Legal and Ethical Issues Chapter 6

The Roles of government Section 6.1 The Roles of government

Government and Laws Role of Government Gov’t has an impact on business and its operations. Part of environmental scan (chapter 2) Provider of Services Customer Regulator Enforcer of free enterprise Monitor of the economy

Structure of the United States Government 3 branches of government – limits the power of the other two Provides a system of checks and balances Business owners and trade groups must follow the laws of all branches and levels of government

Executive Branch Office of the President Executive Departments Each has their own initiatives and issues U.S. Department of Agriculture (USDA) Inspection, grading, and certification of meat Grading services for dairy

Legislative Branch Congress Senate House of Rep Lobbyists try to influence the way legislators vote on bills. Farm groups, consumer groups lobbied for mandatory country of origin labeling (COOL) LOBBYISTS successfully lobbied for legislators to postpone the labeling

Judicial Branch Interprets, applies, and administers the laws. Executive and legislative branches enact laws businesses may appeal to the judicial branch if it has a negative effect on their business

The Primary Duty of Each Branch of Government Government and Laws The Role of Government The Primary Duty of Each Branch of Government

The Role of Service Provider and Customer Gov’t spends a lot …1/3 of GDP is generated by gov’t expenditures.

Federal Agencies Regulate Government and Laws The Role of Government Products Employees Federal Agencies Regulate Environment Businesses

The Role of Regulator Protecting Consumers Protect the safety, health, and welfare of individuals Protect consumers Enforce local zoning laws, licensing requirements, health codes inspection….

The Role of Regulator Protecting Consumers FDA - regulates the labeling and safety of food, drugs, and cosmetics sold in the USA CPSC – overseeing the safety of products. Consumer Product Safety Act 1972 establish standards for products that are considered hazardous

Differences and Similarities Government and Laws The Role of Government Differences and Similarities

The Role of Regulator Protecting Workers EEOC responsible for the fair and equitable treatment of employees with regard to hiring, firing, and promotions. Enforce Title VII of Civil Rights Act Equal Pay Act of 1963 Age Discrimination in Employment Act 1967

The Role of Regulator Protecting Workers OSHA – guidelines for workplace safety and enforces those regulations. Construction workers must wear hard hats…. The Family and Medical Leave Act 1993

The Role of Regulator Protecting Investors Securities and Exchange Commission (SEC) – regulates sales and securities of stocks License brokerage firms and financial advisors Protect investors from deceptive practices

Government and Laws The Role of Government The SEC

The Role of Regulator Protecting the Environment Environmental Protection Agency (EPA) – 1970 protect human health and the environment. Regulate air and water pollution, as well as hazardous waste disposal and recycling.

Government and Laws The Role of Government The Role of Regulator Protecting Consumers Protecting Workers Protecting Investors Protecting the Environment Food and Drug Administration (FDA) Equal Employment Opportunity Commission (EEOC) Securities and Exchange Commission (SEC) Environmental Protection Agency (EPA) Consumer Product Safety Commission (CPSC) Occupational Safety and Health Administration (OSHA)

Government and Laws The Role of Government Enforcer of the Private Enterprise System Federal Trade Commission (FTC) Bureau of Consumer Protection Bureau of Competition Bureau of Economics

Enforcer of the Free Enterprise System The Federal Trade Commission (FTC) – enforces the principles of a free enterprise system and protecting consumers from unfair or deceptive Reports directly to Congress Divided into 3 bureaus Bureau of Consumer Protection Bureau of Competition Bureau of Econommics

Bureau of Consumer Protection Government and Laws The Role of Government Bureau of Consumer Protection

Bureau of Consumer Protection Government and Laws The Role of Government Bureau of Consumer Protection

Monitor of Our Economy To ensure economic stability of the US, our monetary supply is controlled through the Federal Reserve System Controls our monetary supply and interest rates

Business Supporter (SBA) Small Business Administration Supports businesses by providing counseling and educational materials to potential business owners

The U.S. Government and Its Role in the Private Enterprise System Government and Laws The U.S. Government and Its Role in the Private Enterprise System

International Issues Promote Free Enterprise – keeping it fair and safe Protect Intellectual Property rights in foreign countries

Business and Social Responsibility Section 6.2 Business and Social Responsibility

Role in Society Many businesses believe their role in society includes actions affecting: Workplace Marketplace Communities Environment

Workplace 1. Flextime 2. Telecommuting 3. Extended family leave 4. On site child care 5. Health care benefits 6. Time off with pay

Social Responsibilities and Ethics Business and Social Responsibility The Uses of Employee Benefits

Marketplace PROVIDING INFORMATION EMPLOYING SELF-CENSORSHIP Ad Council EMPLOYING SELF-CENSORSHIP RESPONDING TO CONSUMER CONCERNS

In the Community Local Businesses Large Companies Business sponsoring Little League Business sponsoring a holiday food drive Large Companies Ben and Jerry’s donates 7.5% of pretax to disadvantages and needy International Businesses World Business Council for Sustainable Development (WBCSD)

In the Environment CLEANER FUEL GREEN MARKETING Alternatives to gasoline GREEN MARKETING PRODUCE AND PROMOTE ENVIRONMENTALLY SAFE PRODUCTS

Social Responsibilities and Ethics Information on Social Responsibility, Ethics in Business, and the Guidelines for Ethical Behavior

Business Ethics ETHICS: guidelines for good behavior. ETHICAL BEHAVIOR: Knowing the difference between right and wrong AND doing what is right CONSUMERISM: societal effort to protect consumer rights by putting legal, moral, and economic pressure on business

Consumer Rights Consumers have four basic rights To be informed and protected against fraud, deceit, and misleading statements, and to be educated in the wise use of financial resources To be protected from unsafe products To have a choice of goods and services To have a voice in product and marketing decisions made by government and business

Ethics in Marketing Self Regulation (BBB) Better Business Bureau – non-profit organization to set up self-regulation among businesses Ethic issues related to marketing functions Price gouging – pricing products unreasonably high when the need is great or consumers do not have other choices

Social Responsibilities and Ethics Business Ethics

Ethics in Marketing Marketing Information– Industries that maintain databases containing personal information have the responsibility to keep that information private. Banks Doctor’s Office Lawyers Credit Card Companies Selling Practices - Unethical practices of selling involves bribes, kickbacks, favors and high-pressure closing tactics.

Managerial and Personnel Issues Proper Accounting and Reporting The Sarbanes-Oxely act of 2002 was passed in response to the corporate funds and unethical misuse of company funds and unethical corporate governance Whistle-Blowing Provisions in the Sarbanes-Oxley act of 2002 states retaliation against employees who report illegal activity from an employer is against the law.

Guidelines for Ethical Behavior Follow Decision Making Process Get the facts Identify all parties concerned Think of all alternatives Evaluate your alternatives by asking yourself: Is it illegal? Does it go against company policy? How does it affect everyone involved? Is it right, fair and honest? Will it build good will for the company? are you comfortable with the decision? How will it hold up to public scrutiny?