MGMT 4345 Exam 3 Review

GOVERNMENT'S REGULATORY INFLUENCES ON BUSINESS

- Most controversial issue. - Has affected terms and conditions under which firms have competed in their respective industries.

Organizational Levels of Lobbying 4. Umbrella Organizations

-Collective business interests of the U.S. -Broad base of membership that represents businesses in several different industries of various sizes. Example: Chamber of Commerce of the U.S. and the National Association of Manufacturers.

BUSINESS ENVIRONMENTALISM AND SUSTAINABILITY C. CVS Health

Stopped the sale of tobacco products in their stores. Offer smoking cessation programs.

Issues Related to Regulation

"Regulatory Unreasonableness" Business would just soon not have to deal with regulatory bodies; some business's reactions are simply related to the nuisance factor of having to deal with a complex array of restrictions. 1. Innovation may be affected: "defensive research" innovations less likely to take place. 2. New investments in plant and equipment may be affected: Funds must be used for regulatory compliance purposes; these funds are diverted from uses that are more productive. Investments are likely to be continued or increased. Those beyond the scope of regulation likely to diminish. 3. Small Business may be adversely affected: Federal regulations can have a disproportionately adverse effect on small firms due to economies of scale. Large firms have more money, personnel, and resources than small firms. Spread cost over a larger base.

Reasons for Regulation 2. Controlling Negative Externalities

"Spillover effects": When the manufacture or use of a product gives rise to unplanned or unintended side effects on third parties (the producer and the consumer are first and second parties). Air pollution, water pollution, and improper disposal of toxic wastes. Neither the producer nor consumer of the product directly "pay" for all the "costs" that are created by the manufacture of the product. Social Costs because they are absorbed by society rather than incorporated into the cost of making the product.

National Association of Manufacturers (NAM) (Umbrella Organizations)

"the preeminent US manufacturers association as well as the nation's largest industrial trade association."64 Although the membership of NAM has historically been tilted toward the larger smokestack industry firms, it now includes small- and medium-sized firms as well as member associations. The membership of NAM encompasses every industrial sector and all 50 U.S. states.

GOVERNMENT'S REGULATORY INFLUENCES ON BUSINESS A. Regulation: What Does It Mean?

- Has decision making authority - Establishes standard or guidelines. Imposes restrictions on conduct. - Operates in sphere of domestic business activity. - Members appointed by president. - Legal procedures governed by Administrative Procedures Act.

THE CONSUMER MOVEMENT Consumerism/Consumer Movement-

-A social movement seeking to augment the rights and powers of buyers in relation to sellers. In addition to the rights enumerated in The Consumer's Magna Carta (see next slide), consumers today want: -Fair value for money spent -A product that meets reasonable expectations -One with full disclosure of its specs -Truthfully advertised - and safe

Coalitions (Umbrella Organizations)

-Address a particular issue for a period. For example, the Coalition of Gulf Shrimp Industries, an ad hoc coalition of vessel owners and shrimp processors in the United States and Mexico, joined together to petition the U.S. Department of Commerce and the International Trade Commission for relief from unfair trade involving subsidized shrimp from other countries. -A coalition forms when distinct groups or parties realize they have something in com- mon that might warrant their joining forces, at least temporarily, for joint action. More often than not, an issue that various groups feel similarly about creates the opportunity for a coalition. -A standard practice for firms interested in accomplishing political goals or influencing public policy. If a company or an association wants to pass or defeat particular legislation, it can strengthen its position by enlisting support from an individual or organization that has a similar position on the issue.

POLITICAL ACTION COMMITTEES B. Agency Issues

-Arise when the actions of managers are not in the shareholders' best interests. Corporate political spending, like all corporate spending, should have the best interests of the firm, its shareholders, and its stakeholders in mind. Political spending should not provide an opportunity for managers to pursue their personal preferences because the money those managers are spending is not their own. -Arise when managers give the firm's money to a third party, such as a trade association or nonprofit group. These organizations might donate to a candidate whose actions do not serve the interests of the firm's shareholders and stakeholders.

