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GOVERNMENT AND LAWS
Chapter 6
THE ROLES OF GOVERNMENT
“The Stability of a government and its policies shape the political climate of a country. Government actions have a great impact on business and its operations. Thus, it is important to understand how government functions and how it affects business.”
THE ROLES OF GOVERNMENT
The Stability of a government, its structure and legal system is always part of many business analysis’. The government plays roles of provider of services, customer, regulator, enforcer of free enterprise and monitor of economy.
THE ROLES OF GOVERNMENT
In the United States, each of the three branches of government- Executive, Legislative and Judicial – limits the power of the other two. Which prevents any one branch from becoming too powerful.
Structure Of The United States Government
THE ROLES OF GOVERNMENT
Executive Branch
Structure Of The United States Government
Exe
cuti
ve
Bra
nch
Includes various different administrations such as the Office of the President and Departments of Commerce, Interior and Defense. Each admin. Has different initiatives and issues that impact business due to economic times and political agendas
Leg
isla
tive
Bra
nch
Is also known as Congress. It is made up of the Senate and the House of Representatives. Members of Congress debate and vote on laws and regulations. Ju
dic
ial B
ran
ch
Interprets, applies and administers the laws of the United States. It consists of a network of courts at all levels of government. When the legislative/executive branches enact laws which negatively affect businesses, those businesses may appeal to the Judicial Branch of Government.
THE ROLES OF GOVERNMENT
The Role Of Service Provider and Customer
The government spends a lot of money to ensure the safety and general welfare of people in the United States. To keep the country safe, The Department of Homeland spends a lot of money on border protection, disaster relief and on other measures such as airport security.
THE ROLES OF GOVERNMENT
The Role Of Regulator
In the United States most laws are designed to protect the safety, health and welfare of individuals. At the federal, state, and local levels; these laws are carried out by government agencies. The government acts as a regulator to protect consumers, employees , investors and the environment and this affects the businesses.
THE ROLES OF GOVERNMENT
The Role Of Regulator: Protecting Consumers
At the state and local levels, government
agencies are involved with
consumer protection.
People who perform certain services, such as hairstylists, must
be licensed.
Local zoning laws about where homes, businesses and farms
can be located protect real estate investments and quality of life for
residents.
Health departments inspect restaurants
and other food-handling businesses
to protect consumers.
THE ROLES OF GOVERNMENT
The Role Of Regulator: Protecting Workers
Companies must comply with minimum wage standards and other laws and regulations established by state and federal governments. There are also laws set in place to protect employees who report illegal activities by their employers.
•Is responsible for the fair and equitable treatment of employees with regard to hiring, firing and promotions.
Equal Employment Opportunity Commission
(EEOC)
•Sets guidelines for workplace safety and environmental concerns, and enforces those regulations.
Occupational Safety and
Health Administratio
n (OSHA)
THE ROLES OF GOVERNMENT
The Role Of Regulator: Protecting…
Securities and Exchange
Commission (SEC)
Regulates the sale of securities(stocks & bonds) It is responsible for licensing brokerage firms and financial advisors. It also investigates any dealings among corporations such as mergers, that affect the value of stocks.
Investors
Environment Protection Agency
(EPA)
Protects human health and environment. Its responsibilities include monitoring and reducing air and water pollution, as well as overseeing hazardous waste disposal and recycling.
Environment
THE ROLES OF GOVERNMENT
Enforcer of the Free Enterprise System
The FEDERAL TRADE COMMISSION has the responsibility of enforcing the principles of free enterprise system and protecting consumers from unfair or deceptive business practices.
Consu
mer
Pro
tect
ionResponsible for
enforcing consumer protection laws and trade regulation rules. It investigates individual companies and nationwide operations and initiates lawsuits against those who violate these laws.
Com
peti
tion The FTC’s
antitrust responsibilities involve prevention of anti-competitive mergers and business practices.
Eco
nom
ics Studies the
impact of its actions on consumers and reports its findings to Congress, executive branch and the public. It covers antitrust, consumer protection and regulation.
THE ROLES OF GOVERNMENT
Monitor of Our Economy
To ensure economic stability of the United States, the government monitors our economy and controls our monetary supply through the Federal Reserve System. When the FED thinks that the economy is moving too fast or too slowly, it reacts to correct the problem.
THE ROLES OF GOVERNMENT
Business Supporter
The role of SMALL BUSINESS ADMINISTRATION (SBA) is to support business and encourage our free enterprise system. They provide counseling and educational materials to prospective business owners and also support through unconventional loan guarantees.
THE ROLES OF GOVERNMENT
International Issues
Foreign governments may not provide the legal protection or framework necessary to ensure business operations function in a safe and secure manner. Therefore, it is important to analyze the US government’s role in promoting free enterprise principles in the context of International Business.
SOCIAL RESPONSIBILITY AND ETHICS
International Issues
Social responsibility and ethics have become important business topics as trust has deteriorated due to corporate scandals. Corporate scandals and unethical behavior have
a very negative effect on consumer confidence and the image of a company. It is important to see the role of a business in society not only as a provider of goods and
services but also as an integral part of the society at large.
SOCIAL RESPONSIBILITY AND ETHICS
In The Workplace
Many companies recognize their employees’ needs outside the workplace and try to
accommodate them. In doing so, they create a user-friendly workplace environment.
Contd.
