Intro to Business, Ethics
Business 40
Week 2
Carole K. Meagher
26 January, 2005
Agenda







Roll call, introductions, project ideas
Video – “Burton Snowboard”
Chapter 1 Discussion
Article analysis – Kraft Advertising
Chapter 4 Discussion
Project ideas?
Week 3 Lead-in
To watch out for…
 Think about the environment (p. 13) that
Burton Snowboard works within
1.
2.
3.
4.
Economic and legal
Technological
Social
Competitive
 Some of the answers may not be obvious
in the video, so think about them…
Burton Snowboard




Economic and legal
Technological
Social
Competitive
Business & Entrepreneurship
 Business
 Profit
 Entrepreneur
 Match Risk With Profit
 Revenue
 Loss
 Standard of Living/Quality of
Life
 Stakeholders
 Nonprofit Organizations
Objectives of Business
Survival
Growth
Profit
Social
Responsibility
Creating Wealth:
Factors of Production
Entrepreneurship
Land
Labor
Capital
Knowledge
Business Environment
Global
Business
Social
Economic &
Legal
Technology
Competitive
Economic & Legal Environment





Freedom of ownership
Contract laws
Tradable currency
Elimination of corruption
Minimum taxes and regulation
Technological Environment




Information technology
Databases
Bar codes
The Internet
Competitive Environment
Customer service
Stakeholder recognition
Employee service
Concern for environment
Social Environment
 Diversity
 Demographic changes
 Family changes
Social Environment
 Diversity/Multicultural
 Aging/Graying of America
 Two-Income Families
 Telecommuting
 Single-Parent Families
U.S. Household Size
5
4.5
4
3.5
3
Number of
2.5
Persons
2
1.5
1
0.5
0
1900
Source: Census Bureau
1940
1980
2000
Buying Power of Diverse Groups
Women
$3,700 Billion
Hispanic Americans
550 Billion
African Americans
500 Billion
Gay Men & Lesbians
450 Billion
Asian Americans
254 Billion
Native Americans
35 Billion
Sources: National Organization on Disability Employability; U.S. Pan Asian American Chamber of Commerce; DiversityInc.com; U.S. Census Bureau
U.S. Ethnic Composition
80%
70%
60%
50%
40%
1990
2000
30%
20%
10%
0%
White
Source: Census Bureau
Hispanic
African
American
Amer.
Indian
Asian
Other
21st Century Diversity Issues
Race
Age
Gender
Language
Ethnicity
Religion
Disability
Sexual
Orientation
Source: U.S. Equal Employment Opportunity Commission
The Aging of America
40.0
35.0
Median Age
30.0
25.0
20.0
15.0
10.0
5.0
0.0
1900
Source: Census Bureau
1920
1940
1960
1980
2000
% U.S. Population by Age
80%
70%
60%
50%
Under 15
15-64
65+
40%
30%
20%
10%
0%
1920
Source: Census Bureau
1940
1960
1980
2000
Older Americans Working
80%
70%
60%
50%
40%
30%
20%
10%
0%
Female
Male
55-59
Source: USA Today
60-64
65+
Growth of
Dual-Income Households
70%
63%
60%
50%
37%
40%
20% 21%
30%
20%
10%
0%
1950
Source: USA Today
2000
Single-Earner
Married Couples
Dual-Earner
Married Couples
Women In The Workforce
CEOs
Top Earners
B.O.D.
Officers
Mgmt./Prof.
Labor Force
0%
Source: CNNMoney, 3/3/03.
10%
20%
30%
40%
50%
Wives Outearn Husbands
All Couples*
30.7%
Two-Income Couples
24.1%
*3% Involve Salaries $75,000+
Source: CNNMoney, 3/3/03.
Where Americans Live
70%
60%
50%
Central Cities
Suburbs
Rural
40%
30%
20%
10%
0%
1920
Source: Census Bureau
1940
1960
1980
2000
Global Environment
Quality
