1. Social Responsibility of Business and Government
Chapter 4
Social Responsibility of Business and Government

2. Objectives Describe social responsibility issues
Identify benefits and costs of social responsibility
Explain the purpose of a code of ethics
Identify the roles and levels of government
Explain government protection activities
Describe types of intellectual property
Explain actions by government to regulate businesses
Discuss efforts of government to assist businesses
Identify methods used by government to raise money

3. Social Responsibility
Social responsibility: the duty of business to contribute to the well being of a community
A broadened social responsibility of business calls for more attention to social concern which includes:
Protection of the environment
Minorities and women in the workplace
Employment of the physically challenged and older workers
A healthy and safe work environment
Social responsibility issues
In considering its responsibility to society, a business must weigh the interests and concerns of many groups.
A broadened social responsibility of business calls for more attention to social concern which includes:
Protection of the environment
Minorities and women in the workplace
Employment of the physically challenged and older workers
A healthy and safe work environment

4. Environmental Protection
Conservation: saving scarce natural resources
Non-renewable resource: natural resource that cannot be replaced when used up
Gas
Oil
Minerals (i.e. copper, iron ore)
Pollution: occurs when the environment is tainted with the by-products of human actions
Conservation is the goal of many businesses.
An example would include lumber companies that consume trees and have reforestation programs
Socially responsible businesses take action to improve or change operations that cause pollution. Engineers often design new equipment for use in reducing pollution.

5. Environmental Protection
Environmental Protection Agency (EPA): monitors and enforces measurable standards set up by the federal government for monitoring air and water quality
Businesses and the EPA work closely together to reduce pollution.

6. Workplace Diversity
The work force of a business should reflect the range of groups in a community
Removal of employment barriers
The Americans with Disabilities Act (ADA): federal guideline that buildings must have access for wheelchairs and that people with sight and hearing limitations must be accommodated on the job
The Age Discrimination in Employment Act: bars employers from using age as a bias for employment decisions such as hiring, promoting, or terminating someone from a job
The law protests all persons 40 and older
Members of these groups must have equal access to education, training jobs, and career advancement (work force groups)
A major challenge facing businesses today involves learning how to manage a work force made up of the diverse cultures in society.
Removal of employment barriers:
employers are not allowed to exclude women applicants from a physically demanding job unless the business can prove the job requires physical skills that women do not have.
The ADA has made it necessary for workplaces to provide accommodations for physically challenged workers.
In addition to the ADA, other laws have been passed to eliminate bias against older workers.

7. Job Safety Provide full protection from fire and other hazards
Employees should be able to work in an office or factory free from the risks that could cause accidents
The work environment should:
Provide full protection from fire and other hazards
Provide information to employees on how to manage the unexpected
Training on how to work safely and what to do in case of an emergency
Safety standards are regulated and enforced by agencies such as OSHA (The Occupational Safety and Health Administration)

8. Employee Wellness
Workers who have good physical health are valuable assets
Your general well-being as an employee needs to be protected
Clauses (conditions of work) related to employee well-being are often included in labor contracts and company policy manuals
Businesses today do a number of things to improve the health of their workforce. Among programs offered are stop-smoking seminars, counseling for employees with drug problems, and weight-loss sessions.
Some businesses sponsor sports teams and encourage employees to take part.

9. Social Responsibility Evaluation
BENEFITS
Common benefits of socially responsible activities include:
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
Socially responsible actions can cause controversy

10. Social Responsibility Evaluation
COSTS
There are costs involved when a business takes socially responsible actions
A business must make a profit to stay open
Spending on social programs must be at a suitable level so a business can still earn a profit
Money must be spent for new non-polluting or safer equipment, for building repairs to remove risks, for wellness and rehabilitation programs and for social projects sponsored by a company.

11. Business Ethics Ethics: principles of morality or rules of conduct
Business ethics: rules about how businesses and their employees ought to behave
Code of ethics: a set of rules for guiding the actions of employees or member of an organization.
Address topics such as confidentiality of business information
Must be worded in terms of acceptable behavior rather then forbidden action
Ethical behavior involves conforming to these rules.
Unethical behavior violates them.

