UNIT 1: Business and Its Environment - PowerPoint Presentation

1. UNIT 1:Business and Its Environment

2. Business and Its EnvironmentPart 1: Characteristics of BusinessPart 2: Social and Ethical Environment of BusinessPart 3: Economic Environment of BusinessPart 4: International Environment of Business2

3. Part 2: Social & Ethical Environment of BusinessSection 1: Human ResourcesSection 2: Societal ValuesSection 3: Ethical Issues3

4. Human ResourcesObjectivesDescribe the changing nature of the U.S. population and how this impacts businesses.Explain the issues that businesses face with the U.S. labor force4

5. Human ResourcesTermsBaby BoomLabor ForceBaby BustLabor Participation RateFrost BeltGlass CeilingSun BeltSticky Floor SyndromeRust BeltComparable Worth5

6. IntroductionU.S. sits a top world’s economic, technical and political powerWorld’s largest economySophisticated and modern-ProductionTransportationCommunicationHigh Standard of LivingAll of these achievements because of enormous resources this country possess:Ingenuity of its peopleDemocratic form of governmentSocial system that rewards individual initiativePublic polices that encourage innovation6

7. Introduction (Cont.)Problem still persist with regards toDiscriminationCrime and violenceEnvironmental protectionEthical conduct andSocial responsibility Business is apart of total society, the positives and negative of society affects business. Similarly businesses affect society.One cannot study business principles and management without also having an understanding of the social forces that shape business7

8. Introduction (Cont.)People are a firm’s most important resourceRecent study of top managersFound that finding and retaining qualified workers was more important thanFinanceTechnologyProduct InnovationInternational BusinessWorkers help achieve the goals set by the company8

9. Introduction (Cont.)The challenges faced by a business are closely related to those experienced by the workers.In particular, such issues as those caused by changes in population and lifestyles have a direct bearing on business operations and on the well-being of the nation.9

10. PopulationGDP cannot increase unless there are enough people to provide the necessary labor and to purchase the good and services produced.Population stats help companies predict what kinds and how much good and services to produceGDP of a country must grow faster than the populationThis shows an improvement in the living standardInformation about size and character tics of the population are important to business planning.Information can be obtained from the U.S. Census Bureauwww.census.gov10

11. Growing PopulationU.S. has grown steadily over the yearsDetermined by the birth rate, death rate, and immigration into the countryBecause of better health care and improved public health systems people are living longerAlso annually American accepts more legal immigrants than any other country.Also, many immigrants enter the U.S. illegally to seek a better lifeWhat % of US population will be Hispanic by 2050?11

12. Population12

13. Changing PopulationCurrently, more than 80% of Americans can be racially classified as CaucasianWith higher birth rates among Hispanic and African Americans, and recent immigration, their proportions in the population have been growing13

14. Changing PopulationWhat does this change in population groups mean to the work force or business?14

15. Changing PopulationChanges in the birth rate have caused shifts in the number of people in different age groups.Baby Boom – Extremely higher birth rate during 1945-1965. There is a higher % of people in the population that are 42-62 years of age.Then there was a low birth-rate period that followed the boom period. This is called the Baby Bust period.15

16. Changing PopulationThe Baby Bust period has created a shortage of young workers, called “busters”This shortage will drastically increase when the boomers retire in large numbers16

17. Changing PopulationFor businesses to be successful:Offer goods and services needed by people of different ages and racial groupsWhat are some examples?17

18. Moving PopulationOn average, every year, 1 out of 5 Americans changes his/her addressPeople will move short distances, often from cities to suburbsOr can move long distances from the Frost Belt to the Sun BeltFrost Belt – The colder northern half of the countrySun Belt – The warmer southern half of the nation18

19. Moving PopulationAs businesses relocate, so do people to find or even keep a jobMany factory jobs have relocated to southeastern states, where wage rates are lower than in the Rust BeltRust Belt – The north central and northeastern states where the major manufacturing firms once dominated19

