole proprietorships, as this will provide a foundation for discussions of limited liability forms of organizations in the following subunits.

      Terms of Use: The text was adapted by The Saylor Foundation under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensee. 

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  • 9.2 Partnership  
  • 9.2.1 General Partnerships  

    Note: This topic is covered by Section 2 of Chapter 11, which you previously read in subunit 9.2.  General partnerships are the most common form of partnership.  Be aware of the significant similarities between general partnerships and sole proprietorships.  Also, note the significant differences between them, especially the formalities that generally go into forming and ending partnerships.  Therefore, partnerships almost always require the involvement of business lawyers.

  • 9.2.2 Limited Partnerships  

    Note: This topic is covered by Section 2 of Chapter 11, which you previously read in subunit 9.2.  Work to understand the key distinctions between limited partners and general partners in a limited partnership.  Also, notice how the limited partnership takes a step in the direction of other limited liability organizational forms, such as requiring compliance with statutory requirements for forming a limited partnership.

  • 9.2.3 LLP  
  • 9.3 Corporations  
  • 9.3.1 Public vs. Private  

    Note: This topic is covered by Section 3 of Chapter 11, which you previously read in subunit 9.3.  Public corporations are listed on stock exchanges, offer their shares to the public, and are subject to the highest level of regulation.  Private corporations are often owned by a small group of investors with a pre-existing relationship.  These private corporations are also referred to as “closely held corporations.”

  • 9.3.2 Characteristics of Modern Corporations  

    Note: This topic is covered by Section 3 of Chapter 11, which you previously read in subunit 9.3.  Look for the following terms, which describe the characteristics of corporations: separate legal entity, limited liability, board of directors, officers, and shareholders.

    • Assessment: The Saylor Foundation’s “Subunit 9.3.2 Quiz”

      Link: The Saylor Foundation’s “Subunit 9.3.2 Quiz” (HTML)

      Instructions: Please click on the link above and complete the quiz. You must be logged into your Saylor Foundation School account in order to access this quiz. If you do not yet have an account, you will be able to create one, free of charge, after clicking the link. These short quizzes are designed to reinforce key terms and concepts that you will practice in the course project components. The correct answers will appear when you click “Submit.”

      See a broken link? Please let us know!

  • 9.3.3 Formation  

    Note: This topic is covered by Sections 3 and 4 of Chapter 11, which you previously read in subunits 9.2.3 and 9.3, respectively.  Because corporations get significant protections under the law, they must also be formed in strict accordance with the state statutes governing corporate formation in the United States.  Because corporate law is a function of state government, corporations have choices about where to incorporate and what corporate formation requirements to which they wish to conform.  The state of Delaware, in particular, plays a very important role in the formation of corporations.

  • 9.3.4 Shareholder Rights  

    Note: This topic is covered by Section 3 of Chapter 11, which you previously read in subunit 9.3.  This section contains a brief discussion of shareholder rights.  Where do shareholder rights come from?  Go back to Section 3 and view the video in the text box “Video Clip: Activists Shareholders at Wal-Mart” to see shareholders exercising their rights.

  • 9.3.5 Managers and Fiduciary Responsibility  

    Note: This topic is covered by Section 3 of Chapter 11, which you previously read in subunit 9.3.  Pay close attention to the discussion of the role of boards of directors and their rights and responsibilities in acting on behalf of corporations.  Finish by completing the exercises at the end of the section.

  • 9.3.6 Mergers and Acquisitions  
  • 9.3.7 Insolvency, Bankruptcy, and Liquidation  
  • 9.4 Limited Liability Companies  
  • Unit 10: Business Regulation  

    Regulation is always a source of debate within the business community.  In the wake of Enron’s massive fraud, for example, legislators passed the Sarbanes-Oxley Act (SOX) in an attempt to force corporations to be more diligent in their reporting and auditing.  As a result, many corporations have gone private to avoid SOX regulations.  Other corporations must devote so much of their resources to SOX, they can barely maintain profitability.  Regulations are passed all the time; it is important that managers are aware of all regulations in development and all regulations proposed for removal that could affect their business.

