Social Responsibility of Business and Government CHAPTER 4 4/15/2017 4 Social Responsibility of Business and Government 4-1 Social Responsibility 4-2 Government Protection Activities 4-3 Government Regulation and Assistance ITB

LESSON 4-1 Social Responsibility Goals Describe social responsibility issues. Identify benefits and costs of social responsibility. Explain the purpose of a code of ethics. Chapter 4

Key Terms social responsibility non-renewable resource ethics business ethics code of ethics Chapter 4

SOCIAL RESPONSIBILITY ISSUES refers to the duty of a business to contribute to the well being of a community. A broadened social responsibility of business calls for more attention to social concerns such as: Environmental protection Conservation- saving scarce natural resources (Goal for many companies) Some can’t be replaced which is called a non-renewable resource (IE: Gas, Oil, Copper) A socially responsible business takes action to improve or change operations that cause pollution. The Environmental Protection Agency (EPA) monitors and enforces water and air quality standards set forth by the government. Workplace diversity Businesses are more and more sensitive to the role of women, ethnic groups, the physically challenged, and older workers. Major challenge involves learning how to manage a work force made up of the diverse cultures in society American with Disabilities Act (ADA) has caused major improvements to be made toward accommodating workers who are physically challenged. Age Discrimination in Employment Act bars employers from using age as a basis for employment decisiongs (hiring, promotions, or terminations). Protects persons aged 40 and older. Chapter 4

SOCIAL RESPONSIBILITY ISSUES cont. Job safety Workers should be able to work in an office or factory free from the risks that could cause accidents. Work environment should provide full protection from fire and other hazards. Workers need to know how to manage the unexpected. Safety also involves employee training in how to work safely and what to do in case of an emergency. Most employers have put a variety of programs into practice to protect workers Federal and State governments have passed laws to make the workplace safer. Occupational Safety and Health Administration regulates and enforces safety standards. Employee wellness A healthy workforce is a productive workforce Businesses do a number of things to promote a healthy lifestyle like stop smoking seminars, weight loss programs, and counseling for employees with drug problems Clauses that relate to employee well-being are often included in labor contracts and company policy manuals. These clauses are conditions or work that pertain to the health and safety of employees while on the job. Some companies sponsor sports teams and encourage employees to take part. Chapter 4

>> C H E C K P O I N T What are four areas of social responsibility that may require the attention of business? Chapter 4

SOCIAL RESPONSIBILITY EVALUATION Benefits Expanded justice for groups of a society Enhanced company image Reduced need for government actions Improved quality of life in a community and around the world Increased awareness of social issues among workers, consumers, and others Chapter 4

SOCIAL RESPONSIBILITY EVALUATION (continued) Costs New nonpolluting or safer equipment Building repairs to remove risks Wellness and rehabilitation programs Social projects sponsored by a company Spending on social programs must be at a suitable level so a business can still earn a reasonable profit! Chapter 4

>> C H E C K P O I N T What are the main benefits of social responsibility? Chapter 4

BUSINESS ETHICS- rules about how businesses and their employees ought to behave. Ethics are rules of conduct Code of ethics- a set of rules for guiding the actions of employees or members of an organization. Code must be worded in terms of acceptable behavior rather than forbidden action. Can be tricky! Ex: Should a company expand into a profitable market in another country where doing business requires giving expensive gifts to key government officials? Ex: Should a company continue to produce a popular product after it discovers a minor defect in it? American Express Blue Box Values Ethical conduct guidelines Executives who show strong moral character and make ethical business decisions set the ethical standards for a business. Companies set up educational programs to promote honesty and integrity ranging from personal phone calls during work hours to taking supplies for personal use (Stealing) Guidelines to follow when considering if something is ethical: Is the action legal? Who is affected by the action and how? Does the action violate professional or company standards? Conflict of interest is when an action by a company or person results in an unfair benefit. EX: Person serving on the board of directors required that the company buy items only from businesses that he owns or controls. Chapter 4

>> C H E C K P O I N T What is the purpose of a code of ethics? Chapter 4

LESSON 4-2 Government Protection Activities Goals Identify the roles and levels of government. Explain government protection activities. Describe types of intellectual property. Chapter 4

