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Legal Environment of business
True or False
9) Judges in civil law courts find themselves obligated to follow precedents. 9) _______ 10) Disadvantages of case law do not destroy the benefits of certainty, predictability, and stability provided by case law and stare decisis. 10) ______ 11) According to Adam Smith, leading a good life means being solely concerned about the fortunes of oneself. 11) ______ 12) Stakeholder theory suggests that through its managers, an ethical corporation avoids risks to stakeholders which, if explained, would be clearly unacceptable. 12) ______ 13) In a modern corporation, the very nature of corporate structure gives managers the opportunity to abuse and misappropriate corporate resources owned ultimately by shareholders. 13) ______ 14) One of the observations made by the Spanish journal Boletin Circulo is that profits and business ethics are contradictory. 14) ______
Expert Answer
1) Judges in civil law courts find themselves obligated to follow precedents..FALSE
Explanation: The law courts do not make law nor judges in civil law courts think themselves obligated to follow prior judicial decisions, called precedents
2) Disadvantages of case law do not destroy the benefits of certainty, predictability, and stability provided by case law and stare decisis…TRUE
Explanation: Disadvantages of case law do not destroy the gains of certainty, predictability, and stability provided by case law and stare decisis
3) According to Adam Smith, leading a good life means being solely concerned about the fortunes of oneself….FALSE
Explanation: According to Adam Smith leading a good life means more than material possessions and luxury. It means pursuing intangibles, being concerned, as Adam Smith put it, about the fortunes of others.
4) Stakeholder theory suggests that through its managers, an ethical corporation avoids risks to stakeholders which, if explained, would be clearly unacceptable…TRUE
Explanation: Stakeholder theory considers the concerns of the stakeholders and weighs their interests while making decisions
5) In a modern corporation, the very nature of corporate structure gives managers the opportunity to abuse and misappropriate corporate resources owned ultimately by shareholders.. TRUE
Explanation: The nature of corporate structure provides managers the opportunity to abuse and misappropriate corporate resources owned ultimately by shareholders, ethical business practice is made more vital yet more difficult.
6) One of the observations made by the Spanish journal Boletin Circulo is that profits and business ethics are contradictory… FALSE
Explanation: One of the observations made by the Spanish journal Boletín Círculo is that profits and business ethics are not contradictory
