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notes part 1

part 1. The legal framework of business


Business Law Definition This course is for future business managers, especially those who wish to be leaders. An essential factor in preparing for that career is awareness of the legal issues arising in business. Businesses need to finance capital growth, purchase inputs, and hire and develop employees. In addition, they must sell to consumers, please owners, and comply with government rules. All these activities are full of potential legal conflicts. Business law consists of the enforceable rules of conduct that govern commercial relationships. In other words, buyers and sellers interact in market exchanges within the rules that indicate the boundaries of legal business behavior. Constitutions, legislatures, regulatory bodies, and courts spell out what market participants may or may not legally do. nderstanding business law is necessary for future businesspeople because there simply is no market transaction that occurs outside legal guidelines. All contracts, employment decisions, and payments to a supplier are limited and protected by business law. !ach of the six functional areas of business"management, production and transportation, marketing, research and development, accounting and finance, and human resource management"sits on a foundation of business law. Law and Its Purposes #any of us might like to impose rules on others, defining their rights and responsibilities. $ew of us can do this as individuals, but a ma%ority of citi&ens in a democracy can agree to establish rules for business behavior. They can permit certain authorities to make and enforce rules describing what behavior is permitted and encouraged in their community. These rules are what we refer to as the law and they are enforceable in the courts of that community.
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Law is a compulsor! rule of behavior enforced b! the authorit! of the state or other entitled institutions.

!xhibit ()( provides a list of %ust a few of the numerous purposes fulfilled by the law. !ach purpose of the law is important, but taken as a unit, !xhibit ()( is a reminder of why we are very proud when we say we are a society of laws. The respect we give to the law as a source of authority is in part a recognition of the fact that in the absence of law, we would rely solely on the goodwill and dependability of one another. #ost of us greatly prefer the law to that option.
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"lassification of the Law There are many ways of thinking about the law. $or example, we can divide law into national versus international law, federal versus state law, and public versus private law. Private law involves disputes between private individuals or groups. As an illustration, if a businessperson owns a computer e*uipment store and is delin*uent in paying rent to the landlord, the dispute between them entails private law. Public law involves disputes between private individuals or groups and their government. $or instance, if a computer store dumps waste behind its building in violation of local, state, or federal environmental regulations, the resulting dispute focuses on public law. Another distinction among types of laws is civil law versus criminal law. "ivil law involves the rights and responsibilities found in relationships between persons and between persons and their government. It also involves the remedies available when someone+s rights are violated. One example of a civil law case involving a large business organization occurred in 1993. The restaurant chain Jack !n the "ox was ordered to pa# damages after a two #ear old child died of food poisoning from $. coli and several other people became ill from eating the tainted meat. In contrast to civil law, criminal law applies to situations in which someone commits an act against the public as a unit. These crimes are prosecuted not by individuals but by the state or federal government. One example of a criminal law is the prohibition against insider trading on the stock exchange. !nsider trading occurs when an individual uses insider% or secret% compan# information to increase her or his own finances or those of famil# or friends. &or example% several #ears ago an !"' secretar# allegedl# told her husband% who told several other people% that the compan# was going to take over operations of (otus )evelopment. This information was spread among a number of individuals before it was publicl# announced. On the basis of this leak% *+ people bought stock that increased greatl# in value following !"',s public announcement. The -ecurities and $xchange .ommission filed charges against the *+ stock purchasers because the# were creating an unfair trading environment for the public. #ources of Business Law ,ow is law created, and where do we look to find the laws$ierarch! of the law% &ne of the definitions of hierarch! is' the rule of the categori(ation of norms according to their superiorit!.
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The same stands for the laws. Laws have a hierarch!


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)ot all of them have the same importance and some are superior to others.

The Albanian legali&ation is often drafted with the assistance of the ! and . /overnment and generally reflects the same principles found in western democracies and free market economies. In the last two decades Albania has been undergoing several legislative reforms and this has resulted in a large amount of approved legislation. This trend will likely continue in the future as Albania is preparing for ! membership. The formal sources of law Informal sources of law 01ef. Art. ((2 Albanian Constitution3 (. Constitution (. Case 4aw 5. Treaties 5. Academic 6riting 7. 4aws 8. 9ormative acts of the Council of #inisters :. 9ormative acts of the local power 2. 9ormative acts of the ministers and other central organs, having power in all the territory, only within their %urisdiction.
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"onstitutions

The term constitutional law refers to the general limits and powers of the state governments as stated in their written constitutions. The "onstitution is the supreme law of the land the foundation for all laws. If a law conflicts with the constitution than the law must be changed or abrogated. In some countries such compliance is checked b! the "onstitutional "ourt. In some other countries by the upper chamber of the parliament or by a special entitled body. The Constitution is the primary authority when we are trying to identify the relationship between business organi&ations and government.
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Treaties

