Social Responsibility
Of
Business and Government
 Social Responsibility refers to the duty of a business to
contribute to the well-being of a community.
 Current issues to consider:
1. Environmental Protection
2. Workplace Diversity
3. Job Safety
4. Employee Wellness
 Conservation
 Saving scarce natural resources
 Some 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.
 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.
 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
 A healthy workforce is a productive workforce.
 Many businesses offer programs to their employees to
help improve their health.
 Stop-smoking seminars
 Counseling for alcohol and drugs
 Weight-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.
Benefits
 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 must be spent for new equipment.
 If a business doesn’t make enough profit, it will close and
employees will lose their jobs.
 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.
 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?
 Common concern involves a conflict of interest
 When an action by a company or individual results in an
unfair benefit.
 Many professionals also have codes of professional
conduct established by their professional associations
 Lawyers
 Accountants
 Doctors
 They also participate in continuing education related
to ethical issues specific to their professions.
1.
2.
3.
4.
5.
6.
7.
Determine the purpose of the code.
Tailor the code to the needs and values of the
organization.
Consider involving employees from all levels of the
company in writing the code.
Determine the rules or principles that all members of the
organization will be expected to adhere to.
Include information about how the code will be enforced.
Determine how the code will be implemented and where
it will be published or posted.
Determine how and when the code will be reviewed and
revised.
 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?
 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?
 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.
 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 is mainly concerned with these areas:
1.
2.
3.
4.
5.
6.
7.
Providing services for members of society.
Protecting citizens, consumers, businesses, and
workers.
Regulating utilities and promoting competition.
Providing information and support to businesses.
Buying goods and services.
Hiring public employees.
Raising revenue.
 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).
 Government protects your rights in many ways:
Police and fire-fighting services.
2. National security.
3. Worker protection.
4. Contract enforcement.
1.
 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. Agreement
2. Competent Parties
3. Consideration
4. Legality
 Patents
 Gives 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.
 Trademarks
 A word, letter, or symbol linked with a specific company
or product.
 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 Utilities
 Prevent Unfair Business Practices
 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 companies
 Many 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
 Government attempts to promote fair competition.
 Want companies to treat all of their customers fairly.
 Want fair competition between businesses.
 Antitrust Laws
 Prevent unfair business practices such as false
advertising, deceptive pricing, and misleading labeling.
 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 Buys Goods and Services
 Total government spending makes up about 20% of all
the goods and services produced in the U.S.
 Government Employs Workers
 Government is the single largest employer in the U.S.
 Above 16% of workers are public employees
 Government income is called revenue.
 Obtain revenues through:
 Taxes
 Borrowing
 Fines (for traffic and other violations)
 Fees and licenses
 Taxes
 Income tax, property tax, sales tax
 Borrowing
 Selling bonds