Productivity
War & Terrorism
Global Changes
The Economic Cost of Disaster/War
 Loss of property
 Loss of life
 Energy diverted to…
 Rebuilding
 Stress management
 Political/power management issues
Source: Business 2.0 , November 2002.
Evolution of
American Business
Agricultural/Manufacturing
Service Industries
Future???
Trends in Business
Rise of Information &
Communication
Technology
Globalization
Doing Business 24/7
Self-Directed, Empowered
Employees
Communication Skills
Decision-Making Skills
Educated Consumers
Teamwork
Aging Workforce
Leadership
Increasing Diversity
Continual Learning
Pyramid vs. Web
Source: Keying In- Newsletter of the National Business Education Association, March 2003
Skill Level Required
58%
Average Skill
Level: 3.6
40%
2%
Level 1
Level 2
Level 3
Level 4
Level 5
Source: Hudson Institute as reported in Arnold Packer, “Retooling the American Worker,” Washington Post
Level 6
Current Skill Level
70.5%
Average Skill
Level: 2.6
16.1%
6.6%
6.8%
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Article analysis & break…
Kraft limits advertising…
 See pp 104-105
 Discuss the legal implications of Kraft’s action
described in the article
 Discuss the balance/fairness issues of Kraft’s
action described in the article
 Discuss how your group feels about
advertising junk food to kids and Kraft’s action.
There are no right or wrong answers, just
share thoughts and ideas.
A continuum…
Responsible
“Good
Citizen”
Ethical
Legal
Agent of
positive
change
Categories of Business Law
Tort
Bankruptcy
Law
Contract
Law
Law
Business
Law
Sales
Property
Law
Law of
Agency
Law
Tort Law
Wrongful Act Causing Injury
Compensation
Negligence
Product Liability- Strict Liability
Cost of U.S. Tort System
$250
$204
In $ Billions
$200
$150
$129
$141
$148
$156
1994
1996
$167
$179
$100
$50
$0
1990
Source: Forbes, Dec. 23, 2002
1992
1998
2000
2002
Intellectual Property
 Patent - Rights to Invention
 Copyright - Rights to Literary Work and
Art Work (including sound, visual, and
performing arts)
 Trademark - Protects Name, Symbol or
Design (identifies goods or services of a
seller)
Types of Patents
 Design
Patents
©Utility Patents
™ Plant
Source: Entrepreneur Magazine
Patents
Patents Awarded
in the U.S. (2002)
3,500
3,000
2,500
2,000
1,500
1,000
500
0
IBM
Source: USA Today
Canon
Micron
NEC
Hitachi
Unusual U.S. Patents
Awarded to Universities
School
Invention
U. of California
New almond tree named “Winters” to help
pollination
M.I.T.
Caltech
U. of Texas
Johns Hopkins
Source: Forbes, March 31, 2003
Method to track motion of body
Golf putter with “raised center of gravity
New compound to grow human hair
Thermal-control apparatus for body armor
Origin of U.S.
Patents Granted (2000)
S. Korea
Canada
U.K.
France
Taiwan
Germany
Japan
U.S.
0
Source: USA Today
20,000
40,000
60,000
80,000
100,000
IBM Average
Patents Per Week
70
60
50
40
30
20
10
0
1993
Source: World Features
Syndicate
1994
1995
1996
1997
1998
1999
2000
2001
International
Patents Awarded (2002)
3,500
3,000
2,500
2,000
1,500
1,000
500
0
IBM
Source: USA Today
Canon
Micron
NEC
Hitachi
Sales Law
$ Uniform Commercial Code
$ Warranties
 Express
 Implied
 Full
 Limited
$Negotiable Instruments
Contract Law
Breach
 Contract