+ treat! is a binding agreement between two states or international organi(ations. Treaties ma! be called several things' international agreements covenants e,changes of letters conventions or protocols. In modern democracies and after the institutionali&ation of International law, some countries have provided in their constitution that international law is superior to domestic law. As soon as they are ratified by the parliament, they become part of the domestic legislation. 6hen the parliament of a country 0that recogni&es the superiority of international law3, ratifies a convention and if it is not in compliance with the Constitution, than; The Constitution must be changed, or, the country has the right to make declarations and reservations after the treaty or convention has been signed. A treaty is similar to a contract in two important ways. Both treaties and contracts are attempts by parties to determine rights and obligations among themselves. In addition, when a party fails to obey a treaty or a contract, international law imposes liability on that party.

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Laws

4egislative actions, called statutes% are another important source of law. The assortment of rules and regulations put forth by legislatures is what we call law. !ven among the laws there is a hierarchy. The hierarchy of the laws is often defined by the way they are voted in the parliament. In modern democracies, to amend the Constitution, a certain number of votes are needed 0!x; 5<7 of the total number of #=s 0Albanian Constitution3. >ther laws 0considered3 organic laws need a *ualified ma%ority of votes to be approved. 0$or instance 7<: of the total number of #=s 0Albanian Constitution33 $or instance as organic laws could be considered; laws that provide the organi&ation and functioning of constitutional institutions 0=rosecutor+s office or Courts3. Codes in 1omano /ermanic systems need a *ualified ma%ority to get approved. >ther laws considered of special importance. 0!x; !lections3 >ther category of laws are usually approved by a simple ma%ority :? @ A(. In case there is a conflict between an organic law and a Bsimple lawC which regulate the same are- Than the organic law must be respected due to the rule of superiority, for instance .Albanian Constitution provides DArt. (55<5 BAn international agreement ratified by law, is superior to domestic laws that are not in compliance with itC 0Int. agreement3E
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)ormative +cts of "ouncil of /inisters There is another category of rules. 6hich are similar to laws, but are not laws. Those are called normative acts. Issued by the government in the framework and for the implementation of the laws. +rticle 101 % The .ouncil of 'inisters% in cases of necessit# and emergenc#% ma# issue% under
its responsibilit#% normative acts having the force of law for taking temporar# measures. These normative acts are immediatel# submitted to the /ssembl#% which is convened within + da#s if it is not in session. These acts lose force retroactivel# if the# are not approved b# the /ssembl# within 0+ da#s.

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)ormative +cts of Local Power

Acts that are issued by the organs of local power are effective only within the territorial %urisdiction exercised by these organs.
2. )ormative acts of the ministers and other central organs 9ormative acts of the ministers and other central organs, having power in all the territory, only within their %urisdiction. 0>rders, Firectives3

Informal #ources "ase Law In addition to legislation, law can derive from %udgments given by courts when deciding cases brought before them. As a source of law, this is known as precedent. As has already been explained, a defining characteristic of common law systems is the role that the courts have played in creating law in this way. This is not to say that in civil law %urisdictions the courts do not fulfil an important function, but any role they perform in establishing legal principles for application in future cases differs, in theory at least, from that of their common law counterparts.
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+cademic 3riting In many civil law %urisdictions, academics have had a significant influence on the interpretation and development of the law. 6hile not representing a formal source of law in the same sense as legislation, for example, the opinions of leading academics and commentators are, nevertheless, given substantial weight by the legal profession and %udiciary alike. The +lbanian Legal #!stem

Seperation of powers

.eparation of powers, is the doctrine and practice of dividing the powers of a government among different branches to guard against abuse of authority. A government of separated powers assigns different political and legal powers to the legislative, executive, and %udicial branches. The legislative branch has the power to make laws"for example, the declaration of what acts are to be regarded as criminal. The executive branch has the authority to administer the law"primarily by bringing lawbreakers to trial"and to appoint officials and oversee the administration of government responsibilities. The %udicial branch has the power to try cases brought to court and to interpret the meaning of laws under which the trials are conducted. +lbania+s legal system can be organi&ed both in terms of the institutional sources of law and the types of action that each institution performs to create law. At the national level in Albania, three principal categories of institutions constitute the legal system; i3 4egislativeG ii3 !xecutive and iii3 Hudicial. These three branches are not independent of one another because the Constitution set up a system of Checks and Balances to help ensure that no one branch became too powerful. !ach branch has powers that it can use to check and balance the operations and power of the other two branches.
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(egislative "ranch

