1. Legal and Ethical Issues

2. Government and Laws  Structure of US Gov. 1. Executive Branch  Each President's administration has different programs that impact business 2. Legislative Branch  Lobbyists try to influence the votes of Congress 3. Judicial Branch  Interprets, applies, and administers laws of the US

3. Government and Laws  Service Providers  Businesses that provide goods and/or services for any government installation, project, or institution must adhere to govt. guidelines  Tax Payer $ is being spent  Regulator  The Govt. acts as a regulator to protect Consumers, Employees, Investors, and the Environment

4. Government and Laws  Regulator  Consumers  FDA: Food and Drug Administration  Regulates the labeling and safety of food, drugs, and cosmetics  Approves new products and reviews products on the market

5. Government and Laws  Regulator  Consumers  CSPS – Consumer Product Safety Commission  Safety of products: Toys, electronics, furniture  Sets standards for hazardous products and has the power to recall dangerous products (1972 Consumer Product Safety Act)  Safety of Children: Fed. Hazardous Substances Act, Flammable Fabrics Act, Poison Prevention Packaging Act, & refrigerator Safety Act

6. Government and Laws  Regulator  Workers  EEOC – Equal Employment Opportunity Commission  Fair and Equitable treatment of employees with regard o hiring, firing, and promotions  Prevents Discrimination – Race, Age, Ability, Gender  Equal Pay Act (1963), Age Discrimination Act (1967), Rehabilitation Act (1973) Americans with Disabilities Act (1990), Civil Rights Act (1991)

7. Government and Laws  Regulator  Workers  OSHA – Occupational Safety and Health Administration  Guidelines for workplace safety and environmental concerns  FMLA – Family Medical Leave Act (1993)  Up to 12 weeks of unpaid leave to deal with: Newborn child, Adoption, Care for an immediate family member, employee serious health condition

8. Government and Laws  Regulator  Investors  SEC – Securities Exchange Commission  Regulates the sale of stocks and bonds  Investigates actions of corporations that affect stock price  Requires all information about a corporation provided to investors is truthful

9. Government and Laws  Regulator  Environment  EPA – Environmental Protection Agency (1970)  Protect human health and the environment  Monitoring and reducing air and water pollution  Cover problems such as: Acid rain, lead poisoning, mercury, mold, ozone depletion, radon, and littering  Companies can be fines for inappropriately distributing advertising

10. Government and Laws  Enforcer of Private-Enterprise System  FTC – Federal Trade Commission  Protecting consumers from unfair or deceptive business practices  3 Bureaus 1. Consumer Protection 2. Competition 3. Economics

11. Government and Laws  Enforcer of Private-Enterprise System  FTC – Federal Trade Commission 1. Consumer Protection (6 Divisions) 1. Advertising – Claims made can be fulfilled by product/service 2. Enforcement – Internet; postal service; textile, wool, fur, and care labeling; and energy use 3. Financial Practices - Truth in Lending Act. Helps consumers make informed decisions (loans and credit cards)

12. Government and Laws  Enforcer of Private-Enterprise System  FTC – Federal Trade Commission 1. Consumer Protection (6 Divisions) 4. Marketing Practices – Fraudulent activities and scams 5. International Division of Consumer Protection – Consumer confidence in the international market place 6. Planning and Information – Information and help for consumers who report identify theft

13. Government and Laws  Enforcer of Private-Enterprise System  FTC – Federal Trade Commission 2. Competition  Federal Trade Commission Act – prevents unfair methods of competition  Sherman Antitrust Act (1980) – Predatory Pricing  Clayton Antitrust Act (1914) – Mergers and acquisitions  Robinson-Patman Act (1936) – Price discrimination

14. Government and Laws  Enforcer of Private-Enterprise System  FTC – Federal Trade Commission 3. Economics  Reports to Congress and Executive Branch  Antitrust  Consumer Protection  Regulation

15. Social Responsibility and Ethics  Scandals and unethical behavior can have a negative effect on consumer confidence and the image of the company.  Besides following the law, should a business have further social responsibility?  Actions impacting Employees, Consumers, Communities, and the Environment

16. Social Responsibility and Ethics  Workplace - Needs of Employees outside the workplace  Flex Time – Employees choose their workhours  Telecommuting – Typically working from home  Extended Family Leave – Allows retention of valued employees  On-Site Child Care – Tends to reduce employee absenteeism  Health Care Benefits – May cover family and into retirement  Time Off w/Pay – Typically based upon the length of employment (Sick, Vacation, and Personal days)

17. Social Responsibility and Ethics  Marketplace – Consumer Perception and Issues that impact Consumers  Providing Information – Safety information for consumers  Ad Council – Nonprofit Org. helps produce public service advertising campaigns  Employee Self-Censorship – Beyond FCC Regulations  Things not socially acceptable, inaccurate, legal liability  Consumer Concerns – Ex. Promoting healthy foods in relation to the country's obesity levels

18. Social Responsibility and Ethics  Community - Support of community causes  United World Business Council (UWBC) – International companies whose mission is to “provide business leadership as a catalyst for change toward sustainable development, and to promote the role of eco-friendly, innovation, and corporate responsibility”  Environment – Saving the Earth for future generations  Green Marketing – Companies engage in the production and promotion of environmentally safe products.  Build Customer Loyalty, Customer may pay more for

19. Social Responsibility and Ethics  Community - Support of community causes  United World Business Council (UWBC) – International companies whose mission is to “provide business leadership as a catalyst for change toward sustainable development, and to promote the role of eco-friendly, innovation, and corporate responsibility”  Environment – Saving the Earth for future generations  Green Marketing – Companies engage in the production and promotion of environmentally safe products.  Build Customer Loyalty, Customer may pay more for

20. Business Ethics  Ethics – Guidelines for good behavior  Consumerism – Societal effort to protect consumer rights by putting legal, moral, and economic pressure on businesses  JFK’s Consumer Bill of Rights  Consumers have 4 basic rights

21. Business Ethics  JFK’s Consumer Bill of Rights 1. To be informed and protected against fraud, deceit, and misleading statements, and to be educated in the wise use of financial resources 2. To be protected from unsafe products 3. To have a choice of goods and service 4. To have a voice in product and marketing decisions made by government and businesses

22. Business Ethics  Ethics in Marketing - Ethical principles reflect the management of the company.  Self Regulation – Ethical companies are proactive  Better Business Bureau (BBB) 1912, Promotes self regulation among businesses.  To be a member a business must agree to follow the highest principles of business ethics and voluntary self-regulation, and have a proven record of marketplace honesty and integrity.  American Marketing Association (AMA)  Code of Ethics – Honest and Fairness and rights and duties of marketing and organizational relationships

23. Business Ethics  Ethical Issues Related to Marketing Functions  Price Gouging – Pricing products unreasonably high, when need is great (Demand) or when no other choices (Substitutes)  Marketing Information - Responsibility to keep customer database information private  Selling Practices – Unethical practices involve Bribes, Kickbacks, Favors, and High Pressure Closing Tactics

24. Business Ethics  Managerial and Personnel Issues  Management ultimately makes decisions about ethical issues that confront a business. Must become role models for ethical conduct  Proper Accounting and Reporting  Whistle Blowing – Reporting illegal actions of one’s employer  Illegal to be fired in retaliation to whistle blowing

25. Business Ethics  Guidelines for Ethical Behavior 1. Get the facts 2. Identify all parties concerned 3. Think of all your alternatives 4. Evaluate your alternatives by asking:  Is it incompliance with the law  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  Am I comfortable with it  How will it hold up to public scrutiny