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  • 10.1 Securities Regulation  
  • 10.2 Sarbanes-Oxley  
    • Lecture: The Saylor Foundation's “The Sarbanes-Oxley Act”

      Link: The Saylor Foundation's “The Sarbanes-Oxley Act” (YouTube)
       
      Instructions: Please click on the link above and view this brief lecture (14:53), which deals with the adoption and details of the Sarbanes-Oxley Act.  Note that the Act, often referred to as SOX, came about in the wake of several scandals involving large public corporations in the United States.  Note also the role played by leading corporate executives, accountants, auditors, and legal counsel.  Ask yourself what problems SOX attempted to address and what specific changes it made to address those problems.
       
      Terms of Use: The lecture above is licensed under a Creative Commons Attribution 3.0 License (HTML).  It is attributed to The Saylor Foundation.

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  • 10.3 Antitrust Law  
  • 10.4 Administrative Law  
  • Unit 11: Business Ethics  

    Running a successful business is not simply a matter of obeying the law. There are areas, some addressed by the law and others not, where we have to ask ourselves whether it would be right or wrong to do a particular thing.  A life in business often presents us with different ethical challenges.  For example, while it may be legal for executives at companies laying off employees to award themselves, at the same time, substantially higher salaries and bonuses, is it right?  In this unit, we will present an overview of the many ethical challenges businesses and business-people face.  We will look at how ethics applies to various areas within the modern business.  This unit will also take a look at Corporate Social Responsibility (CSR), which works from the premise that just because it is legal to do something, doesn’t mean it should be done.  It may be legal for a corporation to dump a certain amount of waste, but if that impacts the community in a negative way, it could damage the reputation of the business.  Corporate Social Responsibility and established business ethics seek to identify a balance between doing what’s right for the community and doing what’s best for a company’s shareholders.

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  • 11.1 General Business Ethics  
    • Reading: Business Law and the Legal Environment: Chapter 2: Section 1: “What Is Ethics”

      Link: Business Law and the Legal Environment: Chapter 2: Section 1: “What Is Ethics” (PDF)
       
      Instructions: Please click on the link above and read Section 1.  This reading gives a concise introduction to ethics and some of the important issues relating to business.  You will consider how both individuals and institutions can be viewed as ethical.  In addition, you will learn how ethics and the law differ and why an ethical reputation can be more important than compliance with the law.
       
      Terms of Use: The text was adapted by The Saylor Foundation under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensee. 

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    • Reading: New World Encyclopedia's “Business Ethics”

      Link: New World Encyclopedia's “Business Ethics” (PDF)

      Also available in:
      HTML
       
      Instructions: Please click on the link above and read the New World Encyclopedia's entry on business ethics.  This reading provides an excellent overview on the way in which ethics applies to businesses, covering the content of business ethics courses, various categories of ethics challenges facing business, theoretical and practical approaches to business ethics, and professional ethics.
       
      Terms of Use: This resouce is licensed under a Creative Commons Attribution-Share-Alike 3.0 License (HTML).  It is attributed to New World Encyclopedia.

      The Saylor Foundation does not yet have materials for this portion of the course. If you are interested in contributing your content to fill this gap or aware of a resource that could be used here, please submit it here.

      Submit Materials

    • Assessment: The Saylor Foundation’s “Subunit 11.1 Quiz”

      Link: The Saylor Foundation’s “Subunit 11.1 Quiz” (HTML)

      Instructions: Please click on the link above and complete the quiz. You must be logged into your Saylor Foundation School account in order to access this quiz. If you do not yet have an account, you will be able to create one, free of charge, after clicking the link. These short quizzes are designed to reinforce key terms and concepts that you will practice in the course project components. The correct answers will appear when you click “Submit.”

      See a broken link? Please let us know!

  • 11.2 Metaethical Theories  

    Moral Universalism: The view that ethics applies to every person, irrespective of race, sex, religion, and so on.  One very popular version of this view is that God exists and is the judge of right and wrong for everyone, for all time.  However, see subunit 11.3 for more ethical theories, including those of Aristotle, Immanuel Kant, and John Stuart Mill.

