1. Chapter 4

2.  Describe social responsibility  Identify costs and benefits of social responsibility  Explain what a code of ethics is  Identify ethical decisions

3.  Social Responsibility refers to the duty of a business to contribute to the well-being of a community. A call for more attention to social concern  Protection of the environment  Inclusion of minorities and women in the workplace  Employment of physically challenged and older workers  Healthy and safe work environment  Ben and Jerry’s Ben and Jerry’s  McDonald’s McDonald’s

4.  A socially responsible business takes action to improve or change operations that cause pollution. A lumber company that consumes trees will sponsor reforestation programs

5.  The workforce should reflect the groups in a community. Members of these groups should have equal access to education, training, jobs, and career advancement.  The removal of employment barriers for women.  Accommodation of physically challenged employees Compliance of the Americans with Disabilities Act  Elimination of bias against older workers Age Discrimination Act bars employers from using age as a bias for employment decisions, including hiring, promotions, or termination form a job. Protects workers aged 40 and over

6.  Employees should be able to work in an office or a factory that is free from risks that could cause accidents.  Job safety also involves training in how to work safely and what to do in case of an emergency.  Safety Standards are enforced by Occupational Safety and Health Administration (OSHA).

7.  Workers who have good physical health are valuable assets. Stop smoking seminars Counseling for employees with drug problems Weigh loss sessions Eating a balanced diet Encourage participation on a sports team or incentives to join a gym.  Mentor Graphics Mentor Graphics

8.  Often a controversial issue.  Benefits: Expanded justice for groups of 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.

9.  Costs There are costs involved when a business takes socially responsible actions.  Costs include: Money must be spent for new non-polluting and safer equipment Money is spent to on buildings to remove risks Spending on social programs must be at a suitable level so that you still earn a respectable profit

10.  A socially responsible business engages in ethical business practices.  Ethics – principles of morality or rules of conduct  Business Ethics – rules about how businesses and their employees ought to behave  Video of Business Ethics Video of Business Ethics

11.  Code of ethics is a set of rules for guiding the actions of employees or members of an organization. i.e. confidentiality  Should be a guide of values for all employees within that company

12.  Should a company expand into a profitable market in another country where doing business requires giving expensive gifts to key government officials?  Should a company continue to produce a popular product after it discovers a minor defect in it?

13.  Attitude is determined by top management First and foremost, Management should make ethical decisions. Some companies set up programs designed to promote employee honesty and integrity  Personal phone calls during work hours  Taking supplies from work  Sharing of confidential information  Misuse of email  How are ethics changing in today’s society? Technology  Texting  Cell phone usage Sensitivity

14.  Is it legal?  Does the action violate professional or company standards?  Who is affected by the action and how?

15.  Determine the purpose of the code  Tailor the code to the needs and values of the organization  Consider involving employees from all levels of the company in writing the code  Determine the rules or principles that all members of the organization will be expected to adhere to  Determine how the code will be implemented and where it will be published or posted  Determine how and when the code will be reviewed and revised.

16.  Conflict of interest occurs when an action by a company of individual results in an unfair benefit.  Sample conflict of interest Sample conflict of interest

18.  Government plays a role in all economic systems.  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

19.  The main goal of the federal government is to oversee the activities that involve two or more states  Interstate Commerce is business dealings involving companies in more than one state. For example: the federal government would regulate a trucking company that ships products to several states.

20.  State Governments regulate business actions within their own borders.  Intrastate commerce refers to a business dealings involving companies that do business in only one state. A truck company that hauls products within a state’s borders would be regulated by state government.

21.  All states have assigned some of their legislative power to local governments. County Boards City Councils  Local governments also provide services Police Fire

22.  Laws have been set to provide a safe work environment.  Laws protect workers based on race, sex, religion, and age.  Prejudices and personal biases must not affect a hiring decision.

23.  Contract is an agreement to exchange goods or services for something of value, usually money.  Contracts may be written or unwritten.

24.  Agreement: An offer must be made and accepted  Competent Parties: Those entering into contract must be of legal age and must be mentally competent  Consideration: Something of measureable value must be exchanged by the parties involved.  Legality: The contract must be for a product or service that may be legally sold; also, no fraud or deception exists in the agreement.

25.  Apartment leases  Credit card agreement  Documents that state the terms of a purchase.

26.  Intellectual Property is purely intangible, with no physical characteristics. Patents Copyrights © Trademarks

27.  A patent gives the inventor the sole right to make, use, or sell the item for 20 years.  A copyright protects the creative work of authors, composers, and artists. Copyright protection lasts for the life of the person and extends 70 years after the person’s death.  A Trademark is a word, letter, or symbol linked with a specific company or product. Also known as a logo. Nike swoosh

28. Government Regulation and Assistance

29.  Business activity in the United States is structured as a private enterprise or free market system. Government involvement includes regulating utilities and preventing unfair business practices. The government owns almost all of the factors of production.

30.  Most goods and services you use come from private business  A Public Utility is an organization that supplies a service or product vital to all people Local Telephone Service Water Electricity

31.  A public utility is chosen to serve a community. Public Entities are cost effective  Government usually closely regulates utility companies. The rates they charge have to approved by government agencies.

32.  Government attempts to promote fair competition. Must charge the same for all customers Monopoly – exists when a business as control f the market for a product or service.  Good Monopoly: public utility when they provide a needed service at a fair price.  Bad Monopoly: When a company uses its status to charge high prices and sell poor quality products.

33.  Antitrust laws prevent other unfair business practices such as false advertising, deceptive pricing, and misleading labeling.

34.  Government helps businesses by collecting and reporting valuable information. Census information can help a business decide where a majority of potential customers live.

35.  Total federal, state, and local government spending make up about 20 percent of all the goods and services produced in the US. Many businesses depend upon government contracts for their survival.

36.  Government is the single largest employer in the US economy. About 16 percent of workers are public employees.  Police Officers  Firefighters  Teachers  Meat Inspectors

37.  Government must have a way to raise money to fund operations and pay wages to workers.  Government income is called revenue.  Government can obtain revenue through: Taxes and borrowing Fines for traffic and other violations Fees and licenses

38.  A government creates tax policies to pay for the services is provides. Individual Income tax is the largest source of revenue for the government. Sales tax is a state or local tax on goods and services that is collected by the seller. Property tax is based on the value of land and buildings  Property tax revenue is use to pay for schools and other public services such as police protection and community parks.

39.  Government income from taxes and other sources may not always be enough to covers costs. Borrowing is another activity of the government. Government borrows money by selling bonds  Bonds issued by the government and backed by “full faith and credit”