Legal and Ethical Foundations of Free Enterprise

SubjectLegal and Ethical Foundations of Free Enterprise
Semester1st semester (autum)
Study programme:Business studies
Primary language:Slovene
This course will be taught in English language and is obligatory in the official course syllabus for the Master’s Program in Business Studies. This course is divided into two parts. The first part covers legal and ethical aspects of the subject. The second part is focused on in depth understanding of an enterprise functioning and its environment.
Pre-course requirements
Students should understand basic of macroeconomics and microeconomics as well as law, especially corporate law. Students must master basics of mathematics which makes them possible to use functions, integral and derivative also. Students should have sufficient knowledge of English language to be able to communicate with lecturers and students, to follow the lectures and understand the study materials that will be provided within the course.
  1. Students will develop a capability of autonomous understanding of legal and ethical foundations of an enterprise as well as of conducting microeconomic analysis of an enterprise on higher difficulty level.
  2. To teach students how to use in practise knowledge of economics and enterprise in the context of legal and ethical framework of a contemporary society.
  3. To develop a capability of analysing causes and consequences of economic phenomena and understanding their relation to law and ethic.
  • capability to understand the principles and the ethical and legal rules that govern the business activity in a field of freedom;
  • capability of an in-depth understanding of the microeconomic approach to the analysis of an enterprise on a higher difficulty level;
  • capability to understand the interrelated functioning of the economic laws as well as their placement in the legal framework;
  • capability to understand and analyse the functioning of a perfect competition, monopoly (and its regulation), monopolistic competition and oligopoly;
  • capability to understand and apply the game theory in order to analyse strategic behaviour.
Learning outcomes
After passing the course, the student should be able to:
  • use a basic knowledge of (corporate) law and ethic in relation to enterprise and economy;
  • evaluate the decisions that will lead to a socially acceptable and successful business action;
  • use the microeconomic market equilibrium theory and analyse the effect of tax/subsidy;
  • understand and analyse the features of perfect competition, monopoly and monopolistic competition;
  • understand characteristics of price formation in a monopoly;
  • analyse the ways of monopoly regulation;
  • understand and apply characteristics of an oligopoly as a market structure and characteristics of the functioning of a particular types of oligopoly;
  • apply game theory in order to analyse strategic behaviour of an enterprise;
  • apply the knowledge in the field of law, ethic and economy in order to be a successful entrepreneur.
Syllabus outline
I. Legal and ethical aspects
  • Legal order. Definition of order. Bases of the legal order in society: Ethics, moral, natural law.
  • Realization of the legal order. Instruments and institutions that ensure the legal order.
  • Laws of positive law. The constitution and her order. Rule of law.
  • Formation of laws in a democratic, authoritarian and totalitarian system. Surveillance on the creation and compliance of laws. Who inspects and ensures?
  • The legal order and elementary human rights and freedoms. Enumeration of the main. Freedom of enterprise.
  • Concept of freedom of enterprise. Laws subordinated to the constitution: Civil code, Penal code, Business code, labor laws and others.
  • The last word: Independent and impartial justice. Legal security.
II. Economic aspects
  • Cases of unethical business behaviour
  • Use of market equilibrium model for analysis of effects of a tax/subsidy introduction on an enterprise
  • An enterprise and perfect competition
  • An enterprise and monopoly and monopoly regulation
  • An enterprise and monopolistic competition
  • An enterprise and oligopoly (Bertrand and Cournot model of duopoly)
  • An enterprise and game theory
Types of learning/teaching
  • frontal type of teaching
  • independent work and individual study of students
Methods of learning/teaching:
  • explanation
  • discussion
  • case studies
  • solving exercises
  • including guest experts from companies in the teaching
Evaluation system and criteria
The assessment consists of two partial written exams. Each partial exam covers one set of topics (legal or economic) and contributes 50 % to the final grade. To obtain a positive finale grade (to pass the exam), each partial exam itself must be passed. To pass an exam, minimum of 50 % of all points is required.
Teaching and learning material
  • Samuelson, Paul, Nordhaus William. 2014. Ekonomija. Ljubljana: GV založba.
  • handouts of power point presentations, additional exercises and other additional study material provided via faculty intranet.
  • Articles in the Journal of Industrial Organization (different numbers).
 Office hours
  • before and after the class
  • by appointment