The /ssembl# of the 1epublic of /lbania 0Iuvendi i 1epublikJs sJ .h*ipJrisJ3 is the lawmaking body in Albania. There are (8? deputies in the Assembly, which are directly elected by an absolute ma%ority of the voters. The =resident of the Assembly 0or .peaker3 has two deputies and chairs the Assembly. There are (: permanent commissions, or committees. =arliamentary elections are held at least every 8 years. The Assembly has the power to decide the direction of domestic and foreign policyG approve or amend the constitutionG declare war on another stateG ratify or annul international treatiesG elect the =resident of the 1epublic, the .upreme Court, and the Attorney /eneral and his or her deputiesG and control the activity of state radio and television, state news agency, and other official information media. If legislation is approved by the =arliament, it is sent to the =resident for her<his promulgation. If the =resident signs the statute it becomes law and is effective once published in the >fficial
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/a&ette. If the =resident does not sign the bill and sends it back to the =arliament for re) consideration 0suspending veto3, =arliament can override the veto, and the statute then becomes law and is effective after publication in the >fficial /a&ette. =arliamentary law is supreme in Albania except when in conflict with the Constitution. International instruments that are negotiated by the Albanian government must be approved by the =arliament to become law. The procedure to ratify an international instrument in =arliament re*uires a separate piece of legislation to be introduced to =arliament. This act is usually very short, and does not include the specific language of the international agreement, but merely references the agreement.
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$xecutive branch

The executive branch consists of a general or local central bodies, at the top of which stands the /overnment as a Constitutional body. Albanian /overnment consists of =rime #inister, Feputy. =rime #inister and by ministers, all constitutional bodies. It is headed by the =rime #inister and Feputy =rime #inister, and ministers stay on top of departmental, relevant ministry. The Chairman of the Council 0=rime #inister3 is appointed by the =residentG ministers are nominated by the =resident on the basis of the =rime #inisterKs recommendation. The =eopleKs Assembly must give final approval of the composition of the Council. The Council is responsible for carrying out both foreign and domestic policies. It directs and controls the activities of the ministries and other state organs.
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Judicial branch

Albania adopted the %udicial organi&ation of the western countries after the creation of the independent state. ,owever, it remained one of the countries that felt a not balance of power in favor of the executive. In the period of communist government, there was not a separation of power and nobody could discuss the issue of independence of the %udiciary. >ne of the main re*uirements of the current principle of separation and balance of powers, is the need that bodies which exercise their functions in the field of bringing %ustice, be separated from bodies and heads and bodies that make decisions with political character, whether power following legislative or executive power. Thus, %udges are separated from political power. In contrast to public administration, %udicial system is not arranged in hierarchical order. .eparation of %udicial process scale, does not mean the hierarchy between the courts of different levels. Hudges of different courts have no authority over %udges other courts, therefore they cannot order them. .o, it is a characteristic of %udicial power that is organi&ed in not centrali&ed order, but distributed. The +lbanian 4udicial structure Apart from the legislative mechanisms, decisions by %udicial institutions also effectuate law in Albania. The Albanian %udicial structure consists of; (3 the ,igh CourtG 53 .ix appellate courtsG
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and 73 twenty)nine district courts. Additionally, while not officially considered part of the %udicial structure, the Constitutional Court in Albania issues decisions that resolve constitutional conflicts. ,igh Council of Hustice The =resident of the 1epublic chairs the ,igh Council of Hustice 0,CH3 charged with appointing and dismissing other %udges. The ,CH was expanded in late (LLM to comprise (: members from among the various branches of government. Constitutional Court The Constitutional Court is the only body competent to make the final interpretation of the Albanian Constitution. Through its review powers, the Court may invalidate legislation as unconstitutional, and may decide issues related to the compatibility of laws, normative acts, and international agreements with the Constitution 0while other courts may also decide issues of constitutionality, they may not invalidate statutes of =arliament as unconstitutional3. .imilarly, the Court determines whether a law or other normative act is compatible with an international agreement. The Court also resolves both hori&ontal and vertical conflicts of BcompetencyC between government institutions and agencies, and reviews the constitutionality of a referendum and verification of its results. Additionally, once all legal remedies for protection of individual rights have been exhausted, the Constitutional Court is competent to decide constitutional issues surrounding individual complaints claiming a violation of an individual+s constitutional right to due process of law. The Constitutional Court comprises nine members appointed by the =eopleKs Assembly for maximum L)year terms. ,igh Court The ,igh Court, formerly the Court of Cassation, is the highest appellate body in the Albanian %udicial system, with the exception of the Constitutional Court acting within its %urisdiction. The ,igh Court is divided into three panels 0also referred to as colleges3; (3 criminalG 53 civilG and 73 administrative<commercial. The ,igh Court also sits en banc, with all members of the Court present. This is known as the Hoint College. There are two types of decisions issued by the ,igh Court; (3 0Bnon)unifyingC3 decisions reached by individual panels of the CourtG and 53 unifying decisions, decided by the Hoint College. #ost cases are heard by individual panels. The Court itself decides in which cases it should issue unifying decisions. >nce certain legal re*uirements are satisfied 0i.e., specific grounds of appeal3, the ,igh Court must hear the appeal. Assuming the grounds of appeal are satisfied, the case is assigned to a specific panel of %udges based on sub%ect matter. The Constitution re*uires the ,igh Court to write %udicial opinions based on legal BreasoningC and to publish all of its decisions, including minority opinions.

