Managers play a major role within any company. Not only must they understand the business of the company, but they must also possess legal astuteness. According to Bagley,
Legal astuteness is the ability of a manager to communicate effectively with counsel and to work together to solve complex problems. For example, legally astute managers can (1) negotiate contracts as complements to trust building and other relational governance techniques to define and strengthen relationships and reduce transactions costs, (2) protect and enhance the realizable value of the firm’s resources, (3) create options through contracts and other legal tools, and (4) convert regulatory constraints into opportunities. Legal astuteness has four components: a set of value-laden attitudes about the importance of law to the firm’s success, a proactive approach to legal issues and regulation, the ability to exercise informed judgment when managing the legal aspects of business, and context-specific knowledge of the law and appropriate use of legal tools (Bagley, 2013, p.11).
With each component, social media marketing manager who utilizes social media outlets, such as Facebook, for consumer transactions, mitigate the risk doing business through cyberspace.
Having a set of value-laden attitude is essential when doing business in the cyberspace. Managers must consider the success of the business. The laws and regulations are guidelines to help managers determine the risks and opportunity while doing business through cyberspace by ensuring that the business is legal. Managers act proactively seeking out legal advice about the business that is in compliance with laws and regulations. Using managerial judgment is also key when managing the legal aspect of a social media outlet. At times, managers may have to take legal action in regards to the business. If a company is being sued by someone, the manager can make an informed whether to continue the lawsuit in court or deal with the issue within the company. Lastly, legal astute managers can utilize legal tools for increasing realizable value while managing risks. They should:
Evaluate the opportunity and define value proposition (is the ideas protected), assemble an appropriate team (choose appropriate form of business entity and issue equity to founders early), raise capital (sell stock in exempt transaction), develop, produce, market, and sell products or service, and harvest (negotiate and document arrangements with underwriter or investment banker) (Bagley, 2013, p.11).
With any business, various issues will arise with consumers who may make purchases from businesses that provide links via social media. Many may think the only way of resolving these issues is through court, but there are other alternative methods for resolving disputes. Two alterative solutions are arbitration, mediation, and negotiation. Arbitration allows a third party to look at the evidence of the case and imposes a decision in which one or both...