1. Intro to Business, Ethics Business 40 Week 2 Carole K. Meagher 26 January, 2005

2. Agenda Roll call, introductions, project ideas Video – Burton Snowboard Chapter 1 Discussion Article analysis – Kraft Advertising Chapter 4 Discussion Project ideas? Week 3 Lead-in

3. To watch out for… Think about the environment (p. 13) that Burton Snowboard works within 1.Economic and legal 2.Technological 3.Social 4.Competitive Some of the answers may not be obvious in the video, so think about them…

4. Burton Snowboard Economic and legal Technological Social Competitive

5. Business & Entrepreneurship Business Profit Entrepreneur Match Risk With Profit Revenue Loss Standard of Living/Quality of Life Stakeholders Nonprofit Organizations

6. Objectives of Business Survival Growth Social Responsibility Profit

7. Creating Wealth: Factors of Production Land Labor Capital Entrepreneurship Knowledge

8. Business Environment

9. Economic & Legal Environment Freedom of ownership Contract laws Tradable currency Elimination of corruption Minimum taxes and regulation

10. Technological Environment Information technology Databases Bar codes The Internet

11. Competitive Environment Customer service Stakeholder recognition Employee service Concern for environment

12. Social Environment Diversity Demographic changes Family changes

13. Social Environment Diversity/Multicultural Aging/Graying of America Two-Income Families Telecommuting Single-Parent Families

14. U.S. Household Size Source: Census Bureau

15. Buying Power of Diverse Groups Women $3,700 Billion Hispanic Americans 550 Billion African Americans 500 Billion Gay Men & Lesbians 450 Billion Asian Americans 254 Billion Native Americans 35 Billion Sources: National Organization on Disability Employability; U.S. Pan Asian American Chamber of Commerce; DiversityInc.com; U.S. Census Bureau

16. U.S. Ethnic Composition Source: Census Bureau

17. 21 st Century Diversity Issues Race Gender Ethnicity DisabilityAgeLanguage Religion Sexual Orientation Source: U.S. Equal Employment Opportunity Commission

18. The Aging of America Source: Census Bureau

19. % U.S. Population by Age Source: Census Bureau

20. Older Americans Working Source: USA Today

21. Growth of Dual-Income Households Source: USA Today

22. Women In The Workforce Source: CNNMoney, 3/3/03.

23. Wives Outearn Husbands All Couples* 30.7% Two-Income Couples 24.1% *3% Involve Salaries $75,000+ Source: CNNMoney, 3/3/03.

24. Where Americans Live Source: Census Bureau

25. Global Environment Quality Productivity War & Terrorism Global Changes

26. The Economic Cost of Disaster/War Source: Business 2.0, November 2002. Loss of property Loss of life Energy diverted to… Rebuilding Stress management Political/power management issues

27. Evolution of American Business Agricultural/Manufacturing Service Industries Future???

28. Rise of Information & Communication Technology Globalization Doing Business 24/7 Educated Consumers Aging Workforce Increasing Diversity Pyramid vs. Web Trends in Business Source: Keying In- Newsletter of the National Business Education Association, March 2003 Self-Directed, Empowered Employees Communication Skills Decision-Making Skills Teamwork Leadership Continual Learning

29. Skill Level Required Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Source: Hudson Institute as reported in Arnold Packer, Retooling the American Worker, Washington Post Average Skill Level: 3.6 2% 58% 40%

30. Current Skill Level Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Average Skill Level: 2.6 6.8% 70.5% 6.6% 16.1%

31. Article analysis & break…

32. Kraft limits advertising… See pp 104-105 Discuss the legal implications of Krafts action described in the article Discuss the balance/fairness issues of Krafts action described in the article Discuss how your group feels about advertising junk food to kids and Krafts action. There are no right or wrong answers, just share thoughts and ideas.

33. A continuum… Legal Ethical Responsible Good Citizen Agent of positive change

34. Categories of Business Law BusinessLaw BankruptcyLaw TortLaw ContractLaw SalesLaw Law of Agency PropertyLaw

35. Tort Law Wrongful Act Causing Injury Compensation Negligence Product Liability- Strict Liability

36. Cost of U.S. Tort System In $ Billions Source: Forbes, Dec. 23, 2002

37. Intellectual Property Patent - Rights to Invention Copyright - Rights to Literary Work and Art Work (including sound, visual, and performing arts) Trademark - Protects Name, Symbol or Design (identifies goods or services of a seller)

38. Types of Patents ® Design Patents ©Utility Patents Plant Patents Source: Entrepreneur Magazine

39. Patents Awarded in the U.S. (2002) Source: USA Today

40. SchoolInvention U. of California New almond tree named Winters to help pollination M.I.T. Method to track motion of body Caltech Golf putter with raised center of gravity U. of Texas New compound to grow human hair Johns Hopkins Thermal-control apparatus for body armor Unusual U.S. Patents Awarded to Universities Source: Forbes, March 31, 2003

