Download Economic and Ethical Activity in a Changing World

Principles of Business, Marketing, and
Finance
Lesson Five
Economic and Ethical Activity in a Changing World
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Economic Measurements
for a Changing World
• Gross Domestic Product-total
value of goods and service
produced in a country in a
given year
•
•
•
•
Consumer goods and services
Business goods and services
Government goods and services
Goods and services sold to other
countries
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2
Economic Measurements
for a Changing World
• Unemployment Rate
• Rate of Inflation
-rate at which the cost of goods and services rise
• Standard of Living
-amount of goods and services the average citizen can
buy
• Deflation
-when the supply of good is greater than the demand
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3
Economic Measurements
for a Changing World
• National Debt
-total amount of money a
government owes
• Budget Surplus
-when a government’s revenue
exceeds its expenditures
during a one-year period
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4
Four Phases of the Business
Cycle
Prosperity
Recovery
Basic Business
Cycle
Recession
Depression
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5
Ethics
• A set of moral principles by
which people conduct
themselves personally,
socially, or professionally
• Businesses have a legal
responsibility to do what is
right for society’s welfare
• Business Ethics-a set of laws
about how a business should
conduct itself
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6
Unethical Business Practices
• Bad for business
• Affects a business’s profits,
customer base, and employee
loyalty
• Sweatshops
-factories that have unsafe working
conditions, treat workers badly, and
pay poorly
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7
Important Ethical Questions
• Is it against the law?
• What if everyone did this?
• Am I sacrificing long-term benefits for short term
gains?
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8
Making Decisions on Ethical
Issues
•
•
•
•
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Identify the ethical dilemma.
Discover alternative actions.
Decide who might be affected.
List the probable effects of the alternatives.
Select the best alternative.
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9
Social Responsibility
• Duty to do what is best for
the good of society
• Businesses have a
responsibility to
consumers, workers, and
society
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10
Government’s Responsibility to
Customers
• FDA (Food and Drug Administration)
• FTC (Federal Trade Commission
• CPSC (Consumer Product Safety
Commission)
• USDA (United States Department of
Agriculture)
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11
Business’ Responsibility to
Employees
• Equal Pay Act
• OSHA-division of the
Department of Labor
(sets and enforces workrelated health and safety rules)
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12
Business’ Responsibility to
Society
• EPA (Environmental
Protection Agency)
• Saving energy
• Recycling
• Conflict of Interest-when a
business is tempted to put
profits before social welfare
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13
Adapting to Current Markets
• Meeting the challenges of
international competition
• Overcoming economic
conditions
• Adjusting to changing
government demands
• Adjusting the workforce to
different economic conditions
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14