Organizational Levels of Lobbying 3. Trade Associations

-Composed of many firms in a given industry or line of business. Examples include the National Automobile Dealers Association, the National Association of Home Builders, the National Association of Realtors, PhRMA, the American Bankers Association, the American Chemistry Council, and the American Council of Life Insurers. -Established by individual industries to help businesses in the same industry to interact with each other and benefit from those interactions.

Corporate Political Spending B. Arguments Against Corporate Political Spending

-Corporations have access to large amounts of money and that creates a serious imbalance of power. Another concern is the possibility of agency problems as managers may promote their own interests rather than the shareholders' interests, or the interests of stakeholders, when promoting candidates or issues. Even when promoting shareholder welfare, the innate self-interest of business gives people pause as business is not likely to focus on the common good. -The Golden Rule of Politics: He who has the gold, rules.

THE FEDERAL TRADE COMMISSION (FTC) A. The FTC in the 21st Century

-Created the National Do-Not-Call Registry, which forbids telemarketers from calling -Current issues include robo-calls, children's online privacy, and data brokers -Prefers that business self-regulate when possible, and they step in as last resort

THE FEDERAL TRADE COMMISSION (FTC) B. Consumer Financial Protection Bureau

-Enforces consumer financial protection laws -Restricts unfair, deceptive, or abusive acts -Takes consumer complaints -Promotes financial education -Researches consumer behavior -Monitors financial markets -Enforces laws that outlaw discrimination -Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD) - Rates and fees more fair and transparent

Reasons for Regulations 4. Other Reasons

-Excessive competition will lead to prices being set at unprofitably low levels. This will force firms out of business and ultimately will result in products that are too costly because the remaining firm will raise its prices to excessive levels, leaving the public worse off than before. -Company or companies deemed important to the general health of the economy.

Deregulation B. The Changing World of Deregulation

-Exemplified financial, telecommunications, and transportation industry. -Benefits: prices fell in many industries, better service appeared in some industries along with increased numbers of competitors and innovation products and services. -Issues: Competitors unable to compete with dominant firms. Failing, going bankrupt, absorbed by larger firms. -Blamed for savings and load industry crisis. -Few firms began to dominate key industries. -How to enhance the competitive nature of the affected industries without sacrificing the applicable social regulations to allow freer competition without lowering health and safely requirements.

GOVERNMENT'S NONREGULATORY INFLUENCE ON BUSINESS C. Other Nonregulatory Governmental Influences on Business

-Gov't has large pay roll and is major employer itself. -Gov't is a standard setter. -Uses subsidies in a variety of ways. -Major competitor of business. -Gov't loans and loan guarantees. -Taxation -Monetary Policy -Moral Suasion

Reasons for Regulation 3. Achieving Social Goals

-Gov't seeks to use regulations to help achieve certain social goals to be in the public interest. -Gov't is attempting to correct problems that might also be viewed as negative externalities by particular groups. -Keeps people informed. -Preservation of national security (deregulation of oil prices to lessen dependence on imports) -Considerations of fairness or equity (employment discrimination laws) -Protection of those who provide essential services (farmers) -Allocation of scarce resources (gasoline rationing) -Protection of consumers from excessively high price increases (natural gas regulation)

Deregulation A. Purpose of Deregulation

-Represents a counterforce aimed at keeping the economy in balance. -Continual striving for the balance of freedom and control for business. -Increase competition with the expected benefits of greater efficiency, lower prices, and enhanced innovation. -Allows more innovation while allowing the free market to set prices. (Pos) -Allow asset bubbles to build and burst and industries that have large initial infrastructure costs may have a difficult time getting started. (Neg)

STRATEGIES FOR CORPORATE POLITICAL ACTIVITY -Information Strategy

providing information to policymakers through activities such as lobbying, research projects, position papers, and being an expert witness

Organizational Levels of Lobbying 2. Grassroots Lobbying

-Lobbying directly through the use of professional lobbyists, firms and trade associations. -Mobilizing the "grassroots"—individual citizens who might be most directly affected by legislative activity to political action.

The roles of Government and Business (a clash of ethical belief systems) Individualistic (business)

-Maximum concession to self-interest. -Minimize the load of obligations society imposes. -Emphasizes inequalities of individuals.