The non)unifying decisions are published in a monthly publication of the ,igh Court, and are not published in the >fficial /a&ette. >n occasion, the ,igh Court may hear a specific case so that it may issue a BunifyingC decision. In that situation, the Court sits as a Hoint College and decides the case. In addition to being published in the monthly publication of the ,igh Court, unifying decisions now must be published in the >fficial /a&ette. Although the ,igh Court prints its own monthly publication, it does not distribute the publication to other courts. Instead, it is the duty of each court to get a copy from the ,igh Court. The monthly publications are available to the public for a fee. Additionally, the publication does not index or catalogue decisions. Thus, if lower court %udges want to know how the ,igh Court ruled on a specific issue, they have to read through every decision or prepare their own index. Appellate Courts Albania has six appellate courts located in Tirana, Furres, /%irokaster, Iorce, Nlore, and .hkoder. There is also a military court of appeals. !ach appellate court hears issues presented by the lower district courts. The appellate courts must issue written decisions, based on legal reasoning and analysis. ,owever, it is not clear that this happens with any regularity. >nce the appellate court makes its legal determination, it records the decision in a book, but does not publish the decision. Thus, if lower court %udges want to know how the appellate court has ruled in the past on a given issue, they have to go to the appellate court and read the book which records the decisions. ,owever, most decisions only record results, not reasoning. Fistrict Courts There are twenty)nine district courts in Albania. Fistrict courts are courts of first instance and are the lowest courts in the %udicial structure. Albania is a member of the "ouncil of 5urope and a party to the !uropean Convention on ,uman 1ights. Conse*uently the Albanian government may be held liable in front of the 5uropean "ourt of $uman 6ights. As a member of 9, Albania is a party to the .tatute of the International Court of Hustice. Albania has ratified the 6ome #tatute of the International "riminal "ourt. +lbania is also a party to the 5uropean "onvention on International

T&PI" *. business ethics 5thics is the study and practice of decisions about what is good, or right. !thics guides us when we are wondering what we should be doing in a particular situation. Business ethics is an application of ethics to the special problems and opportunities e,perienced b! businesspeople. An ethical dilemma is a problem about what a firm should do for which no clear, right decision is available. 1easonable people can expect to disagree about optimal solutions to ethical dilemmas.
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&or example% imagine #ourself in the position of a business manager at 2ells &argo "ank. 3ou know that providing bank accounts for customers has costs attached to it. 3ou want to cover those costs b# charging the customers the cost of their checking accounts. "# doing so% #ou can preserve the bank,s revenue for shareholders and emplo#ees of 2ells &argo. -o far% the decision seems simple. "ut an ethical dilemma soon appears. 3ou learn from recent government reports that 1* million families cannot afford to have bank accounts when the# are charged a fee to maintain one. 3ou want to do the right thing in this situation. "ut what would that be4 The stud# of business ethics can help #ou resolve this dilemma b# suggesting approaches #ou can use that will show respect for others while maintaining a health# business enterprise. #aking such decisions would be much easier if managers could focus only on the impact of decisions on the firm. If, for example, a firm had as its only ob%ective the maximi&ation of profits, the Bright thingC to do would be the option that had the largest positive impact on the firm+s profits. But businesses operate in a community. Communities have expectations for behavior of individuals, groups, and businesses. Fifferent communities have different expectations of businesses. Trying to identify those expectations and deciding whether to fulfill them complicate business ethics. The community often expects firms to do much more than %ust provide a useful good or service at a reasonable price. $or example, a community may expect firms to resist paying bribes, even when the payment of such fees is an ordinary cost of doing business in certain global settings. The social responsibilit! of business consists of the e,pectations the communit! imposes on firms doing business within its borders. These expectations must be honored to a certain extent, even when a firm wishes to ignore them, because firms are always sub%ect to the implicit threat that legislation will impose social obligations on them. .o, if the community expects businesses to obey certain standards of fairness even when the standards interfere with profit maximi&ation, firms that choose to ignore that expectation do so at their peril. Before business managers consider the social responsibilities of firms in their communities, they need to gather all the relevant facts. !xperienced managers know that assembling the facts is %ust the beginning of a thoughtful business decision. 9ext, it makes sense to ask; Is it legal to go forward with this decision? The legalit! of the decision is the minimal standard that must be met. But the existence of that minimum standard is essential for the development of business ethics. To make this point, let+s take a look at the growing practice of bribery in the absence of legal standards. In some countries businesses must pay bribes to receive legitimate supplies. Though the businessperson may be morally opposed to paying the bribes, the supplies are necessary to stay in business and there may be no other means of obtaining them. Thus, foreign companies face an ethical dilemma; They must decide whether to pay bribes or find alternative sources of supplies. $or instance, when #cFonald+s opened its doors in #oscow, it made arrangements to receive its supplies from foreign providers. These arrangements ensured that the franchise did not have to engage in *uestionable business practices.
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The definition of business ethics refers to standards of business conduct. It does not result in 9a set of correct decisions. Business ethics can improve business decisions by serving as a reminder to not simply choose the first business option that comes to mind or the one that enriches the firm in the short run. But business ethics can never produce a list of correct business decisions that all ethical businesses will make. 4aw and business ethics serve as an interactive system"informing and assessing each other. $or example, our ethical inclination to encourage trust, dependability, and efficiency in market exchanges shapes many of our business laws. The principles of contract law, for instance, facilitate market exchanges and trade because the parties to an exchange can count on the enforceability of agreements. 4egal rules that govern the exchange have been shaped in large part by our sense of commercial ethics. >f course, different ethical understandings prevail in different countries. Thus, ethical conceptions shape business law and business relationships uni*uely in each country. Increasingly, business leaders re*uire sensitivity to the differences in legal guidelines in the various countries in which they operate. These differences are based on somewhat different understandings of ethical behavior among businesspeople in diverse countries. +s we mentioned above business ethics does not !ield one 7correct8 decision. .o how are business managers to chart their way through the ethical decision)making process- >ne source of assistance consists of the general theories and schools of thought about ethics. !ach ethical system provides a method for resolving ethical dilemmas by examining duties, conse*uences, or virtues. In the interest of providing future business managers with a practical approach to business ethics that the# can use% we suggest a three)step process; the 3P$ approach. This approach provides future business managers with some ethical guidelines or practical steps that serve as a dependable stimulus to ethical reasoning in a business conte,t.

