2023 journal article

Contemporary Business Law Courses: An Exploratory Study of Undergraduate Textbook Content and Pedagogical Planning

JOURNAL OF LEGAL STUDIES EDUCATION, 40(1), 119–140.

By: J. Kuzenski n 

UN Sustainable Development Goal Categories
4. Quality Education (Web of Science)
16. Peace, Justice and Strong Institutions (OpenAlex)
Source: Web Of Science
Added: June 19, 2023

What should be covered in a business law textbook for undergraduate business students? The question seems deceptively simple on first pass and yet, as it is further considered, a variety of additional questions give rise to considerations that have an impact on the answer. Some of those new questions are highly subjective and defy a simple quantitative approach to a satisfactory answer. For example, one possible answer is “whatever the major publishers believe should be included for marketability's sake,” since the top five publishers in the United States control an estimated 80% of the academic textbook market.1 Yet another answer is “everything that is relevant and can be made to fit,” and this “fitting” has become easier in the era of the online e-textbook, the term I will use in this work to refer to a variety of book forms that are produced and sold as digital copies with or without a paper-printed version. Solid cases have been made in both peer-review and journalistic literature for a litany of specialized approaches and topics, with most literature reflecting prerogatives and specializations of the author(s). All of these previous articles and essays make complete sense in the ideal course in an ideal world with unrestrained time, faculty expertise, student enthusiasm, and pedagogical horizons. The quite un-ideal course in the real and un-ideal world, however, counsels caution about such an inclusive approach for a variety of reasons. Paramount among these reasons is the inconvenient fact that in American colleges and schools of business or management utilizing a traditional semester calendar, there are fifteen weeks (give or take and subject to institutional rules and peculiarities) in which an entire core course in business law—inclusive of its two popular monikers, “Legal and Regulatory Environment of Business” or simply “Legal Environment of Business”—must be taught from start to finish. In just over 87% of business schools accredited by the Association to Advance Collegiate Schools of Business (AACSB), a single three-hour course in business law is all that is required of undergraduate students for graduation.2 Even then, although I will use “business law” for purposes of parsimony to include all varieties of approaches to the class, it is important to recognize changes in the discipline of business and management that have changed attitudes among faculty and deans over the past fifty-plus years that may counsel for more than a one-size-fits-all approach. Traditional “business law,” which was significantly more quasi-law-schoolish in its approach and in particular satisfied colleagues in accounting-related disciplines, was a boon for that purpose. As businesses changed over the years and business/management schools kept pace with those changes, an honest debate developed over whether a more public policy-oriented approach was more useful to students. This debate continues to simmer today.3 Also noteworthy is the fact that business majors, like their peers in other disciplines, typically take between fifteen-to-eighteen credit hours’ worth of three-hour courses in a given semester, so a professor teaching any course—much less the business students’ often-feared, foul and foreign “required law course”—must tread with caution in setting expectations of breadth and depth in the material that is a passion to the instructor with a J.D. and several bar memberships but not to most of the students who are doing lots of case studies and group work in marketing, human resources, supply chain and the like. Save for economics, which may or may not be in the business school at all at University X, no common business major is typically in the top ten undergraduate majors of law school applicants year after year, and this was certainly true again in 2020–21 according to Law School Admissions Council (LSAC) data.4 Business students are often too eager to take higher-than-mean starting salaries straight out of their undergraduate studies, or have options like the ubiquitous M.B.A. program tempting them with promises of higher academic credentials and possibly even higher salaries and work status, if they opt for that path of graduate or professional education.5 And, of course, even in a world of e-publishing, larger and more inclusive textbooks come with larger price tags—even if a publisher is able to forgo traditional expenses of more paper, thicker binding, and other materials in the production of a book, there are still marketing costs, expanded layout, editing, and production costs; perhaps intellectual property or other licensing expenses; and the like. These factors drive up the cost of an excessively large book to the end user. This fact may be lost on some subset of undergraduate business law textbook author-attorneys, themselves used to the law school norm of one-semester, one-class casebooks of several hundred dollars each, a thousand-plus pages, and a comprehensiveness that is highly suitable for the professional study of law, but for undergraduate one-semester business students, not so much. These observations are merely the tip of a very large iceberg intended to start the process of thinking about and discussing the initial questions that a considerable review of the scholarly literature suggests have not been widely or directly addressed in that medium since 19846—what of significance is or is not in the most widely used business law textbooks today? What should be in an undergraduate business law textbook at its core? What should not necessarily be for the sake of efficiency of actual utilization, teachability, or a reasonable balance of breadth and depth of subject