Vendor Relations
the relationship a company has with those that supply the products and services it needs.
Investor Relations
Relationship a company has with those that support it financially.
Ethics
In short, ethics focuses on whether actions are praiseworthy or not. The philosophical study of morality.
Legal Rights
These are rights that are man-made and are a set of laws that people in a specific society must follow.
Natural Rights
These are rights given to us at birth that are universal and based on principles like expression, thought, beliefs, customs and even privacy. Some people believe that these rights are granted by a higher power, while others believe that these rights are s
Slander
to verbally defame someone's character by making false statements that can harm a person's reputation
Deontology
Is about strict adherence to rules regardless of consequences. For example, people who believe that the death penalty should always be enforced even though some innocent people are executed might be described as having a deontological point of view.
Consequentialism
Consequentialists believe that actions are defined as good or bad based on the consequence for their action. In other words, the end result justifies the means. A consequentialist may believe that the price of gasoline is too high and, thus, be a proponen
ethical relativism
This means what is morally right or wrong depends on the norms in one's culture. This means that there is no one universal moral code by which all people live.
moral absolutism
holds that the same standards apply in every situation regardless of culture or other factors. Let's say you meet a woman from Sweden who thinks it is morally wrong for the United States to provide no public healthcare for its citizens. Even though many A
Virtue Ethics
says that it is not a person's actions that determine whether he is moral or not; it is his character that should be taken into consideration when making judgment. A person who generally treats people well will be less likely to be judged as immoral when
Care ethics
reminds us that people are relational beings and require care in relationships. Adherents to this theory believe that there is no set of standards that define what is right or wrong. It is more about taking another person's feelings into consideration whe
Ethical behavior
Acting in ways that are consistent with how the business world views moral principles and values.
ethical codes of conduct
provide guidelines on how employees should act at work.
organizational relationship problems
which are problems that stem from a company not having a clearly stated mission, goals, and objectives. Employees need to put the company's goals ahead of their own personal agenda. Trendon's top executives stole millions from the company and then donated
Conflict of Interest
A conflict of interest occurs when an employee takes advantage of a business situation for personal benefit rather than the company's own interests. A common example in this scenario is the use of bribes or gifts to embellish a business deal. Trendon's to
Misleading Advertising
which is misrepresenting a product or service in an unethical way. Companies that make illegal or unethical claims in their marketing and advertising can face the loss of customers and fines by the government regulators. Trendon was fined due to misleadin
Fraud
describes circumstances in which a company obscures the truth from public knowledge. As you'd imagine, fraud can happen on a lot of different levels. It could be as simple as a sandwich maker advertising 10-inch submarine sandwiches as being a foot-long o
Insider Trading
or using private knowledge for private financial gain in financial markets, is illegal. Even famous people can get in big trouble for this, like consumer goods mogul Martha Stewart, who spent months in prison after having been found guilty of insider trad
Bribery
occurs when payments are made to another party to ensure that a desired outcome happens. Sometimes companies even try to pay off governments. Think about it like this - if your company was about to get a $1 billion dollar contract, what does $16 million m
Bhopal Disaster
a leak caused a large cloud of poison gas and other chemicals to descend over Bhopal, a town in India, killing thousands. The company is Union Carbide. Tens of thousands more were disabled as a result. Even today, the company is heavily protested in India
Philosophy
Philosophy is the study of how we understand our existence and how we come to know what is real, good, and true. It's an academic discipline and so has branches that focus on specific areas. Philosophy aims to discuss questions such as: 'What is real?,' '
Morality
The Differentiation between right and wrong.
Normative (Ethics)
In which actions are judged by their merits, allowing societies to develop codes of conduct for behavior. The Golden Rule, do unto others as you would have them do unto you, is a classic example of normative ethics, since you are determining morality thro
Descriptive (Ethics)
descriptive ethics ask what do people think is moral? This branch of ethics does not actually claim that things are right or wrong, but simply studies how individuals or societies define their morals. What makes something right or wrong in a specific cult
Universal Set of morals
some things are just right, some things are just wrong, no matter what. Despite the lack of evidence to support this idea, this is still the foundation for many systems of morality, both ancient and modern.
Virtues
Some anthropologists claim that all societies develop morals that strengthen certain virtues. Virtues include wisdom, courage, humanity, justice, temperance, and transcendence, or spirituality. However, even if all societies do believe in these virtues, t
Values
are aspects of life that we consider important and worthwhile. For instance, both philosophers and the general public are concerned with values such as love, freedom, justice, fairness, happiness, and security, for instance. These are a few examples of po
Prescriptive Morality
is focused on prescribing how a person should behave.
Immoral
Something bad or wrong.
Universal
Right and wrong transcend time and culture and apply equally to everyone. For these people, morality is generally explained as coming from one of two sources.
Egoistic
Morals give society a shared set of values and rules, and this gives people guidelines they can use to ensure their own safety, happiness, and success within that group.
altruistic
or focused on others or the greater good. Altruistic morals help preserve group unity and stability by teaching us to be humble and to put the greater good ahead of our own needs.
Metaethics
the study of the meaning of ethical terms and the comparison of ethical theories. In metaethics, you are still searching for moral truths, still trying to define how people ought to act, so many classify it as a branch of normative ethics
Applied Ethics
or the study of how people ought to behave in specific situations. To be clear, this one is unquestionably a field of normative ethics, but again it's often given its own distinction because it is so focused. Applied ethics are not concerned with greater
Laws
are the rules a country or community mandates its citizens follow in order to regulate society. Laws are not optional. They must be obeyed.
Religion
s a structure of faith and worship. It's a belief system based on faith in a supernatural power.
Jurisdiction
the official power to make decisions and judgments. Keeping things as simple as possible, sociologists argue that religion and morality have jurisdiction over a person's private life; the law does not. Revisiting our poor alcoholic, the law can't dictate
Ethics of Care Theory (Carol Gilligan)
pre-conventional, conventional and post-conventional. Within each stage, there are goals and specific transition points that move the individual through the stages. Gilligan suggests that these transitions are fueled by changes in the sense of self rather
Moral Development (Physiologist Lawrence Kohlberg)
People first pass through two stages known collectively as the pre-conventional level. In the first stage, people are motivated by trying to avoid punishment; their actions are bad if they get punished and good if they don't. In this stage, Lauren would g
Moral Foundations theory
According to this theory, there are six universally accepted foundations of morality. No, not everyone lives up to them, but almost all of us know what they are.
1. Care vs Harm
2. Fairness vs Cheating
3. Liberty vs Oppression
4. Loyalty vs Betrayal
5. Au
Care vs Harm
The first principle or foundation of morality is that of care versus harm. This is the natural born belief that as humans we should value and care for others. We should seek the good of others. Whether living in Asia or America, most humans inherently bel
Fairness vs Cheating
The next principle is fairness versus cheating. Again, pretty simple, we all know we're supposed to be fair and just. Cheating is bad; being fair is good. From kids cheating on tests to adults cheating on taxes, we all just inherently seem to recognize it
Liberty v Oppression
Our next moral foundation is that of liberty versus oppression. Although things like slavery have definitely gone against this one, it's the idea that tyrannical oppression is wrong. Quoting a rather famous document, it's the inherent belief that all of u
Loyalty v Betrayal
Next, we'll consider loyalty versus betrayal. Building on the fact that humans are social beings, this is the concept of faithfulness to a group. Whether this is a big brother standing up for his little brother or a young marine fighting for his country,
Authority v Subversion
Moving on, we come to authority versus subversion. Putting this one simply, it's the basic belief that authority is to be respected. It's the reason most of us obey the law. We don't think that much about it; it's just automatic. It's the reason most of u
Sanctity v Degradation
Our last moral foundation is that of sanctity versus degradation. With sanctity meaning holy or sacred, this is the simple idea that some things are just plain wrong, even disgusting. There are just things you don't do. For instance, adults don't hurt chi
Sociology
which is the study of society.
Psychology
Is the study of human thoughts, feelings, and behaviors. Psychology looks at what people have in common, but it also looks at individual differences in thoughts, feelings, and behaviors. Psychological views of morality say that people act morally because
Theology
is the study of religious belief. Many people's morality is based in theology. Guilt, for example, is often associated with religion and the feeling that you have sinned.
Theological approaches to morality focus on the way that religion shapes our moral b
Moral Realism
is the philosophical belief that morals do exist. So, this is the claim that certain morals are simply true, the way a mathematical equation is true.
Ontology
he study of what is
Moral Fact
Moral facts are simply, objectively true. They just are. However, for a moral fact to be true, it must always be true
Moral Statement
A moral claim expressed through language is called a moral statement. My moral statement claims to be true, but it is only factual if it can be observed being true, the way that my mathematical equation is only true if two and two is shown to equal four.
Moral truth
When a moral statement accurately corresponds to reality, it is called a moral truth.
Moral Reasoning
the practical analysis of how someone morally ought to act.
I'm not going to do this for you - you're on your own here, because moral reasoning takes a lot of thought and debate. But I will tell you that to support moral realism, the reasoning must be gro
Moral absolutism
there are universal and absolute moral rules that must be followed without exception. Since giving the unused food to the family would be a kind of theft, at least in the eyes of his employer, Dillon would be ethically prohibited from giving the family th
Moral relativism
Proper moral conduct s relevant to the culture and even particular circumstances at hand. While Dillon may believe that giving the unused food to his friends after work is morally unacceptable as theft, he may believe giving the unused food to the homeles
Utilitarianism
basically says that an act is morally correct if it leads to a net level of happiness rather than a net level of unhappiness. Let's look at a quick example.
Let's say you are the CEO of a major drug company. The FDA has just approved one of your experimen
deontological theory (duty)
holds that there are certain moral rules, also called moral duties, that must be followed. An action is moral if it complies with the duty. On the other hand, if you violate the duty, you commit an immoral act. For example, it's generally accepted that on
ethical nihilism
simply refuse to concede that there is such a thing as an intrinsically moral or immoral act. In the bluntest of terms, a nihilist doesn't believe that murder is either moral or immoral. A business that follows the view of ethical nihilism may pretty much
Deontology
defines an act as moral or immoral based upon whether the duty was violated regardless of the consequences flowing from the act.
Ethical relativism
concedes that there are moral and immoral acts but argues that an immoral act may be considered a moral act in a different culture or under a different set of circumstances.
John Stuart Mill (Utilitarianism)
Mill's moral philosophy, utilitarianism, and how it applies to business dilemmas, like the one about whether to release the drug or not. According to Mill's theory of utilitarianism, the way to know whether something is ethically right or good is not by d
cost vs. benefit
approach to ethical decisions, when a company weighs the pros and cons of possible outcomes for a decision, is utilitarian in nature. Businesses often apply a cost vs. benefit analysis to determine what is ethical from a utilitarian standpoint. In this an
Act utilitarianism
looks at each situation independently and evaluates each dilemma according to utilitarian principles. For example, when you look at your ethical dilemma, it's clear that getting the project done on time will cause the least amount of harm compared with pr
Rule utilitarianism
sets rules or laws based on what the most ethical thing is in most situations. In other words, you might ask yourself, 'In a situation like this one, what is usually the outcome that will cause the most benefit to the most people, and how can we set a rul
Social Contract of Business
Simply put, some view businesses as having special responsibilities due to the fact that they are permitted by society to do business. As we will see in this lesson, that can take on a number of shapes.
philanthropic purposes
These purposes could range from donating to local causes to holding gala events for high-profile charities.
corporate social responsibility
A number of observers are saying that due to the increased size of companies, and the fact that they are growing increasingly wealthy, businesses have a role to play in the societies around them beyond just cutting a check every so often. This is often ca
Social Responsibility
can be defined as a company, person or organization that, during the course of its business dealings, works with the benefit of society as a whole in mind.
Thankfully, many companies have adopted a socially responsible stance when they conduct their busin
Service Principle
which is that the owners' purposes were to service society through the creation of profitable businesses. Robert Wood of Sears is an example of a business leader who subscribed to the principles. His views continue even today.
Between 1900 and the 1960s,
Economic Responsibility
which focuses on a company's obligation to fulfill consumers' needs with products and services
Legal Responsibility
in which Pear Products is expected by customers, society and the government to adhere to national and state competitive, taxation and employment laws. Pear Products was slowly able to initiate sales their first few years as consumers grew to love the qual
Ethical Responsibility
the ability of a company to conduct their business morally and treat their stakeholders ethically. Pear Products treats all of their stakeholders with fairness. For example, a former employee offered to provide detailed product designs of a competitor's n
Philanthropic responsibility
in that they subscribe to practices that benefit society, such as charity work at local homeless shelters, donation of money to help the environment and providing free services. Pear Products recently won CSR Company of the Year due to their donations of
Corporate social responsibility (CSR)
is the use of a business's resources to help solve social problems and achieve social goals. Companies are embracing this business philosophy in order to be profitable and attain respect from their stakeholders. There are four levels of CSR that companies
Sustainability
A new philosophical trend in social responsibility is called sustainability. It is the thought that if a company helps society through their business as a main goal, then they will reap success. Companies can look to solve society's problems by creating a
Stakeholder theory
This theory's central focus is that social responsibility is really giving attention to every stakeholder in the entire company whether it be the employees, customers, owners, suppliers, management or the community.
