Legal and Ethical Leadership in Management Essay Example
Legal and Ethical Leadership in Management Essay Example

Legal and Ethical Leadership in Management Essay Example

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  • Pages: 4 (1090 words)
  • Published: June 2, 2017
  • Type: Essay
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The focus of this paper is the interaction between two rival designer and manufacturing companies, Mathis Inc. and Countess Lori-Ann (CLA), and their shared retailer Normandale's.

Normandale is struggling to make a profit from selling expensive clothing created by Mathis Inc. To try and increase their profits, Normandale asked CLA to replicate the clothing at a lower cost. They provided CLA with samples and photos of the clothing to aid in the duplication process. However, Mathis discovered that the counterfeit clothing was being sold by Normandale, and has requested that they stop selling the imitation product.

Normandale's lack of compliance will be examined in this paper. The discussion will include an analysis of the ethical implications of their behavior, as well as the relevant state and federal laws regarding intellectual property and whether Mathis suffered any damages. Additionally, the paper will explore issues related to social r

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esponsibility, implementation of ethical codes, and personal and criminal liabilities. Business ethics is concerned with good and bad behavior within a business environment (Kubasek, Breenan, & Browne, 2009), while knock off products are defined as unauthorized, cheaper copies of patented, trademarked or copyrighted products or works (WebFinance Inc., 2013).

According to Josephson's (2010) analysis, Normandale violated several business ethics by secretly aiding a competitor to duplicate Mathis's clothing line without the original designer's consent. Furthermore, selling the knockoff products at a lower price was deemed unethical. These actions contradict the values of honesty, integrity, and more. Normandale's conduct is considered unethical under the Humanistic Theory as it did not contribute to the development of intelligence, wisdom, and self-restraint (Kubasek, Breenan, & Browne, 2009).

Both state and federal laws provide protection fo

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Intellectual Property (IP), which refers to property derived from one's creative efforts. Trademarks, patents, copyrights, and trade secrets are some examples of IP types (Kubasek, Breenan, ; Browne, 2009). In addition, there are other forms of IP such as circuit layout design rights, plant breeder's rights, and registered designs (Asia-Pacific Economic Corporation). The Lanham Act is a federal law that safeguards trademarks from unauthorized usage in relation to related or competing products. Some states have also established that using identical trademarks on unrelated products could reduce the mark's value (Kubasek, Breenan, ; Browne, 2009).

Trademark dilution laws were implemented by states to prevent the devaluation of trademarks. These laws prohibit the use of famous or distinctive trademarks and were eventually federally implemented through the Federal Trademark Dilution Act of 1995 (Kubasek, Breenan, ; Browne, 2009). However, laws protecting the fashion industry are underdeveloped and there is no particular IP right that protects the beauty, artistic, and functional facets of clothing design. As a result, fashion designers must categorize their designs into useful and artistic components and obtain individual protections for each component of their design (Mills, 2009).

It is unclear from the scenario whether or not the designs are protected as intellectual property, so it is uncertain how federal or state laws would apply. Mathis experienced a loss of profits due to damages caused by Normandale's actions. If there was a legal violation, Mathis would need to demonstrate that without Normandale selling knockoff versions of their design at lower prices, their sales revenue would have increased (Berkely Law, 2010). Since the articles are virtually identical, there may be some confusion for the consumer regarding who the true

designer is.

This excerpt discusses the possibility of trade dress infringement by Mathis Inc., which would require proving the nonfunctional, distinctive, or secondary meaning of the dress and the resulting confusion among consumers (Kubasek, Breenan, & Browne, 2009). Additionally, the concept of social responsibility in business is explored, with multiple schools of thought including the profit-oriented approach (Kubasek, Breenan, & Browne, 2009).

Normandale may follow the approach that companies fulfill their social responsibility duty by increasing profits for shareholders. Another social responsibility approach is the managerial school, in which businesses feel responsible to those who affect their decision-making and profitability (Kubasek, Breenan, & Browne, 2009).

Those in favor of this perspective maintain that they should assume accountability for their endeavors in pursuit of profit, with the aim of cultivating trust among both internal and external stakeholders. This, in turn, is expected to positively impact profitability and lifespan (Kubasek, Breenan, & Browne, 2009). Another school of thought is the institutional approach to social responsibility, which advocates for holding businesses accountable to the government, individual citizens, and their board of directors with respect to profit-seeking endeavors.

According to Kubasek, Breenan, & Browne (2009), the concept of professional obligation aims to counteract the overuse of the term "professional" in contemporary society. This approach suggests that becoming certified as a "professional" can increase the value and significance of the title, while also emphasizing the importance of assuming responsibility. Moreover, certified "professionals" should adhere to a disciplinary code and be held accountable for pursuing profit-driven activities.

According to the regulation school of social responsibility, no business can act in a socially responsible manner independently. To reduce profit-oriented behavior, government regulations should be increased (Kubasek, Breenan,

& Browne, 2009). To avoid similar situations, Normadale???s needs to incorporate "Fair Dealing" into its code of ethics.

The company and its representatives are required to behave honestly and ethically at all times in accordance with the code of ethic. They should act in good faith, exercise due care, engage only in fair and open competition, and treat competitors, suppliers, customers, and colleagues ethically. It is prohibited to steal proprietary information or possess trade secret information without the owner's consent. Covered Parties must not instigate such disclosures by present or past employees of other companies nor take advantage of anyone through manipulative tactics or any other unfair practice (Berkshire Hathaway Inc., 2012).

The concept of Personal/Criminal Liability pertains to financial and legal accountability, respectively. The former necessitates an individual to compensate for damages, while the latter involves breaching the law or engaging in criminal behavior. It is indistinct from the situation whether the designs are safeguarded as intellectual property. Hence, it becomes challenging to ascertain if the proprietors may face personal or criminal liability. Therefore, insufficient details exist in the scenario to determine any potential intellectual property violations.

It is uncertain which categories of intellectual property this situation pertains to, such as trademarks, trade secrets, patents, and copyrights. Normandale has significant ethical issues concerning honesty, truthfulness, and fair dealings that need attention and resolution. Relevant resources can be found at https://intellectualpropertyexplorer.com/what-is-intellectual-property/, www.law.berkeley.edu/files/bclt_PatentDamages_Ed.pdf, www.berkshirehathaway.com/govern/ethics.pdf, http://definitions.uslegal.com/i/intellectual-property, and http://www.businessdictionary.com/definition/personal-liability.html.

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