Transcript SOCIAL AND ETHICAL ENVIRONMENT OF BUSINESS

SOCIAL AND ETHICAL
ENVIRONMENT OF
BUSINESS
2
Describe the changing nature of the population,
the labor force, and their impact on businesses.
Discuss how the values of Americans have
changed and how business has adapted to those
changed values.
Suggest ways in which businesses can be
socially responsible.
HUMAN RESOURCE
ISSUES
 Population
– Growing population – grown steadily over years
mostly due to immigration
– Changing population – more diverse
• Baby boom – more people aged 35-55 (1945-65)
• Baby bust – period after 1965
– Moving population – 1 out of 5 move yearly
• Frost Belt – cold northern half of country
• Sun Belt – warm southern half
• Rust Belt – north central/northeastern states
HUMAN RESOURCE
ISSUES
 Labor force – 16 or older available to work
 Poverty – 12/15% of pop. live in poverty
– Stats show that the richest 20% of Americans hav con’t to earn
more over the past 30 yrs, while income of the lowest 5th has
stayed the same – gap between richer and poorer continues to
widens
 Equal employment
– Glass ceiling – invisible barrier to job placement
– Sticky floor syndrome – inability for workers to move up due
lows skills/education
 Comparable worth – paying workers equally for jobs
with similar but not identical job requirements
HUMAN RESOURCE
ISSUES
 Societal values
– Generation X – feel less loyal to E’er; expect to
change jobs many times
– Net Generation – 1977-1997
 Employer practices
– Redesigning jobs – used to retain workers
– Improving health and safety – an unfit E’ee is absent
more and less productive
– Family-friendly practices – day care; flexible hours;
work from home
ETHICAL ISSUES
 Standards of moral conduct that individuals and
groups set for themselves, defining what
behavior they value as right or wrong
 Law provides for a minimum standard
 Business ethics
– Collection of principles and rules that define right
and wrong for organizations
• Closely linked to personal values
– Code of Ethics - formal, published collection that
reflect company’s philosophy and goals
Ethical dilemmas
 Arises when it is not clear whether a particular
action is legal or illegal
 What is the value or worth of a specific behavior
for society as a whole
– Best behavior is that which does the most good for
the most people
– Organizations/bosses are faced with ethical
dilemmas all the time
 Supervisor’s Secret (p. 31)
 Nike
– Pg 45 - Think Critically Qs 1-4
SOCIAL RESPONSIBILITY
OF BUSINESS
Social responsibility — the duty of a business to
contribute to the well being of society
What is business’s responsibility to help solve
society’s problems?
Answer is not simple
Profit motive collide with what is good for society
Businesses depend on society for resources, opportunities
and have an obligations to the communities in which they
operate
 It is now widely recognized that business has an
important responsibility to society
 Businesses have realized that by getting involved
socially, it advances its own interests
– Enhancing goodwill in the computer reduce
government’s desire to regulate the business
TASK: Pick any business, small or large, and report on
how they act socially or responsibly to the
community that they operate in.
ECONOMIC ENVIRONMENT
OF BUSINESS
Discuss three economic systems and three
economic-political systems.
Summarize five fundamental elements of
capitalism.
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ECONOMIC SYSTEMS
 Types of economic-political systems
– Capitalism – US; free enterprise; private citizens are
free to go into business; produce what they want and
distribute what they provide and own property
– Socialism – Sweden; gov. controls; how to use scarce
resources is decided by gov.
– Communism – North Korea; extreme socialism; all or
almost all factors of production are owned by the
gov.; decisions on who gets what is decided by the
gov.
FUNDAMENTALS OF
CAPITALISM
 Private property – essential to captialism; R to
own, use and sell
 Profit – incentive of capitalism
 Price setting
– Demand - # of products that will be bought at a
given time at a given price; high demand – higher
cost
– Supply - # of like product that will be offered for
sale at a particular time and at a certain price; low
supply = higher cost
FUNDAMENTALS OF
CAPITALISM
 Competition – Rivalry among sellers for
consumer’s $$$$; benefits consumers
 Income distribution – just like what an
individual receives in goods is determined by
the am’t of $$$ that person has, the am’t of $$$
an individual received in wages is determined
by many factors but mainly supply and demand
SUPPLY
AND DEMAND
$50
Supply
Price
$40
$30
Demand
$20
Market Price
$10
$0
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