41. Origin of U.S. Patents Granted (2000) Source: USA Today

42. IBM Average Patents Per Week Source: World Features Syndicate

43. International Patents Awarded (2002) Source: USA Today

44. $ Uniform Commercial Code $ Warranties Express Implied Full Limited $ Negotiable Instruments Sales Law

45. Contract Law Contract Legally Binding Offer Acceptance Consideration Competence Legal Proper Form Breach Consequences Specific Performance Payment of Damages Discharge of Obligation

46. Business Law/Legislation Sherman Antitrust Act Clayton Act FTC Act Robinson-Patman Act Consumer Protection Tax Bankruptcy Chapter 7 Chapter 11 Chapter 13 Deregulation

47. Ethics More Than Legality Standards are Fundamental Stem From Individual

48. Ethical Decisions are Personal Religious, Moral, Cultural Teachings Individual Rights and Responsibilities Legislation Statutory Law Court Decisions Common Law

49. Factors Influencing Managerial Ethics Individual OrganizationalEnvironmental Values Values Work Background Work Background Family Status Family Status Personality Personality Top Level Mgmt. Philosophy Top Level Mgmt. Philosophy The Firms Reward System The Firms Reward System Job Dimensions Job Dimensions Competition Competition Economic Conditions Economic Conditions Social/Cultural Institutions Social/Cultural Institutions

50. SEC Investigations (2002) Accounting Arthur Andersen Deloitte & Touche Ernst & Young KPMG PriceWaterhouse Coopers Energy CMS Energy Dynergy Enron Halliburton Reliant Resources Software Computer Associates Network Associates Telecom Global Crossing Lucent Technologies Qwest Communications WorldCom Wall Street Credit Suisse First Boston Hedge Funds Capital Markets Merrill Lynch Source: Business Week, June 10, 2002

51. Corporate Scandal Fines CompanyFineReason Arthur Andersen $500,000 Obstruction of Justice Shredding Enron Documents Citigroup $5,000,000 Analyst Issued Misleading Information Merrill Lynch$100,000,000 Conflict of Interest Between Investment Bank & Research Dept. Credit Suisse First Boston $100,000,000 IPO Shares Unfairly Distributed Source: Business Week, Nov. 4, 2002

52. How Much Do Americans Trust Corporations? All Corporations A Great Deal10% Fair Amount41% Only A Little35% Not At All13% No Opinion 1% Your Employer A Lot50% Only Somewhat 39% Not At All 8% No Opinion 3% Source: USA Today/CNN/Gallup Poll, Jan. 25-27, 2002

53. Ethics Check Questions: ÔIs It Legal? ÔIs It Balanced? ÔHow Will It Make Me Feel About Myself?

54. Source: Marketing, 5/E by Berkowitz, Kerin, Hartley, and Rudelius. Corporate Citizenship…

55. Contributions to Charity (In Billions of Dollars)

56. Source: Business Week, Dec. 2, 2002 Donor Estimated Total Given (in Millions Causes Bill Gates $25.6 Health & Education Gordon Moore $6.6 Conservation & Education James Stowers $1.5 Biomedical Research Eli Broad $1.045 Education & Arts Walton Family$.75Education New Philanthropy

57. Merck Johnson & Johnson Pfizer Eli Lilly IBM Microsoft Intel Bank of America $221.0* 176.2 123.9 121.4 116.1 104.7 101.0 91.5 Source: The Taft Group * In Millions Corporate Annual Giving

58. Where Charitable Contributions Go (2001) In Billion $ Source: BusinessWeek. Dec. 2, 2002

59. Why People Volunteer Percent of Respondents Total is more than 100%- respondents could give more than one reason.

60. Corporate Volunteer Days

61. International Ethics & Responsibility Ethics Not Unique To U.S.- Leaders Accountable Demand for Socially Responsible Behavior Inter-American Convention Against Corruption

62. Social Audit By Company Outside Company Socially-Conscious Investors Environmentalists Union Officials Customers

63. In Conclusion… Legal Ethical Responsible Good Citizen Agent of positive change Its a continuum…

64. Week 3 Lead-in Chapters 2 and 3 – Global Economics Find an article talking about the Key Economic Indicators on pages 53-54. How are they interpreted? Do different people have different ideas about if they imply good or bad news? There are lots of articles about global trade right now. Find an article and compare their comments to the text. Any differences in perspective? Or, whatever you want, just be thoughtful and buzzword compliant Before you leave next week… Group roster with project idea!