Types of Regulation 1. Economic Regulation

-Old-line regulatory bodies such as the Interstate Commerce Commission. (Railroad industry) -Civil Aeronautics Board -Federal Communications Commission (Interstate communications, radio, telephone, telegraph) -Regulate business behavior through the controlling and influencing economic or market variables such as prices (max and min) entry to and exit from markets and types of services offered.

THE IMPACT OF BUSINESS ON THE NATURAL ENVIRONMENT H. Ozone Depletion

-Ozone is harmful near the surface of the earth, but vital in the atmosphere. It blocks dangerous ultraviolet radiation from the sun. -Decrease in stratospheric ozone comes from human use of chlorofluorocarbons (CFCs) and other chemicals. -In 2013, the hole in the ozone was at its second smallest point in 20 years.

POLITICAL ACCOUNTABILITY AND TRANSPARENCY

-Political accountability is an assumption of responsibility for political actions and a willingness to be answerable for them. -Transparency has become a major issue in political accountability because much corporate political activity today is outside the public view.

Business Lobbying

-Process of influencing public officials to promote or secure the passage or defeat of legislation. -Goal is to promote legislation that is in their organizations' interests and to defeat legislation that runs counter to that. -Professionalization of the art of persuasion. -May be directed toward the reinforcement of established policy or the defeat of proposed policy shifts. -"One of America's most despised professions" but not all evil. Some Lobbyist work for Nonprofits.

The roles of Government and Business (a clash of ethical belief systems) Collectivistic (gov't)

-Subordination of individual goals and self-interest. -Maximizing obligations assumed by the individual. -Emphasizes equality.

THE ROLE OF GOVERNMENTS IN ENVIRONMENTAL AND SUSTAINABILITY ISSUES

-developed habitable lands, -protected, taxed and zoned natural environment-based areas, and -Exercised regulatory control over how those environments could be used.

OTHER ENVIRONMENTAL AND SUSTAINABILITY STAKEHOLDERS B. Other Sustainability Interest Groups

1. Green Consumers - actual and potential customers of retail who express preferences for environmentally-friendly products and services. 2. Green Employees - play a major role in promoting environmentalism at work. 3. Green Investors - individuals and organizations who prefer to invest with firms that are associated with environmentally-oriented companies. A growing number of bond offerings, money market fund and other financial instruments now include environmental components.

THE IMPACT OF BUSINESS ON THE NATURAL ENVIRONMENT B. Energy

A major environmental issue is energy inefficiency, wasting nonrenewable sources of energy. Fossil fuels such as coal, oil, and natural gas were formed millions of years ago under unique conditions; once they are depleted, they will be gone forever. Caused wars. Energy represents a challenge and an opportunity; firms that succeed in this area will reap big profits.

THE IMPACT OF BUSINESS ON THE NATURAL ENVIRONMENT J. Deforestation

Adds to soil erosion problems. Plays a key role in global warming; Felled trees can no longer absorb carbon dioxide. Dead trees release it into the atmosphere. Accounts for 20% of global carbon emissions - more than the world's trains, boats and planes combined.

THE CONSUMER MOVEMENT D. Advertising Issues

Advertising should be clear, concise and give adequate information about the product being sold. Companies typically use ambiguity, exaggerated claims, psychological appeals, and concealment of facts to sell their products.

The pendulum of Government's role in Business

Business has never been fond of gov't establishing ground rules under which it operates.

INTERACTION OF BUSINESS, GOVERNMENT, AND THE PUBLIC C. Business-Public Relationship

Business influences public through ads, public relations, and other forms of communication. Public influences business through marketplace by forming special interest groups.

BUSINESS ENVIRONMENTALISM AND SUSTAINABILITY E. Business and Environmental Partnerships-Activists, NGOs, and Interest Groups

Business needs environmental partners to inform and validate environmental efforts. NGOs and interest groups need business to change the way it operates in order to protect the planet Corporations view NGOS in four ways: Trusted partners, useful resources, brand challenged, and the uninvited

THE IMPACT OF BUSINESS ON THE NATURAL ENVIRONMENT A. Climate Change (Global Warming)

the prevention of solar heat absorbed by our atmosphere from returning to space. -Environmental Protection Agency's Clean Power Plan introduced in 2015 under the Clean Air Act address climate change issues

THE CONSUMER MOVEMENT C. Product/Service Information Issues

Companies only show their products in good light. Tries to paint the positive picture that leads to misinformation or deception. (Hidden rates etc...)