The following is how each stakeholder w
corporate social responsibility
Corporate social responsibility is a business's concern for society's welfare. This means that marketing managers are interested in long-term corporate interests and also society's health.
Corporate citizenship
Businesses need to treat their stakeholders ethically and with respect by believing in corporate citizenship, in which they show commitment to ethical behavior by balancing stakeholders' needs and protecting the environment. id you know that Microsoft has
Prestige Pricing
This allows the company to offer prestige pricing, or high pricing, for entrance to their park due to their reputation, customer service and high quality.
Stages of Corporate citizenship
Stages of Corporate Citizenship
Fun Town did not always embrace the idea of corporate citizenship. There are five stages of corporate citizenship that all companies will progress through as they gain more experience and understanding. In each of the stage
corporate social performance model
Recently, a model was developed to help determine if a company was being responsible to their legal and economic stakeholders, while also being socially responsible. This model is called a corporate social performance model and consists of three elements
social responsibility categories
The first element of the corporate social performance model is the social responsibility categories, which include economic, legal, ethical, and philanthropic areas. Companies must examine whether they have been successful in each specific area starting a
Mode of Social responsiveness
mode of social responsiveness and refers to how responsive a company is to social issues. A company can be proactive, accommodating, defensive, or reactionary. A socially responsive company will be proactive. Using Microsoft as our example, they act in a
Social Issues of stakeholders
Social issues of stakeholders is the last element of corporate social performance analysis. This part of the model explains the specific topics that a business must consider with the first two dimensions of responsiveness and social responsibility categor
Free marketing
This all amounts to an incredible amount of work for companies, but there are some pretty substantial payoffs. Most notably, a company that meets its global obligations is likely to receive very favorable coverage in the media. That is free marketing. Add
B corporation
A B corporation is very similar to a traditional corporation, but with one big difference. Whereas a traditional corporation exists only to make money, a B corporation also exists to do something good for society. But wait, how can a company make money an
Bottom of the pyramid
bottom of the pyramid (meaning that they are the poorest but largest group within capitalism) as well as how companies are best interacting with them. First, let's make sure we all understand who we're talking about by being at the bottom of the pyramid.
OSHA (Occupational Safety and Health Administration)
the Occupational Safety and Health Administration. The OSHA assures a safe and healthy work environment and working conditions for men and women. The OSHA accomplishes this by providing training, education, and information for organizations to follow and
NIOSH (National Institute for Occupational safety)
National Institute for Occupational Safety and Health s a U.S. federal agency that conducts ongoing research to prevent worker injury and illness. Typically, they would focus on areas such as employees working with chemicals or unsafe working conditions,
NLRB (National Labor Relations Board)
National Labor Relations Board, otherwise known as the NLRB, is a federal agency that has the power to protect employees' rights to organize and to form unions, should the employees wish to do so. The organization also works to prevent and repair any unfa
FMLA (Family Medical Leave Act)
One of the newest government regulations is the Family Medical Leave Act, or FMLA. This act allows eligible employees to take unpaid protected leave for specific reasons, such as the birth of a child or to care for a spouse or sick child that has a seriou
regulation
or controlling and managing an industry through laws.
Economic Regulation
Economic regulation sets prices or conditions for firms to enter a specific industry. Examples of regulatory agencies that provide these types of conditions are the Federal Communication Commission, or FCC.
Social Regulation
Social regulation deals with the protection of individuals through an agency, such as the Environmental Protection Agency (EPA) or Consumer Product Safety Commission (CPSC).
Privatization
Privatization is when government lets businesses take ownership of a public function. This can occur through a government contract where a private company will take ownership of a product or service.
A big concern about privatizing a function is that it r
Deregulation
Deregulation is when there is a decrease of regulation in an industry. A prime example of deregulation is the Airline Deregulation Act of 1978. The Act allowed many new airlines to enter the market with plentiful routes. Initially, prices decreased and op
Cross Subsidization
Cross subsidization is when one group of customers pays less than cost, while another group pays more than cost in order to balance out the inequity. A real-world example would be when you and three friends go out to dinner. The food bill comes to $100, s
Cost of service
Cost-of-service regulation is when price is regulated based on costs, which the end consumer pays. One example would be the electricity industry where their total costs are factored, and then the prices are distributed to the end consumer at the rate need
Regulatory Agencies
The federal government has set up safeguards to help protect all consumers. Companies have numerous federal regulatory agencies that oversee their operations to ensure ethical, safe and professional business practices. A regulatory agency is a governmenta
CPSC (Consumer Product Safety Commission)
The Consumer Product Safety Commission (CPSC) administers federal safety standards through powers endowed by Congress. Their function is to protect the public from unreasonable risk of injury or death from manufacturers of products. For example, many clot
EPA (Environmental Protection Agency)
Another regulatory agency is the Environmental Protection Agency (EPA), which establishes and enforces pollution standards, monitors insecticide use, and protects water sources, etc. The federal government has given the agency power to fine firms that dam
EEOC (The Equal Employment Opportunity Commission)
The Equal Employment Opportunity Commission (EEOC) is another federal regulatory commission that oversees Title VII, or the Civil Rights Act of 1964 (fair employment). Its mission is to protect all employees and job applicants from any form of discriminat
FDIC (Federal Deposit Insurance Corporation)
Financial organizations also have the Federal Deposit Insurance Corporation (FDIC) to monitor their business practices. The FDIC insures bank deposits, approves mergers and audits banking practices. This regulatory agency protects consumers and other busi
FTC (Federal Trade Commission)
In order to protect consumers from unfair or deceptive practices and ensure free and fair business competition, the federal government created the Federal Trade Commission (FTC). This agency's main purpose is to protect consumers from unethical or illegal
FDA (Food and Drug administration)
The Food and Drug Administration (FDA) administers federal food purity laws, drug testing and cosmetics safety. Companies need to ensure that their food or drug products are safe to use for all consumers or face fines or criminal charges. The FDA is also
SEC (Securities and Exchange commission)
The Securities and Exchange Commission's (SEC) mission is to protect stockholders' rights and ensure ethical activities by corporations.
The Securities and Exchange Commission was formed in 1934 as a result of the stock market crash and the need to protec
Sarbanes-Oxley Act
The Sarbanes-Oxley Act was passed to establish new standards for corporate accountability. In addition, new penalties were also created in case companies were unethical in their corporate financial disclosures. The biggest change was that the new law allo
Insider Trading
Another area that has threatened stockholder investments is the issue of insider trading, which is when a person has access to confidential information about a company's financial situation and then uses the information to buy or sell the company's stock
Federal Register
Are you aware that the federal government publishes proposed and new regulations daily? In this year alone, there will be 70,000 pages added to the Federal Register, which provides daily updates on government proposed or new regulations. Businesses have t
Regulatory Impact analysis
Part of the process toward publication in the Federal Register involves a regulatory impact analysis, which is a federal agency analysis of the necessity of the proposed regulation, possible alternatives, and the costs and benefits. Analysis steps include
Rule Making
Rule making is a process that the government uses to create regulations
Congressional oversight
Congressional oversight, which is part of the process of enforcing a regulation, is the reviewing, monitoring and supervision of federal agencies and policies. Here are the steps of the rule making process:
Initiating an event
Determination of rule
Prepar
Antitrust law
Antitrust law is a set of statutes developed to regulate competition between companies, mainly to ensure that businesses are engaging in fair competition. The purpose of these laws is to protect consumers from greedy business owners.
Market Share
the percentage of the total amount of revenue generated from the sale of a product that is held by one single company, it would impact competition. Only a few companies would have the highest market share, leaving little to no room for others to enter int
Monopoly
hich is a total market share taken by one single company, making it impossible for other competitors to make a fair buck.
Market allocation
Market allocation involves two companies conspiring to divide a market in order for two businesses to sell similar products at higher prices to drive away competition. For example, Acme Meat Packing, Inc. and Beefy Meat Packing want to be the only two bee
Bid Rigging
Another way companies can skew competition is by engaging in bid rigging. This happens when two or more companies agree to price bids unfairly.
An example may help. Bill's Plumbing Service, Joe's Plumbing Service and Pepe's Plumbing Service agree to bid o
Price Fixing
Price fixing happens when two companies set higher than average prices for a product that is only available for purchase by the two companies. By setting the same price, customers will not be motivated to be loyal to one store over another. Now, if both c
Sherman Antitrust Act
One way the government intervened was to create the Sherman Antitrust Act. This act was written in the 1800s to prohibit manipulation of markets and stop monopolies. The Sherman Antitrust Act was written to prohibit manipulation of markets and stop monopo
The Clayton Antitrust Act
The Clayton Antitrust Act made it illegal to engage in price discrimination or make exclusive deals and allows for private lawsuits, labor union organization and regulation of mergers. Clayton Antitrust Act makes it illegal to engage in price discriminati
Price Discrimination
Price discrimination refers to charging different prices to customers in the same area. For example, Tony's Tomato Sauce Company cannot charge a significantly higher price to certain pizzerias and less to others in the same market.
Exclusive deals
Exclusive deals are also not permitted. This means a company cannot be the exclusive provider of complementary products. In other words, a coffee machine company cannot develop a machine that takes only a certain type of coffee filter. This creates a mono
Treble damages for private lawsuits
The Clayton Antitrust Act allows treble damages for private lawsuits where a private party sues a business for violation of antitrust violations that had personal effects, like loss of money. Treble damages are three times the amount a jury specifies.
Labor union boycotts
Labor union boycotts are also protected under this act. Labor unions have the right to strike and not be considered in violation of a company's right to competition.
Mergers
mergers, where two or more companies merge to become one, are regulated under this act. The Federal Trade Commission must grant permission to merge. This keeps a company from buying competing companies to create a monopoly.
Occupational Safety and Health Act
Occupational Safety and Health Act which was passed by Congress in 1970. The goal of the Act is to make sure that workers have the most safe and healthy work conditions possible. Many states also run their own OSHA programs, but we'll keep our discussion
The Sarbanes-Oxley Act
The Sarbanes-Oxley Act , also known as SOX, is a federal law that protects investors from fraudulent accounting practices. The Sarbanes-Oxley Act, also known as SOX, is a federal law that protects investors from fraudulent accounting activities. It was en
Audit Report
An audit report is a report that's prepared by an auditor, and it validates the reliability of a company's financial statements. An auditor is a professional whose job it is to examine the financial records of a company and prepare the audit report.
Publicly traded companies
publicly traded companies are companies that offer shares of stock for sale to outside investors.
Internal Controls
Internal controls are procedures that are put in place within an organization to ensure business is carried out in an orderly, effective and accurate manner.
Unfair Competition
Unfair competition refers to several different types of intentional torts that cause economic injury to another person's business. The torts are many various forms of deceptive or wrongful business practices that will allow a civil cause of action and dam
Trademark Infringement
Trademark infringement is using a trademark without authorization from the owner or licensee, thereby causing a violation of trademark rights. I never gave Wilma permission to use my logo. Since Wilma used to work for me, I know she copied my logo on purp
Trade secret
is any confidential business information that provides the business with a competitive edge. This includes things like sales methods, distribution methods, marketing methods, research methods, consumer profiles, advertising strategies, suppliers lists, cl
Deceptive Advertising
This is deceptive advertising and unfair competition because Wilma is using an inaccurate advertisement to make a false statement about quality or price in comparison to another's product.
Deceptive advertising can be accomplished in many other ways, too,
Uniform Deceptive Trade Practices Act
the Uniform Deceptive Trade Practices Act, which simply makes a private civil remedy available to plaintiffs due to any misleading advertising, false disparagement, trade symbol infringement, or other deceptive trade practice. The plaintiff can be a consu
The Lanham Act
The Lanham Act devotes an entire section to unfair competition between businesses. Section 43(a) allows businesses to sue other businesses for a wide-range of false, misleading, confusing, or deceptive statements or practices.
Total Marketing environment
Companies need to understand the total marketing environment when developing a plan of action. These elements can be uncontrollable in nature and consist of demographics, social, economic, political, technological and competition. Let's look at the foreig
Competitive Analysis Research
This is when research is completed to discover exactly who the competitors are in the market and their strengths and weaknesses.
Differentiation
Differentiation is a way of spotlighting the differences between competitors, stores or products. The difference must be of value and noticeable to the consumer. The final plan for Parti Favors was to revamp their product line. They would only offer uniqu
Environmental legislation
Environmental legislation is the collection of laws and regulations pertaining to air quality, water quality, the wilderness, endangered wildlife and other environmental factors. The umbrella of environmental legislation covers many laws and regulations,
NEPA (National Environmental Policy Act)
The cornerstone of environmental law is the National Environmental Policy Act (or NEPA). This is the U.S. environmental law that established a nation-wide policy promoting the protection of the environment. This act of 1969 was formed to encourage a harmo
environmental impact statement (EIS)
The National Environmental Policy Act ensures that matters important to the environment are thoroughly considered in any decisions made by federal agencies. With the act came new procedural requirements for all federal agencies, including an environmental
Environmental law
Environmental law establishes protection for our scarce natural resources and natural surroundings, like land, air and water. It may seem like people have been concerned about industrial effects on the environment for only a short period of time.
