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Describe five ways government influences business
- Purchases business’ products and services
- Prescribes the rules of the game for business
- Is a financier
- Is an architect of economic growth
- Is a major promoter and subsidizer of business
What is industrial policy?
Any selective government measure that prevents or promotes changes in the structure of an economy.
Discuss pros and cons of industrial policy as outlined in lecture and text
- Arguments For:
- Decline of U.S. competitiveness
- Use by other world governments
- Ad hoc industrial policy
- Arguments Against:
- Reduces market efficiency
- Promotes political decisions
- Foreign success variable
- Various interventions create an industrial policy by default
Why do we regulate?
Regulation has arisen because some kind of market failure has occurred and government, intending to represent the public interest, has chosen to take corrective action.
List and briefly describe three reasons for regulating.
- Achieving Social Goals: The government not only employees regulations to address market failures and
- negative externalities but also seeks to use regulations to help achieve certain social goals which seem to be in the publics interest.
- Control Negative Externalities:
- Negative Externalities results when the manufacture or use of a product gives rise to unplanned or unintended side effects on others. Examples are air pollution, water pollution and improper waste of disposal of toxic waste.
- Controlling Natural Monopolies: A natural monopoly occurs in a market where the economies of scale are so great that the largest firm has the lowest costs and thus is able to drive out its competitors.
How can corporations participate in the political sphere?
By not participating in political sphere businesses are in trouble.
List all four means of participating and give an example of each.
- Political Strategy: To secure position of advantage regarding a given regulation or piece of legislation.
- PAC: Instruments through which business uses financial resources to influence government.
- Lobbying: The process of influencing public officials to promote or secure passage or defeat of legislation.
- Coalition Building: Business and other groups joining forces to achieve common goals.
What are the purposes of lobbying?
- Gain legislative support or industrial approval for some objective.
- Obtain reinforcement of establishment of established policy or the defeat of proved policy shifts.
- Targets the election or defeat of national, state, and local legislators.
What do lobbyists do for their clients?
- Protect firms against surprise legislation
- Organize grassroots efforts
- Help members of the congress get reelected
- Establish communication channels with regulatory bodies
- Provide issue papers on anticipated effects of legislative activity
- Draft legislation, slick ad campaigns, direct-mail campaigns
- Communicate sentiments of client on key issues
- Influence outcome of legislation
- Assist companies in coalition building around issues
What’s a PAC?
Are groups of like-minded businesses using financial resources to influence government. The principal instruments through which business uses financial resources to influence government.
Give an argument for and against the use of PACs.
- Argument for PACs:
- PACs are a reasonable means for business to
- organize their contributions to candidates for office.
- Argument against PACs:
- PACs expect something in return other than good
- government and this can lead to differing treatment for those who give and those who cannot, such as the poor.
A contribution made to political parties instead of political candidates.
Is transparent and highly regulated.
List and describe five of the eight critical dimensions of product quality. Give an example for each.
- Reliability: Reflects the probability of a product malfunctioning or failing.
- Durability: Is a measure of the products life.
- Aesthetics: Is a subjective factor that refers to how the product looks, feels, tastes, etc.
- Features: Are the “bells and whistles” or products that supplement their basic functioning.
- Serviceability: Refers to the speed, courtesy, competence, and ease of repair.
- Perceived Quality: Is a subjective inference that the consumer makes on the basis of a variety of tangible and intangible product characteristics.
Contrast between the three ethical dimensions of quality: contractual theory, due care theory and the social costs view
- Contractual theory: Firms must comply with terms of the sale, inform customer, avoid misrepresentation and coercion
- Due care theory: Customer is vulnerable and lacks info that the firm has, therefore, customers depend upon ethical behavior of firm. Firm must “think for customer” to some extent regarding use of its products.
- Social costs view: A firm is always responsible for harm caused by its product. Firms benefit from profits and must therefore be prepared beyond contracts and due care to accept responsibility.
What is meant by Caveat Emptor and Caveat Vendor?
- Caveat Emptor: 1800’s “Let the buyer beware”
- Caveat Vendor: 1900’s “Let the seller take care”
List six of the ten top principles of safety
- Build safety into product design
- Fully investigate product safety incidents
- Learn from mistakes – yours and others
- Educate consumers about product safety
- If a defect occurs, promptly offer a comprehensive recall plan
- Report product safety defects promptly
Doctrine of Strict liability:
A doctrine holding that anyone involved in the design, manufacture, or sale of a product is liable for harm caused to the user if the product as sold was unreasonably dangerous because of its defective condition.
Is more demanding that strict liability.
Market share liability:
Evolved from delayed manifestation cases where delayed reactions to products appear years after exposure.
Describe the role and activities of the Consumer Product Safety Commission
- Develops voluntary safety standards with industry
- Issues and enforces mandatory standards
- Bans consumer products if no feasible standard would protect the public
- Obtains the recall of products or arranges repair
- Conducts research on potential product hazards
- Informs and educates consumers through media, government and private organizations, and by responding to consumer inquiries
Describe TQM in terms of its principles, practices and techniques.
All business functions are blended into an integrated philosophy built around quality, teamwork, productivity, and customer understanding and satisfaction. The customer is the final judge of quality.
Broadly, anything that is external or internal to an entity. For humans, it can include external living, working, and playing spaces and natural resources, as well as internal physical, mental and emotional states.