THE CONSUMER MOVEMENT E. Specific Controversial Advertising Issues

Comparative Advertising - the practice of directly comparing a firm's product with the product of a competitor: Coke vs. Pepsi, and Mac vs. PC. Use of Sex Appeal in Advertising - this has been an ongoing ethical issue for decades. While ads using sex appeal work, they can have a serious impact on the physical and mental health of girls. Advertising to children - "Kid-vid" advertising: the average child to sees 25,000-40,000 ads per year, including one promoting "shopaholic best friends." Lacking cognitive development, children under the age of 8 are easy targets. Marketing to the poor - High interest rates yield significant profits, but can bury the poor in debt. Advertising alcoholic beverages - A voluntary ban on advertising hard liquor on TV has ended; youth exposure to liquor ads has increased 30-fold; some products target children Cigarette Advertising - many oppose advertising a dangerous product, one that kills half its users; ads target the young and less-educated markets Health and Environmental Claims - we are environmentally aware and health-conscious, and ads make health and environmental claims they may not meet. Ad creep - advertising has crept everywhere, into places that were once not considered acceptable for advertisements, including school buses, textbooks, doctors' offices, movies and historical monuments. Social Media Advertising - used in all of the above. Controversial because of rapid growth and questionable use.

THE SUSTAINABILITY IMPERATIVE

Competition for resources - demand is growing more quickly than they can be replaced. Climate change - business must be prepared to respond to new policies regarding emissions, and to take advantage of new technology. Economic globalization - wide disparities in social and environment standards bring risks and opportunities. Connectivity and communications - stakeholders can monitor and react to sustainability efforts more quickly. Reputations are quickly built and destroyed. -Carbon emissions have been slashed by 32% -Greenhouse gases- Halved by 2020 -Water - halve water associated with consumer use of products by 2020 Sustainable sourcing - 100% of agricultural raw materials sustainably by 2020

GOVERNMENT'S NONREGULATORY INFLUENCE ON BUSINESS A. Industrial Policy

Concerned with the role that gov't plays in shaping the national economy

THE ROLE OF GOVERNMENTS IN ENVIRONMENTAL AND SUSTAINABILITY ISSUES A. Responses of Governments in the United States 4. Endangered Species

Endangered Species Act (1973) Prohibits harm to endangered and threatened species May require moving the species to another location or restricting threatening business activities, resulting in intense political conflicts between business and environmental groups Prohibits harm to endangered and threatened species May require moving the species to another location or restricting threatening business activities, resulting in intense political conflicts between business and environmental groups

THE CONSUMER MOVEMENT H. Other Product Information Issues

Equal Credit Opportunity Act -Prohibits discrimination in extending consumer credit. Truth-in-Lending Act -Requires all suppliers of consumer credit to fully disclose all credit terms. Fair Credit Reporting Act -Ensures that consumer-reporting agencies provide information in a manner that is fair and equitable. Fair Debt Collection Practices Act -Regulates the practices of third-party debt-collection agencies.

THE CONSUMER MOVEMENT G. Packaging and Labeling

Federal Packaging and Labeling Act of 1967 -Prohibits deceptive labeling on consumer products -Requires disclosure of certain important information on consumer products -The FTC and the Food and Drug Administration (FDA) have responsibilities under the Act.

Types of Regulation 2. Social Regulation

Focuses on business's impacts on people. Addresses the needs of people in their roles as employees, consumers, and citizens. Examples: Civil Rights Act of 1964 Equal Employment Opportunity Commission (EEOC) Occupational Safety and Health Administration (OSHA). Consumer Product Safety Commission (CPSC). Consumer Financial Protection Bureau (CFPB).

Business Roundtable (Umbrella Organizations)

Formed in 1972, the Business Roundtable (BRT) is often regarded as an umbrella organization, although it has a more restricted membership. It is an association of chief executive officers of leading corporations with a combined workforce of more than 16 million employees in the United States and $7.3 trillion in revenues.59 The Business Roundtable is different from most groups, such as the U.S. Chamber of Commerce and NAM, in the limitation of participation to chief executive officers (CEOs). Rather than pushing narrow issues that benefit narrow interests, the organization generally selects broader concerns on which to focus.