South Carolinas Colonial Assembly
Would you believe that way back in 1671, South Carolina's Colonial Assembly passed a law that stated, 'Should any person cause to flow into or be cast into any of the creeks, streams or inland waters of this State any impurities that are poisonous to fish
Bald and Golden Eagle Protection Act
Bald and Golden Eagle Protection Act makes it illegal to hunt and kill bald or golden eagles by any person for any reason without express government permission.
The Endangered Species Act
The Endangered Species Act is similar but expands to include protection for any endangered species from being hunted and killed.
United States v. Dion
United States v. Dion, Dwight Dion, a member of the Yankton Sioux Tribe in South Dakota was charged with hunting, killing and selling parts of bald eagles and whole bald eagle carcasses.
On face value, it seems appropriate to convict Dion for violating th
Business Ethics
Business ethics refers to the moral principles or values that generally govern the conduct of an individual or group.
Ethical Behavior
Ethical behavior is acting in ways that are consistent with how the business world views moral principles and values. Business ethics determine employees' everyday conduct. Let's take a look at some of the factors that affect your ethical behavior in the
Values
Values are an individual's judgment or standard of behavior. They are another individual factor that affects ethical behavior. To some people, acting in an improper way is just a part of doing business. Would you feel that it is ethical to make up lies ab
Morals
Morals are another individual characteristic that can affect an individual's ethics. Morals are the rules people develop as a result of cultural norms and values and are, traditionally, what employees learn from their childhood, culture, education, religi
Ethical Codes
Most companies establish policies and procedures to provide ethical guidelines to employees. These are known as ethical codes and can establish checks and balances to support ethical behavior.
Organizational culture
Organizational culture is a system of shared assumptions, values and beliefs that governs how people behave in organizations.
Positive Culture
A positive culture helps employees learn and grow in their jobs.
Ethical Culture
An ethical culture promotes ethical behavior among the members of an organization.
Ethical Climate
The ethical climate of an organization is determined by the content and strength of the organization's culture
Unethical behavior
Unethical behavior is any activity by an organization member that does not conform to the standards set by the culture of their organization
Creating a positive organizational culture
Cultures that encourage positive and ethical behavior are typically high in risk tolerance, low in aggressiveness and concerned with the methods that are used to meet organizational goals. In order to create a positive and ethical culture, organizations s
Organizational Culture
Organizational culture is a system of shared assumptions, values, and beliefs that governs how people behave in organizations. The culture of an organization is difficult to measure or observe, but it performs many important functions within an organizati
Sense of Identity
The first function that organizational culture performs is providing group members with a sense of identity. The culture of an organization provides its members with a way to 'define who we are.' Because the culture of every organization is unique, being
Defines the Boundaries
defines the boundaries for members of an organization. These invisible boundaries are the way members of an organization determine 'what makes us different' from other organizations. The culture of an organization gives members of that organization a sens
Generates Commitment
. This causes members of an organization to feel dedication to the group. The unique culture of an organization provides its members with a feeling that they share common goals. Achieving the goals of the organization often becomes a higher priority than
Rules and Standards
The last function that organizational culture provides to members of an organization is a set of unwritten rules and standards that define the rules of the game to its members. Culture acts as a social glue that helps to hold the organization together by
Organizational ethical climate
Organizational ethical climate refers to the moral atmosphere of the work environment and the level of ethics practiced within a company. Instrumental, caring, law and order, rules, and independence are the five types of climates that can exist in an orga
Instrumental
instrumental ethical climate by managing via ethical egotism. He feels that he has every right to make selfish decisions if they benefit either the company or even him personally. He even sabotaged one of his competitor's sales events so that they would t
Caring
a caring ethical environment. Their CEO is concerned about employees' well-being and offers support in career development and other opportunities. This second type of ethical climate is based on excellent leadership, fairness, and goodness. Employees can
Law and Order
law and order climate is when precise codes of conduct are followed. This type of climate relies on the laws from outside sources, like actual state or federal laws. Conservative types of companies usually cultivate this type of ethical climate because th
Rules
the rules type of ethical climate is concerned with following rules, procedures, and policies established by the organization. In comparison to the laws climate, which depends on actual outside real laws, a rules climate relies on internal professional co
Independence
An ethical climate that promotes independence gives employees wide latitude to make decisions. This can cause great success because employees are able to think outside the box for problem-solving, especially if they are given the skills and information ne
Whistleblower
Have you ever heard of the term whistleblower? Did you think the term referred to a referee in a sporting event or a kind of lollipop? In this lesson, you will learn about the role a whistleblower can have in providing ethical reporting.
Ethical policies
ethical policies within an organization. Crazi Toys refers to them as the core values that represent the company and the steps employees need to follow to act in an ethical manner. Crazi Toys has basic values in their ethical policy, such as to uphold cus
Ethics training program
an ethics training program. This program consists of the training of ethical policies as a foundation and then fosters a supportive environment through a few different ways. The first part of the training program is to ensure that every single employee is
Role Play
In a role play situation the employee is asked to put themselves in an ethical dilemma and determine the correct course of action. For example, Crazi Toys has used role play in the past on cases that dealt with toys injuring customers. They asked, how sho
Ethical reporting
Ethical reporting, which is providing an avenue for employees or outsiders to report unethical behavior
organizational citizenship
What we are talking about when we look at a business from a perspective of a company being a city and wanting employees to feel closely associated with the city is organizational citizenship, or a perspective that employees have whereby they extend their
Assisting Coworkers
An employee can take time from their work to help another to get their job done, as they know it's important to the company and to the other employee. We have all potentially had situations where others pitched in to get a job done that had nothing to do
Working for the Future
Working for the future: So many employees look at what they are going to get right now and do not look far into the future. Those who practice organizational citizenship believe there will be rewards down the road and do not focus on the short-term; rathe
Being a company representative
When some employees leave for the day, the company they represent stays behind them in the office. An organizational citizen represents their company 24/7 and has no problem talking to others about how their company might help them. Think about standing i
Managerial Ethics
Managerial ethics is a set of principles and rules dictated by upper management that define what is right and what is wrong in an organization. It is the guideline that helps direct a lower manager's decisions in the scope of his or her job when a conflic
Ethical Behavior
Ethical behavior is acting in ways that is consistent with how the business world views moral principles and values
Ethical Code of Conduct
Ethical Code of Conduct, or guidelines on how people should act at work.
workplace deviance
Unethical behavior, or workplace deviance, will be punished through probation, demotions, and loss of certain privileges, such as extra vacation days, etc.
Diversity
The goal of diversity in business is to have people of varying backgrounds, education, sex, creed and age all working in the same organization. This allows an organization to have an employee base of very different people that can bring different ideas an
Low Context Culture
Low Context: This is a culture where issues are fully detailed and spelled out. Issues are much more specific, and a great deal of focus and importance is put on what is said. Thus, in a group setting, individuals from low context cultures will want speci
High Context Culture
High Context: This is a culture that makes a lot of assumptions about the commonality of the communications, views and knowledge. Individuals from these cultures do not need all the specifics, and there is a level of assumption and mutual understanding th
Formal Power
Formal Power: Power bestowed upon an individual who has expert knowledge in an area.
Informal Power
Informal Power: When an individual has a position of power over others, but it is not part of the hierarchical structure of the organization.
Expert Power
Expert Power: Which is power bestowed upon an individual who has knowledge of an area that is expert in nature.
Ethics
ethics is generally understood to mean the principles that govern a person's or group's behavior. Taking into account that every person has their own interpretation of ethics, we can see how this aspect impacts how a group works together. Decisions being
Discrimination
discrimination is the act of making a distinction between one thing and other. We discriminate between things on a daily basis. For example, in order for you to get dressed you have to discriminate among your pants so that you could find the correct pair
Employment discrimination
Employment discrimination is the unfair treatment of employees based on prejudices. The forms of discrimination can be dependent upon equal pay compensation, sexual orientation, national origin/language, pregnancy, religion, disability, race and sex.
Equal Pay compensation discrimination
equal pay compensation discrimination, because she did not offer both candidates the same pay even though they had the same experience. She also offended some of the interview candidates during the interview process.
Sexual Orientation Discrimination
Sexual orientation discrimination is when someone is treated wrongly just because of their sexual preference, whether it be homosexual, bisexual or heterosexual.
National origin/language discrimination
National origin/language discrimination occurs when someone is not hired due to their country of origin or the language that they speak. Martha discriminated against three foreign candidates for the position, as she did not want to have a subordinate who
Sex Discrimination
sex discrimination, which is treating an individual poorly because of the person's sex. Martha admitted that she wanted females as subordinates, who would go to lunch and shopping with her. She felt that hiring a male candidate would leave her lonely at l
Religious Discrimination
Religious discrimination is when a person is harassed or treated harshly due to their religious beliefs. Martha grew up in a Catholic household in New York. She was shocked when some of the candidates asked about Jewish or Muslim religious holidays as par
Disability Discrimination
Disability discrimination is when a physically or mentally disabled individual is passed over for employment due to their handicap.
Incivility
incivility, which is rude communication and behavior that is disrespectful.
U.S. Equal Employment Opportunity Commission (EEOC)
the U.S. Equal Employment Opportunity Commission (EEOC). It is responsible for policing federal laws that make it illegal to discriminate against an individual because of the person's race, color, religion, sex (including pregnancy), national origin, age
Internal Whistleblowing
internal whistleblowing. This means that the whistleblower reports misconduct to another person within the organization
External Whistleblowing
external whistleblowing. This means that the whistleblower reports misconduct to a person outside the organization, such as law enforcement or the media.
Federal Whistleblowers
federal whistleblowers. These are government employees who reveal misconduct committed by their employers or can also be private-sector employees who inform about the misconduct of their employers that is committed in relation to the federal government
The Whistleblower Protection Act
or WPA, protects disclosures of misconduct. This law protects federal employees who disclose illegal or improper government activities. The WPA shields federal employees from retaliatory action once the employee voluntarily discloses information regarding
Corporate whistleblower
corporate whistleblower. These whistleblowers are employees of corporations or other private businesses that disclose statutory or regulatory violations by the employer.
The Enron whistleblower was Sherron Watkins. She was an Enron executive when she disc
Corporate and Criminal Fraud Accountability Act
Corporate whistleblowers are protected by the Corporate and Criminal Fraud Accountability Act. This act is a subset of the Sarbanes-Oxley Act, which was enacted in 2002 as a direct answer to the issues raised by Enron and other corporate fraud scandals. T
False Claims Act
There are many other laws in place to protect people who engage in whistleblowing. These are often referred to as a patchwork because they vary from state to state and even by industry. The most famous is the False Claims Act, which was enacted in 1863, b
Civil Rights Act of 1964
In 1964, the Civil Rights Act was passed. It included a specific piece of legislation called Title VII, which protected against employment discrimination on the basis of race, ethnic background, gender or religious practices. The idea behind the legislati
Affirmative Action
Affirmative action, which consists of voluntary guidelines for companies to follow to make sure that jobs are available to qualified individuals regardless of sex, age or ethnic and religious background. Let's take a look at how affirmative action works w
Protected Group
Deema heard that the boss said that Deema was being disrespectful by wearing a 'hat' at work. Deema would be considered a member of a protected group since she has been identified as a previous target for employment discrimination.
Adverse Impact
she was facing an adverse impact. This is when members of a protected group are treated unfairly by an employer's personnel action. Deema called for an investigation. She contacted the state agency who investigated Deema's claims and found out that she wa
Title VII
which protected against employment discrimination on the basis of race, ethnic background, gender or religious practices. The idea behind the legislation was that it would level the playing field and give everyone an equal opportunity
Sexual Harassment
Sexual harassment is unwanted sexual advances, obscene remarks or any other offensive sexually motivated material or communication. In other words, we can understand that any type of sexual advance from one person to another that is not mutually welcomed
Hostile Work environment
a hostile work environment, as it relates to sexual harassment, happens when an individual must deal with advances, sexual comments or any type of offensive gender-related language that is beyond what could be defined as reasonable. Two words that we must
Serious/Pervasive
In this case, serious means that the advances are unwanted, and pervasive means they occur at more than one time and are frequent enough to alter how the people feel about them coming to work.