 Legally Binding
 Consequences
 Offer
 Acceptance
 Consideration
 Competence
 Legal
 Proper Form
 Specific
Performance
 Payment of
Damages
 Discharge of
Obligation
Business Law/Legislation
 Sherman Antitrust Act
 Clayton Act
 FTC Act
 Robinson-Patman Act
 Consumer Protection
 Tax
 Bankruptcy
 Chapter 7
 Chapter 11
 Chapter 13
 Deregulation
Ethics
More Than Legality
Standards are
Fundamental
Stem From Individual
Ethical Decisions are Personal
Religious, Moral, Cultural Teachings
Individual Rights and Responsibilities
Legislation
 Statutory Law
Court Decisions
 Common Law
Factors Influencing
Managerial Ethics
Individual
Values
Work
Background
Organizational
Top Level Mgmt.
Philosophy
Family Status
The Firm’s
Reward System
Personality
Job Dimensions
Environmental
Competition
Economic
Conditions
Social/Cultural
Institutions
SEC Investigations (2002)
Accounting
Arthur Andersen
Deloitte & Touche
Ernst & Young
KPMG
PriceWaterhouse Coopers
Energy
CMS Energy
Dynergy
Enron
Halliburton
Reliant Resources
Source: Business Week, June 10, 2002
Software
Computer Associates
Network Associates
Telecom
Global Crossing
Lucent Technologies
Qwest Communications
WorldCom
Wall Street
Credit Suisse First Boston
Hedge Funds
Capital Markets
Merrill Lynch
Corporate Scandal Fines
Company
Arthur Andersen
Citigroup
Merrill Lynch
Credit Suisse
First Boston
Source: Business Week, Nov. 4, 2002
Fine
Reason
$500,000
Obstruction of Justice
Shredding Enron
Documents
$5,000,000
Analyst Issued Misleading
Information
$100,000,000
Conflict of Interest
Between Investment
Bank & Research Dept.
$100,000,000
IPO Shares Unfairly
Distributed
How Much Do
Americans Trust Corporations?
All Corporations
A Great Deal
Fair Amount
Only A Little
Not At All
No Opinion
Source: USA Today/CNN/Gallup Poll, Jan. 25-27, 2002
10%
41%
35%
13%
1%
Your Employer
A Lot
50%
Only Somewhat
39%
Not At All
8%
No Opinion
3%
Ethics Check Questions:
Is It Legal?
Is It Balanced?
How Will It Make Me Feel About
Myself?
Corporate Citizenship…
Societal Responsibility
Stakeholder Responsibility
Ecological
General
Customers Profit
Profit Responsibility
Owners/Stockholders
Public
Suppliers/Distributors
Public Interest Groups
Source: Marketing, 5/E by Berkowitz, Kerin, Hartley, and Rudelius.
Environment
Employees
Contributions to Charity
(In Billions of Dollars)
$9
$10
Individuals
$12
Foundations
Bequests
$120
Corporations
New Philanthropy
Donor
Estimated Total
Given (in Millions
Bill Gates
$25.6
Health &
Education
Gordon Moore
$6.6
Conservation & Education
James Stowers
$1.5
Biomedical Research
Eli Broad
$1.045
Education & Arts
Walton Family
$.75
Education
Source: Business Week, Dec. 2, 2002
Causes
Corporate Annual Giving
Merck
Johnson & Johnson
Pfizer
Eli Lilly
IBM
Microsoft
Intel
Bank of America
Source: The Taft Group
$221.0*
176.2
123.9
121.4
116.1
104.7
101.0
91.5
* In Millions
Re
lig
En
vi
H
ro
io
us um Ar n./
Ch an t/Cu An
ar Se ltu ima
ity rv
ls
. re
Where Charitable
Contributions Go (2001)
Source: BusinessWeek. Dec. 2, 2002
$4.1
$6.4
$11.8
$12.1
$18.4
$20.7
In Billion $
$31.8
$81.0
Why People Volunteer
Percent of Respondents
Civic Duty
Learn Issues/Problems
Be With People With Same Ideals
Be With People They Enjoy
Improve Community
Help People
0
20
40
60
80
Total is more than 100%- respondents could give more than one reason.
100
Corporate Volunteer Days
International Ethics
& Responsibility
Ethics Not Unique To U.S.Leaders Accountable
Demand for Socially Responsible
Behavior
Inter-American Convention
Against Corruption
Social Audit
By Company
Outside Company
Socially-Conscious Investors
Environmentalists
Union Officials
Customers
In Conclusion…
Agent of
positive
change
Responsible
“Good
Citizen”
Ethical
It’s a continuum…
Legal
Week 3 Lead-in
 Chapters 2 and 3 – Global Economics
 Find an article talking about the Key Economic
Indicators on pages 53-54. How are they interpreted?
Do different people have different ideas about if they
imply good or bad news?
 There are lots of articles about global trade right now.
Find an article and compare their comments to the text.
Any differences in perspective?
 Or, whatever you want, just be thoughtful and
“buzzword compliant”
 Before you leave next week…
 Group roster with project idea!