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ENTREPRENEURSHIP (Ms. Hawkins)

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1 ENTREPRENEURSHIP (Ms. Hawkins)
This chapter describes the importance of fulfilling legal, ethical, and social obligations. Laws and regulations that affect businesses Guidelines for establishing an ethical workplace Business response to changes in society March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

2 ENTREPRENEURSHIP (Ms. Hawkins)
UNDERSTAND YOUR LEGAL REQUIREMENTS As an entrepreneur, you will have to become familiar with the government regulations that affect your business dealings: Employees Suppliers Customers Know when to contact a lawyer! March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

3 Regulations That Promote Competition
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Promote Competition To make sure that competition is fair, federal, state, and local governments have enacted various laws (antitrust legislation). Sherman Act (discussing prices with competitors) Clayton Act (requirement to purchase one good in order to be able to buy another good) March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

4 Regulations That Promote Competition
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Promote Competition To make sure that competition is fair, federal, state, and local governments have enacted various laws (antitrust legislation). Robinson-Patman Act (charge different prices to different groups of non-retail consumers) Wheeler-Lea Act (unfair or deceptive business practices--advertising) March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

5 Regulations That Promote Competition
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Promote Competition Gov’t Agencies That Protect Competition There are two major government agencies that make sure competition remains fair: Justice Department (the Antitrust Division takes legal action against businesses involved in monopoly.) Federal Trade Commission (administers most laws dealing with fair competition) March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

6 Regulations That Promote Competition
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Promote Competition Gov’t Agencies That Protect Competition The Federal Trade Commission monitors such activities as: Price setting by competitors False or misleading advertising Price discrimination Misrepresentation about the quality, composition, or place of origin of a product March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

7 Regulations That Protect Businesses and the Public
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Businesses and the Public Laws That Protect Businesses Three special gov’t regulations give legal rights to creators of inventions, literary or artistic works, and brand names Patent (sole right to produce, use, and sell an invention for 20 years as of June 1995) Copyright (exclusive publication, production, sale, or distribution of a literary or artistic work for 70 years after the death of the author) March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

8 Regulations That Protect Businesses and the Public
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Businesses and the Public Laws That Protect Businesses Three special gov’t regulations give legal rights to creators of inventions, literary or artistic works, and brand names. Trademark (name, symbol, or special mark that can be used only by certain businesses) Examples are Band-Aid™ and Kleenex™ March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

9 Regulations That Protect Businesses and the Public
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Businesses and the Public Laws That Protect Consumers Several types of gov’t regulations protect consumers: Licenses Zoning Laws Consumer Protection Laws March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

10 Regulations That Protect Businesses and the Public
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Businesses and the Public Laws That Protect Consumers… State and local governments require some businesses to have licenses: Beauty Salons Restaurants Health and Fitness Center March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

11 Regulations That Protect Businesses and the Public
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Businesses and the Public Laws That Protect Consumers… Local governments often establish zoning regulations that control what types of buildings can be built in what areas: Residential Commercial Multiple Purpose March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

12 Regulations That Protect Businesses and the Public
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Businesses and the Public Laws That Protect Consumers… A variety of laws and government agencies protect the public (consumer laws): Food and Drug Administration (FDA) Consumer Product Safety Act of 1972 March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

13 ENTREPRENEURSHIP (Ms. Hawkins)
UNDERSTAND YOUR LEGAL REQUIREMENTS The FDA is a government agency established in 1906 with the passage of the Federal Food and Drugs Act. The agency oversees food, drugs, cosmetics, animal food, dietary supplements, medical devices, biological goods, and blood products. According to the Sanitation Defect Levels Handbook the FDA allows a certain amount of impurities in our food. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

14 ENTREPRENEURSHIP (Ms. Hawkins)
UNDERSTAND YOUR LEGAL REQUIREMENTS Can you name recent food issues concerning the FDA? Spinach (Salmonella) Peanut Butter (Salmonella) Cantaloupes Pet Food ConAgra Foods Inc. recalled Peter Pan peanut butter and other peanut items. The CDC said in a March 7, 2007 statement that 425 people in 44 states were infected with the strain of salmonella also found in the peanut products. Although the FDA reports only 16 confirmed deaths, 4,427 pet deaths have been reported to the Pet Connection Blog database. Contamination is due to melamine, a chemical used to produce durable, heat-resistant plastic. Castle Produce recalled roughly 2,560 cartons of cantaloupes delivered on or after Feb. 16 to wholesalers in California for distribution in the western states. The Dole Fresh Fruit Co. recalled 6,100 cartons of cantaloupes between Feb. 5 and Feb The CDC said a salmonella outbreak potentially linked to spinach produce, sickened at least 172 people in 18 states in October 2006. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

15 ENTREPRENEURSHIP (Ms. Hawkins)
UNDERSTAND YOUR LEGAL REQUIREMENTS The FDA is responsible for such things as the former food pyramid (currently the food plate) and nutrition food labels. The Center for Food Safety and Applied Nutrition, one of six product-oriented centers of the FDA, provides free pamphlets on food and nutrition. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