20. Moving PopulationThe moving from city to suburbs, north to south, has caused many unintended consequencesCities lose the financial ability to provide high-quality servicesAs a result, poverty and crime have increased in large citiesWhen companies move from the Rust Belt, they leave behind unemployed workers, closed factories, decaying towns, and homeless people20

21.  CHECKPOINT1. What factors are influencing shifts in the U.S. population?21

22. Labor ForceAs the population grows so does the labor forceLabor Force – includes most people aged 16 or over who are available for work, whether employed or unemployedMany people that are considered in the labor force, but are not actively seeking employment, such as students and full-time homemakers.22

23. Labor Force (Cont.)Bureau of Labor Statistics reports140 Million in Labor ForceLabor Participation Rate – the percentage of the adult population that is in the labor force.In the last three decades the Labor Participation Rate has rose considerably, why?23

24. Labor Force (Cont.)1976 – 46% of women worked outside the home2005 – 60%Choosing not to marryDelaying marriageMarry and pursue career before or while having children.24

25. Labor Force (Cont.)The growth of the economy, changes in population and where people live, and technological advances have created a variety of new jobs.Creating new jobs is a great strength of the American economyMost are in the service industryComputer programmingBanking and insuranceLeisureFood services and Health care25

26. Labor Force (Cont.)Computer have created large numbers of technical jobs – applications and programmingInnovation with internet affect the ways businesses now operate – communication to salesRapid growth in computer industry has led to a shortage of qualified workers, in turn, has led to high wages for those with the necessary education and skills26

27. Labor ForceMany new jobs require more skills, which means workers have to be educatedSome jobs require little training and no education, therefore pay low wagesSome jobs have been completely eliminated because they can be automated27

28. Labor Force (Cont.)For various reasons, including lack of financial resources, public schools in many areas are failing to provide the quality of education historically expected of high school graduates. High school graduates are particularly deficient in math, computer, social, and communication skills. Businesses sometimes have to provide remedial education in basic skills for newly hired workers.28

29. FACTS & figures1966Women earned $0.58 for every dollar a man earned for similar workHas risen a half penny each year since then2004Women earned $0.765 for every dollar a man earned for similar workNearly every year the difference in earnings narrows somewhat29

30. PovertyProsperity in America is not shared equally12-15% of the population in any given year live in povertyPoorly housedClothedFed30

31. PovertyRichest 20% have continued to earn money over the last 30 yearsThe income of the lowest 20% has remained about the sameThus, the gap between the rich and poor is widening31

32. PovertyElderly have been helped bySocial SecurityMany children still live in poverty because they reside in households where one or more parents do not have the education and skills to hold high-paying jobs.“THE STRONGEST INFLUENCE ON INCRESED INCOME IS INCREASED EDUCATION” – “Business Principles and Management Pg. 3432

33. Equal EmploymentEquality for all is one of the basic principles on which the U.S. was foundedSome groups still find it difficult to have equal employmentLaws have been passed to outlaw discrimination on the basis ofRaceGenderNational OriginColorReligionAgeHandicap andOther characteristics33

34. Equal EmploymentSome groups, predominantly women and racial minorities, find it difficult to advanceGlass Ceiling – Even when these groups find jobs, people in these groups may encounter difficulties in being promoted above a certain levelAn invisible barrier to job advancement34

35. Equal EmploymentMany women and members of racial minority groups are employed in entry level jobsWith little hope for advancementThese are low paying jobs requiring little skill and educationThe inability of these workers to move up from these jobs is referred to as the sticky floor syndromeHigher education and redesigning the jobs offer the best opportunities for workers to escape from this predicament35

36. Comparable WorthStudies show that men tend to earn more than women do.But men and woman also tend to hold different types of jobs that pay differentlyBut what happens when the jobs are not the same but require similar levels of training and responsibility?Comparable worth means paying workers equally for jobs with similar buy not identical job requirements.36

