Chapter 7 Social and Ethical Environment of Business

Chapter 7: Social and Ethical Environment of Business Lesson 7.1: Human Resources Characteristics of the Workers - The U.S. has the world’s largest single country economy and relies on highly sophisticated and modern means of production, transportation, and communication - Problems in the economy persist in terms of discrimination, crime and violence, environmental protection, ethical conduct, and social responsibility - The GDP of a country cannot increase unless there are enough people to provide the necessary labor and to purchase the goods and services produced - The GDP must grow at a faster rate than its population to improve living standards Growing Population - The U.S. population has grown steadily - Growth rate is largely determined by the birth rate, the death rate, and the level of immigration into the country - Because of better health care and an improved public health system, people are living much longer Changing Population - Currently 25% of Americans can be racially classified as non-white - Higher birth rates of non-white individuals and recent immigration, the proportions in the population have been rapidly changing - Population size and birth rate affect businesses because they influence the number of people available to work and to consume good and services - Baby Boom - The generation formed by the high birth rate between 1945 and 1965 - Generation X - The generation born during the low birth-rate period between 1960 and 1980 - Generation Z - The generation caused by the higher birth rate between 1991 and the end of the millennium - Baby Bust - the period between baby boomers and the millennials which created a shortage of workers Moving Population - Americans are people who are always on the move - Frost Belt - colder states in the north and northeast - Sun Belt - the warmer states in the south and southwest - - People often often move from the frost belt to the sun belt As businesses relocate to where customers are located, they affect where other people move to in order to find jobs - Rust Belt - the north central and northeastern states where major manufacturing firms once dominated Labor Force - Labor Force - most people aged 16 or over who are available for work, whether employed or unemployed - - People actively looking for work Labor Participation Rate - the percentage of the adult population that is in the labor force - - Calculated by dividing the labor force by the adult population While the overall labor participation rate hovers around 65 percent, the participation rate is higher for men than for women - - Narrowed over time The job market is influenced by fluctuations in the economy, changes in the population and where people live, and technological advances - One of the greatest strengths of the American economy is the flexibility of the workforce and entrepreneurial cultural allowing for new jobs - Many new jobs that come with the introduction of technology require new skills which means workers have to be educated - More people are going to college or acquiring training in new skills as a result Poverty - The prosperity of Americans is not equally distributed among the population - - Between 13 and 15 percent of the population in any given year live in poverty - Are poorly housed, clothed, and fed - Live in inner-city slums or in rural areas Many parents cannot participate fully in the labor force because they don’t have access to good quality, affordable child care - The strongest influence on increased income is increased education - The government has several programs to reduce poverty such as minimum wage rates, unemployment benefits, financial or food aid, and subsidized medical care - Also offer training programs to increase skills people need to find jobs Equal Employment - Equality is on of the basic principles on which the United States was founded - Several laws have been passed to outlaw discrimination on the basis of race, gender, national origin, color, religion, age, handicap, and other characteristics - - Glass Ceiling - an invisible barrier to job advancement - Often difficult to detect - When people in certain groups may encounter difficulties in being promoted Many women and members of racial minority groups are employed in entry level position with little hope for career advancement - Sticky Floor Syndrome - The inability of these workers to move up from these jobs Comparable Worth - Comparable Worth - paying workers equally for jobs with similar but not identical job requirements - Wages tend to be lower in jobs that employ lots of women than in jobs held primarily by men - If two different jobs require the same level of training and responsibility, the pay scale for the two jobs should be the same - To determine whether work is of equal value, analysts compare factors such as special skills, physical strength, job dangers, responsibility, and education - But it is not easy to determine the specific factors that measure the worth of jobs - Factors such as physical strength come into play between certain jobs (such as between legal secretaries and carpenters) 7.2 Societal Values Changing American Values - Values - underlying beliefs and attitudes - Because of increased competition in the economy, managers are striving to produce more while keeping costs low - - Employers have increased their demands on employees - Many employees find the pace and demands of work stressful Job insecurity discourages workers from taking vacations or time off, and instead they work longer hours to meet their job requirements. - With so many men and women working side by side, incidents of sexual harassment have blossomed - A disturbing aspect in some parts of contemporary American