16 ENTREPRENEURSHIP (Ms. Hawkins)
FORMER FOOD PYRAMID March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

17 ENTREPRENEURSHIP (Ms. Hawkins)
THE NEW FOOD PLATE The food pyramid now belongs to the ancient world as of Nov. 21, 2011. The new wonder of the modern age of healthy eating is the "food plate," a graphic that represents portions of desirable foods such as fruits and vegetables on a plate that nutritionists hope will be easier to understand Read more: March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

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March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

19 Consumer Product Safety Act of 1972
The U.S. Consumer Product Safety Commission (CPSC) is an independent federal regulatory agency created by Congress in (http://www.cpsc.gov/cpscpub/pubs/178.html) They protect the public against unreasonable risks of injuries and deaths associated with consumer products. Report an unsafe product Report a product-related injury Find out whether a product has been recalled Get information on what to look for when buying a consumer product Receive information about ordering CPSC safety publications March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

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Consumer Product Safety Hotline March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

21 Regulations That Protect Employees
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Employees The government has enacted laws that protect employees in various areas: Hiring Firing Time Away From Work Working Conditions Minimum Wages ($5.15 per hour in GA) March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

22 Regulations That Protect Employees…
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Employees… Minimum Wage: Some states are over, under, or at the federal level of $7.25 per hour. Alabama none Hawaii $7.25 Alaska $7.75 Kansas $7.25 California $8.00 Louisiana none Connecticut $8.25 Michigan $7.40 Florida $7.67 Oregon $8.80 Georgia $5.15 March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

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March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

24 Regulations That Protect Employees…
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Employees… Subminimum Wage There some other employees who can be paid at hourly rates below the minimum wage according to the Fair Labor Standards Act (FLSA). Young workers under 20, workers who earn tips, and some other categories of employees can be legally paid at rates below the hourly minimum wage according to the Fair Labor Standards Act (FLSA). March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

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March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

26 Regulations That Protect Employees…
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Employees… Workplace Discrimination Laws exist to guard against discrimination in the workplace: Equal Employment Act (age, race, color, national origin, religion, gender) Americans With Disabilities Act (accommodation by employers with 15 or more employees March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

27 Regulations That Protect Employees…
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Employees… Safe Working Conditions The Occupational Safety and Health Administration (OSHA) enforces safe working conditions for employees. Employers must keep safety records. Employers must provide workers with special training. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

28 Regulations That Protect Employees…
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Employees… Family Medical Leave Act Businesses with more than 50 employees must provide up to 3 months (12 weeks) of unpaid leave if a serious health condition affects the employee, their child, or parent or spouse. Employees must have been employed for 1 year to be eligible. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

29 Regulations That Protect Employees…
UNDERSTAND YOUR LEGAL REQUIREMENTS Regulations That Protect Employees… Wages The Fair Labor Standards Act establishes the maximum number of hours employees can work. Other provisions include: Rules for children working under age 16 Overtime rates National minimum wage rate ($7.25 per hour) March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

30 ENTREPRENEURSHIP (Ms. Hawkins)
Rules for Employing Youth in Restaurants and Quick-Service Establishments under the Fair Labor Standards Act (FLSA) 18 Yrs. no longer subject to the federal youth employment provisions. 16 & 17 Yrs. unlimited hours in any occupation other than hazardous (motor vehicles or power-driven machinery) 14 & 15 Yrs. outside school hours; no more than 3 hours on a school day, including Fridays; no more than 8 hours on a nonschool day; no more than 18 hours during a week when school is in session; no more than 40 hours during a week when school is not in session; between 7 a.m. and 7 p.m. - except between June 1 and Labor day when the evening hour is extended to 9 p.m. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

31 ENTREPRENEURSHIP (Ms. Hawkins)
Rules for Employing Youth in Restaurants and Quick-Service Establishments under the Fair Labor Standards Act (FLSA) Under 14 Yrs. Children under 14 years of age may not be employed in non-agricultural occupations covered by the FLSA, including food service establishments. Permissible employment for such children is limited to work that is exempt from the FLSA (such as delivering newspapers to the consumer and acting). Children may also perform work not covered by the FLSA such as completing minor chores around private homes or casual baby-sitting March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

32 ENTREPRENEURSHIP (Ms. Hawkins)
UNDERSTAND YOUR LEGAL REQUIREMENTS Get Legal Advice Learn About Laws Affecting Your Business With the proper information, there are some issues you can handle yourself. Check zoning laws. Check land-use restrictions. Take a course in business law with Ms. Hawkins Check the Internet. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

33 ENTREPRENEURSHIP (Ms. Hawkins)
UNDERSTAND YOUR LEGAL REQUIREMENTS Get Legal Advice… Hire A Lawyer At some point you will need legal advice. Check with your Chamber of Commerce for a list of lawyers who specialize in small businesses. Check with other businesses in your community. Purchase a prepaid legal plan. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

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ETHICAL ISSUES IN BUSINESS As an entrepreneur, you will have to make ethical decisions about how you run your business. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

