SLIDE 1

4-1 Social Responsibility and Business Ethics

4-2 Government Protection Activities

4-3 Government Regulation and Assistance

4C H A P T E R

Social Responsibility of Business and Government

4-1 International Business Basics Goals

1.Describe social responsibility issues

2.Identify benefits and costs of social responsibility

3.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 DiversityBusinesses 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 forceStop-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?1. Environmental Protection

2. Work place diversity

3. Job Safety

4. 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 organizationAddress 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 ETHICS1. Determine the purpose of the code.2. Tailor the code to the needs and values of the

organization.3. Consider involving employees from all levels of the

company in writing the code.4. Determine the rules or principles that all members

of the organization will be expected to adhere to.5. Include information about how the code will be

enforced.6. Determine how the code will be implemented and

where it will be published or posted.7. 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 1.Identify the roles and levels of

government

2.Explain the role of government protection and the legal system in business

3.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?LocalStateFederal

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 moneyContracts could be written or unwritten 4 basic elements to be enforceable:

1. Agreement

2. Competent Parties

3. Consideration

4. Legality

Legal System Enforces laws and government regulations Two types of cases:

1. Criminal Case – brought for violations of criminal laws

2. 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?AgreementCompetent partiesConsiderationLegality

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 1. Explain actions by government

regulations

2. Discuss Efforts of government to assist businesses

3. 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.