4 Social Responsibility of Business and Government C H A P T E R 4 Social Responsibility of Business and Government 4-1 Social Responsibility and Business Ethics 4-2 Government Protection Activities 4-3 Government Regulation and Assistance

4-1 International Business Basics Goals Describe social responsibility issues Identify benefits and costs of social responsibility Explain the purpose of a code of Ethics

Social Responsibility Issues Social Responsibility – refers to the duty of a business to contribute to the well-being of a community A business must weigh the interests and concerns of many groups. Protection of the environment Inclusion of minorities and women in the workplace Employment of physical challenged and older workers Healthy and safe work environments

Environmental Protection Conservation – saving scarce natural resources. Some natural resources can not be replaced Non-renewable Resource – a natural resource that cannot be replaced when used up. Gas, Oil, Minerals (Copper and Iron) Pollution occurs when the environment is tainted with the by products of human actions

Work Place Diversity Businesses are more and more sensitive to the role of: Women Ethnic Groups Physically Challenged (ADA) Older Workers Members of these groups must have equal access to education, training, jobs, and career advancement

Job Safety The work environment should provide full protection from fire and other hazards Workers need to know how to manage the unexpected Employee Training Safety standards are regulated and enforced by agencies Occupational Safety and Health Administration (OSHA)

Employee Wellness A healthy workforce is a productive workforce Business do a number of things to improve the health of a work force Stop-smoking seminars Counseling for Employees w/ drug problems Weight-loss sessions Clauses are often included in labor contracts that relate to employees well-being

Checkpoint #1 What are four areas for social responsibility that may require attention of business? Environmental Protection Work place diversity Job Safety Employee Wellness

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

Social Responsibility Evaluation Costs New nonpolluting or safer equipment Building repairs to remove risks Wellness and rehabilitation programs Social projects sponsored by a company

Checkpoint #2 What are the main benefits of social responsibility? 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

Business Ethics Ethics – principles of morality or rules of conduct Business Ethics – rules about how businesses and their employees ought to behave A code of ethics can help a business identify proper employee behavior

Code of Ethics A set of rules for guiding the actions of employees or members of an organization Address topics such as confidentiality of business information Even with a code of ethics, the choice of proper behavior cause dilemmas for decision makers within a business

Ethical Conduct Guidelines Ethical conduct of a business is greatly determined by its top management Ethical conduct guidelines Is the action legal? Does the action violate professional or company standards? Who is affected by the action and how?

GUIDELINES FOR WRITING A CODE OF ETHICS Determine the purpose of the code. Tailor the code to the needs and values of the organization. Consider involving employees from all levels of the company in writing the code. Determine the rules or principles that all members of the organization will be expected to adhere to. Include information about how the code will be enforced. Determine how the code will be implemented and where it will be published or posted. Determine how and when the code will be reviewed and revised.

Checkpoint #3 What is the purpose of a code of ethics? The purpose of a code of ethics is to guide actions and decisions of employees or members of an organization.

4-2 Government Protection and Activities Goals Identify the roles and levels of government Explain the role of government protection and the legal system in business Describe types of intellectual property

Government in Society Government plays a role in all economic systems Our role as a citizen and voter has an effect on the decisions and actions taken by government The role of government in the economy often changes as newly elected officials take office.

Roles of Government 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

Levels of Government Federal Government – to oversea the activities that involve two or more states or other countries Interstate Commerce – business dealings involving companies in more than one state State Government – regulate business actions within there own boarders Intrastate Commerce – business dealings involving companies that do business in only one state Local Government – include county boards and city or town councils

Checkpoint #4 What are the three levels of government? Local State Federal

Government Protection Activities Government protects your rights in a number of ways: Citizens are protected through police and fire-fighting services The armed forces provide for national defense National security is a chief concern of the federal government

Worker Protection As a worker, you have a basic right to safe working conditions Government inspection and regulation of work areas help reduce the number of job-related accidents More government regulations result from the need to protect the basic human rights for workers

Contract Enforcement Contract – an agreement to exchange goods or services for something of value, usually money Contracts could be written or unwritten 4 basic elements to be enforceable: Agreement Competent Parties Consideration Legality

Legal System Enforces laws and government regulations Two types of cases: Criminal Case – brought for violations of criminal laws Civil Case – have a plaintiff who asks the courts to take action against a defendant

Checkpoint #5 What are the main elements of a contract? Agreement Competent parties Consideration Legality

Protection of Intellectual Property Intellectual Property – is purely intangible, with no physical characteristics – a person can not touch it. Patent – gives the inventor the sole right to make, use, or sell the item for 20 years Copyright – protects the creative work of authors, composers, and artists Trademarks – a word, letter, or symbol linked with a specific company or product.

Checkpoint #6 What are three types of intellectual property? Patents Copyrights Trademarks

4-3 Government Regulation and Assistance Goals Explain actions by government regulations Discuss Efforts of government to assist businesses Identify methods used by government to raise money

Regulatory Activities Business activity in the United States is structured as a private enterprise or free market system Private organizations own the factors of productions Government does not get involved in some areas of business activities. Regulating Utilities Preventing Unfair Business Practices

Regulation of Utilities Most goods and services you use come from private businesses (mostly free of gov’t regulation) Public Utility – an organization that supplies a service or product vital to all people Local telephone service, water, and electricity Government closely regulates utility companies

Prevent Unfair Business Practices Monopoly – exists when a business has control of the market for a product or service When competition is present, consumers get best values are fairest prices Antitrust Laws – prevent unfair business practices such as false advertising, deceptive pricing, and misleading labeling.

Checkpoint #7 Why does government regulate utilities? Reasons for government regulation of utilities might include the assurance of fair prices, the conservation of resources, and to avoid overcrowding of utility poles and other facilities, such as power plants.

Government Assists Business Government helps businesses by collecting and reporting valuable information. Incomes, prices, worker availability, and business failures. Census can help a business decide where a majority of potential customers live. Federal Government through the SBA, helps new businesses get started by guaranteeing private bank loans

Government Buys Goods and Services Government spends a great deal of money each day on an array of products and services Total federal, state, and local government spending make up about 20% of all goods and services produced in U.S. Government is a key economic force Many businesses depend on government contracts for their survival Government pays businesses to construct highways and build schools

Government Employs Workers Government is the single largest employer in the U.S. Economy About 16% of workers are public workers Government also employs the same types of workers as private businesses Administrative assistants, lawyers, teachers, meat inspectors, and data analysts

Checkpoint #8 How does government assist business? The government assists businesses in a variety of ways, including providing demographic data, buying goods and services, and employing workers who then have the means to buy goods and services.

Government Raises Money Government income is called Revenue Taxes and Borrowing Governments can raise revenue by: Fines for traffic violations Fees and licenses

Taxes Government creates Tax policies to pay for the services it provides Earnings, property, sale price of goods and services Income Tax – levied on the income of individuals Largest source of revenue for government Property Tax – based on the value of land and buildings Sales Tax – state or local tax on goods and services that is collected by the seller.

Borrowing Government borrows money by selling bonds Banks, insurance companies, and other financial institutions help finance governments by purchasing bonds in large numbers By borrowing money, the government becomes a debtor and must pay interest on its debt.

Checkpoint #9 What is the difference between tax revenue and borrowing by government? Tax revenue is money the government collects to cover the costs of services. This is money that the government is not required to pay back. The government is required to pay back money borrowed.