Diversity Training
Diversity training is a series of courses or instruction that increase the participants' understanding, knowledge and awareness of different cultural attributes. Most of this training centers on helping the individuals to better communicate and work with
The Americans with Disabilities Act (ADA) 1990
The Americans with Disabilities Act (ADA), passed in 1990, aimed to provide those with mental or physical disabilities equal opportunities to experience mainstream, public life. Modeled after the Civil Rights Act, the law prohibits discrimination in areas
Reasonable Accommodation
Since the passage of the Act, Eli's return to work would be very different. As long as the cost and difficulty was not extensive, his employer could be asked to provide a desk that allowed access for his wheelchair. This is known in the ADA as a reasonabl
Temporarily abled
In fact, the term 'temporarily abled' is sometimes used to describe a person currently without a disability to point to the reality that most of us will experience disability at some point in our lives, and most likely in our older years.
Workplace Privacy
Workplace privacy is simply the right to privacy afforded to employees under the law at the workplace or while engaging in work activities.
Ethics
Ethics is a system of rules and principles of appropriate conduct in any given culture, society or organization that guides people in their decision making and responsibilities. In simpler terms, it's a system of rules that tells us what behavior is 'good
Corporate Social Responsibility (CSR)
a policy of corporate social responsibility (CSR). Corporate social responsibility is the idea that a business has duties and obligations beyond making profits for shareholders and includes responsibilities to other stakeholders, including society at larg
Stakeholder
A stakeholder is a person or organization that affects, or is affected by, the company. Stakeholders can be internal, such as employees and managers, or external, such as suppliers, creditors, customers, shareholders, competitors, government and society a
Stakeholder Theory
Stakeholder theory is a framework used for ethical analysis that looks at the relationships between an organization and others in its internal and external environment and how these relationships affect how the organization conducts its activities. For ex
External Factors
External factors are things from outside an organization that directly or indirectly influences it. Oftentimes, these external factors are outside of the control of organization. These influences include the social and cultural, technological, economic, a
360 degree appraisal
A 360 degree appraisal is a type of employee performance review in which subordinates, co-workers, and managers all anonymously rate the employee. This information is then incorporated into that person's performance review.
Lawrence Kohlberg's concept of ethical development
In general, he lists three stages. In the first stage, a person's behavior is driven by simplistic concerns, such as fear of punishment or a quick appraisal of the immediate benefits to be obtained. In the second stage, a person's behavior is constrained
Sherman Act of 1890.
Sherman Act of 1890. This act makes monopolies or attempts to monopolize illegal, and it ensures fair competition. T
Robinson-Patman Act of 1936
Robinson-Patman Act of 1936, and this makes it illegal to offer different prices to different buyers of merchandise of like grade and quality. T
The Federal Trade Commission Act of 1914, the Hart-Scott-Rodino Act and the Celler-Kefauver Antimerger Act of 1950
The Federal Trade Commission Act of 1914, the Hart-Scott-Rodino Act and the Celler-Kefauver Antimerger Act of 1950 all were passed to regulate the competitive environment. These acts give the federal government more power to approve corporate mergers and
State Laws
state laws. Each state has different laws for companies to follow. For example, in California, the state has passed laws to lower energy consumption on an assortment of appliances. It is important to keep updated on state government changes within the sta
Regulatory Agencies
regulatory agencies. These agencies are known to pursue businesses that violate regulatory laws. He spent the most time briefing the marketing managers about three specific agencies.
Consumer Product Safety Commission (CPSC)
The Consumer Product Safety Commission (CPSC) is a federal agency established to protect the health and safety of consumers in and around their homes. This agency sets safety standards for all consumer products. They can impose large financial fines on co
Federal Trade Commission (FTC)
The Federal Trade Commission (FTC) is another federal agency empowered to prevent persons or corporations from using unfair methods of competition in commerce. The agency can investigate unfair company mergers and deceptive advertising. Recently the FTC w
Food and Drug Administration
Food and Drug Administration. This agency handles regulations against selling and distributing misbranded or hazardous food and drug products. The agency has gone against the tobacco industry for years and has recently decided to target fast food companie
Ethics
The answer is that it is, usually, your ethics. Ethics refers to the moral principles or values that generally govern the conduct of an individual or a group. They can also be viewed as a standard of behavior. The gray area of ethics occurs when one perso
Business Ethics
Business ethics determine companies' everyday conduct. They include both laws and morals, which determine how an employee will act in the business world.
Laws
Laws define the boundaries of what is legal and are the written guidelines that must be followed in society.
Morals
Morals are the rules people develop as a result of cultural norms and values and are, traditionally, what employees learn from their childhood, culture, education, religion, etc. They are usually described as good or bad behavior. Would a salesperson have
Lawrence Kohlberg
Psychologist Lawrence Kohlberg famously identified three levels of ethical development that individuals typically progress through. By looking at these stages, we can begin to talk about whether behavior is ethical and what its motivations might be. The f
preconventional morality
The first level of ethical development is called preconventional morality. This level of ethics is most childlike. The best example would be to think of how a toddler acts during a day. They're very self-centered and only driven by rewards or punishment,
conventional morality
conventional morality, which means behaving in accord with society's rules and expectations. This level is when a marketing manager would be concerned with breaking a law and how it could be viewed by outsiders. Another way to look at this is peer pressur
Postconventional Morality
The last level is called postconventional morality and revolves around the idea that people are more concerned about how they view themselves and not what others may think. Internal pressure to behave correctly and follow a moral path is the central theme
Ethical target marketing
Ethical target marketing occurs when businesses analyze and research consumers to see what predisposed ways might make an individual purchase a product.
Predisposed ways
Predisposed ways can be numerous factors that make consumers purchase a specific way, such as personal preferences, cultural norms, or habitual purchasing.
unethical target marketing
Other companies use unethical target marketing by focusing on target markets that can be easily influenced and manipulated.
Target Marketing
Target marketing is when a company targets a specific group of customers for their product or service through advertising. The groups are organized together because they have similar beliefs and values, which leads to common purchasing patterns. Among the
Vulnerable populations
When companies purposely target vulnerable populations, they are participating in unethical target marketing. These types of populations or target markets consist of consumers that have psychological problems or lack maturity and intelligence to make info
Manipulation
One way companies' use unethical target marketing is through manipulation to force or direct consumers' behavior in subtle ways. An example of this type of unethical marketing occurred with a product called Save a Life, which sold medical alarms to the el
Deceptive advertising techniques
Since companies face difficulty in acquiring consumers' interest in such a competitive landscape, many have resulted in using deceptive advertising techniques to get attention. This type of advertising is also known as false advertising and uses misleadin
Ambiguity
Advertisers tend to use ambiguity or inexact, obscure, or vague wording to try and convince consumers to purchase their product. Businesses like to be vague in their wording in the hopes that consumers will come to their own favorable thoughts about their
Weasel words
Another example of ambiguous wording is called weasel words, which is when companies select words that help make their claim seem legitimate. The best example of a weasel word is the term 'help'. Consumers will assume that if a product will help them lose
Puffery
The use of puffery, or exaggerated claims, is the last ambiguous abuse of advertising that businesses employ. Examples of puffery are when advertisers use the words 'best, most, greatest' to communicate to consumers some sort of fact, even when there is n
Hiding facts
Another way businesses use advertising unethically is by hiding facts from the public. In this technique, companies conceal information that would be considered uncomplimentary. This is a manipulation of the truth and can also result in consumer harm.
Controversial advertising
Although the main abuses of advertising fall under deception, companies also use controversial advertising, also known as shock advertising, to gain the attention of their consumers. This type of advertising uses shocking, inappropriate, and sometimes une
Federal Trade commission (FTC)
Government has the most substantial role in battling advertising abuses. The Federal Trade Commission (FTC) oversees the protection of consumers from fraudulent business practices and deceptive advertising.
Cause-related marketing
This is called cause-related marketing, and its growth has exploded during the last ten years. A more official definition of cause-related marketing is that it is the team marketing efforts of a for-profit and a non-profit business.
The trend has increase
Persuasive messages
Persuasive messages are a type of communication that's used to change an individual's intentions, actions or beliefs.
Legal Communications
Legal communications are concerned with employees having the understanding to not violate ethics, standards and laws pertaining to business communications. The five areas of legal communication that Georgia Baked Chicken needs to be concerned with are dis
Disclaimers
The first type of legal communication that Georgia Baked Chicken needs to establish is concerning disclaimers, or written documents that will protect the restaurant chain from potentially harmful litigation in the event of misuse or misunderstanding by cu
Disclosures
Georgia Baked Chicken also needs to make sure that they are honest with their business practices through disclosures. These usually deal with conflicts of interest, research claims or revealing business proprietary relationships. Georgia Baked Chicken has
Marketing Communications
According to federal regulations, Georgia Baked Chicken has to provide professional marketing communications, or fair, accurate and non-deceptive marketing and advertising when communicating to their customers and clients. Product claims must be fact-base
Reporting
Every publicly-traded company, like Georgia Baked Chicken, needs to provide detailed financial reporting, which are standardized reports that summarize a company's financial position at a specific point in time. It is important for the communication to be
Internal Communicatons
Finally, Georgia Baked Chicken needs to ensure that they have an excellent way to conduct internal communications. This type of communications are with a company's outside stakeholders, state agencies and employees. It is important to communicate directio
Moral agency
Georgia Baked Chicken also needs to be concerned with establishing a moral agency, or an ability to choose the best ethical path within their growing restaurant chain
Ethical communications
Ethical communications, or truthful, accurate and respectful actions, are a pillar of how a business maintains integrity. Georgia Baked Chicken's philosophy is based on three key elements of ethical understanding: goals, means and outcomes.
Goals
The first element focuses on goals, or what the restaurant wants the end result to be. In regards to the before mentioned layoff, Georgia Baked Chicken wanted the end result to remain profitable and attractive to investors.
Means
The second key element is means or how someone chooses to communicate. Georgia Baked Chicken wanted to communicate honestly and with transparency. They held open meetings to address the financial issues and discuss the implications of the layoffs. No empl
Outcomes
The last element of ethical framework is outcomes, which is the consequence of the decision. In order to remain ethical, companies need to consider the amount of harm that a decision could cause to someone. Companies need to work hard to minimize damage o
Gramm-Leach-Bliley Act, or GLBA
Gramm-Leach-Bliley Act, or GLBA. This federal law was enacted in 1999 and is named for the three congressional co-sponsors of the act. The act is extensive and complicated with lengthy provisions. Generally speaking, though, it specifies how financial ins
Financial Privacy Rule
The GLBA's financial privacy rule requires companies to give individuals privacy notices and the right to opt-out of some information sharing. You may recall receiving this type of privacy notice from your credit card company or bank. The privacy notices
Safeguards Rule
The second section is the safeguards rule. This rule basically requires financial institutions to develop and implement an information security plan. The plan must include both physical and technical safeguards for consumer information. The rule is purpos
Pretexting Provisions
The third section contains the pretexting provisions. Unlike the other two sections, these provisions don't apply to financial institutions. The provisions basically prohibit individuals and companies from obtaining customer information from financial ins
Consumerism
consumerism has more than one definition. In business and economy, it means to promote the rights and safety of consumers.
Consumer Protection
Consumer protection, therefore, refers to laws and other forms of government regulation designed to protect the rights of consumers. The Federal Trade Commission, or FTC, serves as our nation's consumer protection agency and administers many different con
Consumer Rights
Consumer protection is based on consumer rights, or the idea that consumers have an inherent right to basic health and safety. The FTC protects these rights by:
Enforcing product safety
Distributing consumer-related information
Preventing deceptive market
Product Liability
Consumer protection is often achieved through the legal doctrine of product liability. Generally speaking, this is the legal responsibility imposed on a business for the manufacturing or selling of defective goods. Product liability laws are state laws, a
Strict Liability standard
a strict liability standard. This means that a manufacturer will be held liable if the manufacturer's defective product causes injury, regardless of fault. This wasn't the law in 1944, but it is today in many jurisdictions.
The Consumer Financial Protection Bureau (CFPB)
The Consumer Financial Protection Bureau (CFPB) ensures consumers have the information needed to select the best financial services, such as credit cards, student loans, and mortgages. The CFPB works with companies to eliminate fine print add-ons that can
The Consumer Product Safety Commission
The Consumer Product Safety Commission is responsible for consumer product safety
In 1972, Congress passed the Consumer Product Safety Act
In 1972, Congress passed the Consumer Product Safety Act, which gave the CPSC powers to protect individuals from unsafe consumer products. They accomplish this task through evaluating the safety of consumer products, developing standards, and conducting r
The Federal Trade Commission (FTC) was initially created in 1914
The Federal Trade Commission (FTC) was initially created in 1914 as an agency that wielded a weapon against antitrust. Eventually, the commission's powers were enlarged to also protect consumers against false advertising and fraud. There are many specific
food and Drug administration
The Food and Drug Administration is responsible for the safeguarding of public health by monitoring drugs, medical devices, and cosmetics. The administration also helps improve consumers' health through advancing drug innovation. Lastly, they also protect
The National Highway Traffic Safety Administration (NHTSA)
The National Highway Traffic Safety Administration (NHTSA) was created by the U.S. Department of Transportation in 1970 to protect consumers by reducing death, injuries, and monetary losses through vehicle accidents. It also plays a huge role in the inves
The Securities and Exchange Commission (SEC)
The Securities and Exchange Commission (SEC) is another federal regulatory agency that was established by Congress to protect consumers. The purpose of the SEC is to regulate the securities markets and provide full public disclosure of financial informati
Better Business Bureau (BBB)
As it turns out, you may have your hopes dashed about just what the Better Business Bureau (BBB) can do. It is not a government agency, so any dreams you have about seeing your most hated company receiving serious punishment are gone. Instead, it is a non
Privacy
Privacy is the right to be left alone and free from surveillance and unreasonable personal intrusions.
