Managers and the Legal Environment - Assignment Example

MANAGERS AND LEGAL ENVIRONMENT BY Question martin Luther King and Saint Thomas Aquinas point of view Martin Luther King was keen to point out that laws are not always just; according to him, there are just and unjust laws. The just laws are made in line with human morality and uphold the moral believes of human beings. Therefore, just laws are morally acceptable and simply uphold the existing moral standards and practices by the society. On the other hand, unjust laws are against the human morality. They are aimed at reducing tension I the society but in the process infringe on the rights of the minority. Such laws are used to oppress the minority in the society with the excuse of maintaining peace and reducing tension. Unjust laws are against morality and are not in the best interest of the society as they are portrayed. Saint Thomas Aquinas had the same view with Martin Luther King concerning unjust law but from a slightly different perspective. Both of them agree that unjust laws are against morality and defy the very existence of human nature. However, Saint Thomas is more specific to unjust law being against the natural law. As far as he is concerned, unjust law is no law at all. Thus such a law is null and void. Martin Luther King is keen to note that those who believe in morality should disobey the unjust law and face the consequences proudly as they are fighting for the right thing; thus, he believes unjust laws are existent and should be defied. In Saudi Aramco Company Community service, some laws are unjust o some extent. Though the community service is aimed at helping the community, the service offered are not absolutely free as may be implied by the naming of the project. The laws of the firm concerning the health center require patients to pay some subsidized fee to receive medical attention from the health center. Therefore, anyone not having the required prerequisite fee may not receive the full medical attention they require contradicting the very purpose of community service. Question 2: key difference between actual authority and apparent authority Actual authority of an agent is derived from an agreement between the agent and the principal to create an agency relationship thus the agent serves the interest of the principal. On the other hand, apparent authority does not require any mutual agreement between the agent and the principal but rather, the principal ratifies the actions of the agent. The two theories are important in agency theory in that they create a relationship between the agent and the principle making the principal liable for any actions by the agent in on his (principal) behalf as long as the agent acted in best interest of the principal. In Saudi Aramco company community service, the actual authority of an agent is derived from an employment contract where employees are granted certain powers to act on behalf of the firm in their various areas of specialization. The firm is liable for any error committed accidentally by the employee in the course of work. An example is misdiagnosis of a patient in the health center by the firm’s medical practitioner. Implied authority in the firm includes the security person at the gate giving information to clients about services offered by the firm. The main duty of the security personnel is to provide security but the firms management is not opposed to him informing others of the services thus having implied authority. Question 3: vicarious liability and respondeant superior Vicarious liability is where the principal is answerable for the acts of his agent. Respondeant superior on the other hand directly translates to ‘let the master answer’. Respondeant superior is specific to employee employer relationship where the employer is held liable for the actions of the employee as long as they are within the mandate given to the employee. Any action outside the employment agreement is not constituted in the respondeant superior (Bagley 2011). The above, vicarious liability and respondeant superior affect my employment contract as my duties and responsibilities in the firm are specified in the employment contract. My employer is answerable to my actions as long as they are within the stipulated duties and responsibilities. Anything contrary to the employment contract is on my own account. Question 4: rational used by the department of justice in the US in considering whether to indict a company The nature and seriousness of the offense is to be considered by the justice department. The more harm the firm causes to the public the higher the chances of indictment. The second consideration is the pervasiveness of wrongdoing within the corporation. If the organization’s managers are used to condoning wrongdoing then it should be indicted to stop the vice. Thirdly, corporation history of similar misconduct is another guide. Absence of history may indicate a genuine error in the organization which can be pardoned; but a history of similar error is an indication of the organization’s conscious actions. Furthermore the corporations timely and voluntary disclosure of wrongdoing and its willingness to cooperate in the investigation of its agents is another consideration. Failure to disclose will attract the justice department to indict the firm. Example of company indicted by the department of justice is Smart Power Systems Inc. indicted on April 17 2015. The firm together with other three firms and five individuals were indicted for illegally exporting high-tech microelectronics and other commodities against the International Emergency economic powers Act. The firm management was aware that it was illegal to export such products and did not stop or disclose the activities to the authority thus warranting an indiction. Question 5: corporation is built around what central premise? When another entity wishes to get past the central promise it is called what? List and explain 2 main factors used by a court to consider piercing the central premise of corporate formation? The central premise of corporation is the limited liability. This implies that the shareholders of the corporation are liable only to the amount of their share contribution to the firm. Thus personal property of shareholders and directors cannot be used to repay debts and other liabilities of the corporation. Getting past the central premise is referred to as piercing of the corporate veil. Main factors used by the court to consider piercing the corporate veil include when there is no real separation between the corporation and its owners. This means the owner does not separate their personal financial dealings with the corporation’s finances making them two faces of the same person. Therefore, the owner is held liable if the court was to discover the non-separation of the two. Fraudulent action by the firm is another reason for court corporate veil piercing. The owners of a firm with knowledge of the financial position of the firm can decide to take up debt that they are sure the firm will not be able to service during dissolution. Thus, through this fraudulent act, the credit holders lose greatly when the firm dissolves. If such information is presented in a court of law, the owners can be held liable for their actions which were done in their own personal interest at the expense of creditors.   