37. Comparable WorthAlso called “Equal pay for comparable work”The jobs compared maybe drastically differentFor example, Legal Secretary and CarpenterIf it can be determined that these two jobs require the same education and amount of training, the pay scale should be the same for the two jobs37

38. Comparable WorthTo determine whether work is of equal value analysts compare factors such asSpecial skillsPhysical strengthJob dangersResponsibility and Education38

39. Comparable WorthIt is not easy to determine the specific factors that measure the worth of jobsShould physical strength, for instance, be used to compare the worth of a legal secretary to a carpenterIf few applicants are available for the carpenter’s position and many are available for legal secretaries, is it fair to pay legal secretaries more than carpenters?39

40. Comparable WorthIt is very difficult for employers to design and implement comparable worth plansStates have passed laws that promote using comparable worth for determining wages in government jobs40

41.  CHECKPOINT2. List the factors influencing the U.S. Labor Force.41

42. 3. The U.S. labor force includesPeople aged 16 and over who are available for workEmployed people aged 16 and overUnemployed people aged 16 and overAll of the above4. When people encounter difficulties in being promoted to management about a certain level they have encounteredA glass ceilingA promotion ceilingA sticky floorA legal barrierReview Assessment42

43. 5. What factors are contributing to the growth of the U.S. population?6. What has caused the decline in the number of young workers in recent years?Review Assessment43

44. Part 2: Social & Ethical Environment of BusinessSection 1: Human ResourcesSection 2: Societal ValuesSection 3: Ethical Issues44

45. Societal ValuesObjectivesDiscuss how the values of Americans have changedExplain how businesses have adapted to changing valuesDescribe the dilemma posed by the need for business to grow and the need to protect the natural environment.45

46. Societal ValuesTermsGeneration XTelecommuteNet GenerationRecycling46

47. Societal Values IntroductionChange is constant in our societyNew ProductsNew IdeasNew ways of doing thingsNew attitudesIn recent decades, societal values have been undergoing change at a fast pace47

48. Changing American ValuesMajor change in American families today?# of children living with both parents continues to declineRising divorce rate and single mothersBirth rate has declinedWomen delay marriagePursue careers outside the home48

49. Changing American ValuesTraditional definition “Family” consisting of working husband, a homemaker wife, two kids, and a dog is now the exception.Fewer than 25% of families today fit this descriptionOften both parents work to support the family, as must single parents49

50. Changing American ValuesBecause of increased competition in the economy, businesses are striving to produce more while keeping costs low. Employers have increased their demands on employees, making it very stressfulFor dual career households, especially those with children, the quality of home life often suffers.50

51. Changing American ValuesJob insecurity discourages workers from taking vacations or time offInstead they work longer hours to meet their job requirementsFactors such as these have strained the employee-employer relationship51

52. Changing American ValuesGeneration X – workers from the post-baby-boom generationFeel less loyal to a particular employer than did earlier generationsThey expect to change jobs many times during their working careerAs do people from the Net GenerationNet Generation – those born between 1977 and 199752

53. Changing American ValuesCompetent women who were stopped by the glass ceiling, often quit their jobs to start their own businessWoman now operate a majority of new small businesses53

54. Changing American ValuesWith men and women working side-by-sideWorkplace romance has increasedSo has sexual harassment casesWith parent(s) working, dining in has been replaced with dining out.American consumers spend more on restaurant meals than on groceries54

55. Changing American ValuesDisturbing increase in unpredictable and unprovoked violence through the use of guns, often by young peopleWorkplaces, schools, churches, and transportation systems are all possible places for random gunfire killing and injuring innocent peopleHas led to expanding personal-security business in the form of personal and home protective gadgets, guns, guards, gated communities, and prison construction.55

56. Changing American ValuesU.S. also is labeled as being lawsuit happy.Individuals, groups, and organizations are quick to file lawsuitsLawsuits can be very expensiveBusinesses try to be very careful with respect to the safety of their products and the impact of their operations on employees, customers, and the overall society.56

