The Legal Environment of Business: A Critical Thinking Approach
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Chapter 1
Critical Thinking and Legal Reasoning
Introduction
Chapter one is the most important chapter in the text. This chapter is important because it
presents the framework for studying the legal environment of business that not only increases
students’ understanding of significant legal ideas, but also promotes critical thinking. This chapter
addresses these questions:
• Why is critical thinking important?
• What is the critical thinking model the text asks instructors to apply throughout the book?
• What are the various steps involved in the critical thinking process?
Achieving Teaching Excellence
Understanding the Importance of Evaluation
Kubasek, Brennan & Browne begin their book by defining critical thinking. They tell instructors
that critical thinking means the ability to recognize the structure of an argument and apply a set of
evaluative criteria to assess the merits of the argument. This section of the Instructor’s Manual
explains how critical thinking relates to Bloom’s Taxonomy of Educational Objectives. This
explanation will emphasize the skill of evaluation.
Bloom developed a hierarchy of six cognitive operations. The operation at the higher level
subsumes all those levels below. Here is a presentation of Bloom’s Taxonomy, from the lowest level
to the highest level:
• Knowledge: This is the lowest level of learning and is a prerequisite for all operations to
follow. This level relies primarily on the intellectual processes of recall and memory.
• Comprehension: The learner must go beyond knowledge and show understanding. Students
can paraphrase or explain something they have heard or read.
The Legal Environment of Business: A Critical Thinking Approach
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domains. Students can reassemble component parts into a new structure not previously
apparent.
The first three levels are often called lower-order thinking skills. Here are some questions that
would encourage students to develop lower-order thinking skills. The questions are related to United
States of America v. Martha Stewart and Peter Bacanovic [hereinafter Martha Stewart], the case
Chapter One studies.
3. Given the court’s decision in the Martha Stewart case, what would happen if a witness’s
The last three levels are often called higher-order thinking skills. Here are some questions that
encourage students to develop higher-order thinking skills.
1. Explain why the court discounted Lawrence F. Stewart’s [hereinafter Lawrence] testimony.
2. Explain how Lawrence’s testimony about the “$60” notation relates to the broader case against
How does the critical thinking model Kubasek, Brennan & Browne present in Chapter One
relate to Bloom’s taxonomy? Let’s look at the two:
Steps 1 through 4 of the critical thinking model correspond to the skills of knowledge,
comprehension, application, analysis, and synthesis. Steps 5 through 8 correspond to the highest
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(1988).
• Benjamin S. Bloom, ed., TAXONOMY OF EDUCATIONAL OBJECTIVES (1956).
Chapter Overview, Case Summary and Topic Outline
The Critical Thinking Model
The first four help us understand how the
court’s argument fits together.
1. What are the facts?
2. What is the issue?
3. What are the reasons and conclusion?
4. What are the relevant rules of law?
Bloom’s Taxonomy
The first three are lower-order thinking skills.
2. Comprehension
3. Application
The second three are higher-order thinking
4. Analysis
5. Synthesis
The last four steps help us e
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arguments.
5. Does the legal argument contain
significant ambiguity?
6. What ethical norms are fundamental to
the court’s reasoning?
7. How appropriate are the legal analogies?
8. Is there relevant missing information?
6. Evaluation
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It will be worth the time to study Chapter One more than instructors might have originally
planned. Instructors might want to choose an additional case and work on the case in class the way
the text authors worked with the critical thinking model using the Stewart case.
Topic Outline
I. The Importance of Critical Thinking
II. A Critical Thinking Model
1. United States of America v. Martha Stewart and Peter Bacanovic
III. The Critical Thinking Steps
A. Facts
B. Issue
C. Reasons and Conclusion
D. Rules of Law
E. Ambiguity
III. Using Critical Thinking to Make Legal Reasoning Come Alive
A. Legal Reasoning
IV. Applying the Critical Thinking Approach
Summary
To extend the critical thinking model to essays, instructors would ask:
• What Is the Issue?
• What Are the Reasons and Conclusion?
• Does the Argument Contain Significant Ambiguity?
• What Ethical Norms Are Fundamental to the Author’s Reasoning?
• Is There Relevant Missing Information?
Remember: An instructor’s goal will be to first understand an argument, then decide whether it can
accept the author’s conclusion given the evidence and reasoning the author provides.
Case Summary—United States of America v. Martha Stewart and Peter Bacanovic
Defendants Martha Stewart and Peter Bacanovic were both convicted of conspiracy, making
false statements, and obstruction of an agency proceeding, following Stewart’s sale of 3,928 shares
of ImClone stock on December 27, 2001. Stewart sold all of her ImClone stock after Bacanovic,
Stewart’s stockbroker at Merrill Lynch, informed Stewart that the CEO of ImClone, Samuel Waksal,
was trying to sell his company stock. On December 28, 2001, ImClone announced that the Food and
The Legal Environment of Business: A Critical Thinking Approach