3P$ approach.
This approach provides future business managers with some ethical guidelines or practical steps that serve as a dependable stimulus to ethical reasoning in a business conte,t. The 3P$ 9ramework for Business 5thics A useful set of ethical guidelines re*uires the recognition that managerial decisions must meet the following primary criteria; O The decisions affect particular groups of stakeholders in the operations of the firm. The pertinent *uestion is thus, Whom would this decision affectO The decisions are made in pursuit of a particular purpose. Business decisions are instruments toward an ethical end. O The decisions must meet the standards of action)oriented business behavior. #anagers need a doable set of guidelines for How to make ethical decisions.

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WHO +65 T$5 65L5:+)T #T+;5$&LD56#< The stakeholders of a firm are the many groups of people affected by the firm+s decisions. Any given managerial decision affects, in varying degrees, the following stakeholders; 1. >wners or shareholders. *. !mployees. -. Customers. .. #anagement. 1. The general community where the firm operates. 2. $uture generations. #anagers should make sure they consider all relevant stakeholders when they engage in ethical reasoning. 3$+T +65 T$5 =LTI/+T5 PURPO ! &9 T$5 D5"I#I&)< 6hen we think about the ultimate reason or purpose that we make decisions in a business firm, we turn to the basic unit of business ethics>values. "alues are positi#e a$stractions that capture our sense of what is good or desira$le% They are ideas that underlie conversations about business ethics. 6e derive our ethics from the interplay of values. :alues represent our understanding of the purposes we will fulfill b! making particular decisions. &or example% we value honest#. 2e want to live in communities where the trust we associate with honest# prevails in our negotiations with one another. "usiness depends on the maintenance of a high degree of trust. 5o contract can protect us completel# against ever# possible contingenc#. -o we need some element of trust in one another when we bu# and sell. If we think about the definition of values for a moment, we reali&e two things. $irst, a huge number of values pull and push our decisions. .econd, to state that a value is important in a particular situation is to start a conversation about what is meant by that particular value. &or instance% a manager might be deciding whether to fire an emplo#ee whose performance is less than impressive. !n making the decision% the manager explores alternative visions of ke# values such as 6ustice and efficienc# and then makes choices about which action to take. 7alues and their alternative meanings are often the foundation for different ethical decisions. HOW D& 35 /+;5 5T$I"+L D5"I#I&)#< #aking ethical decisions has always been one of our most confusing and important human challenges. In the process of meeting this challenge, we have discovered a few general, ethical guidelines to assist us. An ethical guideline provides one path to ethical conduct. 9otice that all three ethical guidelines below reflect a central principle of business ethics; consideration of stakeholders.

