Legal, Ethical and Social Environment Information 2022

Running head: LEGAL, ETHICAL AND SOCIAL ENVIRONMENT
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Legal, ethical and social environment
Name
Institution

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Summary of Business: Its Legal, Ethical and Global Environment
The success of any Business-oriented entity depends on the policies and strategies that
govern its operations as well as conformity to the regulations of both its intrinsic and extrinsic
environment. Through these components of business operations, a firm can either glowingly
maximize the competitive advantage or flame down and be kicked out of the market. Among the
sensitive element of the internal business environment are the human resource and the business
governance structure. These two elements define the 16th and 17th chapters in Jenning's book.
Moreover, in the external environment, business security is among the most valuable aspect of
sustainable business operations. This section is covered in the 18th chapter of the book.
Chapter 16: Management of Employee Conduct
Employees are the representative of the owner of a firm, and their practice depicts the
policies and ethical practices passed by the management. The image of a company depends on
the actions and values of its workers. Therefore, the competitive advantage of any firm is in the
hands of the employee. This fact illuminates the need for remarkable management of human
resources. In this section, the primary insights are on how to leverage the power of the
employees through implementation of the right strategies. The chapter starts by outlining the
importance of healthy relations in the intrinsic operation s of the business. By describing the best
practices on both vertical and diagonal relationships in human resource management, the chapter
section guides on practical application of power as well as the importance of warm relations
between the business principals and the agents. The book stipulates the fundaments of this
relationship as comprised of loyalty, obedience, honesty, trust, and care (Jennings, 2016).
The book proceeds into outlining the roles of agents and the responsibilities of the
principals in the embracement of their employee’s rights. Moreover, this section expounds on

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the loyalty policies between the agents and the principals. The author explains the noncompete as
well as the post-employment agreement. He further emphasizes the importance of the
employees’ signature, on this contract, for the firm operations and prospects. In general, every
firm needs protection and privacy of sensitive information regarding its policies and strategies
because there are the gears for sustainable competitive advantage in the market.
Moreover, it is the liability of the principals to maintain and oversee the activities and
relationships of the agents to the third party. This section covers the disclosed, partial disclosed
and the fully sealed or undisclosed principal operation. The three elements of the principals’
liability strategies are the regulatory policies for the agent to third party relationships.
Chapter 17: Governance and Structure
The formation of business entities is a structural procedure that needs evaluation and
knowledge of both the pros and cons of business structure. Most businesses start as individual’s
ideas. Furthermore, these individuals always wish to actualize their ideas through sole
proprietorships. However, in today's market, most competitively productive firms are owned by
more than a single person. This chapter seeks to explore the insights of multi-partnered business
as well as the sole ownership. Through illuminating the structure and formation of limited
liability companies and partnerships, corporations as well as the roles, liabilities, and benefits of
the owners of these business structures, the book enlightens and solves the dilemma of structural
choices.
This book provides solutions through discussing the legal formalities required for
launching a business. Moreover, through exploring the sources of funds, founder and partner’s
liabilities, as well as the vertical and horizontal managemental roles, the book straightens the
curves in organizational structures. Additionally, the book reviews the legal regulations on the

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taxation, dissolutions, and termination of business entities. Finally, the chapter illuminates the
ethical codes which are necessary for the success of structural, formational and legalization of
the various business entities.
Chapter 18: Governance and Regulations
The primary focus in this chapter is the rules and regulations that govern the interests of the
owners, management and the external investors the various firms. These regulatory rules define
the term Business security laws. Their importance in business management is evident in the
control of the different affiliations that mostly arise between the owner, who always want the
business to expand, and the investors who primarily want to maximize the profits for their
investment. In general, the chapter outlines the rules and regulations for the dividend and
interests sharing methodologies in the firm.

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References
Jennings, M. (2016). Business: Its Legal, Ethical, and Global Environment. Boston, MA:
Cengage Learning.