12. Business Ethics
Ethical Conduct Guidelines
Greatly determined by top management
Companies concerned about ethical behavior in their employees have set up educational programs on ethical conduct
They promote honesty and integrity
When considering the ethics of business situations, you could follow these guidelines:
Is the action legal?
Does the action violate professional or company standards?
Who is affected by the action and how?
Conflict of interest: can occur when an action by a company or individual results in an unfair benefit
An example of a conflict of interest would be if a person serving on a board of directors required that the company buy items only from businesses that he owns or controls.

13. An example of a non-renewable resource would be:
Solar energy
Agricultural products
Gold
A library book
Answer: B-gold

14. The Americans with Disabilities Act (ADA) requires that a company:
Provide training to people with disabilities
Find ways to help workers who are physically challenged
Hire a certain number of people with special needs
Adapt products manufactured for special-needs customers
Answer: B—find ways to help workers who are physically challenged

15. A code of ethics is designed to:
Meet government regulations
Reduce operating costs of a company
Provide guidelines for proper behavior
Improve employee productivity
Answer: C-provide guidelines for proper behavior
Students need to complete the Sharpen Your Life Skills Working in Teams assignment on page 81. They will read the assignment and then write out the Think Critically questions and answer them in complete sentences. Read the information in the Teachers Edition to the right of the scenario to guide students in beginning the assignment. This is an all or nothing grade—check the answers together in class to help determine students’ understanding.

16. Government Protection Activities

17. Government in Society 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
Government plays a role in all economic systems. Your role as a citizen and voter has an effect on the decisions and actions taken by government.
As issues facing society change, so must governmetn change. there are some basic roles of government that are displayed on your screen.
Each of these roles has either a direct or indirect impact on business expansion, consumer affairs, and economic growth in the country.

18. Levels of Government
The main goal of the federal government is to oversee the activities that involve two or more states or other countries
Interstate commerce: business dealings involving companies in more than one state
Intrastate commerce: refers to business dealings involving companies that do business in only one state
Local governments include county boards and city or town councils
They provide services needed for an orderly society (i.e. police and fire protection)

19. Government Protection Activities
Worker Protection
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 of workers
For example:
You cannot be denied work because of your race, religion, sex, or age. Selection of someone for a job must be based on job requirements, training, and experience. Prejudices and personal biases must not affect a hiring decision.

20. Government Protection Activities
Contract Enforcement
Contract: an agreement to exchange goods or services for something of value, usually money
May be written or unwritten
For example:
You cannot be denied work because of your race, religion, sex, or age. Selection of someone for a job must be based on job requirements, training, and experience. Prejudices and personal biases must not affect a hiring decision.

21. Government Protection Activities
Contract Basics
Valid, enforceable contracts must contain:
Agreement
An offer must be made, and an acceptance must occur
Competent Parties
Those entering into the contract must be of legal age and must be mentally competent
Consideration
Something of measurable value must be exchanged by the parties
Legality
The contract must be for a product or service that may be legally sold: also, no fraud or deception exists in the agreement
The elements listed in this chart are the basis for many legal disputes. This is known as a consideration—which is an item seen as having different values
Both businesses and consumers benefit from government enforcement of contracts

22. Protection of Intellectual Property
Intellectual property: purely intangible with no physical characteristics—a person cannot touch it
Includes patents, copyrights, and trademarks
Patent: gives the inventor the sole right to make, use, or sell the item for 17 years
Copyright: protects the creative work of authors, composers, and artists—lasts for the life of the person receiving the copyright and extends for 50 years after the person’s death
Trademarks: a word, letter, or symbol linked with a specific company or product

23. International trade with other countries is the responsibility of state and local governments. True False
False. International trade is the responsibility of the federal government.