57. Employer ResponsesA changing society affects individuals as well as organizationsWhen individuals are distracted by problems in their personal lives, this may affect their job performanceTo attract and retain competent workers, employers have taken action to improve the way work is done, to assure healthier and safer working conditions, and to help workers deal with some personal problems57

58. Redesigning JobsRepetitive jobs tend to bored employees resulting inProductivity drops, low morale, late to work, call in sick, or even quitting to find a more excite workCompanies are redesigning jobs to make them varied and challengingSome organizations employees learn a variety of jobs and regularly switch jobs within the same organizationIncreases worker’s interestEnables employees to fill in for coworkers who may be absent58

59. Redesigning JobsWorkers now often participate in job decisions., provide suggestions, and serve on committees that look for ways to improve work qualityOften work in teamsCan improve morale and quality of workBusinesses also try to improve job satisfaction through empowering workers to make important decisions59

60. Improving Health and SafetyU.S. is facing an obesity epidemic that is negatively affecting employees’ healthBusinesses are starting to operate wellness and fitness programsWhy??60

61. Improving Health and SafetyA physically unfit employee is absent more and is less productive than a fit employeeBusinesses are starting to provideIncentives to smokers to quitMemberships to health clubsCounseling services for stress or emotional problemsPayment for treatment of drug, alcohol and other addictionEmployers thereby reduce medical and insurance costs61

62. Family-Friendly PracticesEmployers are working to help with changes in employees’ family lifeBy law, employers provide unpaid leave to employees to take care of their sick children or parents, or to give birth to, adopt, or take care of newborn childrenSome companies will even provide on site day-care or pay for day-care62

63. Family Friendly PracticesSome employers provide flexible working schedules to accommodate familyAdvances in communication technology in the form of Internet, e-mail, mobile phones, and fax have led many businesses to allow workers to telecommute.Telecommuters work from home or on the road, staying in contact with their employers electronically63

64.  CHECKPOINT7. Describe how employers are reacting to changing societal issues.64

65. Natural Resource IssuesWith a growing population, mean there is more waste and garbageAlso, the increasing demand for products places great pressure on natural resources, such as land, water, air, minerals, and forests.Affects habitats of wild animals and lives of native peopleBoth business and society have to address these resource issues65

66. Managing the EnvironmentPreserving the natural environment and properly disposing of consumer and industrial waste have become major concerns in our society.We have shifted our focus to reducing the growth of waste and to recyclingRecycling – reusing products and packaging whenever possible66

67. Managing the EnvironmentTrying to limit our use of nonrenewable resourcesOil, natural gas, and iron oreAt the same time, tying to use more renewable resourcesElectricity generated from the sun, from water, and from wind67

68. Managing the EnvironmentPollution-control goals work against Energy conservation goalsExample:There is an abundance of coal which pollutes worse than Natural Gas, which is in short supply.Some companies have to decide which is better of the two evils68

69. Managing the EnvironmentPollution dangers have become more and more apparentMajor cities can be covered in smog from industries and vehiclesResidents suffer from breathing problemsSome rivers and waterways have had chemical contaminants that have killed fish and wild lifeIn some places has even entered the food chain69

70. Controlling Environmental PollutionGovernment and businesses have had to tighten pollution standards Government created Environmental Protection Agency (EPA) in 1974 to help control and reduce pollution in the basic areas of air, water, solid waste, pesticides, noise, and radiation.70

71. Controlling Environmental PollutionEPA Enforces:Clean Air ActClean Water ActResource Recovery ActFederal Water Pollution Control ActFederal Environmental Pesticide Control ActNoise Control ActResource Conservation and Recovery ActLaws have been passed to require engines to be both fuel-efficient and less polluting71

72. Controlling Environmental PollutionIn the aftermath of Exxon Valdez accidentLarge oil spill along coast of Alaska in 1989Environmentalists and Socially minded groups formed Coalition of Environmentally Responsible Economies to encourage companies to behave responsiblyCreated 10 environmental guidelines, named CERES PrinciplesAsked companies to voluntarily follow guidelines, there is no law holding companies to themSun Oil Company (Sunoco) was the first to promise72