Information Privacy
Information privacy is the right to determine when and to what extent information about oneself can be communicated to others. This applies to individuals, groups, and institutions. Privacy can be interpreted quite broadly, which contributes to the debate
Electronic surveillance
Electronic surveillance involves monitoring people with technology, often without their knowledge. Video recordings, photography, and audio recordings are common electronic surveillance techniques
Identity theft
Identity theft is the stealing of another person's social security number, credit card number, or other personal information for the purpose of borrowing money, making purchases, and running up debts. In some cases, thieves even withdraw cash directly fro
cookies
Cookies are small data files that are written and stored on the user's hard drive by a website when that user visits the site with a browser. The cookie provide information within the website on pages visited, items examined, dates of visits, and even pas
Spyware
An even more intrusive technology is spyware. Spyware is a small computer program, stored on the user's hard drive, that collects user's habits and transmits that information to a third party, all without the user's consent. Spyware can monitor any websit
Employee Internet Management software
There is a category of tools called Employee Internet Management (EIM) software
Data Breach
data breach, which is when sensitive information is viewed or stolen, your checking account was emptied. This is happening more frequently to consumers online
Privacy by design
privacy by design through the production of products that have built-in privacy for consumers. For example, the social network Google+ was designed to give the user the ability to create multiple circles to keep information private for family and/or frien
The Financial Services Modernization Act
The Financial Services Modernization Act covers consumers' financial privacy in regards to financial loans. The act specifies exactly what private and non-private information can be shared, forces companies to inform consumers about their policies and als
The Fair Credit Reporting Act
The Fair Credit Reporting Act provides numerous ways for consumers to protect and check on their credit. For example, consumers are now allowed to get one free credit report from each of the three agencies per year. Consumers are also allowed to attain th
Children's Online Privacy Protection Act (COPPA)
Children's Online Privacy Protection Act, also known as COPPA, was formed to protect children's online privacy. The act establishes requirements for business websites with services targeted to children under 13 years of age.
The Platform for Privacy Preference Project (P3P)
The Platform for Privacy Preference Project (P3P) is one way that customers can restrict personal information being released on the Internet.
The Children's Online Privacy Protection Act of 1998 (COPPA)
The Children's Online Privacy Protection Act of 1998 (COPPA) requires that Messy Chocolates accumulate information for a child under 13 with verifiable (usually through email) consent from a parent or guardian. Messy has a well-known, kid-friendly website
Hackers
hackers, or cyber criminals who break into companies' private data.
Honeypots
honeypots, which is a system used by security professionals to lure hackers to a made-up website that can monitor all their movements and prevent another attack.
chief information officer (CIO)
a chief information officer (CIO) to handle the managing of security and privacy technology factors.
Copyright Infringement
Messy had to handle copyright infringement over corporate material that was used without permission on Internet blogs. A blog used images of their candy on the blog owner's stuffed homemade pets. In addition, Messy caught a company manufacturing t-shirts
file-sharing
File-sharing, or the transmittal of computer data or space through a network, can cause a company problems when it is done illegally or with proprietary information.
Piracy
Piracy, or the use of software without a license, is a growing trend as well. Messy's CIO is determined to protect their corporate information and maintain customer privacy through new technological applications.
proprietary information
I may learn the hard way the importance of protecting proprietary information, or business secrets and intellectual property. That was my client list. It was in the Barks and Bubbles front desk computer. Only Wilma and I had access to that computer. We ha
Patent
A patent is a legal document issued by the government. It protects a party's intellectual property rights in an invention. The invention must be unique and original, and not previously disclosed to the public. A person receives a patent by applying with t
patent infringement
To do so is patent infringement. Patent infringement is a federal, civil cause of action alleging that one person used another person's patented item without the patent owner's permission. In other words, I can sue Wilma, or Wash and Woof, if they use my
Injunction
In a lawsuit, I can ask the court for an injunction. This is a court order preventing the defendant from continuing to use the patented item.
damages
I can also ask the court for an award of damages. This is a money award meant to compensate the patent owner for any loss incurred due to the defendant's patent infringement.
Trade secret
Generally speaking, a trade secret is any confidential business information that provides the business with a competitive edge. This includes things like sales methods, distribution methods, marketing methods, research methods, consumer profiles, advertis
Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS
There are only a few standard conditions that must be met in order for information to be considered a trade secret. These requirements come from the Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS. This is an agreement, admini
The Uniform Trade Secrets Act
The Uniform Trade Secrets Act is a model act regarding trade secrets and adopted as law in 47 states. This act says that the law protects a trade secret only when the owner has made efforts that are reasonable under the circumstances to maintain its secre
unfair business practice
Once the trade secret is properly protected, any unauthorized use of the confidential information will be considered an unfair business practice and the misappropriation of a trade secret. This is a business tort and a civil cause of action. The business
The Federal Trade Commission, also known as the FTC
The Federal Trade Commission, also known as the FTC, exists to protect consumers from unfair, deceptive, illegal or unethical business practices. It was created through the passage of The Federal Trade Commission Act of 1914. The FTC has five board member
the Securities and Exchange Commission, which is also known as the SEC.
All business sectors in the United States operate under guidelines that have been established either directly or indirectly by our government. The accounting industry is no different. The organization that oversees accounting practices is called the Secur
Financial Accounting Standards Board
To ensure that this occurred, the SEC created yet another organization to focus strictly on the accounting industry. This organization is called the Financial Accounting Standards Board, which is also known as the FASB.
Generally Accepted Accounting Principles, or GAAP for short.
The SEC charged the FASB with creating the guidelines for financial reporting that all accounting professionals must follow in order to produce accurate and reliable financial statements. These guidelines are called the Generally Accepted Accounting Princ
he Public Company Accounting Oversight Board, which is also known as the PCAOB
Another organization that was formed by the SEC is the Public Company Accounting Oversight Board, which is also known as the PCAOB. The PCAOB oversees the audits of public companies.
International business
In its simplest form, international business is conducted by either importing products and services or exporting products and services.
Licensing
In the case of licensing, a company is giving another company the right to make their product. Now, we all love soda, or at least I do. In a licensing situation, Coke (in the United States) would license, or allow, a foreign company to bottle their produc
joint venture
Take a look at your knee joint. You have the upper part of your leg and the bottom part, and the knee joint is what holds them together. This is very much like a joint venture. Two companies come together to work as one to produce a product or service. Ea
Strategic Alliance
so, then, what's the difference between a joint venture and a strategic alliance? The difference here is that a strategic alliance is a short-term joint venture where neither company invests any money to form a third company. Typically, joint ventures are
wholly owned subsidiary
Not every company wants to, or has the opportunity to, work in any of the methods we've just discussed. Maybe the product is a pharmaceutical that they need to make sure they can control, or maybe the company makes a safety device that they cannot allow a
International trade
. International trade is the exchange of goods between national borders. The three leaders were named GATT, NAFTA, and WTO.
General Agreement on Tariffs and Trade GATT
The first leader, GATT, or General Agreement on Tariffs and Trade, has the objective to reduce tariffs among all member nations. This trade agreement allows for the creation of the MFN (Most Favored Nation) designation, which permits the designated countr
MFN (Most Favored Nation)
this trade agreement allows for the creation of the MFN (Most Favored Nation) designation, which permits the designated country to export goods with very low tariffs and other beneficial terms.
NAFTA North American Free Trade Agreement
The NAFTA, or North American Free Trade Agreement, is the second leader of international trade. NAFTA's purpose is to remove all trade barriers between Canada, Mexico, and the U.S. It has also reduced restrictions on banking and provided uniform protectio
WTO World Trade Organization
The last of the three leaders is WTO, or World Trade Organization, which has absorbed GATT since its inception. The WTO tries to reduce trade barriers and governs trade agreements in areas such as agriculture and intellectual property. Each member nation
International Business
international business, or business transactions that take place between two or more countries outside their political boundaries
Corruption
corruption, or the abuse of power for financial gain in foreign countries
the Caux Round Table
the Caux Round Table is a well-known and accepted formation of global ethical codes that Neon Garb subscribes to. It was formed by international special interest groups and business and political leaders whose purpose was to create a common code of global
Military Dictatorships
military dictatorships, which are repressive regimes that are governed by dictators who maintain control through the military. Pear Products usually avoids this type of business environment as it is difficult to flourish with a dictator and military inter
Authoritarian Rule
authoritarian rule, such as Pakistan. Countries in this system block society's right for cultural and religious freedom. This, in turn, can be a difficult environment for companies to flourish due to lack of human rights. The United Nations' Universal Dec
Free Enterprise Systems
free enterprise systems with countries that offer minimal regulatory restrictions and limited government ownership, such as the U.S. Pear Products is able to develop new innovations without government ownership and can sell their products directly to cons
Central State Control
The next type of economic system that Pear Products tries to avoid is formed around a central state control, where power is controlled by government and politicians. In addition, the government would actually own Pear Products' property and factories that
Constructive Engagement
constructive engagement, which means that Pear Products needs to conduct their operations overseas with a good moral and ethics code and try to engage change in the international countries.
Import
An import is any good or service produced in one country and sold to a buyer in another country. Think of imports as buying something that will be brought into our country. For example, Edward has a beautifully carved wood trunk he bought at a local impor
Duties
duties. Duties are import taxes and vary by the type of item and the quantity imported. Other imports may be prohibited or restricted.
Export
An export is any good or service that a buyer in one country purchases from a seller in another country. Note that exports are shipped out of our country, while imports are products brought into our country.
US Bureau of Industry and Security
Governs US exports
Treaty
A treaty is a formally concluded and ratified agreement between independent governments. Treaties are written agreements that must be ratified, or approved, by all parties to the treaty.
Treaties are an exchange of promises made between independent states
Article II of the US Constitution
Treaties are also addressed in other portions of the U.S. Constitution. Article II authorizes our president to make treaties with other countries. The president uses treaties in order to conduct foreign business and policy, such as through peace or trade
Bilateral Treaties
Treaties made between two independent governments are called bilateral treaties. For example, the Louisiana Purchase is a well-known bilateral treaty. President Thomas Jefferson executed the agreement on behalf of the U.S. in 1803. The treaty secured the
Multilateral Treaties
Sometimes treaties are made between many independent parties. Treaties between more than two independent governments are known as multilateral treaties. For example, the North American Free Trade Agreement, or NAFTA, is a treaty executed in the early 1990
Regional Intergration
Regional integration is when a group of countries get together and develop a formal agreement regarding how they will conduct trade with each other. There are many different levels of involvement, and in this lesson, we will review the types and how a man
Exchange Rate
Exchange rate: The value of one currency for the purpose of conversion to another. For example, one U.S. dollar buys .76 Euros. Thus, the exchange rate from dollars to Euros is .76.
Tariffs
Tariffs: Tariffs are the taxes paid on a product when it enters a market. For example, if the tariff on tires entering Saudi Arabia is 10%, then the purchase cost of the tires plus 10% would be what the buyer pays. It is similar to the tax you pay when yo
Transportation
Transportation: As one would expect, this is the charge for transporting the item from one country to another. If a company needs the product quickly, they will ship it by airplane. If not, they will ship it by ocean. Ocean takes longer, but it's much les
Regional Integration
Regional integration is a process in which countries enter into a regional agreement in order to enhance regional cooperation through regional structure and rules. The most well known of these are: NAFTA (the North American Free Trade Agreement), which is
Economic Integration
Economic integration is the process where the economic barriers between two or more countries are eliminated. It involves specific policy decisions by governments designed to reduce or remove barriers to mutual exchange of goods, services, capital and peo
Free Trade Agreement
Free trade agreement means that the members of the free trade agreement charge each other lower tariffs (taxes when goods are sold from one country to another) than those applicable to non-members; however, there is no free movement of goods within the ar
Customs Union
A customs union goes further than a Free Trade Agreement and requires its members to implement a common external tariff (or taxes) on imports from outside the union. The aim is to facilitate goods to move freely throughout the union.
Common Market
The creation of a common market has a goal of free movement of labor, capital, services and persons. Now, not just products, but people, money and services can move between the member countries freely.
Economic Union
Finally, we have the establishment of an economic union, which entails a common currency and/or the unification of monetary, fiscal and social policies.
Political Environment
The political environment consists of the government and its actions.
Legal Environment
The legal environment is the court systems and laws that are present in a foreign country.
Sociocultural
To understand how managers have to deal with sociocultural issues, we have to understand what 'sociocultural' means. It is defined as 'the blending of social and cultural aspects in a country.'