Question 6: Consider the following scenario and discuss the potential outcomes to the case if it leads to a law suit. Francis McQuade(FM) was the manager of New York Giants baseball team. Charles Stoneham (CS) owned a majority of the stock of the company that owned the Giants and sold shares in the company to FM and John McGraw. As part of this transaction, these three shareholders each agreed to use his best efforts to continue to keep each of the others as directors and officers of the company at their present salaries. CS and John subsequently failed to use their best efforts to continue to keep FM as director and treasurer of the company. FM sued for specific performance of the agreement? What would you believe the result of the lawsuit would be? The transaction agreement was attaching the directors to the firm in their capacity as shareholders and not individuals. Therefore,the complainant will lose the law suit since he is requesting to be retained as the director and financial manager but not a shareholder. Thus the firm contractual relationship with the complainant is to the extent of a member and not his profession making him a third party to the contract with no right to sue the firm. Also, the transaction agreement did not take into consideration the possible non-performance of the directors and officers of the firm. Therefore it is possible for the court to dismiss the case on ground that the performance agreement did not take into consideration the wellbeing of the firm.       Upholding of the present salary may be another factor the court will consider when ruling the case. With changing economic times, the salaries of the directors and other officers are bound to change to match the change. Therefore, with the changing situation, the transaction agreement is rendered voidable thus the complainant will lose the case. Question 7 The difference between a C corporation and a limited partnership comes from the fact that in a limited partnership there is at least one partner who should incur any kind of obligation on behalf of the partnership. The other partners are called limited partner. Limited partners have limited liability and their main contribution to the business is capital investment. A C corporation on the other hand, is taxed separately from its owner thus the owners. Closely held corporations refers to the business organization, there is a small group of shareholders who are directly obligated for the business’ liabilities. Most of such businesses are family run businesses. Sabic Company is a limited company because it has only one general partner which in the government of Saudi Arabia, with 70% of the company’s shares. This is an implication that the Saudi Arabian government is responsible for the company’s liabilities. However, the government of Saudi Arabia is also advantaged because they have the ability to influence the day-to-day management and operation of the business, unlike the other shareholder whose only contribution towards the company is the capital investment. Question 8 Governments have the obligation of making sure that consumers are protected within their territories. One of the ways through which the government protects consumers is by requiring business organizations to register. The registration process is important in making sure that the financial liability of business owners is defined so that consumers will not have to suffer the liabilities of a business organization whose products or services they consume. The government also makes sure that business organizations, especially those in monopolistic industries do not exploit their customers by overcharging for their products or services. This is done through setting of price ranges for products or services in accordance with an organization’s production cost. The government also makes sure that there are quality standards that are supposed to be adhered to by producers of both products and services (Constance&Diane 2012). As a result, consumers can be able to be assured of quality products and services at reasonable prices. The government has laws that protect consumers from induced shortages that are aimed at increasing demand, thus having the ability to increase prices. The government is also supposed to protect consumers from the consumption of products that are of negative effect to their lives. Even the products of that nature that are sold in the market are sold under the condition that health warnings are given on the packages. Question 9 Executive Recycling used to be an electronic waste recycling company located in Engelwood, Colorado with affiliations in Utah and Nebraska. The company engaged in activities of collecting electronic waste from different government organizations, businesses and private entities. The company was registered with the Colorado Department of Public health and Environments as a “Large Quantity Handler of Universal Waste”. Ritcher was responsible for supervising all aspects of the company whereas Olson ran its day to day operations. A large amount of the electronic waste collected was Cathode Ray Tubes and the company engaged in the activity of exporting the wastes to foreign countries, including China. Between February 2005 and January 2009; however’ the company devised a way to defraud businesses and government agencies who wanted to dispose their wastes and to obtain their money by use of materially false and fraudulent pretences. The company presented themselves on a website as having extensive knowledge of EPA regulations and falsely promised customers it would handle their waste right in the US and not export it to oversees countries. The company directors were charged with fraud, destruction, alteration, falsification of records in Federal investigations and bankruptcy, smuggling goods in the United States. In January 2013, BP was sentenced and charged with a 4 billion dollar fine(the largest criminal resolution ever in the history of the United States) after pleading guilty to 11 counts of manslaughter, a count of felony and violation of Clean Water and Migratory Bird Treaty Act for its role in the 2010 deep water horizon disaster. Mark Jeffery Glover, CEO of Discount Computer Inc., was charged with trading counterfeit goods and also with violating environmental laws. Mark was fined $10000and sentenced to 30 months behind bars. REFFERENCE Bagley C. (2011). Managers and Legal Environment: Strategies for 21st century, 7th edition. USA, South-West cengage learning. Read More