73. CERES PrinciplesProtect the environment from the release of pollutants, especially hazardous substances that may damage the environmentConserve nonrenewable natural resources through efficient use and careful planningMinimize the creation of waste, especially hazardous waste, and dispose of such material in a safe, responsible mannerMake every effort to use environmentally safe and sustainable energy sources to meet organizational needs.Reduce environmental, health, and safety risks to employees and surrounding communities73

74. CERES Principles (Cont.)Sell products that cause as little damage to the environment as possible and are safe to useAccept responsibility for any harm the company causes to the environment, correct damages made to the environment, and compensate injured partiesKeep the public informed of incidents relating to operations that harm the environment or pose health or safety hazards.Appoint one person to represent environmental interests to serve on the highest-level decision-making committee that represents owner interestsProduce and publicize a yearly self-evaluation of progress toward implementing these principles and meeting all applicable laws worldwide.www.ceres.org74

75.  CHECKPOINT8. List natural resources issues impacting businesses and describe how these businesses are reacting to them.75

76. 9. Which of the following is not true for the Net Generation?They expect to change jobs many times during their careersThey were born between 1977-1997They are the post-baby-boom generationThey feel less loyal to a particular employer10. Pollution can, in part, be controlled throughRecyclingEPA RegulationsFollowing CERES PrinciplesAll of the AboveReview Assessment76

77. 11. Identify a list of employer practices that have enhanced the quality of work life for employees.12. Give at least two examples of how environmental goals can be at odds with energy conservation goals.Review Assessment77

78. Part 2: Social & Ethical Environment of BusinessSection 1: Human ResourcesSection 2: Societal ValuesSection 3: Ethical Issues78

79. Section 3: Ethical IssuesObjectivesDescribe how ethics relates to business practiceSuggest ways in which businesses can be socially responsible79

80. Section 3: Ethical IssuesTermsEthicsStakeholdersBusiness EthicsNongovernmental organizations (NGOs)Code of EthicsSocial Responsibility80

81. Ethical Issues IntroductionLaws provide a minimum standard for behavior for people and businesses to followMany behaviors are neither allowed nor disallowed by lawWhat determines some of these behaviors is EthicsEthics – refers to standards of moral conduct that individuals and groups set for themselves, defining what behavior they value as right or wrong81

82. Ethical Issues IntroductionEthical behavior is closely linked to personal valuesUnderlying beliefs and attitudes that individuals or groups possessTo determine if something is ethicalMust ask, “Is the action right or is it wrong, regardless of what the laws state?”Ethical conduct goes beyond state and federal laws82

83. Business EthicsA collection of principles and rules that define right and wrong conduct for an organization is called Business EthicsNot all businesses have the same rules of ethical behaviorWhat is viewed as right and wrong vary from manager to manager, business to business, and country to countryIf the conduct is viewed favorable to the largest number of people, it is considered ethically desirable83

84. Business EthicsSome companies even hire Chief Ethics OfficersTheir job is to ensure that workers are trained in how to comply with a company's ethics policiesSome companies have created Code of EthicsCode of Ethics – is a formal, published collection of values and rules that reflect the firm’s philosophy and goalsHaving such a code removes or reduces opportunities for unethical conduct84

85. Business EthicsSome issues Code of Ethics may deal with:Accepting Business giftsRespecting employee privacyUsing company property for personal useMaintaining confidentialityBusiness confidentiality means keeping sensitive company information secret85

86. Business EthicsEthic Codes are communicated through memos, newsletters, posters, and employee manualsOrganizations establish procedures for when the code(s) are violatedTo be effective, must be supported throughout the whole organization. Top-Level managers, down.Codes are ineffective if they are not enforced86

87. Ethical DilemmasPhilosophers have debated the issue of right and wrong for centuries“What is the value or worth of a specific behavior for society as a whole?”The best behavior is that which does the most good for the most people87