Chamber of Commerce of the United States (Umbrella Organizations)

Founded in 1912 as a federation of businesses and business organizations. In addition to firms, corporations, and professional members, the chamber has thousands of local, state, and regional chambers of commerce; American chambers of commerce abroad; and several thousand trade and professional associations. Its diversity of membership shows why it is referred to as an umbrella organization.

GOVERNMENT'S NONREGULATORY INFLUENCE ON BUSINESS 2. The Privatization Debate

Functions of entire bureaucracies need to be contracted out to a private sector. Gov't involved in thousands of businesses in which it had no comparative advantage and no basic reason for being involved

INTERACTION OF BUSINESS, GOVERNMENT, AND THE PUBLIC A. Government-Business Relationship

Gov't influencing business through regulation, taxations, and other forms.

GOVERNMENT'S NONREGULATORY INFLUENCE ON BUSINESS 1. Producing versus Providing a Service

Gov't provides a service (has program for and pays for service) and produces a service (has own employees who do it).

Corporate Political Spending A. Arguments for Corporate Political Spending

Government may not restrict independent corporate political expenditures. The logic behind the ruling is that the First Amendment establishes the right to free speech and that not only individuals, but also groups of individuals, have that right. From this perspective, limiting a group's right to political advocacy would violate the free speech of the people who belong to that group.

POLITICAL ACTION COMMITTEES A. The Impact of Super PACs

Have facilitated outside spending in politics and the effect of outside spending has been huge. In the five years since the Citizens United ruling there has been an "explosion" of political money, much of it Super PAC money supporting future candidates that one expert called "a system that is pretty close to no holds barred."

THE FUTURE OF BUSINESS: GREENING AND/OR GROWING?

How much is enough? How much economic growth? How much materials and energy? With unrestricted economic growth, environment problems will change in degree from significant to severe.

RESPONSIBILITY FOR ENVIRONMENTAL AND SUSTAINABILITY ISSUES A. Environmental Ethics

Humans must consume at least some plants and water to survive. What level is ethical? Which school of environmental thought should we apply? Kohlberg - levels of moral development Utilitarianism - greatest good for greatest number

THE CONSUMER MOVEMENT F. Warranties and Guarantees

Implied Warranty -Unwritten promise that there is nothing wrong with the product and its intended use. Express Warranty -Promise or affirmation of fact that the seller makes at the time of the sale. Guarantee - a promise regarding product quality, less likely to be written. The Magnuson-Moss Warranty Act of 1975 set standards for what must be contained in a warranty, and its ease of being understood. Full Warranty - Covers the entire product. Limited Warranty - Certain parts or types of defects are not covered under the warranty. Extended Warranty - Service plans that lengthen the warranty period and are offered at an additional cost. G. Packaging and L

THE CONSUMER MOVEMENT B. Consumerism Today

Involves grassroots organizations, social media activism, and the rise of nonprofit organizations

OTHER ENVIRONMENTAL AND SUSTAINABILITY STAKEHOLDERS A. Environmental Interest Groups

Known as "the environmental movement," they are responsible for the "greening" of nations. Radicals - confrontational behaviors Mainstreamers - Seek pragmatic reform through cooperation and confrontation Accommodators - avoid confrontation, and are more trusting of corporations.

BUSINESS ENVIRONMENTALISM AND SUSTAINABILITY D. Tesla

Known for the development of the electric vehicle. Building an ecosystem of sustainable brands - group of interconnected elements, formed by interactions with others in its community and environment.

STRATEGIES FOR CORPORATE POLITICAL ACTIVITY A. Financial Performance Outcomes

Many studies have been conducted to calculate whether corporate political spending influences political decisions and, ultimately, firm performance. These studies have mixed results. Some find strong support, others find none, and a third group has mixed or marginal findings.136 A recent meta-analysis found that corporate political activity had a consistent positive relationship with firm financial performance.137 However, generic results are of limited value because the outcomes of corporate political activity occur in a variety of contexts and so researchers have looked for contingencies that might explain differences in returns.

