week 4 discussion question and journal entry

Slide #

Narration

Slide 1

Tammy: Welcome to Contemporary Business.

I must say, we are learning quite a bit here working with the brilliant people of Walter’s Aeroworks. As you can tell, everyone is so diversified, which paves the way for a great business environment – short term and long.

This week I will be meeting with Christopher Newman, one of our corporate attorneys, to review the ideas the company has for expansion.

Slide 2

Tammy: Good morning, Chris! Thank you for taking the time to speak with me today regarding Walters Aeroworks and the possible expansion plans for the company.

Chris: Tammy, thanks for stopping by! I’ve heard some great things about you.

Tammy: From my conversation with Cliff Walters last week, I learned how Walters Aeroworks got started with you as one of the five founders.

Chris: That is correct! This company has certainly grown since we started fifteen years ago, and now we need to make strategic choices for our future.

It’s funny - you may think why I, a co-founder, is one of the attorneys at the company. I always had been involved with the legal side of startup companies. When we formed I found myself very protective about our ideas and our company so I decided to oversee all of our trademarks, patents, filings, and other legal information a company of our nature would need as we grow. Once you meet all the co-founders you’ll see how diverse we all are from one another, which is why we have been so successful.

Slide 3

Tammy: So Chris, can you identify for me the alternatives that Walters Aeroworks is exploring?

Chris: We have three alternatives in mind at this time. The first is to expand our present manufacturing location where we are currently located or build a new one based on our business expansion plans. The second alternative is about taking the company public, and our third alternative is to expand our product lines beyond the three that we currently have.

Slide 4

Tammy: How does the regulatory environment of business impact the possible strategies that you have identified?

Chris: That is a very good question! Even though we are an employee-owned company, we still have to follow state and federal regulations with respect to how we operate the business. In addition, if we decide to expand our company beyond the borders of the United States, we also have to address the implications of international laws.

Tammy: Can you give me some examples of the laws that you are referencing?

Chris: We have to work within the federal laws such as the Sherman Act which bans:

Monopolies and restraint of trade;

The Clayton Act, which prevents any actions that would reduce or restrict competition;

The Robinson-Patman Act that outlaws price discrimination; and

The Wheeler-Lea Act that bans deceptive advertising.

Tammy: And these are just the federal laws! How about international implications?

Chris: We have to consider trade agreements like the North American Free Trade Agreement, also known as NAFTA, if we are working with customers and other businesses in either Canada or Mexico, and import/export restrictions if we are working with countries where tainted or defective products could be brought into the United States.

Last, we have to consider the local regulations present in Virginia that may impact our employees with worker’s compensation, unions, and even how much we could expand our current location if that is what we finally decide to do.

Slide 5

Tammy: Wow! I had no idea of how one business decision can be impacted by so many factors!

Chris: I haven’t even covered the consumer protection laws yet!

Tammy: How do those enter into the picture?

Chris: For example, we have to be mindful of laws like the National Environmental Policy Act that established the Environmental Protection Agency, also known as the EPA, to deal with the various types of pollution. We have to be careful about wastewater from our plant is not entering into the water table in our community and causing problems. This is another major consideration if we expand our current location.

Tammy: Are there other consumer protection laws that must be addressed?

Chris: Yes, we also have to be mindful of the Consumer Protection Safety Act with our products as well. Much of what we do is to build specialty parts and since they are put on airplanes, we need to ensure that they meet exacting standards as well as having products examined by the Federal Aviation Administration, or the FAA, to help maintain the airworthiness of an aircraft. That means the plane can fly with the parts we have manufactured!

Slide 6

Tammy: How do employee protection laws impact what you want to do here?

Chris: We have to ensure that our employees are working in a safe and legal environment, so we have to look at following rules such as the Occupational Safety and Health Administration, also known as the OSHA Act of 1970 to address the elimination of hazards that can impact the health of our workers. We do have chemicals that treat the metals we use in some of our products. Therefore, we have to make sure that we have the proper safety equipment in place to protect our people.

Tammy: What other laws are important here?

Chris: We also have to look at the Americans With Disabilities Act of 1991, commonly known as ADA, to ensure that we eliminate any barriers within the workplace or on our company campus that would impede our employees with special needs from being able to navigate here at the office. When you talk with Leslie Bentley, our HR Manager, she can give you more information regarding the specific employee protections that we must employ.

Slide 7

Tammy: Let’s go back to the alternatives that we were discussing earlier. When you finally do have the alternatives identified that you are considering, what has to take place as far as contracts are concerned?

Chris: Great question! Let’s go do an interactive exercise to talk about the requirements of a contract and why they are important.

Slide 7-1

Chris: As you know, a contract is a legally enforceable agreement between two or more parties regarding a specified act or thing.

There are four parts to an enforceable contract with the first element being the agreement. This contract ensures that parties understand the ramifications of the content specific contract.

Tammy: That makes sense that you want to know why you are doing the contract in the first place! What’s next for an enforceable contract?

Slide 7-2

Chris: The second element is consideration, which is the value or benefit that a party provides to the others with whom the contract is made.

Tammy: Can you give an example of consideration?

Chris: I sure can! If a builder hires an electrician to install wiring in a new house, then considerations are the wiring job and the resulting payment for the work. As the builder is getting the wiring completed, and the electrician is receiving the payment for completing the work each party is getting value for the work.

Tammy: What else goes into an enforceable contract?

Slide 7-3

Chris: The third element is a legal and serious purpose. What you are looking for here is the fact that the parties signing the contract are serious about why the contract is being drawn up. For example, you cannot sign a contract to fix prices for products, because this is not enforceable as price fixing is illegal.

Tammy: That seems to be logical that you are serious about wanting to sign a contract with the other parties. There is one more element, right?

Slide 7-4

Chris: Yes, the last element is capacity. This is the legal ability of a party to actually enter into an agreement. This means that you have to understand the implications of entering into a contract. For example, if you have a party that is judged to be legally insane, then any contract that they sign would not be enforceable, because they do not have the mental ability to understand what it is that they have signed.

Remember that we all sign contracts on a routine basis, for things like cell phones or when we purchase or lease a car. All of these elements come into play for something that simple, or more complex with a business agreement.

Slide 8

Tammy: Thanks for explaining the elements of a contract and giving us examples. It makes the concept so much easier to understand.

Chris: My pleasure! I hope that what we have covered today provides good input to the recommendations that we are hoping you can give us on our future business strategy.

Tammy: Thanks for your time today, and I now see more of the regulatory environment that has to be taken into consideration for any recommendations.

Chris: You are welcome, and please, if you have any other questions, stop back and see me.

Oh, and please do not forget to head over to the threaded discussion forum to take part in this week’s assigned course work.