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The ?olden 6ule The idea that we should interact with other people in a manner consistent with the way we would like them to interact with us has deep historical roots. Both Confucius and Aristotle suggested versions of that identical guideline. >ne scholar has identified six ways the ?olden 6ule can be interpreted' 1. Fo to others as you want them to gratify you. *. Be considerate of others+ feelings as you want them to be considerate of yours. -. Treat others as persons of rational dignity like you. .. !xtend brotherly or sisterly love to others, as you would want them to do to you. 1. Treat others according to moral insight, as you would have others treat you. 2. Fo to others as /od wants you to do to them. 1egardless of the version of the /olden 1ule we use, this guideline urges us to be aware that other people"their rights and needs"matter. The focus on others that is the foundation of the /olden 1ule is also clearly reflected in a second ethical guideline; the public disclosure test. Public Disclosure Test >ne way to think of the public disclosure test is to view it as a ray of sunlight that makes our actions visible, rather than obscured. The public disclosure test is sometimes called the Btelevision test,C for it re*uires us to imagine that our actions are being broadcast on national television. The premise behind this general guideline is that ethics is hard work, labor that we might resist if we did not have fre*uent reminders that we live in a community. /iven our role as a member of a community, our self)concept is tied, at least in part, to how that community perceives us. =niversali(ation Test A third general guideline shares with the other two a focus on the BotherC"the stakeholders whom our actions affect. Before we act, the universali&ation test asks us to consider what the world would be like were our decision copied by everyone else. Applying the universali&ation test causes us to wonder aloud; BIs what I am about to do the kind of action that, were others to follow m# example% makes the world a better place for me and those I love-C In summary, business managers can apply the 6=, approach to most ethical dilemmas. The 6=, framework provides a practical process suited to the fre*uently complex ethical dilemmas that business managers must address *uickly in today+s society. III. 3hite%"ollar "rime 5L5/5)T# &9 + "6I/5 The purpose of criminal law is to punish an offender for causing harm to public health, safety, or morals. In a criminal proceeding, the government files the charges against the defendant. Thus, the government is always a party to a criminal action. /overnment involvement distinguishes criminal trials from civil proceedings. $or civil actions, an individual person or corporation can file a suit. The difference exists because in a criminal trial society is seen as the victim, whereas in a civil trial there is an individual victim or victims. Criminal laws usually define criminal behavior and set guidelines for punishment. To punish an individual for criminal behavior, the government must demonstrate the two elements of a crime;
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1. 6rongful behavior, that is, actus reus 0guilty act3. *. 6rongful state of mind, also known as mens rea 0guilty mind3. A person bears criminal responsibility if, at the time he or she commits an offence, he or she has reached the age of fourteen. A person who commits a criminal contravention bears responsibility at the age of si,teen. The government thus must show that a defendant committed a prohibited act with a wrongful intent. To prove the first element, actus reus 0guilty act3, the government must establish the nonmental elements of the crime. That is, the government must demonstrate that a prohibited act or a prohibited conse*uence resulted because of the behavior of the defendant. To prove the second element, mens rea 0guilty state of mind3, the government must prove that the defendant acted with purpose, knowledge, recklessness, or negligence, depending on which of these states of mind is re*uired by the law defining the relevant offense. The defendant+s type of wrongful state of mind helps determine the seriousness of the punishment for the crime. A defendant can purposefull& commit a crime by engaging in a specific wrongful behavior to bring about a specific wrongful result. A defendant can knowingl& commit a wrongful act if the person knows the act is wrongful or believes that the act is wrongful yet does nothing to confirm or disconfirm this belief. A defendant is reckless if a criminal act occurs when the individual consciously ignores substantial risk. $inally, a defendant is negligent if he or she does not meet a standard of care that the reasonable person would use in the context that led to the criminal act. C'( I)IC(*IO+ O) CRI,! Crimes are divided into categories based on the seriousness of the offense. Criminal acts are classified into offences and contraventions. &ffences include serious crimes, such as murder, that are punishable by imprisonment for more than two !ears in a penitentiary. "ontraventions are less serious crimes punishable by fines and<or imprisonment for less than two !ear. #P5"I9I" 3$IT5%"&LL+6 "6I/5# >riginally, white)collar crimes were distinguished from other crimes because of the social status of the offender. The more modern approach is to define white%collar crime as a variety of nonviolent illegal acts against society that occur most fre*uently in the business context. #ail fraud, bribery, embe&&lement, and computer crimes are examples of offenses typically classified as white)collar crimes. These crimes occur more fre*uently than you might think. The conse*uences of white)collar crimes are far)reaching. $irst, the cost of white)collar crimes can be tremendous. It is estimated that fraud in the health care industry alone costs society over P(?? billion each year. .econd, in cases where company employees commit the crime, many companies fail to report the crime to avoid publicity. Third, white)collar crimes can be costly to
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the environment. $or example, improper disposal of chemicals, such as dumping chemicals in a stream, has long)term repercussions for marine life, the surrounding ecosystem, and any humans who may come in contact with the contaminated water source. Briber! >ne of the better)known white)collar crimes is bribery. Briber! is the offering giving soliciting or receiving of mone! or an! ob4ect of value for the purpose of influencing the 4udgment or conduct of a person in a position of trust. To demonstrate bribery, the government must show three elements; 0(3 .omething of value was offered, given, or promised to 053 a public official with 073 intent to influence that person+s %udgment or conduct. The Bthing of valueC element has been construed very liberallyG actual commercial value is not necessary. Additionally, the definition of Bpublic officialC is also expansive. The statute defines public officials as members of =arliament, government officers and employees, and anyone Bacting for or on behalf of C the government Bin any official function, under or by authority of C a government department or agency. / t#pe of briber# is commercial briber#% which includes a bribe in exchange for new information or pa#offs. &or example% suppose .omdac .omputers is looking for a compan# that manufactures a certain t#pe of computer part. Jane )evlon owns such a compan# and realizes that if .omdac gets the computer parts from her% she will potentiall# make a lot of mone#. 