24. An oral contract can be legally binding. True False

25. Fire and police protection is the main responsibility of:
Local government
State government
Federal government
All levels of government
Answer: A—local government

26. A ____ would protect the composer’s musical score.
Patent
Trademark
Copyright
Contract
Answer: C—copyright

27. Government Regulation and Assistance

28. Regulatory Activities
Business activity in the US is structured as a private enterprise or free market system.
Price and output decisions are made not by the government, but by businesses and consumers acting under varying economic conditions.
Government does get involved in some areas of business activities
regulate utilities
prevent unfair business practices

29. Regulatory Activities
REGULATION OF UTILITIES
Public utility: an organization that supplies a service or product vital to all people
telephone services
water services
electricity
A public utility is chosen to serve a community.
Many utility companies are privately owned, however the government usually regulates them.
The rates they can charge have to be approved by government agencies
There has been a trend in recent years to deregulate these prices so that competition can be intorduced.

30. Regulatory Activities
PREVENT UNFAIR BUSINESS PRACTICES
Monopoly: exists when a business has control of the market for a product or service
Anititurst Laws: prevent other unfair business practices such as false advertising, deceptive pricing, and misleading labeling of products.
**These laws were also created to promote fairness and competition and to avoid monopolies.
Most business people are fair and honest. However, a few may try to take advantage of their customers or competitors.
If a company charges different prices to different people for the same product, it is treating its customers unfairly. If one business receives lower rates for the same quality and quantity of supplies that other businesses receive, it has an advantage – which can result in unfair competition.
Monopoly: exists when a business has control of the market for a product or service.
Monopolies may not be good for an economy. If a company that owned the utilities in our area also owned all the food stores in our city, then we, the consumer, might not be treated fairly. They could charge high prices and sell poor quality products. With competition present, consumers get the best values at the fairest prices.

31. Government Assists Business
Government helps businesses by collecting and reporting valuable information.
helps with planning
Agencies that provide information
The Bureaus of Labor Statistics
The Department of Agriculture
The Department of Commerce
Small Business Association (SBA): assistance from the federal government that helps new business owners obtain loans to help them get started

32. Government Assists Business
GOVERNMENT BUYS GOODS AND SERVICES
Total federal, state, and local government purchases of goods and services make up about 20% of all the goods and services produced in the US
Many businesses depend on government contracts for their survival
Governments buy everything from file cabinets to buildings to military jet aircraft. This makes the government a key economic force.

33. Government Assist Business
GOVERNMENT EMPLOYS WORKERS
Single largest employer in the US economy
Includes:
Police officers
Firefighters
Sanitation workers
Administrative assistants
Lawyers
Teachers
Meat inspectors
Accountants
Talk about the great opportunities that are available when working for the government.

34. Government Raises Money
Government income is called revenue
Earned through :
taxes and borrowing
Fines for traffic violations
Fees and licenses (business and driver’s)
Fishing and hunting privileges

35. Government Raises Money
Taxes
Policies are created to pay for the services a government provides
Levied on earnings, value of property, and the sale price of goods and services
Earnings as an individual are subject to an income tax
largest source of revenue for the federal government
Real estate property tax: major source of revenue for local governments and is based on the value of land and buildings
Most property tax revenue is used to pay for schools and other local government services like police protection and community parks.

36. Government Raises Money
Taxes
Sales tax: a state or local tax on goods and services that is collected by the seller
Paying taxes is a duty of citizens and businesses
Borrowing
Government borrows money by selling bonds
Banks, insurance companies, and other financial institutions help finance governments by purchasing bonds in large numbers
Bonds issued by the US government are backed by the “full faith and credit” of the federal government and are considered less risky than all other debt
Tax laws and policies are set to help make the paying of taxes fair.

37. Antitrust laws are designed to
Reduce utility rates
Lower taxes
Create more jobs
Maintain competition
Answer: D—maintain competition

38. A(n) ____ tax is a common source of revenue for state and local governments.
Sales
Gift
Import
Unemployment
Answer: a--sales

39. A monopoly is never a benefit to consumers.
True
False
Answer: False—a monopoly can be a service to customers. Without competition, some companies, such as utilities, may keep costs and therefore prices low.
Classwork/Homework: Complete the Chapter 4 Study Guide. Students need to visit the textbook website and complete the activities for chapter 4 to prepare for the test.