Flextime• Allows workers to choose their work hours
Telecommunicating• Involves working at home, usually on a computer.
Completed jobs are transmitted by e-mail or mail-in disk.
Extended Family Leave• Some companies offer employees family leave without
pay beyond the time required by the Family and Medical Leave Act.
SOCIAL RESPONSIBILITY AND ETHICS
In The Workplace
Contd.
On-Site Child Care• Is a benefit that has grown in popularity with the
increase in two-income families.
Healthcare Benefits• With rising health costs, health care insurance
paid for by employers is a major employee benefit.
Time Off With Pay• Time Off with pay includes vacations, sick days, and
personal days.
SOCIAL RESPONSIBILITY AND ETHICS
In The Marketplace
Consumers are the focal point of a company that follows the marketing concept. Such businesses are
concerned about consumers’ perceptions of a company, as well as issues that impact consumers.
Pro
vid
ing
Info
rmati
on Socially
responsible companies cooperate with the government and consumer groups to provide important information to consumers.
Em
plo
yin
g
Self-
Censo
rship In the
broadcast industry, standards are established by the FCC. Beyond those regulations, network executives establish their own policies for self-regulation.
Resp
ondin
g T
o
Consu
mer
Conce
rnsSocially
responsible companies look for ways to respond to consumers’ concerns.
SOCIAL RESPONSIBILITY AND ETHICS
In The Community
Consumers are the focal point of a company that follows the marketing concept. Such businesses are
concerned about consumers’ perceptions of a company, as well as issues that impact consumers.
Larg
e C
om
panie
s Many large companies have guidelines and initiatives that clearly define how they see their role in supporting community causes.
Inte
rnati
onal
Busi
nessThe United
Nations has a Division of Economic and Social Affairs. An outgrowth of that division is the World Business Council For Sustainable Development. (WBCSD) which is a coalition of International companies .
SOCIAL RESPONSIBILITY AND ETHICS
In The Environment
Socially responsible companies are concerned about our environment and have programs about our environment and have programs to work toward saving the earth for
future generations. Two major issues involve:
Cle
aner
Fuels Alternatives to
traditional transportation fuels od gasoline and diesel fuel are currently being developed. Some Vehicle fuels, because of physical or chemical properties, create less pollution than do today’s gasoline.
Gre
en
Mark
eti
ngConsumer concern
over the environment is increasing, and marketers are paying attention. The growing importance of ecological issues has brought about green marketing.
BUSINESS ETHICS
A major aspect of social responsibility is business ethics. Ethics are guidelines for good behavior. Ethical behavior is based on knowing the difference between
right and wrong and doing what is right.
BUSINESS ETHICS
Ethics And Consumerism
Consumerism involves the relationship of marketing to those customers who buy a company’s goods or service.
Consumerism is the social effect to protect consumer rights by putting legal, moral and economic pressure on business.
BUSINESS ETHICSEthics In Marketing
Consumerism and corporate scandals have prompted businesses to address the many ethical issues and topics that involve marketing in general, as well as
specific functions and activities.
BUSINESS ETHICSSelf-Regulation
Ethical companies are proactive. They join organizations that help to create an ethical
business environment. The Better Business Bureau (BBB), is one of the oldest non-profit organizations to be set self-regulation among businesses. To be a member of the BBB, a business must agree to follow the highest regulation of business ethics and self-regulation and have proven record of marketplace honesty and integrity.
Another comprehensive guide for marketing ethics is the Code of Ethics adopted by the American Marketing Association (AMA). Ethical companies subscribe to the AMA’s Code of Ethics which is a guideline for ethical professional conduct. The code addresses honesty and fairness, rights and duties in all areas of marketing and organized relationships.
BUSINESS ETHICSEthical Issues Related to Marketing Functions
Ethical issues can always rise when doing business.
Price
Gouging
•Is not covered in the AMA’s Code of Ethics; however it is a major concern in the pharmaceutical industry, as well as when a natural disaster creates a need for products such as bottled water or flashlights.
Privacy
•Management of marketing information involves issues of privacy. Industries that maintain customer databases containing your personal information have the responsibility to keep your information private.
Research
•Product research ad marketing research must report findings honestly by disclosing the facts involved in the research design and results.
BUSINESS ETHICSEthical Issues Related to Marketing Functions
Bribes
•Selling practices that come under scrutiny because of ethical issues often involve bribes.
High-pressure selling tactics and failure to follow through on promises made to close a sale are examples of unethical selling practices. One of the reasons for this unethical behavior can be under pressure to meet sales quotas established by high-level management.
BUSINESS ETHICSManagerial and Personnel Issues
Management ultimately makes the decisions about major ethical issues that confront a business. From the top level right on down to the supervisory level, managers must take responsibility for establishing and creating role model for ethical practices within a firm.Proper Accounting and Reporting• The Sarbanes-Oxley Act of
2002, was passed in response to the corporate scandals that involves misuse of company funds and unethical corporate governance.
Whistle Blowing• Provisions from the
Sarbanes-Oaxley Act, as well as many other laws involving management and personnel issues, include whistle-blowing protection. Whistle Blowing involves reporting illegal action of ones employer.
BUSINESS ETHICSGuidelines for Ethical Behavior
Companies with an interest in ethical business behavior have or are developing guidelines to help employees make ethical
decisions. It is important to remember that people make the decisions, and so business ethics are closely related to personal
ethics.