society is the incidence of unpredictable and unprovoked violence through the use of guns, often by young people. - This concern over violent crime has led to an expanding personal-security business Employer Responses - Many social issues transfer to work settings - Responsibilities may be enormous for workers with preschool children, aging parents, family illnesses, and financial burdens - Employers work to improve the way work is done, to assure healthier and safer working conditions, and to help workers deal with some personal problems - When jobs consist of mainly repetitive tasks, workers get bored, productivity drops, and morale declines - Employers redesign jobs to make them varied and challenging - Employees learn a variety of jobs and regularly switch jobs within the same organization - Increases workers’ interest in their jobs and enables employees to fill in for co-workers who may be absent - Workers now often participate in job decisions, provide suggestions, and serve on committees that look for ways to improve work quality - In response to concerns over health and safety, businesses operate wellness and fitness programs - Provide incentives for smokers to quit, membership to health clubs, counseling services where workers can receive support for stress or emotional problems, and payment for treatment of drug, alcohol, and other forms of addiction. - By law, employers provide unpaid leave to employees to take care of their sick children or parents, or to give birth to, adopt, or take care of newborn children - Many progressive businesses provide day-care facilities for the young children of employees and flexible scheduling - Telecommute - working from home or on the road, staying in contact with their employers electronically. Sustainability Issues - The increasing demand for products places great pressure on natural resources - - Affects the habitats of wild animals and the lives of native peoples Sustainability - using strategies that consider the needs of the environment, society, and the economy to meet present needs without compromising the ability of future generations to meet their needs. - Recycling - reusing products and packaging whenever possible - - Conserve nonrenewable resources (oil, natural gas, and iron ore) Pollution dangers have become more and more apparent - Many residents suffer from breathing problems and marine life have been killed - Environmental Protection Agency - helps control and reduce pollution in the basic areas of air, water, solid waste, pesticides, noise, and radiation - Enforced include the Clean Air Act, Clean Water Act, Resource Recovery Act, Federal Water Pollution Control Act, Federal Environmental Pesticide Control Act, Noise Control Act, and Resource Conservation and Recovery Act - Laws against pollution and demands for conserving natural resources are costly to businesses - Issues arise when other countries show less concern about the environment or less commitment to conservation than the United States - Allows other countries to make cheaper goods Lesson 7.3: Ethical Issues and Social Responsibility Business Ethics - Ethics - standards of moral conduct that individuals and groups set for themselves, defining what behavior they value as right or wrong - is closely linked to personal values - underlying beliefs and attitudes that individuals or groups possess. - Business Ethics - A collection of principles and rules that define right and wrong conduct for an organization - Moral conduct that is favorable to the largest number of people is considered ethically desirable - Code of Ethics - a formal, published collection of values and rules that reflect the firm’s philosophy and goals - Deal with such issues as accepting business gifts, respecting employee privacy, using company property for personal use, and maintaining confidentiality - Communicated to employees through memos, newsletters, posters, and employee manuals - The issue of ethics often arises when it is not clear whether a particular action is legal or illegal - Businesses are constantly faced with ethical dilemmas of various kinds - Because values also differ among nations, problems sometimes arise for firms involved in international business - Firms have to choose between the ethical practices of the foreign country and of their home country Social Responsibility of Business - The primary goal of business is to make a profit for the owners - Social Responsibility - the duty of a business to contribute to the well-being of society - Stakeholders - any individuals or groups that are affected by the firm’s actions, such as owners, customers, suppliers, employees, creditors, government, and the public - Expect a business to be responsible and responsive to their interests - Usually believe that a business has the resources to contribute to a community’s well-being - It is now widely recognized that business has an important responsibility to its stakeholders - - Getting involved socially advances the business’s own interests Nongovernmental Organizations (NGOs) - The conduct of businesses is being increasingly and closely examined by various independent groups - Given the fast pace of change in the world today, society and business will face different issues in the future - The racial and ethnic mix of the labor force will continue to change - Computer-related jobs are multiplying as entrepreneurs establish Internet companies to find new applications for this new technology - The general public has become more conscious of environmental and human rights issues, and there is growing concern over balancing family and work life *Chapters 8-12 are associated with Introduction to Business (the course prior to Business Management) and are not used in this course