SOCIAL AND ETHICAL ENVIRONMENT OF BUSINESS  Describe the changing nature of the population, the labor force, and their impact on businesses.  Discuss how the values of Americans have changed and how business has adapted to those changed values.  Suggest ways in which businesses can be socially responsible. 22

HUMAN RESOURCE ISSUES  Population –Growing population – grown steadily over years mostly due to immigration –Changing population – more diverse Baby boom – more people aged ( ) Baby bust – period after 1965 –Moving population – 1 out of 5 move yearly Frost Belt – cold northern half of country Sun Belt – warm southern half Rust Belt – north central/northeastern states

HUMAN RESOURCE ISSUES  Labor force – 16 or older available to work  Poverty – 12/15% of pop. live in poverty –Stats show that the richest 20% of Americans hav con’t to earn more over the past 30 yrs, while income of the lowest 5 th has stayed the same – gap between richer and poorer continues to widens  Equal employment –Glass ceiling – invisible barrier to job placement –Sticky floor syndrome – inability for workers to move up due lows skills/education  Comparable worth – paying workers equally for jobs with similar but not identical job requirements

HUMAN RESOURCE ISSUES  Societal values –Generation X – feel less loyal to E’er; expect to change jobs many times –Net Generation –  Employer practices –Redesigning jobs – used to retain workers –Improving health and safety – an unfit E’ee is absent more and less productive –Family-friendly practices – day care; flexible hours; work from home

ETHICAL ISSUES  Standards of moral conduct that individuals and groups set for themselves, defining what behavior they value as right or wrong  Law provides for a minimum standard  Business ethics –Collection of principles and rules that define right and wrong for organizations Closely linked to personal values –Code of Ethics - formal, published collection that reflect company’s philosophy and goals

Ethical dilemmas  Arises when it is not clear whether a particular action is legal or illegal  What is the value or worth of a specific behavior for society as a whole –Best behavior is that which does the most good for the most people –Organizations/bosses are faced with ethical dilemmas all the time

 Supervisor’s Secret (p. 31)  Nike –Pg 45 - Think Critically Qs 1-4

SOCIAL RESPONSIBILITY OF BUSINESS Social responsibility — the duty of a business to contribute to the well being of society What is business’s responsibility to help solve society’s problems?  Answer is not simple  Profit motive collide with what is good for society  Businesses depend on society for resources, opportunities and have an obligations to the communities in which they operate

 It is now widely recognized that business has an important responsibility to society  Businesses have realized that by getting involved socially, it advances its own interests –Enhancing goodwill in the computer reduce government’s desire to regulate the business TASK: Pick any business, small or large, and report on how they act socially or responsibly to the community that they operate in.

ECONOMIC ENVIRONMENT OF BUSINESS  Discuss three economic systems and three economic-political systems.  Summarize five fundamental elements of capitalism. 33

ECONOMIC SYSTEMS  Types of economic-political systems –Capitalism – US; free enterprise; private citizens are free to go into business; produce what they want and distribute what they provide and own property –Socialism – Sweden; gov. controls; how to use scarce resources is decided by gov. –Communism – North Korea; extreme socialism; all or almost all factors of production are owned by the gov.; decisions on who gets what is decided by the gov.

FUNDAMENTALS OF CAPITALISM  Private property – essential to captialism; R to own, use and sell  Profit – incentive of capitalism  Price setting –Demand - # of products that will be bought at a given time at a given price; high demand – higher cost –Supply - # of like product that will be offered for sale at a particular time and at a certain price; low supply = higher cost

FUNDAMENTALS OF CAPITALISM  Competition – Rivalry among sellers for consumer’s $$$$; benefits consumers  Income distribution – just like what an individual receives in goods is determined by the am’t of $$$ that person has, the am’t of $$$ an individual received in wages is determined by many factors but mainly supply and demand

SUPPLY AND DEMAND Price Quantity Supply Demand Market Price