matter? There is a widespread understanding that most business undergraduates will need some exposure to the law to maximize their opportunities to succeed as businesspeople or managers, but the extent of that exposure could easily become overkill if we lose sight of the fact that these are not law students we are teaching. They are business undergraduate students who may have no further interest in legal education. My purpose in this article is to provide an exploratory study and some possible answers—or at least lines of development for future research into more satisfying answers—into these and related questions. In a broader scope, the significance of the one-semester (or introductory) core course in business law at a curricular minimum is well established. AACSB lists business law as a “commonly observed business discipline” with numerous references in its interpretive guidance for program accreditation.7 Several surveys have identified legal knowledge as one of the most relevant subjects for business executives. In one study, 902 senior business managers taking part in a graduate-level executive education program at the University of Michigan were asked to rank the importance of widely recognized business subfields to their respective careers.8 Law was identified as at or near the top of the list.9 In a similarly sized study of business graduates who were then in the developing stages of their careers, 71% replied that their business law undergraduate courses were helpful to them in making business decisions, 67% responded that these courses were as helpful as other non-law courses, a majority indicated that they had regular business dealings with lawyers, and more than 88% declared they were “comfortable” working with lawyers as a result of their undergraduate training.10 Taking the legal education–business leadership connection one step further, a Harvard Business Review analysis of litigation risks in 70,000 cases between 1992 and 2012 determined that businesses with an attorney as a Chief Executive Officer experienced up to 74% less litigation and spent considerably less on legal matters than non-lawyer-run companies, with subsets of high-growth and high-litigation risk companies actually producing higher firm value over time.11 The appropriate title for and content of a core “business law” class generally have received fair coverage in the literature as well, with one well-documented and engaging study from Carol J. Miller and Susan J. Crain pointing out that questions of both what to do in these classes and what to call them have been around in professional education circles since the 1950s, with some inquiries being registered as early as the turn of the twentieth century.12 Among other useful observations from their research, these scholars make the point that there is a content difference between courses labeled “Business Law” and “Legal Environment” (or alternatively “Legal and Regulatory Environment”) among AACSB-accredited schools. The former typically tends to place much more emphasis on formal rules and procedures of the law with a substantially heavier emphasis on contracts and sales while the latter more commonly stresses the interplay of law, public policy, and regulatory factors in overall business decision-making.13 Perhaps another dimension of the inquiries posed in this research is that a rose by any other name could be one of several types, each with its own necessities for proper care and feeding. If that is the case, however, are authors or publishers of longer and more formalistic, inclusive works giving due consideration to titles of those works prior to using labels such as “legal and regulatory environment” or “legal environment”? Does the distinction still matter in business law publishing of the 2020s, or are we now comfortable with using any of these labels interchangeably? Given the ease with which the weightiest sixty-chapter book can now be custom-reduced to, say, fifteen chapters in digital or loose-leaf formatting by publishers, perhaps the distinctions are less meaningful than they once certainly were. The questions of orientation and goals of these courses raise a somewhat more nuanced issue than the one regarding types of textbooks Donnell described in his 1984 study. At that point in time and after developing from what essentially were very short and simple guides directed at a lay audience of businesspeople to drive sales, the first academic business law books tended to be one of several forms: (1) devoted to the functional (problem-centered) approach, tailored in narrative to business professionals; (2) the legal casebook, written by lawyers who were often attached to law schools and therefore who believed that approach was also appropriate for business students; and (3) a hybrid of functional and case law-inclusive works that attempted to be a sort of “law school lite” approach straddling those disciplines.14 James E. Holloway has argued that a hybrid approach is preferable because such an approach does not lose sight of the need for the business analytic, while simultaneously emphasizing a legal mindset.15 A functionalist understanding of key public policy goals generally is essential to a good, albeit fuzzy, grounding in the subjects covered. Legal cases can then illustrate the way in which precedents are used (or changed) and allow for application of the rules of law to real-life conflicts. By learning to read and understand these cases, students may acquire a more practical or applied sense of the course content.16 On a review of the best-selling, contemporary, undergraduate business law textbooks, I discovered that the casebook approach was clearly left behind at the law school's doors in favor of another format, typically what Donnell identifies as a hybrid approach. The typical emphasis in major undergraduate business law textbooks is largely functional for business managers, albeit with cases amply used in many titles for the purpose of providing exemplars that bridge the gap between business and law. Given that