Read to Learn

• Describe social responsibility issues

• Identify benefits and costs of social responsibility

• Explain the purpose of a code of ethics

Essential Question: What is social responsibility?

The Main Idea

This chapter offers a basic understanding of social responsibility along with discussion of the various roles of government in relation to business

Social Responsibility

Social responsibility Refers to the duty of a business to contribute to the wellbeing of a community

When considering its responsibility to a society, a business must weigh the interests and concerns of many groups

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Responsibility

Responsibility toCustomers

Responsibility toEmployees

Responsibility toSociety

Responsibility toCreditors andOwners

Businesses must pay attention to:

• 1. Protection of the environment

• 2. Minorities and women in the workplace

• 3. Employment of the physically challenged and older workers

• 4. Healthy and safe work environment

1. Environmental Protection

Non-renewable resourceA natural resource that cannot be replaced when used up

Ex – gas, oil, minerals

Conservation is saving scarce natural resources. Ex – lumber companies planting trees

Pollution-

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

• EPA – Environmental Protection Agency enforces govt’s measurable standards for water and air quality.

Workplace diversity and Job Safety

• Businesses are more and more sensitive to the role of women, ethnic groups, the physically challenged, and the older workers.

• OSHA – Occupational Safety and Health Administration

Social Responsibility EvaluationBenefits:-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

Costs:-Money

The Nature of Ethics

ethicsPrinciples of morality or rules of conduct

When you are guided by ethics, you do not cheat on a test or lie to friends or family.

Social Responsibility

business ethicsRules about how businesses and their employees ought to behave.

Most businesses are guided by business ethics.

Different cultures, businesses, and industries have different ethical standards

Business Ethics

Creating safeproducts

Creating jobs

Fair treatmentof

employees

Environmentalprotection

Truthful aboutfinancial

status

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Social Responsibility

Code of ethicsIs a set of rules for guiding the actions of employees or members of an organization

In business, people follow rules as well as a code of ethics (aka code of conduct)

Codes of ethics address topics such as confidentiality of business information to how to treat customers.

Ethics as Good Business

Unethical business practices include:

• Lying

• Offering merchandise known to be substandard

• Treating customers or employees unfairly

Ethics as Good Business

If a business violates government regulations, the owner can be fined or go to jail.

If an employee violates a company or professional code, the employee might be fired or lose his or her license.

Guidelines to ask yourself

dealing with business ethics:

1. Is the action legal?

2. Does the action violate professional or company standards?.

3. Who is affected by the action and how?

Conflicts of Interest

Conflict of interest is a major ethical question that is generally not illegal.

Ex – Ms. Wall FH ref for MVC

conflict of interestCan occur when an action by a company or individual results in an unfair benefit.

Partner Activity – Conflict of Interest

• Pair up

• On a sheet of paper, come up with three conflict of interest examples

Ethical Observations by EmployeesFigure 4.1

1. What is the difference between personal and business ethics?

Personal ethics: moral principles that guide an individual; business ethics: rules, based on moral principles, used by a business.

2. Describe some of the ways that unethical business practices can affect a business.

Customers will not patronize the business.It is hard to retain employees. If the behavior is illegal, the business might be fined.

3. What is the relationship between illegal behaviors of business and unethical behaviors of business?

Generally, illegal behaviors of business are also considered unethical but there are some unethical behaviors that are not illegal.

Chaper 4.2 page 82

• Identify the roles and levels of government

• Explain government protection activities

• Describe types of intellectual property

• Essential Question: How does government protect business?

Government in Society

• 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

Roles of Government

1. Provide services for members of society

2. Protect citizens, consumers, businesses, and workers

3. Regulate utilities and promote competition

4. Provide information and support to businesses

More on page 82

What are the three levels of government?

• Federal

• State

• Local

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FederalGovernment

StateGovernment

LocalGovernment

Country State CountiesTownships

CitiesTowns

Three Levels of Government

Levels of government• Main goal of the fed. Gov’t is to oversee the

activities that involve two + states or other countries

• Interstate commerce = federal government

– Trucking company that goes outside of PA

• Intrastate commerce = state government

– Trucking company that stays in PA

• Local gov’ts – provide services for an orderly society like police and fire fighters.

Government Protection Services

The government protects our rights in a number of ways:

• Worker Protection

• Contract Enforcement

Worker Protection

• Laws established to help provide a safe work environment.

• Workers have rights such as:– Safe buildings, machines, no bad chemicals

– Human rights• Can’t be denied work because of race, religion, sex

or age

Contract Enforcement

contractAn agreement to exchange goods or services for something of value, usually money

Contracts are another example of government protection.

Contracts can be written or unwritten.

