Reference no: EM132285752

Case study

Roger is a director of a major car manufacturer. This is one of the few remaining car companies yet to introduce a sport utility vehicle. Roger convinces the board to investigate forming a new division to design, build and market a sport utility vehicle. Roger also convinces the board that the first sport utility vehicle that the division introduces should be the largest yet sold to the general public.

The board set up a committee to do some research, and this committee hired a marketing consulting firm. The committee and the consulting firm both had a few reservations about such a large vehicle, but the data showed that the market could most likely support it. After much discussion, the board of directors voted in favor of creating the new division and the huge sport utility vehicle as its first product. The vote was 9 to 6 in favor of the plan.

Shortly before this vehicle was introduced, there was a major oil supply disruption that caused the price of crude oil to nearly triple. Few purchasers were found for the huge new sport utility vehicle and the company lost considerable money. A shareholder files suit against Roger claiming he violated his duty to the corporation by convincing the board to build and market the large SUV.

Discuss Roger's duties as a director and any defenses he has to the lawsuit.

Recognize the applicable areas of law

Identify the applicable principles of law

Identify the key facts

Apply the law to the facts to resolve the issue

APA Format; Organization; and grammar, punctuation, and spelling

Your analysis and solutions must be based on the principles of law, ethics, and business - not on your opinions. You MUST describe how application of the principles to the key facts support your determination of the issues, in other words, you need to show the reasoning behind your decision.