2hen .omdac sends its contractor to the )evlon factor#% )evlon offers the contractor 8+99%999 in exchange for the contractor,s promise that .omdac will bu# all such parts from onl# her factor# for the next #ear. /lternativel#% she might offer the contractor 8+%999 to disclose the dollar amounts of the competing bids so that she can offer a better bid to earn the contract. This chapter+s Case >pener also involves commercial bribery. Conner+s offer of money to $reeman to return to his old %ob, so that he could provide better tips, is a commercial bribe. 5,tortion >ften confused with bribery, but completely different, is the crime of extortion. !xtortion otherwise known as blackmail% is the making of threats for the purpose of obtaining money or property. 6hereas bribery is offering someone something to obtain a desired result, extortion involves the threat of doing something if the target of the extortion does not relin*uish money or a specific piece of property. 9raud Criminal fraud encompasses a variety of means by which an individual intentionally uses some sort of misrepresentation to gain an advantage over another person. $raud generally re*uires the following three elements; 0(3 a material false representation made with intent to deceive :scienter;% 053 a victim+s reasonable reliance on the false representation, and 073 damages. 9orger! the fraudulent making or altering of any writing in a way that changes the legal rights and liabilities of another, is another type of fraud. If you sign your colleague+s name to the back of a check made out to your colleague, you have committed forgery. >ne of the most fre*uently prosecuted frauds is mail fraud% which is the use of mails to defraud the public. A type of fraud involves bankruptcies. In 5??8, more than (.2 million bankruptcy filings occurred. An individual can file for bankruptcy to be relieved of oppressive debt. Qet claims
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need to be carefully reviewed to prevent bankruptc# fraud. $or example, an individual might hide some assets so that they will not be considered during the proceedings. Conversely, a creditor 0a party to whom another owes money3 might fi le a false claim against a debtor 0the party who owes money to a creditor3. Thus, bankruptcy fraud can occur on the part of the debtor or the creditor. "omputer "rimes The term computer crime refers broadly to any wrongful act that 0(3 is directed against computers, 053 uses computers to commit a crime, or 073 involves computers. Computer crime is not necessarily a new kind of crime but is, instead, a new way of committing traditional crimes. Consider fraud, a crime that has existed for centuries. Today, online auctions, such as eBay, are a common source of fraud in the nited .tates. Indeed, some statistics suggest that, compared with nonelectronic methods, using computers is a more profitable method of committing crimes. According to federal officials, the average loss in a nonelectronic embe&&lement is P57,:??G in contrast, in a computer fraud case, the average loss is almost P:??,???.7 Computer crimes are often difficult to prosecute, in large part because they are difficult to detect. A computer crime could be committed by an insider, such as an employee, or by an outsider, such as a hacker "a person who illegally accesses or enters another person+s or a company+s computer system to obtain information or to steal money. In addition, computer systems are *uite open to attack. A c!ber terrorist is a hacker whose intention is the exploitation of a target computer or network to create a serious impact, such as the crippling of a communications network or the sabotage of a business or organi&ation. The activity of a cyber terrorist can have an impact on millions of citi&ens if the terrorist+s attack is successful, particularly if it involved the computer systems of a ma%or stock exchange, any bank, or any federal agency or government. Penal Code in force contains onl& one article regarding this widespread crime t&pe(rticle .9/0$ !nterference in the computer transmissions !nterference% in an# wa#% in the computer transmissions and programs% constitutes a penal contravention and is punished b# a fine or imprisonment up to three #ears. This ver# act% when brings about serious conse<uences% is punished b# imprisonment up to seven "orporate "riminal Liabilit! An individual or a corporation can be charged with and convicted of a crime. ,owever, there has been much debate over whether corporations should be held criminally responsible. nder the common law, a corporation could not be considered a criminal because it was not an actual person and thus did not have a Bmind.C Conse*uently, it could not meet the mens rea 0guilty) mind3 re*uirement for a crime. Currently, corporations can be held criminally accountable for almost any crime. Albania; Article 8: Criminal sanctions for %uridical persons 0Abolished by 4aw 9o. RM77, date 58 Hanuary 5??(, article 83. Than it was introduced again in 4aw 9o.LM:8, dated (8.2.5??M S B=enal 1esponsibility of Huridical =ersonsC. In order for a corporation to be held criminally liable for the acts of an employee, the prosecutor must show that 0(3 the employee was acting within the scope of her or his employmentG 053 the employee was acting with the purpose of benefiting the corporationG and 073 the act was imputed to the corporation.
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In addition to corporations having criminal liability, corporate executives may also be personally liable for a business crime. The beneficiary of the crime is irrelevant, as corporate executives and officers can be found to be personally liable regardless of whether the crimes were committed for their personal benefit or for the benefit of the corporation. "riminal Procedure Criminal procedure differs from civil procedure in several key ways. $irst, the government, referred to as the prosecutor% always brings the criminal case, whereas in a civil case, the party fi ling the case, the plaintiff, can be an individual, business, or government entity. .econd, the outcome of each is different. In a criminal case, the ob%ective is punishment, so the defendant may be fined or imprisonedG in a civil case, the ob%ective is to remedy a wrong done to the plaintiff, so the defendant either will have to provide compensation to the plaintiff or may be sub%ect to an e*uitable remedy such as an in%unction or order for specific performance. Third, because the potential impact of losing a criminal case is so much more serious than the impact of losing a civil case, the Constitution provides a number of safeguards for the criminal defendant. These safeguards are set forth in the following articles of the Constitution;

