Role and Function of Law
Role and Function of Law
Law is an essential part of business and society. The definition of law is, “Any system of regulations to govern the conduct of the people of a community, society or nation, in response to the need for regularity, consistency and justice based upon collective human experience” (ALM, 2013, P. 1). There are four common types of law constitutional law, statutory law, common law, and administrative law. Each of these four types plays a different role in the regulation of business and society. In addition to the types there are also three common categories of law criminal and civil, substantive ...view middle of the document...
Administrative law authorizes the authority of the executive branch and government agencies, for example; laws created by the Food and Drug Administration.
Categories of Law
Along with the four types of law there are also three common categories of law. Each of these categories relate differently to society and businesses. Categories of law in many cases overlap and are not mutually exclusive. Laws are either criminal or civil. Criminal law deals with crime and the punishment for committing criminal infractions, and civil law deals with disputes between people and organizations to determine compensation for a perceived wrong. Procedural law is a set of rules guiding the proceedings of the court. These rules ensure due process. Substantive law is the legal relationship between people or between people and the state. To compare procedural and substantive law, procedural law is the rules and substantive law is the duties of the people. Public laws are between the people and the reigning government. Public laws are between the people. Types and categories of law are important in both society and business.
Function and Roles of Law in Business
Every business faces areas where the law must be met and complied with. In 2002, the world of inventory control changed. The Sarbanes-Oxley Act became law after several mismanagement and accounting scandals. “Sarbanes-Oxley (SOX) was passed to combat corruption at big public companies like Enron, WorldCom, Tyco, Adelphia, Global TelLink, HealthSouth, and Arthur Andersen. But small and not-for-profit companies are finding they have no choice but to adopt many of the same standards if they want to get insurance, attract investors and donors, and repel lawsuits. SOX compliance is becoming a portfolio building block that no company can ignore” (John Willey and Sons INC., 2013). SOX creates accountability for businesses. Inventory within the company must be audited within SOX compliance. The law plays a large role in the life of an inventory control manager. Every decision made requiring the removal, placement, or replacement of inventory must comply with SOX regulations. Managers and supervisors obtain SOX training to ensure compliance. Not all positions require intimate knowledge of regulations, but each position in every company does have their own legal regulations.
Cipollone v. Liggett Group, Inc.
Businesses must work with their legal teams to decide the best course of action in every move they make. In the case of Cipollone v. Liggett Group, Inc. the company was sued for failure to disclose the dangers of cigarettes in advertising. Cipollone lost the case in the United States Supreme Court. The Supreme Court ruled...