THE ROLE OF GOVERNMENTS IN ENVIRONMENTAL AND SUSTAINABILITY ISSUES B. International Government Environmental and Sustainability Responses

Montreal Protocol, 1987 - by which most CFC-producing nations agreed to a quick phase-out of these ozone-destroying substances. This was the first UN treaty to achieve universal ratification.

National Federation of Independent Businesses (NFIB) (Umbrella Organizations)

NFIB is able to speak with one voice due to the homogeneity of their membership and the many issues that small businesses share because of their size. For this reason, the NFIB avoids the problems faced by the NAM and the U.S. Chamber of Commerce.

Reasons for Regulation 1. Controlling Natural Monopolies

Natural Monopoly exists 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. Can supply the entire market more efficiently and cheaply than smaller firms. Govt's desire to intervene when it thinks companies have engages in anticompetitive practices called, "antitrust".

RESPONSIBILITY FOR ENVIRONMENTAL AND SUSTAINABILITY ISSUES B. The NIMBY Problem

Not in my Backyard -Reflects human denial of responsibility for misuse of the environment. Entities causing environmental pollution are not identified as the sources of the problem, so no action is taken. -A NIMBY attitude avoids or denies the root cause of the damage. - "honk if you love the environment"

THE IMPACT OF BUSINESS ON THE NATURAL ENVIRONMENT F. Air Pollution

Outdoor Air pollution - Acid Rain Global Warming Smog Depletion of the ozone layer Serious respiratory illnesses Indoor Air Pollution - Comes from oil, gas, kerosene, coal, wood and tobacco products, building materials and furnishings, damp carpets, household cleaning products and lead-based paints. Long term effects—respiratory diseases, heart disease and cancer—can be fatal.

Corporate Political Participation

Participation in the formulation and execution of public policy at various levels of gov't.

BUSINESS ENVIRONMENTALISM AND SUSTAINABILITY B. Apple

Partners with multiple initiatives to avoid conflict of minerals and unfair labor conditions. The electronics brand with the highest use of renewable energy.

POLITICAL ACTION COMMITTEES

Political action committee (PAC), companies can contribute corporate funds to trade associations and other tax-exempt groups that will subsequently support a particular candidate or cause. Committees that are organized to raise and spend money for political candidates, ballot initiatives, and proposed legislation.

INTERACTION OF BUSINESS, GOVERNMENT, AND THE PUBLIC B. Public-Government Relationship

Public voting and electing officials. Forming special interest groups. Gov't uses politicking, public policy information, and other political influence.

THE IMPACT OF BUSINESS ON THE NATURAL ENVIRONMENT C. Water

Quality - Degradation of oceans & waterways Municipal sewage, industrial wastes Urban runoff, agricultural runoff Atmospheric fallout, over harvesting Dam sedimentation, deforestation Overgrazing, over-irrigation More than a billion people lack clean water. Quantity - Earth is a closed system with a fixed water supply; growing populations use more water. The world is facing water bankruptcy.

THE CONSUMER MOVEMENT A. Ralph Nader's Consumerism

Ralph Nader is considered the father of the modern consumer movement. Build a new era - that of the consumer.

BUSINESS ENVIRONMENTALISM AND SUSTAINABILITY A. Patagonia

Recycled decades before others; Used old plastic soda bottles to make its outdoor gear

THE IMPACT OF BUSINESS ON THE NATURAL ENVIRONMENT G. Waste Management

Reduce, reuse, and recycle!

Organizational Levels of Lobbying 1. Professional Lobbyists

Referred to as "influence peddlers," operate under a variety of formal titles and come from a variety of backgrounds. Officially, they are lawyers, government affairs specialists, public relations consultants, or public affairs consultants. Some are on the staffs of large trade associations based in Washington. Others represent specific companies that have Washington-based offices dedicated to the sole purpose of representing those companies in the capitol city. Still others are professional lobbyists who work for large law firms or consulting firms in Washington that specialize in representing clients to the lawmakers.

SELF-REGULATION IN ADVERTISING

Self-Regulation - the control of business conduct by the business itself or business associations.