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+rticle *@ (. !veryone whose liberty has been taken away has the right to be notified immediately, in a language that he understands, of the reasons for this measure, as well as the accusation made against him. The person whose liberty has been taken away shall be informed that he has no obligation to make a declaration and has the right to communicate immediately with a lawyer, and he shall also be given the possibility to reali&e his rights. 5. The person whose liberty has been taken away, according to article 5M, paragraph 5, subparagraph c3, must be sent within 8R hours before a %udge, who shall decide upon his pre)trial detention or release not later than 8R hours from the moment he receives the documents for review. 7. A person in pre)trial detention has the right to appeal the %udgeKs decision. ,e has the right to be tried within a reasonable period of time or to be released on bail pursuant to law. 8. In all other cases, the person whose liberty is taken away extra)%udicially may address a %udge at anytime, who shall decide within 8R hours regarding the legality of this action. :. !very person whose liberty was taken away pursuant to article 5M, has the right to humane treatment and respect for his dignity. +rticle *A (. 9o one may be accused or declared guilty of a criminal act that was not considered as such by law at the time of its commission, with the exception of cases, which at the time of their commission, according to international law, constitute war crimes or crimes against humanity. 5. 9o punishment may be given that is more severe than that which was contemplated by law at the time of commission of the criminal act. 7. A favorable criminal law has retroactive effect. +rticle -0 !veryone is considered innocent so long as his guilt is not proven by a final %udicial decision. +rticle -1 Furing a criminal proceeding, everyone has the right; a. )) to be notified immediately and in detail of the accusation made against him, of his rights, as well as to have the possibility created to notify his family or those close to himG b. )) to have the time and sufficient facilities to prepare his defenseG c. )) to have the assistance without payment of a translator, when he does not speak or understand the Albanian languageG d. )) to be defended by himself or with the assistance of a legal defender chosen by himG to communicate freely and privately with him, as well as to be assured of free defense when he does not have sufficient meansG e. )) to *uestion witnesses who are present and to seek the presentation of witnesses, experts and other persons who can clarify the facts. +rticle -* (. 9o one may be obliged to testify against himself or his family or to confess his guilt. 5. 9o one may be declared guilty on the basis of data collected in an unlawful manner. +rticle --

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(. 9o one may be denied the right to be heard before being %udged. 5. A person who is hiding from %ustice may not take advantage of this right. +rticle -. 9o one may be punished more than one time for the same criminal act nor be tried again, except for cases when the re)ad%udication of the case is decided on by a higher court, in the manner specified by law.

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