Economic environment
Economic environment is the economy and the economic system present in a country. The economy could be weak and the system might not be stable, which would impact how a manager would manage his or her operations in a foreign market. It is apparent why a m
Techical
The technical aspect of managing internationally has a unique twist that you might not be aware of. Here we're talking about technology that is present in a market. To help you understand this, let us use China as an example. In China, the government regu
Planning
Planning: Developing and implementing strategy for the organization to function
Organizing
Organizing: Ensuring the company has all the right people and parts, in the right place, at the right time
Staffing
Staffing: Hiring, training and developing personnel
Controlling
Controlling: Making sure the steps of your plan and the results of your work are monitored
Leading
Leading: Supplying a vision to the personnel in the organization
Plan
Plan: Have a specific outline of the steps that it will take to be successful or have their department or company be successful.
Control
Control: Be able to keep all the pieces and parts of the plan moving together.
Organize
Organize: Get all the people and equipment together to support the plan.
Lead
Lead: Show vision and enthusiasm to reach the goal of the plan.
Global Manager
A smart global manager will review and understand the culture from different perspectives (religion, culture, etc.) so they have a better chance of being successful.
Global Mindset
a global mindset. That is to say, they need to see business in a global perspective and not just how Americans see it. Chances are that global company is working with many international vendors and customers, and a successful manager will need to think gl
Geert Hofstede's cultural dimensions theory
Geert Hofstede's cultural dimensions theory, a theory that looks at unique aspects of cultures and rates them on a scale for comparison. Now, I am not trying to say dogs to humans are the same, but the way they interact is quite similar. Geert Hofstede is
Power Distance
Power Distance: This dimension expresses the degree to which the less powerful members of a society accept and expect that power is distributed unequally.
Individualism vs. Collectivism:
Individualism vs. Collectivism: This dimension focuses on the questions about whether people prefer a close knit network of people or prefer to be left alone to fend for themselves.
Masculinity vs. Femininity
Masculinity vs. Femininity: Masculinity represents a preference in society for achievement, heroism, assertiveness and material reward for success. Its opposite, femininity, stands for a preference for cooperation, modesty, caring for the weak and quality
Uncertainty Avoidance
Uncertainty Avoidance: This dimension expresses the degree to which the member of a society feels uncomfortable with uncertainty and ambiguity.
Long Term vs Short Term Orientation
Long-term vs. Short-term Orientation: Long-term orientation dimension can be interpreted as dealing with society's search for virtue. Societies with a short-term orientation generally have a strong concern with establishing the absolute truth.
Outsourcing
Outsourcing occurs when a company retains another business to perform some of its work activities. These companies are usually located in foreign countries with lower labor costs and a less strict regulatory environment. Lower labor costs. Companies typic
Globalization
Globalization is the increasing movement of goods, services and capital across national borders. Information technology has been a driving force of globalization. Advances in software, hardware, Internet and telecommunications have made it easier and fast
Downsizing
Downsizing means we have to reduce the number of employees that work for our organization. We will downsize our sales department, marketing department and finance department. We anticipate cutting 20 to 30 jobs over the next several months. This measure w
Insourcing
Insourcing involves moving a business function in-house rather than having an external vendor complete the task.
Insourcing may involve bringing in specialists or consultants to provide expertise or training. Currently, our accounting function is outsourc
Migrant Workers
Migrant workers are usually low-skilled workers or laborers who travel from region to region or country to country in order to find work. Although people have always moved to wherever they can find work and undocumented migrant workers have been part of t
Protectionist
protectionist strategies, which simply means trade policies that restrict the importation of goods and services produced in foreign countries. Some of the most common trade restrictions are referred to as tariffs, quotas, and embargoes.
Emerging Market
An economically developing country transitioning into an economically developed country is considered to be an emerging market. Emerging markets demonstrate rapid economic growth, relative stability, a good infrastructure, and a legal and regulatory syste
Economic Integration
Economic integration is an agreement between two or more countries to reduce or eliminate economic barriers to trade and commerce between their countries.
For example, Norman's country is a party to several trade agreements, which are treaties that govern
Market
A market is an institutional structure that permits people and organizations to exchange goods, services and labor. The United States, for example, is a market. The United States, Canada, and Mexico form a quasi-free market governed by the North American
Global Market
A global market is not limited to specific geographic locations but rather involves the exchange of good, services, and labor anywhere in the world. For example, a business may be located in the United States. It may purchase components for one of its pro
Standardization
Standardization: The goods and services traded in the global marketplace should be standardized so that they can be utilized by all market participants. For example, appliances should operate on the standard electrical system. An obvious problem today is
Trust
Trust: Global market participants must have confidence that everyone will follow the same rules of the marketplace, and the rules will be uniformly enforced. For example, buyers and sellers need to feel confident that contracts will be honored by all part
Globalization
you may have heard of the term globalization, or the integration of international economies, politics, and culture
Global Society
we may actually be facing a true global society, or a unified social community that encompasses the entire world.
Global Crises
There's one other telling factor that points to the emergence of a global society that deserves mentioning: global crises. World War I and World War II were major international conflicts, but they were understood mostly in terms of how they impacted indiv
Import Quotas
import quotas that limit the number of imports permitted during a specific period of time. An import quota limits the quantity of specific products that can be imported into the country during a specific period of time. Sometimes import quotas are absolut
Economic System
An economic system is the manner in which a country determines how resources are allocated and distributed in the society. Economic systems can generally be divided into command and market systems. See Next two terms
Command
In a command system, the state owns most resources and makes most economic decisions regarding allocation, production and distribution.
Market
In a market system, private individuals own most of the resources, and individuals in the marketplace make most of the economic decisions. Chester's company will have a much easier time working within a market-based system than a command system. In fact,
Trade protectionism
a policy of trade protectionism, which is a policy aimed at restricting imports of foreign goods into a country.
Tariff
A tariff is a special type of tax that is imposed on imports. Tariffs increase the price of imports, which helps protect domestic industries because the imports become more expensive than locally produced products.
Subsidies
subsidies, which are a direct infusion of cash by a government to a business, for developing industries
Dumping
dumping, which occurs when an exporter sells a high volume of products in a foreign country at a lower price than it charges in its own domestic market.
Anti-dumping duty
An anti-dumping duty on products it believes are being dumped on its market. An anti-dumping duty is a tariff aimed at imports that are dumped on a market. For example, Cara's country may impose a 100% duty on products dumped on her country's market, whic
Customs Union
customs union, trade barriers between member countries are eliminated just like with free trade areas. However, unlike free trade areas, members of a customs union will develop a unified trade policy regarding non-members.
Common Market
A common market not only lifts trade barriers between members and provides for a common trade policy, but it also lifts most barriers to the movement of capital, labor and technology among member countries.
Economic Union
n the other hand, an economic union is like a common market, but the member countries also maintain a consistent monetary policy, fiscal policy and tax policy. The member countries act as a single economic unit in many ways. The European Union is an examp
World Trade Organization (WTO)
World Trade Organization (WTO), she will have to abide by the rules and regulations governing trade set forth under it. The World Trade Organization is an international organization that is involved in regulation of international trade. It helps administe
General Agreement on Tariffs and Trade (GATT 1994)
The new General Agreement on Tariffs and Trade (GATT 1994) is a part of the World Trade Organization regime and governs trade in goods.
Stakeholder Theory
Stakeholder theory looks at the relationships between an organization and others in its internal and external environments. It also looks at how these connections influence how the business conducts its activities.
Stakeholder
Think of a stakeholder as a person or group that can affect or be affected by an organization. Stakeholders can come from inside or outside of the business. Examples include customers, employees, stockholders, suppliers, non-profit groups, government, and
Stockholder Model
One theory, championed by Milton Friedman, is the stockholder model. It argues that the sole obligation of a corporation is to maximize shareholder wealth.
Social Responsibility
Modern organizations have embraced the idea of social responsibility within their company. This is when companies feel an ethical responsibility for the interests and welfare of society. Companies, such as Life Drugs, that follow this philosophy bring pos
Stakeholder Engagement
Stakeholder engagement is the building of 2-way relationships between organizations and stakeholders. In order to say that a company is partaking in stakeholder engagement, they must be working with at least one stakeholder group, such as employees, inves
Stakeholder Engagement
Stakeholder engagement is the building of 2-way relationships between organizations and stakeholders. In order to say that a company is partaking in stakeholder engagement, they must be working with at least one stakeholder group, such as employees, inves
Stakeholder Dialogue
stakeholder dialogue, where his company and stakeholders meet face to face frequently to discuss issues and problems. For example, Nate holds employee open houses where employees can stop by and ask questions about any company issues. His plan was so effe
Interactive
interactive. This is where Munchie worked constantly with stakeholders to develop trust, honesty and participation. The company has been able to launch new products, build new factories and distribution centers, and has exceptional ties to their customers
Stakeholder networks
Nate also believes in creating stakeholder networks by utilizing the expertise of different stakeholder groups to work collaboratively to solve problems and issues. He was able to use his stakeholder networks to solve training issues in his factories.
The
Corporation
One of the most popular business structures is the corporation. A corporation is a complex business structure where the business is a separate entity from the individuals that run the business. A corporate structure involves various individuals working in
Shareholders
The owners of an incorporated business are known as shareholders. The corporation must be operated in a manner that best benefits its shareholders. A shareholder can be a person, company or other entity. It's any entity that owns at least one share of a c
Board of Directors
the board of directors. The directors are the managers, or trustees, of the corporation. The shareholders elect the board of directors. Generally, the corporation's bylaws will set out how many directors the corporation should have.
Fiduciary
The directors aren't agents of the shareholders, but they do owe the shareholders a fiduciary duty. This means that the directors are required to act in the best interests of the shareholders. As the managers, directors serve as the major decision makers
Officers
Lastly, let's take a look at officers. Corporate officers are high-level executives responsible for everyday business operations. Officers are agents for the corporation, meaning that they act on behalf of the corporation and can bind the corporation to c
Common Stockholders
Eddie's project illustrates that there are two kinds of stockholders. The first type is a common stockholder in which a shareholder purchases common stock and is able to vote to elect the board of directors. Eddie has purchased Pear Products common stock,
Stock Splits
Eddie has purchased Pear Products common stock, so he has been able to vote on issues, such as stock splits, where a company splits current stock into multiple shares.
Dividends
In addition, Eddie received dividends that were declared by Pear Products and amount to quarterly payments paid to the shareholders based on profits.
Preferred Stockholders
Preferred stockholders receive a steady dividend before a common stockholder. This worries Eddie because if Pear Products has financial difficulties in the future, then he will not get his money back until preferred stockholders receive their money first.
Short-Term Profit
Eddie felt that he was initially going to be interested in just a short-term profit objective, as Pear Products was known to produce blockbuster products. Short-term profit is where stock price increases very quickly, resulting in a profit.
Long Term Profit
Eddie changed his objective to long-term profit. He believed they were the leader in technology, and his one share could end up very profitable years from now. Long-term profit is when stockholders receive yearly dividends and invest in long-term goals of
Strategic Influence
During his tour of Pear Products, he met some investors who maintain large shares of the company so they can exert their strategic influence, or affect policy changes within the firm. Eddie revealed that his one share would not put him in that position of
Minimize Risk
Eddie also had an objective to minimize risk to his investment. This is when a person invests in stock that will likely have a good return with minimal chance of a loss. He felt that although a Pear Products share was expensive, he would have a safe, soun
Separate Powers
Eddie's tour of Pear Products gave him firsthand knowledge about how shareholders, managers, board of directors and employees all have separate powers that act as checks and balances within the organization. The board of directors is focused on protecting
Shareholder activist
Eddie taught his class about a new focus of shareholder influence called a shareholder activist. This is a person who utilizes their rights as a shareholder of a publicly-traded corporation to force social change, such as the elimination of the use of a s
Boundary Spanning departments
The most efficient way for corporations to interact with each different stakeholder group is to establish boundary-spanning departments, which are offices within an organization that interact across boundaries that divide the company between different sta
Department of Public affairs
Department of Public Affairs, in which they track government laws and monitor policy trends. For example, the company recently has decided to launch an organic line of baby food. This department was in charge of inquiring about the definition of organic i
Investor Relations
Another boundary-spanning department that Gas Free Foods has created is called investor relations, in which they handle audit requests and SEC filings and communicate with stockholders.
SEC Filings
SEC Filings are financial statements requested by the U.S. Security and Exchange Commission. This department educates and updates investors and works at developing long-term positive relationships to help grow the company.
Customer relations
Customer relations is Gas Free Foods' division that interacts directly with their customer stakeholders. Customers are able to call a 1-800 number to have questions answered about the baby food or to express their concern about quality. (1-800 Gas Free) L
Corporate Relations Office
Gas Free Foods' Corporate Relations Office handles varied duties targeted at the general public, from social monitoring to environmental scanning of competitors. This group provides feedback on trends, such as competitors providing new gluten-free baby fo
Public Relations Department
Another Gas Free Baby Food organizational branch that is important for communicating with media stakeholders is the Public Relations Department. This office interacts with the media and provides crisis management, image advertising and executive speeches.
