intro to business ch 4

Social responsibility

The duty of a business to contribute to the well-being of its stakeholders groups

Businesses should pay attention to social concerns such as:

-Protection of the environment

-Equal employment opportunities

-Providing a safe work environment

Stakeholders are any individual or group that:

-Have an interest in your business (directly or indirectly)

-Are impacted by your business

-Who can have an impact on the success of your firm

Internal stakeholders

Are direct members of the organization

Example of internal stakeholders

• employees

• Executives

• Shareholders

• Managers

External stakeholders

Are not directly involved with the organization, but are impacted by the firm in some way

Example of external stakeholders

• customers

• Suppliers

• Competitors

• Banks

• Community

• Government

4 social responsibility issues

1. Environmental protection

2. Workplace diversity

3. Job safety

4. Employee wellness

Benefits of social responsibility

• enhanced company image

• Reduced need for gov’t actions

• Improved quality of life in community and world

• Increased awareness of social issues among workers, consumers and others

• Motivation for workforce

• Cost cutting

Disadvantages of social responsibility

• compliance costs

• Expensive equipment or programs - impact overall profit margin

• Some businesses can’t afford to make changes- lead to bad publicity

• Stakeholder conflict

• Employee conflict

Business ethics

Rules about how businesses and their employees should behave

Code of ethics (written)

The code of professional responsibility

Conflict of interest

When a business is tempted to put profits before social welfare

If your acting unethically, does it mean you are breaking the law?

No!

Roles of government

• providing services for members of society

• Protecting citizens, consumers, businesses, & workers

• Promoting competition

• Providing info & support to businesses

• Buying goods & services

• Hiring public employees

• Raisin revenue

Federal government

Regulates foreign and interstate commerce

Interstate commerce

Business dealings involving companies in more than 1 state

State government

Regulates intrastate commerce

Intrastate commerce

Within state borders

Local government

Police, fire services

What are some examples of government protection activities ?

• workplace safety (OSHA)

• Consumer protection (CPSC, FDA, USDA)

• Environmental legislation (EPA)

• Discrimination laws

• Contact enforcement

• SEC

Patents

Inventions

How long does patents last

20 years

Copyrights

Creative work of authors, composers, writers

How long does copyright last

Life of person + 70 years after death

Trademarks

Word, letter, or symbol linked with specific company or product- logo

Trade secrets

Processes, lists, prevents from stealing

Monopoly

when a company and its product offerings dominate one sector or industry

Oligopoly

Consists of a select few companies having significant influence over an industry

Revenue

Government income

Examples of revenue

• taxes

• Borrowing

• Fines and fees