1. Chapter 10-1 Chapter 10 BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Prepared by Deborah Baker Texas Christian University  BUSINESS, GOVERNMENT and REGULATION

2. Chapter 10-2  Given all of the tasks that must be accomplished to make our society work, which should be handled by the government & which should be handled by business?  How much autonomy are we willing to allow business?  What is government’s role in regulating business? Roles of Government & Business

3. Chapter 10-3 Interaction of Business, Government, & the Public Lobbying (Ch 11) Regulation, Taxation & Other Forms of Persuasion (Ch. 10) Advertising Public Relations Elections Voting Interest Groups Contributions Public Business Government Interest groups Boycotting Protests Politicking Public policy

4. Chapter 10-4 BusinessGovernment  Individualistic ethic  Maximize self-interest & freedom of expression  View G. regulation as constraints & obstacles (reduces profit)  Emphasizes inequalities of individuals (survival of the fittest).  Collectivistic ethic  Promotes society’s interests  View themselves as enforcers of bad behavior  Emphasizes equality of individuals. Clash of Ethical Beliefs Why is the relationship antagonistic?

5. Chapter 10-5 Federal Government’s Nonregulatory Influence on Business Industrial Policy Privatization http://www.FirstGov.gov @

6. Chapter 10-6 Industrial Policy  Any G. measure that prevents or promotes changes in the structure of an economy  The role G. plays in international trade  “Redirecting of resources”  The result of G. being active & influential (rather than not intervening) Examples?

7. Chapter 10-7  U.S. competitiveness  Use by other nations  Currently ad hoc system (unplanned, haphazard reaction to emergencies)  Reduces market efficiency  Promotes political decisions (leave politics out of economic decisions)  Foreign success variable  National attempts are uncoordinated & unplanned Industrial Policy ForAgainst

8. Chapter 10-8 Privatization The process of “turning over to”the private sector some functionthat was previously handledby government. (public education, public transit, prisons) Purpose?Pros?Cons? Government functions: 1. Provide a service2. Produce a service

9. Chapter 10-9 Privatization Pros  No advantage to G. being involved  Publicly owned enterprises are less efficient Cons  There are some things that private B. can’t handle safely or effectively (airport or water port security)

10. Chapter 10-10  Major employer  Set standards  Large purchaser  Subsidies  Transfer payments  Major competitor  Loans & loan guarantees  Taxation  Monetary policy (Federal reserve)  Moral persuasion Other Nonregulatory Influences

11. Chapter 10-11 Government’s Regulatory Influence Regulation means:  Having D/M authority  Controlling B. by way of law  Establishing standards  Imposing restrictions Pros? Cons? Reasons for regulation?

12. Chapter 10-12 ***Reasons for Regulation Controls negative externalities Achieves social goals Controls excess profits Controls natural monopolies Controls excessive competition

13. Chapter 10-13 Types of Regulation Civil Aeronautics Board Federal Communications Commission Interstate Commerce Commission Economic Regulation Occupational Safety and Health Administration Equal Employment Opportunity Commission Environmental Protection Agency Social Regulation

14. Chapter 10-14 Benefits of Regulation  Fair treatment of employees  Safer working conditions  Safer products for consumers  Cleaner air & water.

15. Chapter 10-15  Direct costs  Indirect costs  Induced costs Reduced innovation Reduced investment in plant & equipment Increased pressure on small business (less resources) Costs of Regulation

16. Chapter 10-16 Deregulation Purpose Balance freedom of B. with control of G. Increase competition with the expected benefits  greater efficiency, lower prices, & more innovation. Dilemma Sacrificing health & safety.