Social Responsibility

Of

Business and Government

Introduction to Business

Social Responsibility refers to the duty of a business to contribute to the well-being of a community.

Current issues to consider:1. Environmental Protection2. Workplace Diversity3. Job Safety4. Employee Wellness

Social Responsibility Issues

ConservationSaving scarce natural resourcesSome natural resources cannot be replaced

(non-renewable resources)Pollution

Occurs when the environment is tainted with the by-products of human actions.

Socially responsible businesses find ways to improve or change operations that cause pollution.

Environmental Protection Agency (EPA) sets measurable standards for water and air quality.

Environmental Protection

The workforce of a business should reflect the groups in a community.

A major challenge for businesses is learning how to manage a workforce made up of workers who represent the diverse cultures in society.

Challenge is not just about cultures/ethnicity.Role of females in the workforce.Workers with disabilities.The aging labor force.

Workplace Diversity

Employees have the right to expect a safe work environment.Work environment should provide full

protection from fire and other hazards. Employees need to know how to handle the

unexpected (accidents do happen)Businesses should provide employee training in

how to work safely and what to do in case of an emergency.

Occupational Safety and Health Administration (OSHA) regulates and enforces safety standards

Job Safety

A healthy workforce is a productive workforce.

Many businesses offer programs to their employees to help improve their health.Stop-smoking seminarsCounseling for alcohol and drugsWeight-loss sessions

Many labor contracts and company policy manuals include clauses (conditions of work) that pertain to the health and safety of employees while on the job.

Employee Wellness

BenefitsExpanded 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.CostsMoney must be spent for new equipment.If a business doesn’t make enough profit, it will

close and employees will lose their jobs.

Social Responsibility Evaluation

Ethics are principles of morality or rules of conduct.

Business ethics are rules about how businesses and their employees ought to behave.

Code ethics is a set of rules for guiding the actions of employees or members of an organization.Should be worded in terms of acceptable

behaviors rather than forbidden actions.Even with a code of ethics, choice of proper

behavior can cause dilemmas for decision-makers within a business.

Business Ethics

Ethical conduct is determined by its top management.

Companies concerned about ethical behavior of their employees will set up educational programs on ethical conduct.Designed to promote employee honesty and integrity.

When considering the ethics of a business situation, ask yourself:

1. Is the action legal?2. Does the action violate professional or company

standards?3. Who is affected by the action and how?

Ethical Conduct Guidelines

Common concern involves a conflict of interestWhen an action by a company or individual

results in an unfair benefit.Many professionals also have codes of

professional conduct established by their professional associationsLawyersAccountantsDoctors

They also participate in continuing education related to ethical issues specific to their professions.

Guidelines continued……

1. Determine the purpose of the code.2. Tailor the code to the needs and values of the

organization.3. Consider involving employees from all levels of the

company in writing the code.4. Determine the rules or principles that all members of

the organization will be expected to adhere to.5. Include information about how the code will be

enforced.6. Determine how the code will be implemented and

where it will be published or posted.7. Determine how and when the code will be reviewed

and revised.

Guidelines for Writing a Code of Ethics

Don Sutton applied for a payroll clerk job with Search Services, a market research firm. To improve his chances in getting the job, he exaggerated his work experience on his resume. Based on his resume, Don was hired. After one year, he received above-average ratings during his annual performance review. Shortly thereafter, his boss met Don’s former supervisor and learned the truth.

Is the action illegal?Does the action violate company or

professional standards?Who is affected, and how, by the action?

Is it ethical?

Eva Torres is a receptionist for Media Technologies. After the company installed voice mail, Eva’s workload became lighter, so her supervisor assigned additional responsibilities, including some accounting tasks. Even with these assignments, Eva is not always busy. To fill the time, she plays computer games.

Is the action illegal?Does the action violate company or

professional standards?Who is affected, and how, by the action?

What about this one?

National Automotives assembles a safety system for passenger automobiles. This system substantially reduces sever injuries to drivers involved in accidents. In an effort to increase profits, National recently took steps to cut costs and increase production. National has begun using some less expensive components. These components increase the system’s estimate failure rate from 12 to 15 failures per 10,000 accidents. Despite this increase, the company continues to meet the government’s safety standard of 20 failures per 10,000 accidents.

Last one…..

Government plays a role in ALL economic systems.

As a citizen with the right to vote, you have an effect on the decisions and actions taken by government.

In private enterprise, government has a less extensive role than in other economic systems.

The role of government often changes when new officials are elected.

Government in Society

Government is mainly concerned with these areas:

1. Providing services for members of society.2. Protecting citizens, consumers, businesses,

and workers.3. Regulating utilities and promoting

competition.4. Providing information and support to

businesses.5. Buying goods and services.6. Hiring public employees.7. Raising revenue.

Roles of Government

Federal Government – main goal is to oversee the activities that involve two or more states or other countries (interstate and foreign commerce).

State Government – regulate business within their own borders (intrastate commerce).

All states have assigned some of their legislative power to local governments.Local governments control services needed for

an orderly society (police and fire protection).

Levels of Government

Government protects your rights in many ways:

1. Police and fire-fighting services.2. National security.3. Worker protection.4. Contract enforcement.

Government Protection Activities

An agreement to exchange goods or services for something of value.

May be written or unwritten.Certain elements must be included to be

enforceable.Four main elements for a valid contract:1. Agreement2. Competent Parties3. Consideration4. Legality

Contracts

PatentsGives the inventor the sole right to make, use,

or sell the item for 20 years.Copyrights

Protects the creative work of authors, composers, and artists.

Lasts the lifetime of the person receiving the copyright plus 70 years after their death.

TrademarksA word, letter, or symbol linked with a specific

company or product.

Protection of Intellectual Property

Government does not get involved in most areas of business activities. However, it is necessary for government to be involved in regulation of some business activities.

Regulation of UtilitiesPrevent Unfair Business Practices

Government Regulation

Public utility is an organization that supplies a service or product vital to all people.Includes: local telephone services, water, &

electricity.Difficulties of having competitive utility

companiesMany utility companies are privately owned,

but closely regulated by the government.Rates have to be approved by government

agencies.Trend towards deregulation to generate

competition

Regulation of Utilities

Government attempts to promote fair competition.Want companies to treat all of their customers

fairly.Want fair competition between businesses.

Antitrust LawsPrevent unfair business practices such as false

advertising, deceptive pricing, and misleading labeling.

Prevent Unfair Business Practices

They collect and report valuable information.This data can help businesses plan.Examples: census information, Bureau of

Labor Statistics, Department of Agriculture, Department of Commerce

They help new businesses get started.Small Business Administration (SBA)

guarantees private bank loans.Programs are designed to promote the

financial well-being of society.

Government Assists Business

Government Buys Goods and ServicesTotal government spending makes up about

20% of all the goods and services produced in the U.S.

Government Employs WorkersGovernment is the single largest employer in

the U.S.Above 16% of workers are public employees

More Government Assistance

Government income is called revenue.Obtain revenues through:

TaxesBorrowingFines (for traffic and other violations)Fees and licenses

TaxesIncome tax, property tax, sales tax

BorrowingSelling bonds

Government Raises Money