The volume of and intensity of use by organisms that can be sustained in a particular place and at a particular time without degrading the environment’s future suitability for that use. It has limits that need to be respected for continued use.
All living and nonliving substances present in a particular place, often interacting with others.
A measure of disorder of energy, indicating its unavailability for recycling for the same use. Energy tends to break down into lower quality with each use.
The point at which a particular phenomenon, previously suppressed, suddenly begins to be activated. For instance, when a population’s carrying capacity threshold is exceeded, the population tends to decrease or even crash as a result of increased morbidity and mortality.
The existence of material or energy that has gone through a transformation process and is perceived as unwanted or devalued in a particular place and a particular time.
The continuous loop like movement of water, air, and various nutrients, such as nitrogen, phosphorous, and sulfur, through the environment. Such cycles can be impaired in performing their roles, such as purification and sustenance, by excessive human-caused pollution and depletion.
The inability of humans and nature to restore environmental conditions to a previous state within relevant time frames. Human environment-related actions that appear this way are the destruction of a rainforest or extinction of a species.
What is the sustainability imperative and what are four of the six principles of sustainable success?
The Sustainability Imperative:
Meeting the needs of the present without compromising the ability of future generations to meet their own needs.
- Your Business is part of a much larger system.
- The culture of your business is determined by the
- context you create for it.
- The soul of a business is found in the hearts of its people.
- True power is living what you know.
- You can’t predict the future, but you can create it.
- There is a way to make an idea’s time come.
Describe the tragedy of the commons. What does it mean for business?
Constraints must be placed on the use of the commons (i.e., our environment) because in the absence of constraints, self-interest is likely to lead individuals and organizations to behave in ways that will not sustain our shared resources.
According to lecture, how has the U.S. government responded to environmental issues? (The slide lists six ways).
- National Environment Policy Act (NEPA)
- Environmental Protection Agency (EPA)
- Air quality legislation
- Water quality legislation
- Land-related legislation
- Endangered species protection
According to the textbook, how should you terminate an employee (list two points for this) and what SHOULDN’T you do when terminating and employee (list two points for this)?
- Best practices for terminating an employee:
- Fire employees in a private space
- Preserve the employee’s dignity
- What not to do when terminating an employee:
- Don’t terminate an employee via email. This is a face to face task
- Don’t rush through the meeting. If they need more time to process this, you can provide that
Define “employment-at-will”. Describe two exceptions.
- Employment-at-will Doctrine: The relationship between employer and employee is a voluntary one that can be terminated at any time by either party. Is a fairly unique concept in the world.
- Describe two Exceptions:
- Public policy exceptions: Protects employees from being fired for refusal to commit crimes.
- Implied contract exception: Protects employees who they believe have contracts or implied contracts.
Rights provided by the law
Collective Bargaining Rights:
Process by which unions negotiate with a company for certain employee rights, such as seniority preferences or grievance procedures
Employee rights that come from employer promises
What is “strategic philanthropy”?
An approach by which corporate giving and philanthropic endeavors are designed to fit with the firm’s mission, goals, or objectives.
Describe five of the seven standards of excellence in corporate community involvement.
- Leadership: Support, commitment & Participation in community
Strategy: Approached community relationships strategically but with needs of firm and community in mind.
- Relationship Building: Stakeholder approach: Relationship matters
Infrastructure: Community involvement in institutionalized, i.e. regular meetings
Issues Management: Identifies issues important to operation and reputation
Identify and discuss two basic ways of business giving.
- Health & Human Services:
Briefly describe two of the four central strategies for natural capitalism.
- Radical Resource Productivity: Use resources more effectively
- Biomimicry: Design along biological lines to minimize waste
- Service and Flow Economy: A shift from commodity acquisition as a measure of affluence to an economy where quality, utility and performance promotes well-being.
- Investing in Natural Capital: Reverse destruction by investing in sustaining and restoring living systems and resources
Assumptions of Natural Capitalism:
- Economic and environmental sustainability depends on redressing global inequities of income and material well-being.
- Human welfare is best served by improving the quality and flow of desired services delivered, rather than be merely increasing the total dollar flow.
- One of the keys to the most beneficial employment of people, money, and the environment is radical increases in resource productivity.
Assumptions of Conventional Capitalism:
- GDP maximizes human well-being
- Any resources shortages that do occur will elicit the development of substitutes.
- Free enterprise and market forces will allocate people and resources to their highest and best uses.
According to the text, briefly describe the GRI and four of the CERES principles.
- Global Reporting Initiative: A collaborating center of the United Nations Environment Programmer
- spearheaded the development of a sustainability reporting framework that outlines the principles and indicators that organizations can use to measure and report their economic, environmental, and social performance.
Risk Reduction: We will strive to minimize the environmental, health, and safety risks to out employees and the communities in which we operate through safe technologies, facilities, and operating procedures, and by being prepared for emergencies.
- Informing the public: We will inform in a timely manner everyone who may be affected by conditions
- caused by our company that might endanger health, safety, or the environment.
Safe products and services: We will reduce and where possible eliminate the use, manufacture, or sale of products and services that cause environment damage or health or safety hazards.
Energy conservation: We will conserve energy and improve the energy efficiency of our internal operations and of the goods and services we sell.