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Social Responsibility. Lesson 3. Video. What do you think?. Think about some things a business can do to be socially responsible . Computer industry (Dell, Apple, HP) Grocery Industry Fast Food Automotive Newspaper & Magazine. Business and Social Responsibility.
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Social Responsibility Lesson 3
What do you think? Think about some things a business can do to be socially responsible. • Computer industry (Dell, Apple, HP) • Grocery Industry • Fast Food • Automotive • Newspaper & Magazine
Business and Social Responsibility • Social responsibility is the duty to do what is best for the good of society. • Businesses that follow ethical standards value integrity and honesty in employees. • Integrity – possessing firm moral principles and values. • Mixed reactions on social responsibility. • Some feel that just producing beneficial products is enough • Others think they need to do more
Responsibility to Customers • Customers are a business’s first responsibility. • Business should offer a good, safe product at a reasonable price. Question: How is producing a good or service a way of being socially responsible? • FTC protects consumers from falsely advertised products • Some companies do not act responsibly in the marketplace. • Especially with fair competition
Responsibility to Customers • Fair competition is necessary for the marketplace to operate effectively. • Major component of market economy. • Market economy relies on market forces to allocate goods, services, and other resources to determine prices. • Some businesses use unethical tactics to eliminate the competition. • Most common way is to conspire with other businesses to control the market for a product. • They control supply and the price.
Responsibility to Customers • When competition is restricted, it affects customers. • Fewer choices • Price they pay • Restricting competition can backfire • Productivity is decreased during this time • New market opens, business may be unprepared • Movie industry example Question: What do you think is the mission of the Food and Drug Administration?
Responsibility to Employees • Some provide work experience for those with limited job skills. • Helps them develop skills • Increase confidence levels • Businesses help through volunteerism. • May allow employees to take a paid day off to work on a community project.
Responsibility to Employees • Businesses have the responsibility to provide safe working conditions, equal treatment and fair pay for employees. • Equal Pay Act (1964) – men and women be paid the same wages for doing equal work. • Americans with Disabilities Act – bans discrimination against people with physical or mental disability. • Effect of treating workers unfairly • Low morale • Poor production • High turnover rate
Responsibility to Society • Biggest social issue is environmental responsibility. • Environmental Protection Agency (EPA) • Created in 1970 • Enforces rules that protect the environment and control pollution
Responsibility to Creditors and Owners • Inaccurate accounting records (late 1990s and early 21st century) • Records showed higher profits than reported • Example of being unethical and unlawful • Harmful to creditors (those who loan money • Harmful to shareholders (those who are owners but do not work in the business) • Legislation passed - Sarbanes-Oxley Act • Mandates truthful reporting • Makes CEO more accountable for actions of financial managers of the business
