Chapter 2 Business Review

What is the goal of affirmative action programs? How is this goal achieved?

The goal of affirmative action programs is to increase the number of minority employees at all levels within an organization. The Equal Employment Opportunity Commission (EEOC) was created by Congress to investigate complaints of discrimination and to sue firms that practice discrimination in employment.

What is the primary function of the Equal Employment Opportunity Commission?

The primary function of the EEOC is to investigate complaints of discrimination in employment.

What are the six basic rights of consumers?

- The right to choose - The right to be informed - The right to be heard - The right to consumer education - The right to service - The right to safety

What are the arguments for increasing the social responsibility of business?

-Business cannot ignore social issues because it is a part of our society. -Business has the technical, financial, and managerial resources that are needed to tackle today's complex social issues. -By helping resolve social issues, business can create a more stable environment for long-term profitability. -Socially responsible decision making by business firms can prevent increased government intervention

Why might an individual with high ethical standards act less ethically in business than in his or her personal life?

Pressure from low or declining profits can cause a person with normally high ethical standards to behave less ethically in business. But financial incentives are not the only reason. People make unethical decisions to support colleagues or friends with whom they are doing business

What are the arguments against increasing the social responsibility of business?

-Business managers are primarily responsible to stockholders, so management must be concerned with providing a return on owners' investments. -Corporate time, money, and talent should be used to maximize profits, not to solve society's problems. -Because social problems affect society in general, business should not be expected to solve these problems. -Social issues are the responsibility of officials who are elected for that purpose and who are accountable to the voters for their decisions.

Describe the steps involved in developing a social responsibility program within a large corporation.

-Commitment of top executives. Top executives should develop a policy statement that outlines key areas of concern. -Planning. Managers should form a plan that deals with each of the issues described in the policy statement. -Appointment of a director. A top-level executive should be appointed to direct the organization's activities in implementing the policy. -The social audit. The social audit is a comprehensive report of what an organization has done, and is doing, with regard to social issues that affect it.

How would an organizational code of ethics help to ensure ethical business behavior?

An organizational code of ethics would help a firm establish a guide to acceptable and ethical behavior for employees to follow. It shows the company's commitment to ethical behavior and sets a standard for all employees in the firm. Often, a company's code of ethics communicates the method for reporting unethical or illegal actions.

How and why did the American business environment change after the Great Depression?

The Great Depression and its national consequences showed both the American people and the government that a more centralized control over certain kinds of businesses and business activities would be required in the future to prevent our economy from falling victim to the forces that caused the Depression.

What are the major differences between the economic model of social responsibility and the socioeconomic model?

The economic model of social responsibility holds that society will benefit most when business is left alone to produce and market profitable goods. The socioeconomic model places emphasis not only on profits but also on the impact of business decisions on society. (See Table 2.3.)

Our environment can be cleaned up and kept clean. Why haven't we simply done so?

The environment hasn't been cleaned up and kept clean because of the costs involved and the problems associated with deciding who will pay for the cleanup.

There are more women than men in the United States. Why, then, are women considered a minority with regard to employment?

Women are a minority, not because they are fewer in number, but because there are fewer of them employed than men and fewer in positions of true responsibility. Women also fit the definition of a minority because they have been singled out as a group for unfavorable treatment.