1. Legal and Ethical Issues
Chapter 6

2. The Roles of government
Section 6.1
The Roles of government

3. 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

4. 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

5. 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

6. 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

7. 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

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

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

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

11. 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….

12. 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

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

14. 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

15. 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

16. 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

17. Government and Laws
The Role of Government
The SEC

18. 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.

19. 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)

20. 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

21. 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

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

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

24. 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

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

26. 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

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

28. Business and Social Responsibility
Section 6.2
Business and Social Responsibility

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

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

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

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

33. 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)

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

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

36. 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

37. 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

38. 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

39. Social Responsibilities and Ethics
Business Ethics

40. 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.

41. 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.

42. 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?