in many other business subfields the “case study method” is a popular pedagogy for teaching and student discussion or written reports, one might argue that the same method is also a natural fit for business law. Instructors of business law, however, must be aware that the lawyer's case study is quite a different creature from the business case study, and both attorneys and businesspeople review their own kind for quite different takeaways. Lawyers review cases because of the significance of stare decisis and the establishment of rules of law, exceptions to those rules, or limiting/expanding language applied to existing doctrines by certain courts. There is typically little gray area between the black and white of what lawyers take away from their case studies; the major discussable points, typically laden with specialized procedural questions, revolve around issues of reversible error and points of appeal. Business case studies, on the other hand, and there is no shortage of them provided by many outstanding internet support services for non-law business professors (and comparatively few for business law professors), are designed to provoke thought about an actor faced with a situation and how they freely chose to resolve it or ride it out. Non-legal business case studies facilitate student discussion about crisis management, board of directors’ decisions and actions, and other subjective issues of the like involving autonomous actors who did something well or not-so-well and then faced consequences for their processes or deliberations.17 Certainly, the case study approach could be adapted to a legal environment classroom as well, particularly in dealing with tort risk management,18 contract negotiations, and related issues. But business students take a myriad of classes in various subfields that use the same intellectual toolkit for the presentation of, and resolution to, “the case study.” Learning how to read and extract important content from a human resources case study may not be that intellectually different from doing so in organizational behavior, supply chain, or entrepreneurship. In a standard one-course presentation of business law, however, the toolkit usually has to include an appreciation for the different approaches and takeaways that legal professionals require to make use of the legal case study. More precious time, space, and effort must be devoted, therefore, to adding specialized tools to facilitate student comprehension of why “all these cases” appear in between the bullet points and simple textual descriptions of a business law text. For a professor who incorporates significant case law into their curriculum, the task of lecturing on and discussing the case citations within the confines of the typical semester is daunting, at the very least. To return to the central questions of this article and develop enough information to offer a reasonably informed discussion about their resolution, it is useful to think about some of the major variables that would move toward that end. Certainly, at least a basic analysis of the content of most-popular business law textbooks is a good start down that road. Additionally, a look at how faculty are actually teaching the courses using these books as reflected in a collection of course syllabi is also worthwhile. Some indication of the pedagogy utilized in these courses would be helpful, which might also be extracted from the syllabi. Finally, are the subjects offered in the books and also taught in lecture- or discussion-based (e.g., “flipped”) business law classrooms the ones that newly minted businesspeople and managers will actually encounter in the conduct of their businesses most frequently? What data are available to allow us to make informed and reasonable judgments about the answer(s)? Eleven popular and widely used undergraduate business law textbooks were reviewed for this study, as determined by an index of major online book websites sales, rental rankings, and college/university bookstore “adopted textbook” data for courses identified as the school's main or gateway undergraduate business law class in its college or school of business administration or management. The aggregate market share enjoyed by this collection of books is not specifically known in this study, but nineteen of the twenty courses used as cases in later analysis used one of these books, with the sole outlier being one institution that used a free open textbook copyrighted in 2003. Not surprisingly, the books all came from one of the “big three” contemporary publishers in the U.S. college textbook market—Cengage, Pearson, and McGraw Hill. Aggregate descriptive statistics for the books produce eye-popping numbers in terms of both the chapter counts and total pages provided: the mean chapter count was 34.36 (range = 24–52 chapters), and the mean page count was 1,007.27 (range = 672–1632 pp.). These data provided a basis for impressions about the nature and usage of the textbooks adopted for and being used in core business law classes across the United States. How much content across how many subfields of law is being offered? How much of that content is actually used or incorporated into class assignments given a fixed and relatively uniform semester length, as evidenced by course syllabi? Does this content align reasonably well with what we should be teaching business students about the law, or do they over- or underperform in that regard? The final question there is a more subjective one, of course, and seems likely to reflect much of the variance in business law syllabi seen from school to school, or even between different sections of the same course offered within the same school. Because what is being taught is best reflected in course syllabi, the next portion of the research task was to collect and scrutinize syllabi for assigned subjects. Additionally, the nature of the pedagogical structure of the course is important to determine. How are students expected to learn textbook content? A traditional college or university