GACE Business (6–12) (715)

Business ethics applies moral principles to business situations. Ethical dilemmas arise when values conflict or right action is unclear. The utilitarian approach evaluates actions based on outcomes for the greatest number. The rights approach emphasizes respecting individual rights. The justice approach focuses on fair distribution of benefits and burdens. The virtue approach considers what a person of good character would do.

The stakeholder model considers obligations to all parties affected by business decisions including shareholders, employees, customers, suppliers, communities, and the environment. The shareholder model prioritizes maximizing returns to owners while operating within legal and ethical boundaries.

Corporate social responsibility encompasses voluntary actions beyond legal requirements to benefit society. Economic responsibilities involve profitability and providing goods and services. Legal responsibilities require compliance with laws and regulations. Ethical responsibilities involve doing what is right and fair. Philanthropic responsibilities involve giving back to communities through donations and volunteer efforts.

The triple bottom line framework evaluates business performance on people, planet, and profit dimensions. Environmental sustainability involves minimizing ecological impact through resource conservation, pollution prevention, and sustainable practices. Social sustainability involves treating employees fairly, supporting communities, and respecting human rights.

Corporate codes of ethics establish expected behavior standards. Effective codes address conflicts of interest, confidentiality, fair dealing, protection of company assets, and compliance with laws. Implementation requires training, enforcement, and modeling ethical behavior from leadership.

Conflicts of interest arise when personal interests interfere with professional judgment. Insider trading involves using nonpublic information for securities transactions. Bribery and corruption distort fair competition. Discrimination and harassment violate employee rights. Environmental violations harm communities and ecosystems. False advertising deceives consumers.

Constitutional law establishes government structure and individual rights. Statutory law consists of legislation enacted by federal, state, and local governments. Administrative law involves regulations created by government agencies. Common law develops through court decisions and precedent.

Federal courts handle cases involving federal law, constitutional issues, and disputes between states or citizens of different states. State courts handle most business disputes, contracts, and torts. Trial courts determine facts and apply law. Appellate courts review legal issues from trial court decisions. The Supreme Court is the highest appellate court.

A valid contract requires offer, acceptance, consideration, capacity, and legality. An offer communicates willingness to enter an agreement on specified terms. Acceptance is unqualified agreement to offer terms. Consideration involves exchange of value between parties. Capacity requires parties to be of legal age and sound mind. Legality means the contract purpose must not violate law or public policy.

Contracts may be express with explicit terms or implied from conduct. Bilateral contracts involve mutual promises. Unilateral contracts involve a promise exchanged for performance. Written contracts are required for certain transactions under the Statute of Frauds including real estate sales, contracts lasting more than one year, and sales of goods over $500.

Breach of contract occurs when a party fails to perform. Remedies include compensatory damages for actual losses, consequential damages for foreseeable indirect losses, specific performance requiring contract completion, and rescission canceling the contract.

Torts are civil wrongs causing harm to persons or property. Negligence involves failure to exercise reasonable care. Negligence requires duty, breach, causation, and damages. Intentional torts include assault, battery, defamation, and fraud. Strict liability applies regardless of fault for abnormally dangerous activities and defective products.

Real property includes land and permanently attached structures. Personal property includes movable items and intangible rights. Intellectual property protects creations of the mind. Patents protect inventions for 20 years. Copyrights protect original works of authorship for the creator's life plus 70 years. Trademarks protect distinctive marks identifying goods and services. Trade secrets protect confidential business information.

Agency relationships exist when one party acts on behalf of another. Principals authorize agents to act for them. Agents owe fiduciary duties including loyalty, obedience, and disclosure. Principals are liable for agents' authorized acts and acts within apparent authority. Independent contractors are not agents and control their own work methods.

At-will employment allows either party to terminate the relationship at any time for any legal reason. Exceptions include contracts, collective bargaining agreements, and public policy protections. Title VII prohibits discrimination based on race, color, religion, sex, and national origin. The Americans with Disabilities Act requires reasonable accommodations. The Age Discrimination in Employment Act protects workers 40 and older. The Fair Labor Standards Act establishes minimum wage and overtime requirements.