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Chapter 2Social & Ethical Environment of Business • Human Resource Issues • Natural Resource Issues • Ethical Issues • Social Responsibility of Business
Population • The GDP (Gross Domestic Product) - the total market value of all goods produced and services provided in a country in one year. The GDP cannot increase unless there are enough people to provide the labor an purchase the goods and services that are produced. • Growing Population - birth rate, illegal immigrants, longer life expectancy • Changing Population - Hispanic population is growing • Baby Boom • Baby Bust • Moving Population - from Frost to Sun Belt
Type of Government/Economy # of people in the United States Age /Gender Structure Population Growth Rate # of Households Demographics of the population Ethnic Groups Religion Language Average Income Unemployment Rate Labor Force Poverty Rate Inflation Rate Immigration GDP GDP per Capita Exports & Imports Trading Partners Activity #1U.S. Population Statistics • Use http://www.census.gov to find out information about our economy.
Labor Force • Labor Force - people 16 or older who are available for work, employed or unemployed. • Labor Participation Rate - the % of the labor force that is either employed or actively seeking employment • Quality of Education - a recent major study revealed that 1/2 the adults in this country lack the ability to write a simple letter. Organizations must be willing to train.
Human Resource Issues • Poverty - between 12 &15% of the population live in poverty. • Equal Employment - it is still very difficult to get promoted or obtain jobs on an equal basis. • Glass Ceiling - an invisible barrier to job advancement usually for women and minorities. • Comparable Worth - on average females are only paid 75 % of what males are paid for most jobs. Comparable worth means equal pay for equal work. To determine whether work is of equal value, factors such as special skills, physical strength, job dangers, responsibilities, and education are compared.
Pay Differences Between Men & Women In 1966 women earned .58 cents for every dollar earned by men. In 1996, women earned .74 cents for every dollar earned by men.
Societal Values • Transformation of the Family • # of children living with both parents continues to fall. • Birth rate has declined, as women delay marriage and pursue careers. • Both parents work to support the family. • Dining at home is being replaced by dining out. • Transformation of the Workplace • Sexual Harassment cases have increased.
Employer Practices • Employees leave home each day thinking about personal problems. • Redesigning Jobs - when jobs are repetitive, workers get bored, productivity decreases, and morale is low. • Job Sharing - employees regularly switch jobs with others to learn new skills. • Empowerment - employees are making more decisions, serve on committees to look for ways to improve quality etc. • Improving Health & Safety - wellness & fitness programs, no smoking laws, warnings for hazardous work, and drug testing. (Some employers are not hiring smokers)
Adapting to Worker Needs • Employers have established day care facilities for employees with children. • Family Leave Act provides months unpaid leave for those who are giving birth or wish to adopt. • Flex-Time - employees start late and leave late or start early and leave early. • Telecommuting - allows employees to work at home using computers. Good for working mothers and handicapped employees.
Natural Resource Issues • Managing the Environment - better management of our limited natural resources and improved disposal methods of waste products are critical concerns of society and business. • recycle - reusing products or product packaging whenever possible. • Government - tightened pollution standards in order to conserve natural resources. These laws are very expensive for business. Foreign countries make goods cheaper because of looser restrictions. • EPA – Environmental Protection Agency • Clean Air Act • Clean Water Act • Federal Pesticide Controls
Ethical Issues • Ethics - a code of moral conduct that set standards for what is valued as right and wrong behavior for one person. • Business Ethics - what is right and wrong for an organization. Not all firms have the same rules of conduct. • Code of Ethics - a formal, published collection of values and rules that are used to guide the behavior of an organization towards its various stakeholders. Must be communicated in memos, newsletters, and employee manuals (differ from culture to culture)
Activity #2Company Credo or Mission Statements • Use the Internet to research company mission statements a.k.a credos for the following companies: • Walmart • Burger King • McDonalds • Kraft • Coke • Pepsi • Johnson and Johnson • Procter and Gamble • Kodak • + 5 additional companies that you choose.
Social Responsibility of Business • The primary goal of business is to make a profit for the owners. • Social Responsibility - refers to the duty of a business to contribute to the well being of society. The organization has an obligation to aid the community in which it operates. • Stakeholders - owners, customers, suppliers, employers, creditors, government, the public - all expect business to be responsible and responsive to their interests.
Activity #3Social Programs • Use the Internet to research social programs from several corporations: • Wal-Mart • Eckerd Drugs • Ben & Jerry’s • McDonalds • K-Mart • +5 additional companies that you choose.