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Chapter 2 Social and Ethical Environment of Business

Chapter 2 Social and Ethical Environment of Business. Objectives. Describe the changing nature of the population, the labor force, and their impact on businesses. Discuss how the values of Americans have changed and how business has adapted to those changed values.

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Chapter 2 Social and Ethical Environment of Business

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  1. Chapter 2Social and Ethical Environment of Business

  2. Objectives • Describe the changing nature of the population, the labor force, and their impact on businesses. • Discuss how the values of Americans have changed and how business has adapted to those changed values. • Debate the dilemma posed by the need for business to grow and the need to protect the natural environment. • Suggest ways in which businesses can be socially responsible. • Predict how changes in society and business will affect employment in the future.

  3. Human Resource Issues • People are a firm’s most important resource • More important than finance, technology, product innovation, or international business • Changes in population and lifestyles have a direct bearing on business operations

  4. Human Resource Issues • Population • Gross Domestic Product (GDP) cannot increase unless there are enough people to provide necessary labor and to purchase the goods and services produced • Growing Population • Current US population = 307,254,924 • Growth Rate largely determined by the birth rate, the death rate, and the level of immigration • As the standard of living increases, birth rate falls

  5. Human Resource Issues • Population • Growth Population • Much of it takes place through immigration • US accepts more legal immigrants than any other country • Changing Population • The nature of the population • Demographics • Baby Boom • Baby Bust

  6. US Growth Chart • http://www.google.com/publicdata?ds=uspopulation&met=population&tdim=true&q=US+population

  7. Human Resource Issues • Population • Moving Population • One out five Americans changes his or her address • Frost Belt – The colder northern half of the country • Sun Belt – The warmer southern half of the nation • Rust Belt – the north central and northeastern states where the major manufacturing firms once dominated • Florida and Georgia have experienced rapid economic and industrial growth

  8. Human Resource Issues • Labor Force • Most people aged 16 or over who are available for work (employed and unemployed) • Does not include active duty military • Labor force size is approximately 150 mil. • Labor participation rate is the percentage of the labor force that is either employed or actively seeking employment = 65.5% • Unemployment Rate = 9.7%

  9. Human Resource Issues Unemployment Rates

  10. Human Resources Issues • Poverty • 37.3 million people (12.5% of the population) lived at or below the official poverty level • Primarily children and adults who had not participated in the labor force during the year • 7.5 million working poor (at least 27 weeks in the labor force) • Education, living conditions (single, family) all are taken into account

  11. Human Resources Issues • Poverty • Low-earnings income $305 a week • http://aspe.hhs.gov/poverty/08Poverty.shtml • Equal Employment • Laws passed to outlaw discrimination • Glass Ceiling- an invisible barrier to job advancement • Comparable Worth • Paying workers equally for jobs with similar but not identical job requirements • Not easy measure a jobs worth

  12. Human Resources Issues • Societal Values • Based on the generations • Generation X – post baby boom generation • Net Generation – born between 1977-1997 • Employer Practices • A changing society affects an employer’s choices • Redesigning jobs • To reduce boredom • To reduce job receptiveness • Improving Health and Safety • Family-Friendly Practicing • Bank of America • Allstate • Children’s Health Care of Atlanta

  13. Natural Resource Issues • Managing the Environment • Companies going GREEN • Following environmental trends

  14. Ethical Issues • Ethics are the standards of moral conduct that individuals and groups set for themselves • Defines what behavior they value as right or wrong • Closely linked to personal values, underlying beliefs and attitudes that individuals or groups possess

  15. Ethical Issues • Ethical Dilemmas • Rises when it is not clear whether a particular action is legal or illegal • Constantly faced with ethical dilemmas of various kinds

  16. Societal Responsibility of Business • Social Responsibility refers to the duty of a business to contribute to the well being of society • Stakeholders are any individuals or groups that are affected by the firm’s actions, such as owners, customers, suppliers, employees, creditors, government and the public

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