Health and Safety Department
In order to show that Gas Free Baby Foods is interested in protecting the environment, they also have established a Health and Safety Department that will ensure compliance with the Environmental Protection Agency (EPA) and state guidelines. One prime wor
Human Resources Department
Lastly, the Human Resource Department of Gas Free Baby Foods allows open dialogue with all of their worldwide employees through examples such as union negotiations and ensuring cooperation with labor laws. Their department is well recognized for establish
Employment Relationship
An employment relationship is a legal link that is formed between an employee and employer when work is completed for monetary reimbursement. Both the employee and employer have responsibilities and duties towards each other to ensure that the bond is suc
Market
The market would consist of Fun Town's actual business profits and sales. For example, Fun Town's park workers went on strike to request higher pay and better benefits. Fun Town not responding to employees' needs resulted in the water park closing for ove
Non-Market
In addition, Fun Town's internal relationships with their employees also benefits the non-market environment, such as society and government. When employees are not financially stable (as when Fun Town's employees were on strike), they are not able to hel
Ethical decision-making
Managers must make decisions every day, and many of these decisions have an ethical dimension. Ethical decision-making is a cognitive process where people consider ethical rules, principles or guidelines when making decisions. Ethical decision making is m
Ethics
Ethics is a system of values and principles of right or proper conduct. For example, most ethical systems find lying to be a violation of an ethical rule of being truthful.
The Golden Rule
The Golden Rule is simple. It asks that you treat people the way you want to be treated. This is a lesson many of us learned in kindergarten. It involves taking the feelings of others into consideration when making decisions that affect them. Respect peop
...
This brings us to corporate social responsibility, and it means a corporation's responsibility to be aware of the environment and society when making decisions. Think accountability, integrity and honesty.
Back in 1968, the Ford Motor Company quickly desi
Corporate Social Responsibility
This brings us to corporate social responsibility, and it means a corporation's responsibility to be aware of the environment and society when making decisions. Think accountability, integrity and honesty.
Back in 1968, the Ford Motor Company quickly desi
Public Disclosure Test
Similar to the Golden Rule is the public disclosure test. This test asks that a business decision be something a company would be so proud of that it would not mind if the decision were to be broadcast on public television for the whole world to see.
Let'
Universalization Test
Finally, the universalization test prods us to think about how the world would be if everyone made the same decision. In other words, if a decision you make in business was replicated by every other business, what would happen? Would it benefit society? W
Ethical Balance
An ethical balance is when a company is able to find a moral compromise between company and owner, stockholder and stakeholder interests.
The shareholdermodel
The shareholder model supports the belief that the only social responsibility a company has is to maximize profits. Phojack is the preeminent maker of photography film. Their focus is to increase profits, which will result in an increase in stock price to
Moral agent
Phojack believes that they should not be concerned with charitable actions or supporting social causes. They feel that it is not possible to balance every shareholder's interests and act as a moral agent, or someone who makes moral decisions as to what is
stakeholder model
The stakeholder model is the second model that companies can adopt as a way to ethically balance owner, stockholder and stakeholder interest. Film Booth subscribes to this model, which is focused on the company's long-term survival and profitability. It i
Primary Stakeholders
How does Film Booth support every stakeholder's interests? They focus on primary stakeholders, who are considered groups that are invaluable to the long-term survival of the company. The primary stakeholders are shareholders, employees and customers becau
Public Issue
Companies need to be aware of potential public issues that could affect their financial condition. Stakeholders do not want to discover that their company is suddenly struggling to survive. What can a company do to prevent problems from developing with th
performance-expectations gap
Most public issues develop due to a performance-expectations gap, which is inconsistency between what stakeholders expect and what an organization's daily performance is in the workplace. Companies need to identify any gaps as soon as possible in order to
Environmental Analysis
N&N's managers first effective way to monitor public issues is to use environmental analysis in order to attain information regarding external issues, threats and trends, so they can form an overall strategy that eliminates threats and focuses on developi
eight strategic radar screens
N&N uses eight strategic radar screens (the customer, competitor, economic, technological, social, political, legal and geophysical environments) to give managers the ability to research and glean information regarding their business environments from eac
Competitive Intelligence
N&N also uses competitive intelligence to glean information about their competitors in the marketplace. This information usually contains specific competitor's future plans, decisions and operations. For example, N&N has come across some key information t
Fair Trade Suppliers
Also, stakeholders are growing dissatisfied with N&N not purchasing their chocolate ingredients from fair trade suppliers. These suppliers are usually located in developing countries and do not use middlemen. N&N signed new contracts to purchase their ing
Community
In the context of this lesson, a community refers to an area that can be influenced by the company or interacted with to achieve mutual goals. Companies and communities are interdependent upon each other as their expectations and successes are intertwined
Corporate Citizenship
Why should a business respond to community issues? The answer is that community members can be valuable stakeholders. There are many instances of communities dying from real estate crashes or drug problems, which can make businesses suffer as well. In add
Economic development
One result of the collaborative partnerships is economic development, or the formation of new companies and jobs within the community. For example, in the United States, the federal Community Reinvestment Act requires banks to show their commitment to loc
Crime abatement programs
Many businesses have created community alliances to fight and reduce crime in the area through crime abatement programs. For example, in Chicago, workshops are held for business owners and local community members on how to increase safety in the area.
Aid to minority businesses
Aid to minority businesses is another result of business and community partnerships. For example, many companies have partnered with universities to provide expertise and training to minority entrepreneurs. Microsoft offers an Explore Microsoft program to
Charitable donations
charitable donations, which consist of gifts of money
in-kind contributions
Corporations can also give in-kind contributions, which are gifts of products or services. This type of donation from companies now exceeds their cash donations. Pear Products provides free tablets, laptops, and technology expertise to schools, universiti
volunteer employee services
Lastly, companies can provide volunteer employee services, which are the gifts of time. Pear Products' employees volunteer at local shelters, food kitchens, and for environmental causes. For example, last month all of the employees spent a day cleaning up
skills-based volunteerism
A new trend in corporate volunteering involves skills-based volunteerism, where employee skills are matched to specialized needs in the community. Pear Products' technology team runs volunteer weekend classes where they help small businesses develop skill
strategic philanthropy
Smart companies establish strategic philanthropy, which is strategy that is in line with their goals and objectives so that both society and business benefit from the giving. Companies can benefit from having effective giving strategies. The benefits incl
Consumerism
Many of you might be familiar with the derogatory definition of consumerism, which is the preoccupation of society with the acquisition of consumer goods. The term consumerism also means an organized way to protect consumers from company policies and prod
Consumer advocacy groups
Consumer advocacy groups soon developed, and their purpose was to protect the interests of the buying public. One of the most well-known consumer advocates is Ralph Nader, who started the consumer advocacy group called Public Citizen. For example, his gro
Consumer Product safety act 1972 (CPSC)
The federal government has the most far-reaching legislation that protects consumers. In 1972, Congress passed the Consumer Product Safety Act, which gave the Consumer Product Safety Commission, or CPSC, powers to protect individuals from unsafe consumer
The Children's Gasoline Burn Prevention Act (2008)
The Children's Gasoline Burn Prevention Act, which was passed in 2008 and requires portable gasoline containers manufactured for sale in the United States on or after January 17, 2009 to conform to safety requirements for child-resistant packaging.
The Federal Hazardous Substance Act
The Federal Hazardous Substance Act, which requires certain hazardous household products to have warning labels, including children's items. Examples of products regulated under this law include electrically operated toys, cribs, rattles, pacifiers, bicyc
The Child Safety Protection Act
The Child Safety Protection Act - This act is an amendment of the CPSA to better protect small children from choking hazards through the production of products that will be safe for children to use and warning labels.
The Poison Prevention Act - (PPPA)
The Poison Prevention Act - The PPPA requires a number of household substances to be packaged in child-resistant packaging. It is why all medicines have a child safety top that even some adults find difficult to open.
Consumer Product Safety Commission, or CPSC,
self explanatory
Consumer Rights
Consumer rights are consumer protections that encourage businesses to produce products and services that will be beneficial and safe for consumers. In this lesson, we will identify and discuss the five major rights of consumers: safety, information, choic
Redress
If a product is defective or harmful to consumers, the bill of rights provides the method of redress, or compensation for harm or wrongfulness. Nixon added redress, while Kennedy proposed the original four rights.
Class action lawsuits
This last right allows consumers to ask for financial compensation or other benefits for product error. For example, numerous companies have faced class action lawsuits because of wrongdoing regarding their product or service. This type of lawsuit is usua
Environmental Ethics
Environmental ethics is the philosophical discipline that considers the moral and ethical relationship of human beings to the environment. In other words: what, if any, moral obligation does man have to the preservation and care of the non-human world?
Human Values
Environmental ethics helps define man's moral and ethical obligations toward the environment. But human values become a factor when looking at environmental ethics. Human values are the things that are important to individuals that they then use to evalua
anthropocentric (human-centered)
Ethical debates impact our ability to solve environmental problems because individuals differ on man's obligation concerning the natural environment. Those that place significantly higher value on human interests at the expense of non-human things are sai
ecocentric (nature-centered)
Those that see the intrinsic value of non-human things regardless of their usefulness to man are said to have an ecocentric ethical view. This term is also easy to recall if you remember that the prefix 'eco' refers to nature. Combined with 'centered,' wh
R. Edward Freeman
one of the most important stakeholder theorists.
Environmental Policies
Environmental policies consist of a government's course of action regarding regulating the manner in which we interact with the environment. Areas of environmental policy include pollution, land use, protection of wildlife, energy, consumption of renewabl
Command and control regulations
One approach is the use of command and control regulations. This was the approach utilized by the U.S. government in the 1970s. Command and control regulations impose mandatory requirements and standards upon parties in their activities relating to the en
Incentive Regulations
Evan and policymakers can also recommend the use of incentive regulations, which has started to play a significant role in U.S. environmental law and regulations starting in the 1990s. Incentive regulations are market-oriented and seek to provide incentiv
Environmental Regulation
Fortunately, the EPA facilitated environmental regulation, or a form of government intervention in the business world to reduce or eliminate environmental hazards against individuals and the world. There still is a constant debate between companies, socie
incentive-based regulatory approaches
I think most people would agree that it's easier to perform a task if there is an incentive to get the job done. Incentives provide us with motivation. Take Timmy for example. Timmy does not recycle, and even though he feels recycling is a good idea, he d
environmental taxes
One example of an incentive-based regulatory approach is environmental taxes. Environmental taxes are defined as an approach to environmental protection that utilizes taxes connected to pollution emissions and waste production. The primary objective of en
Green Taxes
therefore, environmental taxes are sometimes referred to as green taxes. Green tax revenues may be used to promote conservation efforts or to promote environmentally-friendly energy technologies, such as wind power. While taxes may not seem like an incent
Subsidies for pollution control
Subsidies for pollution control are another incentive-based approach. This is defined as financial support granted by the government for activities and products deemed to be environmentally friendly. Instead of attaching a charge to companies that create
Tradable Permits
Another example of an incentive-based regulatory approach is tradable permits. Tradable permits are an approach to environmental protection that utilizes government-issued permits, which can be traded among polluters, for the release of a set amount of po
Business Environment
Business environments consist of all those factors that have a bearing on the business. The term business environment implies that internal and external factors have an impact on the individual organization.
Specific factors
Specific factors affect the individual organization in its day-to-day operations.
General factors
General factors have an impact on an entire industry and affect individual organizations equally.
Value System
Value System: A value system includes the culture and norms of the organization. In other words, it's the regulatory framework of an organization and every employee has to act within the limits of this framework. The value system can be changed or replace
Mission and Objectives
Mission and Objectives: Different priorities, policies, and philosophies of a business can affect the mission and objectives.
Internal relationships
Internal Relationships: Factors like the amount of support the management enjoys from its shareholders, employees, and the board of directions all affect the smooth functions of an organization.
Competitors
In order to survive, a business must keep a close look at the market and formulate its own policies and strategies to have a competitive advantage over its competitors.
Economic Factors
Economic factors include economic conditions and the economic policies that together constitute the economic environment. These items include the national growth rate, inflation, restrictive trade practices, etc. All of these items have a considerable imp
Technological factors
Technological Factors: Good technologies can help improve the marketability of a product. Therefore, it is important for an organization to keep a pace with the changing technologies in order to survive.
sustainable development
The earth is being attacked on a daily basis, not by alien beings, but by threats from global business. We will examine businesses' major threats to the earth's ecosystem. Some businesses are not supporting sustainable development, where natural resources
ozone
The earth depends upon ozone, which is a layer of gas that is located in the stratosphere and protects us all from the sun's rays.
ozone depletion
Unfortunately, the emissions from many companies' production processes and products, such as aerosol hairspray, emit chlorofluorocarbons (CFCs), which have destroyed large parts of the ozone layer. This is called ozone depletion.