88. Ethical DilemmasShould a lumber company cut down a forest if doing so would endanger a rare species of bird?Should old drilling be permitted off a coast, thus destroying its natural beauty?Should a business hire a woman to win support from women’s groups?How businesses handle these issues determines whether they are acting in an ethical mannerNotions of what is right and wrong change over time, Answer are often not clear-cut88

89. Ethical DilemmasValues also differ between countriesSometimes problems arise for firms involved in international businessBusiness may have to decide between the ethical practices of the other country and of their home countryExample - Japan89

90.  CHECKPOINT13. Describe why ethics is important to a business.90

91. Social Responsibility of BusinessA question often raised: “What is business’s responsibility to help solve society’s problems?”This is not simpleProfit motive of a business often collides with what is good for societyExample: Should businesses accept lower profit, for instance, in order to keep jobs in a declining community?The business is put on the spot to decide for themselves what is right and wrong91

92. Social Responsibility of BusinessThe primary goal of business is to……..Even though is this a main goal in business today, another business goal is also emphasized – Social ResponsibilitySocial Responsibility – refers to the duty of a business to contribute to the well-being of society92

93. Social Responsibility of BusinessA business depends on society forResourcesOpportunitiesRightsTherefore, they have an obligation to the communities in which they operate93

94. Social Responsibility of BusinessA large of the society to a business are the stakeholdersStakeholders – are any individuals or groups that are affected by the firm’s actionsOwners, Customers, suppliers, employees, creditors, government, and the publicThey expect a business to be responsible and responsive to their interests94

95. Social Responsibility of BusinessBeing responsible and responsive to stakeholders can mean a variety of different things depending on the organizationStakeholders usually believe that a business has the resources to contribute to a community’s well-beingGood deeds normally transfer into favorable publicity, which in turn means for sales and profit95

96. Social Responsibility of Business“The business of business is business”Milton Friedman – Renowned economistTwo sided coin – Explain??Questions are also raised about the ability of a business to solve social problemsDoes a manager know how to solve drug abuse?Should a business be responsible for promoting a sporting event in the community96

97. Social Responsibility of BusinessNo matter the answers to these questionsIt is now widely recognized that business has an important responsibility to its stakeholdersAlso recognized that by getting involved socially, the business advances its own interests97

98. Social Responsibility of BusinessSome businesses review their social programs regularlyThe review shows what the business is doing to fulfill its social responsibilitiesIts success in accomplishing its goalsAnd plans for pursuing future activities98

99. Social Responsibility of BusinessAlong with stakeholders, the conduct of businesses is being increasingly and closely examined by various independent groups known as nongovernmental organizations (NGOs)These groups may specialize in particular issuesWorkplace discriminationEnvironmental protectionNGOs influence businesses through lobbying, publicity, and pressure tactics to alter their activities.99

100. The FutureGiven the fast face of change today, society and business will face different issues in the futureIt is difficult to predict the future, but trends provide hints of what may be in store in the years to comeAs discussed earlier, the racial and ethical mix of the labor force will continue to changeComputers continue to change the way businesses operate100

101. The FutureBusinesses are becoming more and more involved in providing social services to the communityIn the past have been the responsibility of families, government, or individualMore conscious of the environment and human rights issuesAs societal values change, each business will continue to shape and be shaped by the society in which it operates101

102. 14. List the reasons that a business needs to be concerned about social responsibility issues.102

103. 15. Which of the following is not related to the concept of ethics?Ethics refers to standards of moral conductEthical behavior is closely linked to personal valuesEthics always shows what is right and what is wrongEthics helps define what behavior is seen as right and wrong16. The duty of a business to contribute to the well-being of society is calledBusiness ethicsSocial responsibilityConstituency analysisBusiness responsibility103

104. 17. Because businesses are established for making profits, the only way to ensure that they behave ethically is to have strong laws that require them to do so. Do you agree with this statement? Justify your answer.18. Explain how a business can ensure that its code of ethics will be effective.104