course in business or law is typically lecture-oriented with the instructor presumption that students have consumed daily or weekly readings in the textbook and other sources.19 Lecture time then uses either a traditional disquisitive or Socratic method to explore course topics with the professor serving as the linchpin. The professor will distribute key facts, examples, and other information, in addition to guiding the discussion. Increasingly in the digital age, however, both textbook publishers and third-party startup businesses have found rampant room to run in what I loosely formally describe as the “online educational task and evaluation space,” and less formally describe as the “robocourse” industry. They go well beyond merely the delivery of online content such as e-textbooks, diving into all manner of prepackaged online content delivery and student evaluation tools designed to automate routine grading processes. Particularly with the maturation of the online higher education industry, robocourse technologies are proliferating by leaps and bounds,20 and a combination of traditionally anecdotal and increasing scholarly evidence suggests that in courses that use higher numbers of robocourse applications, faculty (if not students) feel more comfortable assigning more content throughout the semester.21 Quantity of content, with its commensurate risk of a less watchful eye on quality of comprehension, becomes the measurable metric that drives this market.22 For the purposes of being able to evaluate both textbook utilization levels and the degree to which courses reviewed may be robocourses, online syllabi of business law courses were found in a standard internet search engine (Google) using searches inclusive of “business law,” “legal environment,” and “legal and regulatory environment.” The documents were then reviewed and coded with the goals of determining values for both of these variables. I defined a robocourse for this study as one in which two-thirds or greater of the student's final grade was determined by student performance on one or more automated content delivery systems that were either integrated into the course's online Learning Management System (LMS) (e.g., Blackboard, Moodle, etc.) or required separate student logins to complete work that was reported back to the instructor. The textual artifacts (i.e., syllabi) were taken in the order of presentation on randomly selected web pages of the search results and then subjected to a number of exclusion criteria. Those criteria were that (1) the syllabus clearly had to identify an assigned textbook and a course schedule indicating assigned chapters from that textbook; (2) the grading scheme had to indicate weighted assignments and their form clearly; (3) the course had to be offered within an AACSB-accredited school/college of business/management and (4) offered at the sophomore (200/2,000) level or above, but (5) not a graduate-level (500/5,000 or higher) course. No attempt was made to inquire further as to the curriculum status of these courses, for example, whether the course was a stand-alone, one-course offering in business law within its college/school, was the first of several intended to be taught as a series over multiple semesters, or whether in either of those scenarios, it was a core (required) or elective credit. Using these criteria, a final (and small, but analytically valid for descriptive statistics) number of 20 cases was derived demonstrating a respectable cross-section of public and private schools from across the United States (18 states) of a variety of types—inclusive of several large and prominent Carnegie research universities, several small–medium institutions, and a handful of regional colleges. There were no statistically significant differences in a two-tailed t-test between the percentage of chapters utilized in the assigned textbook by public/private status (p = −0.681) or size of institution (p = 0.281). As hypothesized, however, group differences between robocourse and non-robocourse offerings demonstrated high significance between groups (p < 0.001) with respect to the chapter utilization rate of assigned textbooks. The mean textbook utilization rate across all institutions was 60.9%, with a range of 27%–100% and a standard deviation of 22.382%. For the seventeen non-robocourses in this dataset, the mean was 55.47%, but for the three robocourses, it was 91.67%. These data suggest that for any given required business law textbook in an undergraduate business class, most students will not use roughly 40%–45% of the work they have purchased for the course. Students who are assigned significantly larger portions of such textbooks are far more likely to demonstrate an understanding of subject matters covered using automated grading, presumably without faculty intervention or review. In both types of classes, but particularly worrisome to a more automated business law class employing more robocourse technology, the rapid proliferation of commercial internet “online help” (or cheating, depending on one's perspective) websites with prepackaged and well-indexed answers to known robocourse evaluation questions poses a greater problem. It is increasingly easier for students with a basic knowledge of online searches but no burning desire to master business law course content to open an online assignment, find all the answers to questions for which they have paid on a third-party commercial site, and then to complete the assignment with a good grade and little to no comprehension of the professor's student learning goals in assigning the work.23 Especially in an era that started before the COVID-19 pandemic increased pressures on institutions to maintain cost-effectiveness and reduce fees and added expenses for university-level students,24 and exacerbated by some situations in which an unabridged textbook costs considerably more than an abridged or shorter alternative book, this seems to be a critically important consideration in business law faculty's decision-making process