4 main parts of a contract must happen for it to be valid:

Contract Basics

1. Agreement - An offer must be made, and acceptance must occur.

2. Competent Parties – Those entering into the contract must be of legal* age and must be mentally competent.

* 47 states must be18 years old. Nebraska and Alabama 19, America Samoa (a US territory) – 14! Mississippi – 21!

Contract Basics

3. Consideration – Something of measurable value must be exchanged by the parties involved.

4. Legality – The contract must be for a product or service that may be legally sold; also, no fraud or deception exists in the agreement.

Again – Main parts of a contract

• Agreement

• Competent Parties

• Consideration

• Legality

Protection of Intellectual Property• Intellectual Property – is purely intangible

with no physical characteristics – no one can touch it. But it still is someone’s property.

• Examples are patents, copyrights and trademarks.

Git off mah

yaard!

In your quad pod…• First learn the characteristics of a patent,

copyright and trademark

• Prepare a list of various patents, copyrights, and trademarks owned by companies and nonprofit organizations.

• Explain how these assets contribute to the success of the organization.

• Be able to discuss why intellectual property is important

Patents

patentGives the inventor the sole right to make, use, or sell the item for 20 years.

When individuals or companies create new products, they may obtain a patent.

Copyrights

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

Copyright protection lasts for the life of the person receiving the copyright.

It also extends 50 years after the person’s death!

Ice Ice Baby vs Queen!

Trademarks

trademarkA work, letter, or symbol linked with a specific company or product.

Businesses register company names, team emblems, and label designs with the government.

Trademarks can be very valuable.

They are also called logos

Examples of Trademarks

Chapter 4.3 pg. 87

• Explain actions by government to regulate business

• Discuss efforts of government to assist businesses

• Identify methods used by government to raise money.

• EQ - How does government regulate business?

The Main Idea

Our government’s role is to foster success in the economy. One way it does that is by creating rules and regulations that organizations and consumers must follow. Laws cover three aspects of the economy. They protect competition. They protect business agreements and creative properties. They are also used to regulate the production process.

How Government Regulates Business

The government is responsible for fostering economic success and protecting people by regulating businesses.

Regulatory Activities

• Business activity in the US is structured as a private enterprise or free market system. Private organizations own the factors of production (natural, human and capital resources)

• Making money is all on the business to do, but gov’t does get involved sometimes…

Regulation of Utilities

Public utility companies provide local phone service, water, electricity, sewagePublic utility companies are usually privately owned but gov’t regulates prices.

Public utilityAn organization that supplies a service or product vital to all people

Prevent Unfair Business Practices

• For the most part, businesses are fair and honest.

• Gov’t attempts to promote fair competition – meaning they try and make sure everyone is being charged the same prices

Prevent Unfair Business Practices

When a monopoly occurs, consumer choice is limited.

Ex – if one person owns all the food stores in Lehighton, what are we going to see with those products?

monopolyWhen a business has control of the market for a product or service

Monopoly, the BoardGame

Lizzie Magie, a young Quaker woman from Virginia, created a game that became Monopoly® in 1903.

It was developed as a way to teach people about the monopoly of land ownership.

Protecting Competition

The U.S. government formed the Federal Trade Commission (FTC) to enforce antitrust laws and regulate interstate trade and break monopolies up.

antitrust lawsLaws that prevent other unfair business practices such as false advertising, deceptive pricing, and misleading labeling.

Promoting Competition (cont’d)

• Antitrust laws are a government action meant to promote competition and fairness to avoid monopolies.

Government Assists Business pg 88

• Small Business Administration (SBA)- New businesses can obtain government loans to help them get started.

• SBA is a key source of businesses loans

Government buys goods and Services

• Our gov’t spends a great deal of money each day to buy an array of product and services.

• Total federal, state and local gov’ts purchases of goods/services make up about 20% of all the goods/services produced in the US.

Government Employs workers

• *Our Gov’t is the largest employer in the US economy.

• About 1 in 9 workers is a public employee.

• Administrative assistants, lawyers, teachers, meat inspectors, and data analysts are all employed by the government.

Taxes

• Income taxes– Levied on the income of individuals

– Largest source of revenue for the fed. Gov’t

• Property tax– Based on the value of land and buildings

– Major source of revenue for local govt’s

– Use to pay for schools. Go Lehighton!

Taxes

• Sales tax (6% in PA on non-necessities) – State or local tax on goods and services that is

collected by the seller

– Goes to the state

Borrowing

Gov’t income from taxes and other sources may not always be enough

• Gov’t borrows money by selling bonds.

• They promise to give your money back plus interest

• Bonds are backed by the “full faith and credit” of the fed. Gov’t.