Montreal Protocol
In 1987, a large group of nations created the Montreal Protocol, which called for the banning of CFCs. If countries and companies continue to support the agreement, there is potential for the ozone layer to recover.
Global warming
Many scientists blame global warming for the drastic weather pattern changes or natural disasters, such as hurricanes. Global warming is also known as the greenhouse effect, and it happens when carbon dioxide and gases in the atmosphere stop heat from dis
Black Carbon
The problem can be blamed on a few different reasons. The first way global warming occurs is through the oxidizing of oil and gas as a byproduct of corporations. In addition, diesel engines and wildfire release black carbon into the atmosphere, which resu
deforestation
Companies that cut down trees permanently for other land uses through deforestation also impact global warming as the trees absorb carbon dioxide and help clean the atmosphere.
Methane
Lastly, companies that are involved in beef production release methane, a greenhouse gas that is made as a by-product of cow digestion.
Water Pollution
water pollution occurs when companies release toxic chemicals into the world's waterways. Companies that pollute the waterways end up killing fish populations, destroying coral reefs and our world's fish food supply.
Environmental issues
Environmental issues are harmful consequences of human activity on the natural environment. In this lesson, we will discuss some of today's major environmental issues: global warming, pollution and loss of habitat.
Pollution
Pollution can be defined as the introduction of harmful substances into the environment. Most of the time, the harmful substances come from industry and modes of transportation, such as cars, which release waste products that are harmful to humans, animal
Habitat loss
Habitat loss occurs when an animal population loses its home. Every animal in the animal kingdom has a place in their animal community, and without their specific habitat, they no longer have a place to live. Loss of habitat occurs because of the high dem
business sustainability
Do you make purchases from companies that claim to produce green or environmentally friendly products? Perhaps you drink certified organic coffee or send greeting cards made from recycled paper. For many businesses, going 'green' is a lot more than a popu
ecologically sustainable organization
An ecologically sustainable organization operates consistently with principles of sustainable development, which conduct business to meet the needs of current customers without compromising future generations' ability to live. In this lesson, you will lea
Sustainable development
Sustainable development requires that natural resources are used at an amount that can be extended over an infinite period. Companies that strive for sustainability move through five different stages. Let's take a look at Makeup Work, a leading women's co
Non-compliance
The first stage is non-compliance, and at this point, companies, like Makeup Work, do not care about sustainability and, in fact, cut corners in the name of profits. For example, Makeup Work used subpar ingredients in the manufacturing of their makeup, wh
Compliance
The second stage of sustainability is compliance, where a company, like Makeup Work, starts to embrace all safety, health and environmental regulation. Although the company is not endorsing sustainability yet, they are at least obliging the bare minimum l
Beyond Compliance
In the third stage, called beyond compliance, Makeup Work finally realized that sustainability could help the company save money by decreasing energy usage, saving water, and decreasing waste-handling and packaging costs. For example, the marketing depart
Integrated strategy
The integrated strategy stage has finally found Makeup Work with a committed ecologically sustainable business model that is integrated into all key business strategies. Makeup Work can claim that they are a fully sustainable company through the use of bi
biocatalytic production
Makeup Work can claim that they are a fully sustainable company through the use of biocatalytic production of their cosmetics. The production process uses less energy, no acids, and eliminates the need for solvents during the making of their cosmetics. In
Passion and purpose
The last step of a company becoming a sustainable organization is called passion and purpose. Not all companies move from step four into step five. In fact, there is much similarity between the two steps. The only difference is that companies, such as Mak
Environmental Policies
Environmental policies are the guidelines put in place to manage human activities for the benefit of the environment. Manufacturing and production of products requires the use of raw materials and energy. The extraction of raw materials and the production
Trade Liberalization
the WTO works to ensure that trade between countries can flow freely. One of the ways to do this is through trade liberalization, which is the reduction of barriers on trade between nations. This can include the removal of a tax or duty on goods produced
Environmental Protection
A country with lower environmental protection policies could have an advantage when it comes to the trade of goods and services because they can produce them cheaper.
global environmental concern
Ancient societies had more time and space to deal with environmental threats than we do today. Collectively, each of these qualities make an ecological challenge a global environmental concern. In this lesson, we will briefly cover some of the more major
Greenhouse Effect
What causes this situation is when the amount of carbon dioxide increases in the atmosphere and traps solar radiation, which then increases the atmosphere's temperature. This is called the greenhouse effect. The increase of pollution in the atmosphere not
Water Scarcity
As more water sources dry up because of misuse or become undrinkable because of pollution, there becomes a lack of secure, uninterrupted, long-term availability of adequate clean freshwater, known as water scarcity.
Biodiversity
Biodiversity, defined as the number and variety of living organisms on Earth, is also in overall decline. As pollution and overuse cause important plants and animals that many people rely on to go extinct, there becomes a cause for great concern in wonder
Convention on Biological Diversity
For example, developed countries attempted to reduce the destruction of the world's biodiversity by the formation of an international regime called the Convention on Biological Diversity. This convention works on finding and implementing ways to conserve
Kyoto Protocol
Clearly, the most important global agreement regarding the environment, however, is known as the Kyoto Protocol. It is an international agreement on reducing carbon dioxide emissions. However, over the years, economic, scientific, and ideological disagree
Public Policies
A government uses public policies to pursue objectives that can help a large part of a country's citizens. Policies can cover many different areas. The government utilizes these policy tools to create a society that flourishes for the public and business.
Fiscal Policy
The first type of policy is fiscal policy and deals with taxation and spending decisions that are used to help the economy. A government's taxation policy can drastically affect Neon Garb's business strategies. For example, in a few global nations such as
Monetary Policy
Monetary policy, or how a government manages the supply, demand, and valuation of currency, also impacts Neon Garb's international business. A higher valuation of a country's money means that Neon Garb's American dollars are not worth as much. For instanc
Economic Public Policies
Another public policy that influences business is the economic public policies, which can include industrial development of specific industries and trade policies to help block or increase trade with countries. Neon Garb was attracted by Europe's open tra
Social Services Policies
The last set of policies that aid in government-business relations are social services policies. Social services policies consist of health care, education, and housing policies that improve living conditions of their citizens. Countries such as the U.S.
Lobbyists
So companies typically end up hiring lobbyists who specialize in influencing government regarding issues pertinent to companies. The United States Chamber of Commerce (USCC), one of the largest lobbying groups in the United States, is an example of a busi
Direct Communication
Direct communication, such as inviting politicians to headquarters, parties and events to give them an understanding of business, is another tactic that businesses can use to communicate with government. For example, pharmaceutical companies will offer po
Expert witness testimony
Expert witness testimony is another tactic businesses can use to influence government. For example, many CEOs will testify for Congress as experts about their industry in order to get a business agenda to the forefront. Hearings can affect whether or not
Political action committees (PAC)
Political action committees (PAC) are independently organized organizations that can request money and then pass the money directly to political candidates. Businesses are not legally allowed to give money directly to politicians. PACs allow businesses to
Economic leverage
Economic leverage is when businesses use their power and influence to threaten governments. For example, a company threatens to leave a state unless certain political action is taken. An example would be if a CEO threatened to build a new auto factory ove
Public Relations
Public relations encompasses a large area of communication activities that target specific audiences and create a positive opinion about a company or its activities.
Public Affairs
A public affairs department allows an organization to monitor external stakeholder relationships and activities related to policy development. In this lesson, we will examine the role and activities of the public affairs department of Lavish Chocolate and
Analyst
As an analyst at Lavish Chocolates, the public affairs department monitors, analyzes and reports on regulation that could affect overall business. For example, a new regulation was recently passed that will force Lavish Chocolates to purchase only fair tr
Communicator
A communicator is another role that Lavish's public affairs department handles. The role of a communicator deals with crisis communication, interactions with the media, customer response and stakeholder conversation. For example, Lavish's public affairs d
Strategic Advisor
The strategic advisor is the last role of the public affairs department. In this role, Lavish's department offers advice via policy discussions regarding issue advocacy. The department will educate managers about numerous issues that could affect Lavish's
advisor
An advisor is a person selected by the government to help provide scientific or economic expert advice in regards to regulations.
advisory panel
Why would a seasoned executive or business CEO serve on an advisory panel? Do they receive a free jet? The answer is, of course, no. They do receive many other non-material benefits by providing their services through an advisory panel, or a group of busi
General Services Administration
The FDA believes it will provide better results on the drug's ability to work, while the pharmaceutical industry is afraid the added time will hurt their new drug business. All panels are overseen by the GSA, or General Services Administration, who ensure
Business Strategies
Business strategies are a corporation's long-term plans to achieve specific objectives. Business strategies are a corporation's long-term plans to achieve specific objectives.
Campaign Contributions
Campaign contributions are political monetary donations from a business to either the Democratic or Republican Party in order to secure beneficial relationships. As the saying goes, 'money talks!' And companies use their financial influence to help protec
Grassroots lobbying
One way a business can influence Congress is through grassroots lobbying, or a form of communicating with the public about company important legislation and providing an argument for or against it.
Information Strategies
A key business strategy is the use of information to appeal to stakeholders to achieve a goal. Businesses need to develop information strategies, which contain pertinent data, scientific research and facts that will achieve ethically and socially responsi
Societal Strategies
Keeping both community stakeholders and investors happy can be a difficult balance for businesses. Crazi Toys knew that investors would be happy with the new plant's location in the U.S., but was aware of local concern from communities about traffic, poll
Political and legal strategies
Companies also develop political and legal strategies to achieve their business objectives. These are achieved by communicating with legislators and regulators to communicate a business' purpose.
Business Interest groups
Participate in business interest groups, or coalitions that promote company or industry objectives in order to help the company's cause: For example, business interest groups, such as Toy Companies for America, banded together to push for government appro
grassroots constituency lobbying
Utilize grassroots constituency lobbying, or a form of communicating with the public about important legislation and providing an argument for or against it: Crazi Toys encouraged stakeholders to contact local and state government to allow the factory to
Testimony or advisory panels
Testimony or advisory panels in which business leaders testify to Congress in order to help shape new regulations: This is usually used in conjunction with participating in comments via regulation.gov. Members of Crazi Toys' upper management did speak to
Campaign Contributions
Campaign contributions are political monetary donations from a business to either the Democrat or Republican Party in order to secure beneficial relationships. As the saying goes, 'money talks!' And companies use their financial influence to help protect
Society
Society is a group of individuals who reside in communities that have shared values and laws. In addition, society is made up of different religions, cultures, interests, attitudes, and lifestyles.
Market Capitalism
The first model is called market capitalism and is found in democratic societies. The definition is based on an economy that is focused on supply and demand, where the prices of goods and services are set through an open free market system. For example, N
Dominance (Populism)
Dominance is the second model that can be used to explain business, government, and society. This model is based on the idea that a few people are rich at the expense of many. It is also known as populism, where the common man views business and governmen
Public Sentiment
N&N faces countless new regulations from the government that is used to keep big business under ethical control. Consumers tend to view N&N as big business and the 'bad guys' out just to make a profit under this model. Recent public sentiment, or public o
Countervailing Forces
Countervailing forces is also based on a democratic ideal. The premise is an open society where society and government both take a hand in building relationships with business. For example, N&N uses lobbying and influence to affect regulations in governme
non-regulatory
You would assume correctly that the government wields a strong regulatory fist over business in the U.S. What might surprise you is that government influences business through non-regulatory ways that do not include government regulations. In this lesson,
Subsidies
Subsidies, or monetary amounts issued by the government to help offset price increases and keep a service competitive, are also ways to influence business. Pear Products received a government subsidy for producing and selling green technology products, su
Moral Suasion
Moral suasion is the government's ability to use policy announcements or speeches (instead of regulation) to persuade businesses to take a specific action. For instance, the head of the Federal Reserve can speak about the economy and drastically affect th
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Finally, the universalization test prods us to think about how the world would be if everyone made the same decision. In other words, if a decision you make in business was replicated by every other business, what would happen? Would it benefit society? W
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Similar to the Golden Rule is the public disclosure test. This test asks that a business decision be something a company would be so proud of that it would not mind if the decision were to be broadcast on public television for the whole world to see.
Let'
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This brings us to corporate social responsibility, and it means a corporation's responsibility to be aware of the environment and society when making decisions. Think accountability, integrity and honesty.
Back in 1968, the Ford Motor Company quickly desi
Corporate Social Responsibility
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The Golden Rule
The Golden Rule is simple. It asks that you treat people the way you want to be treated. This is a lesson many of us learned in kindergarten. It involves taking the feelings of others into consideration when making decisions that affect them. Respect peop
Ethics
Ethics is a system of values and principles of right or proper conduct. For example, most ethical systems find lying to be a violation of an ethical rule of being truthful.
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Managers must make decisions every day, and many of these decisions have an ethical dimension. Ethical decision-making is a cognitive process where people consider ethical rules, principles or guidelines when making decisions.
Market
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Non-Market
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