  • 11.2.1 Ethical Relativism  
    • Reading: Mesa Community College: Dave Yount’s “Individual and Cultural Relativism”

      Link: Mesa Communit College: Dave Yount’s “Individual and Cultural Relativism” (PDF)
       
      Instructions: Please click on the link above and read the summary of individual and cultural relativism.  Reflect on whether you can defend either of these versions of relativism.  What is right or wrong is solely determined by either the individual (individual relativism) or one’s culture (cultural relativism).

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  • 11.2.2 Nihilism  
  • 11.3 Ethical Theories  
  • 11.3.1 Aristotle’s Ethical Theory: Virtue Ethics  
    • Reading: Mesa Community College: Dave Yount’s “Aristotle’s Ethical Theory”

      Link: Mesa Community College: Dave Yount’s “Aristotle’s Ethical Theory” (PDF)
       
      Instructions: Please click on the link above and read this explanation of Aristotle's ethical theory.  Reflect on whether you prefer Aristotle’s ethical theory.
       
      Terms of Use: This resource has been reposted by the kind permission of Dave Yount.  Please note that this material is under copyright and may not be reproduced in any capacity without the explicit permission of the copyright holder. 

      The Saylor Foundation does not yet have materials for this portion of the course. If you are interested in contributing your content to fill this gap or aware of a resource that could be used here, please submit it here.

      Submit Materials

  • 11.3.2 Immanuel Kant’s Ethical Theory: Rights and Duties  
    • Reading: Mesa Community College: Dave Yount’s “Immanuel Kant’s Ethical Theory”

      Link: Mesa Community College: Dave Yount’s “Immanuel Kant’s Ethical Theory” (PDF)
       
      Instructions: Please click on the link above and read this explanation of Immanuel Kant's ethical theory.  Reflect on whether you prefer Kant’s ethical theory.
       
      Terms of Use: This resource has been reposted by the kind permission of Dave Yount.  Please note that this material is under copyright and may not be reproduced in any capacity without the explicit permission of the copyright holder. 

      The Saylor Foundation does not yet have materials for this portion of the course. If you are interested in contributing your content to fill this gap or aware of a resource that could be used here, please submit it here.

      Submit Materials

  • 11.3.3 John Stuart Mill’s Ethical Theory: Utilitarianism  
    • Reading: Mesa Community College: Dave Yount’s “Utilitarianism”

      Link: Mesa Community College: Dave Yount’s “Utilitarianism” (PDF)
       
      Instructions: Please click on the link above and read this explanation of John Stewart Mill's utilitarianism.  Reflect on whether you prefer Mill’s ethical theory.
       
      Terms of Use: This resource has been reposted by the kind permission of Dave Yount.  Please note that this material is under copyright and may not be reproduced in any capacity without the explicit permission of the copyright holder. 

      The Saylor Foundation does not yet have materials for this portion of the course. If you are interested in contributing your content to fill this gap or aware of a resource that could be used here, please submit it here.

      Submit Materials

  • 11.4 Practical Exercises in Business Ethics  
  • 11.5 Corporate Social Responsibility (CSR)  
  • 11.5.1 Company and Community  
  • 11.5.2 Potential Business Benefits  
  • 11.5.3 Issues with CSR  
  • Final Exam  
  • NCCRS Credit Recommended Exam  
    • Optional Final Exam: The Saylor Foundation's "BUS205 Final Exam"

      Link: The Saylor Foundation's "BUS205 Final Exam" (HTML)

      Instructions: The above linked exam has been specially created as part of our National College Credit Recommendation Service (NCCRS) review program.  Successfully passing this exam will make students eligible to receive a transcript with 3 hours of recommended college credit.

      Please note that because this exam has the possibility to be a credit-bearing exam, it must be administered in a proctored environment, and is therefore password protected.  Further information about Saylor's NCCRS program and the options and requirements for proctoring, can be found here.  Please make sure to read this page carefully before attempting this exam.

      If you choose to take this exam, you may want to first take the regular, certificate-bearing BUS205 Final Exam as a practice test, which you can find above.

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