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ETHICAL ISSUES IN BUSINESS What Is Ethics? Ethics is the study of moral choices and values. It involves choosing between right and wrong. It means behaving in an honest manner. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

36 ENTREPRENEURSHIP (Ms. Hawkins)
ETHICAL ISSUES IN BUSINESS What Is Ethics? Can something be unethical yet legal? Give some examples... Slavery was legal until the 13th Amendment abolished it in 1865. • Children were allowed to work in mines, glass factories, and textile and other industries instead of going to school until the Fair Labor Standards Act was passed in 1938. • Women didn't have the right to vote until 1920. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

37 Workplace Example of Unethical Behavior
The COO and primary manager of the company recently hired a relative of his wife's friend. This person is in a 40 hour a week job. However, she is in the office anywhere from only 6 to 7 1/2 hours per day, sometimes less. She does not put any time off on her time card, so she is stealing time/pay. While in the office she is on her cell phone 80 % of the time, she watches movies streamed in through her computer, and will be on the internet shopping/surfing all other times. If she produces 4 hours of honest work a week that is a lot. This situation is bothering a lot of people in the area in which she sits. The complaints have been brought to the department lead from another supervisor. Because of the employee's relationship with the COO, the department lead will not speak to her or deal with the issues. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

38 ENTREPRENEURSHIP (Ms. Hawkins)
ETHICAL ISSUES IN BUSINESS What Is Ethics? Culture And Ethics Different cultures define ethical behavior differently. For example: Bribes are an accepted business practice in some cultures. Community elders must sometimes be consulted about business transactions. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

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ETHICAL ISSUES IN BUSINESS What Is Ethics? Codes of Ethics Even within the same culture, individuals develop different standards or codes. A code of ethics is the level of ethical behavior demanded by an individual, a business, or a culture. Some individuals have very high standards of ethics. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

40 ENTREPRENEURSHIP (Ms. Hawkins)
ETHICAL ISSUES IN BUSINESS Ethics And Business Business Ethics is the application of the principles of right and wrong to issues that come up in the workplace. Some believe that entrepreneurs need not concern themselves with ethical issues. Businesses must show consumers that they concern themselves with ethics. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

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ETHICAL ISSUES IN BUSINESS Ethics And Business… Establish An Ethical Workplace There are several reasons to do so: You want to do the right thing. You want to serve as a role model to others. You want to be proud of the way you conduct yourself, and you want others to be proud of you. Ethical behavior is good for business. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

42 ENTREPRENEURSHIP (Ms. Hawkins)
ETHICAL ISSUES IN BUSINESS Ethics And Business… Establish An Ethical Workplace… There are several reasons to do so: Employees are more likely to act ethically if they see the business owner acting in an ethical manner. Acting ethically reduces the possibility of being sued. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

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ETHICAL ISSUES IN BUSINESS Ethics And Business… Create A Written Code Of Ethics Even if you are your business’s only employee, you should create a written code of ethics. Such guidelines help employees know how to behave in certain situations. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

44 ENTREPRENEURSHIP (Ms. Hawkins)
MEET YOUR SOCIAL RESPONSIBILITIES Entrepreneurs have responsibilities to the people they work and deal with, to the communities in which they are located, and to the environment. Economist, Milton Friedman, said “the business of business is business.” What did he mean by this? March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

45 Social Responsibilities
MEET YOUR SOCIAL RESPONSIBILITIES Social Responsibilities Responsibilities To Customers Treat all customers with respect. Be honest. Avoid exaggerating the merits of your products or services. Inform customers of possible dangers of products you sell. Handle all disputes fairly. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

46 Social Responsibilities…
MEET YOUR SOCIAL RESPONSIBILITIES Social Responsibilities… Responsibilities To Suppliers Treat all suppliers with respect. Refuse to participate in dishonest schemes. Give suppliers time to fill your order. Handle all disputes fairly. If you change suppliers, let your current supplier know the reasons. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

47 Social Responsibilities…
MEET YOUR SOCIAL RESPONSIBILITIES Social Responsibilities… Respond To Changes In The Workplace In general, become sensitive to the needs of the people who work for you. Accommodate your employees’ family needs (doctor appt., parent/teacher conference, etc.). Consider flexible work hours. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

48 Respect The Environment
MEET YOUR SOCIAL RESPONSIBILITIES Respect The Environment Environmental Responsibilities Protect the environment from pollutants. Conserve nonrenewable resources, such as coal and oil, by using them efficiently. Reduce waste and dispose of waste responsibly. Use environmentally safe and sustainable energy sources. Sell products that cause little damage. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

49 Respect The Environment…
MEET YOUR SOCIAL RESPONSIBILITIES Respect The Environment… In 1970, the federal government created an agency to enforce the laws governing the environment. The Environmental Protection Agency (EPA) enforces federal laws concerning clean air and water; businesses handling hazardous materials should become familiar with EPA laws. March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)

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The End! March 27, 2017 ENTREPRENEURSHIP (Ms. Hawkins)


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