about textbook adoption. There is a useful if somewhat fragmented body of both quantitative and qualitative data addressing the question of what the biggest legal issues for businesses are in their day-to-day operations. Previous research has established that the size, type, and sector of business operations will have some impact on the attempt to create a “Top Ten” list or similar guidance, because such a list for a small family entrepreneurial startup is likely to be considerably different from that of a Fortune 500 corporation. At the same time, however, there are common legal risks to all businesses,25 and it is sensible to reason that at the very least these issues are a bedrock of required content in an undergraduate business law class and textbook. Quantitative data are plentiful, primarily from federal and state court administrative bodies, on cases filed, litigated, and resolved within their respective systems, but methodological issues abound in responsibly parsing these data to ensure that there is no double-counting of cases, causes of action are clearly identified, and the like.26 Legal practitioners and their firms specializing in or doing large-scale trade in business defense work also have their lists, and many seem eager to share their short lists of the most perilous situations for businesses large and small on a variety of web pages, blog posts and other electronic media in the digital age.27 One of a certain methodological bend might be more persuaded by one of these approaches over the other, specifically the empirical rigor of big data from case filings vis-à-vis practitioners’ actual experience in matters handled by their firms in the routine course of business. Each measurement comes with its own sources of potential measurement error. For the purposes of this exploratory work, however, I have made an attempt at compiling some reasonably informed inferences from both sources. There are some common legal risks to all businesses regardless of the methodology used to identify them, and a review of these two sources of data may more clearly identify what risks those are. For federal district courts, quantification of filed cases and identification of incorporated business entities as parties is made easier by the classifications of causes of action on the Civil Cover Sheet, Form JS-44, last revised in April 2021.28 Each of the thirteen broad, general categories has more specific subcategory claims within, leading to the ability to analyze patterns in filings that have produced what are referred to as the “Big Six” causes of action—contracts, “recovery” contracts, torts, civil rights, prisoner petitions, and Social Security claims. These causes of action, which come with their own measurement issues as described by Moore, nevertheless typically produce about three-quarters of the civil litigation brought to the federal district courts.29 Comparing Moore's data with more recent data from the Administrative Office of the United States Courts30 and controlling for prisoner petitions and Social Security actions, both of which seem to have a more limited utility in the context of the teaching of business law basics, a rank ordering of the frequency of causes of actions still consistently emphasizes (1) torts,31 (2) contracts, (3) property (predominantly now intellectual property, but with real property issues on the rise), and (4) civil rights, which ostensibly could be taught as a specialized unit or in the broader context of federal constitutional law. Rolling five-year data of civil case filings from twenty-three state court systems are generally supportive of these findings except for the dramatically larger share of the litigation pie enjoyed by contract cases.32 Of the 9.95 million civil cases filed in these states’ courts of first impression, 19.6% were primarily non-debt collection and non-landlord/tenant contract matters, with torts comprising only 3%—eclipsed by small claims actions, which are often distributed between tort, contract, and property issues (13.3%) and probate actions (7%).33 When simple debt collection and landlord/tenant disputes are added to the contract figures, the percentage of contract causes of action in state trial courts soars to a whopping 60% of cases.34 Among the “Big Two” of contracts and tort cases in state courts analyzed by the National Center for State Courts in 2001, to give some nuance regarding from where these cases arise, torts are dominated by motor vehicle accidents (52.4%), followed by premises liability (17.1%) and medical malpractice (15.0%) as the only others in double-digit percentages.35 Among contract cases, seller plaintiff (32.4%) and buyer plaintiff (22.0%) cases regarding breach are the top two subcategories, with general fraud claims (17.5%) being the final double-digit percentage of cases.36 Rental/lease agreements and employment (including discrimination claims) are at roughly 7% each, with partnership, tortious interference, and other claims all producing less than 2% of litigation in these courts.37 These objective data generally support the advice of attorneys practicing business law in the field, with limited exception, on a review of short articles or blog posts from a variety of solo practitioners, law firms, and/or business legal information sites across the country. These resources were found by internet engine searches using keywords such as “most common,” “most likely,” “biggest,” and “most dangerous” as adjectives and “issues,” “problems,” “dangers,” “legal risks,” and the like for “businesses” or “business *” (wildcards were used in many searches to maximize search results). After excluding content that was not specifically dedicated to the question of identifying the weightiest legal risks facing business ventures, a total of twenty-five sites were included in content analysis and rankings of their lists of between five and eleven “top concerns” for businesspeople. In percentages of sites reporting certain topics as most critical, contracts were mentioned by 100% of the sites a