Key Terms contract patent copyright trademark Chapter 4

GOVERNMENT IN SOCIETY Roles of government (continued) Providing services for members of society Protecting citizens, consumers, businesses, and workers Regulating utilities and promoting competition Providing information and support to businesses Buying goods and services Hiring public employees Raising revenue Chapter 4

GOVERNMENT IN SOCIETY Levels of government (continued) Federal government State government Local government Chapter 4

FEDERAL GOVERNMENT Oversees the activities that involve two or more states or other countries. Regulates foreign and interstate commerce Interstate Commerce dealings involves companies in more than one state. (I 95) Chapter 4

STATE GOVERNMENTS Regulate business actions within their own borders Assign some of their legislative power to local governments Intrastate Commerce- refers to business dealings involving companies that do business in only one state. (PA-512) Chapter 4

LOCAL GOVERNMENTS Include county boards and city or town councils Provide services needed for an orderly society, such as police and fire protection Chapter 4

>> C H E C K P O I N T What are the three levels of government? Chapter 4

GOVERNMENT PROTECTION ACTIVITIES Worker protection As a worker you have a basic right to safe working conditions. Government inspections and regulations or work areas help reduce the number of job-related accidents. Prejudices and personal biases must NOT affect a hiring decision. Contract enforcement Contract is an agreement to exchange goods or services for something of value, usually money. May be written or unwritten Contract Basics Cont on next slide Chapter 4

Contract Basics cont. Agreement- an offer must be made and an acceptance must occur. Competent Parties- must be legal age and mentally competent Consideration- something of measurable value must be exchanged. Legality- product or service legally sold. No fraud or deception exists in the agreement Chapter 4

>> C H E C K P O I N T What are the main elements of a contract? Chapter 4

PROTECTION OF INTELLECTUAL PROPERTY- is purely intangible with no physical characteristics Patents- gives the inventor sole right to make, use, or sell the item for 17 years. Copyrights-protects the creative work of authors, composers, and artists. Trademarks- word letter or symbol linked with a specific company or product. Chapter 4

>> C H E C K P O I N T What are three types of intellectual property? Chapter 4

LESSON 4-3 Government Regulation and Assistance Goals Explain actions by government to regulate business. Discuss efforts of government to assist businesses. Identify methods used by government to raise money. Chapter 4

Key Terms public utility monopoly antitrust laws revenue Chapter 4

REGULATORY ACTIVITIES Business activity in the US is structured by the producers and consumers but government DOES get involved in some areas such as: Regulation of utilities Public utility is an organization that supplies a service or product vital to all people (EX: water and electric) Government regulates these companies and the rates they charge have to be approved by government agencies. Moving toward a deregulation where competition can be introduced. Prevent unfair business practices Government attempts to promote fair competition. Monopoly exists when a business has control of the market for a product or service (PRICES ---HIGH) When competition is present then the consumers get the best values at a fair price. Antitrust laws- prevent unfair business practices such as false advertising, deceptive pricing, misleading labeling Chapter 4

>> C H E C K P O I N T Why does government regulate utilities? Chapter 4

Government buys goods and services GOVERNMENT ASSISTS BUSINESS -Data gathered by government such as census can help businesses with planning or potential customers in a certain area. -Can also help provide loans or financial aid due to flooding, hardship, droughts. Government buys goods and services All levels of government make up about 20% of all the goods and services produced in the US Many businesses depend on government contracts (EX: govt. pays businesses to construct highways and build schools) Government employs workers Single largest employer in US 1 of every 9 workers is a public employee Public defenders, meat inspectors, teachers are all examples Chapter 4

>> C H E C K P O I N T How does government assist business? Chapter 4

GOVERNMENT RAISES MONEY -must have a way to fund operations and pay wages to workers -Fines for traffic violations; fees and licenses provide revenue Taxes Income tax- the more you make the more they take Property tax- value of land and buildings Sales tax- tax on goods and services (PA –6%) Paying taxes is a duty of citizens and businesses Borrowing Government borrows by selling bonds. When you buy a bond, you are helping to fund services provided by the government. Bonds issued by the government are backed by the “full faith and credit” of the federal government and they become a debtor and must pay back bond with interest. Chapter 4

>> C H E C K P O I N T What is the difference between tax revenue and borrowing by government? Chapter 4