THE ROLE OF GOVERNMENTS IN ENVIRONMENTAL AND SUSTAINABILITY ISSUES A. Responses of Governments in the United States 3. Land-Related Legislation

Solid Waste Disposal Act - State and local governments mainly responsible Resource Conservation & Recover Act set up a regulatory system for tracking hazardous waste Toxic Substances Control Act requires businesses to identify chemicals posing substantial risks. Superfund (CERCLA) places responsibility for remediation of hazardous waste dumps Emergency Planning and Community Right-to-Know Act requires manufacturers to report annually all of their releases into the environment of any of more than 500 toxic chemicals

THE ROLE OF GOVERNMENTS IN ENVIRONMENTAL AND SUSTAINABILITY ISSUES A. Responses of Governments in the United States 1. Air Quality Legislation

The Clean Air Act- Sets standards and timetables for implementation Created Emissions trading (cap and trade) Businesses that reduce their emissions can trade them to other businesses, earning income.

THE ROLE OF GOVERNMENTS IN ENVIRONMENTAL AND SUSTAINABILITY ISSUES A. Responses of Governments in the United States 2. Water Quality Legislation

The Clean Water Act - Involves both state and federal governments Goal: to achieve water quality safe for humans, and protection of fish, shellfish and wildlife Banned discharge of pollutants into navigable waters through pollution permit system Set timetables for installation of state-of-the-art pollution control equipment. Marine Protection , Research & Sanctuaries Act set a similar system for coastal waters The Safe Drinking Water Act of 1974 establishes maximum contaminant levels for drinking water.

MORAL MODELS AND CONSUMER STAKEHOLDERS

The Moral Management Model best represents the highest ethical standards of consumer treatment, and is therefore the recommended model for business to follow.

THE NATURAL ENVIRONMENT

The environment was polluted by companies. Environmentalism becomes profitable and business change their ways. It is now one of the most significant societal issues of our time. Emphasis on two themes: 1) Humans are a part of their natural environment; 2) The environment is complex, defying simple analyses

THE FEDERAL TRADE COMMISSION (FTC)

The government's major instrument for ensuring that business lives up to its responsibilities.

THE IMPACT OF BUSINESS ON THE NATURAL ENVIRONMENT D. Biodiversity and Land Use

The variation of life forms inside an ecosystem, serves as a key indicator of its health. Species die off at a natural rate of 1 to 5 a year, now dozens go extinct each day.

THE IMPACT OF BUSINESS ON THE NATURAL ENVIRONMENT E. Chemicals, Toxins, and Heavy Metals

Two main problems - 1. We are not always aware of the effects of exposure to chemicals. 2. Toxic substances can be associated with industrial accidents, causing unforeseen widespread biological damage.

THE IMPACT OF BUSINESS ON THE NATURAL ENVIRONMENT I. Oceans and FIsheries

Watershed - an area that drains to a common waterway. We all live in a watershed. Once inconceivable, now 85% of the world's fisheries are at capacity, over capacity or have collapsed. The oceans are running out of fish to meet human needs

RESPONSIBILITY FOR ENVIRONMENTAL AND SUSTAINABILITY ISSUES

Wicked problems - (smog, toxic waste and acid rain) are problems with complexity, uncertainty, interconnectedness, ambiguity, conflict, and societal constraints. When no one takes responsibility. Tragedy of the commons - A "commons" (our environment) is a plot of land available to all. Constraints must be placed on the use of the commons because self-interest is likely to lead individuals and organizations to behave in ways that will not sustain our shared resources.

GOVERNMENT'S NONREGULATORY INFLUENCE ON BUSINESS B. Privatization

Zeroes in on the question of whether current public functions should be turned over the the private (business) sector for more effective and efficient administration

STRATEGIES FOR CORPORATE POLITICAL ACTIVITY -Financial Incentives Strategy

making direct financial contributions, providing desired services, reimbursing travel, or paying fees to policymakers

STRATEGIES FOR CORPORATE POLITICAL ACTIVITY -Constituency Building Strategy

mobilizing grassroots or business cohort to work together through public relations, political education, press conferences, and advertising

SELF-REGULATION IN ADVERTISING A. The National Advertising Division's Program

most prominent organization for advertising self-regulation by business. Created to help sustain high standards of truth and accuracy in national advertising. -Initiates investigations, determines issues, collects and evaluates data, determines whether an advertisers claims are substantiated.