Download Legal, Ethical, Social Obligations of a business

Legal, Ethical, Social
Obligations of a business
Chapter 14
Regulations that
promote competition
• Sherman Act – Makes it illegal for
competitors to get together and set
prices on the products or services
for sell
• Gas prices
• Clayton Act – It is illegal for business
to require a customer to purchase
one good in order to be able to
purchase another good
• Purchase computer to get software
Regulations that promote
competition (cont.)
• Robinson-Patman Act – makes it
illegal to charge different pries to
different groups of non-retail
consumers
• Modern Vending selling to stores
• Wheeler-Lea Act – bans unfair or
deceptive actions or practices by
businesses
• Drug companies and side effects
Government Agencies
that protect Competition
• Justice Department – Antitrust
Division of the U.S. Justice
Department – takes legal action
against businesses it believes
are trying to have a monopoly
• Federal Trade Commission –
administers most of the laws
dealing with fair competition
Better Business Bureau
• Report information on business
reliability
• Alert the public to fraud against
consumers and businesses
• Act as intermediary between
businesses and consumers
when there is a complaint
Laws that protect
businesses
• Patent – gives inventor sole right to
produce, use, and sell an invention.
• Good for 20 years
• Copyright – legal right to exclusive
publication, production, sale, or
distribution of a literary or artistic work
• Good for 70 years
• Trademark – name, symbol, or special
market that can only be used by certain
businesses
• Band-Aid ™
Laws that Protect
Consumers
• Federal Food, Drug, and Cosmetic
Act – bans sale of unsafe food,
drugs, cosmetics, improper labels,
etc.
• The Federal Food and Drug
Administration enforces this law
Consumer Product Safety Act –
safety for products other than food
and drugs (recalls)
Laws that Protect
Consumers
• Licenses – varies by state and
local governments to operate a
business
• Beauty salon
• Restaurant
• Health and fitness center
• May have regular inspections
Laws that protect
consumers (cont.)
• Zoning laws – local
governments establish zoning
laws that control what type of
buildings can be built
• Commercial
• Residential
Regulations that protect
employees
• Workplace Discrimination –
Bans against discrimination
against race, age, color,
national origin, religion, or
gender (Equal Employment
Opportunity Commission
regulates this)
Workplace
discrimination(cont.)
• Americans with Disabilities Act
– bans discrimination against
people with disabilities
• Businesses with more than 15
employees to accomodate the
needs of employees with
disabilities
• All businesses open to public must
accommodate to allow access to
all people
Safe working conditions
• Occupational Safety and Health
Act – requires employers to
maintain safe working
environment for employees.
• Enforced by Occupational Safety
and Health Administration (OSHA)
Workplace laws
• Family Medical Leave Act –
requires businesses with more
than 50 employees to provide
up to 3 months of unpaid leave
if serious health condition o f
immediate family member
• Maternity or paternal leave
• Must be employed for 1 year
Wages
• Fair Labor Standards Act –
maximum number of hours
an employee can work
• Hours for children under 16
• National minimum wage
Ethics in business
• Ethics is the study of
right and wrong
•Code of ethics – is the
level of ethical behavior
Why have an ethical
workplace?
• You should want to do the right
thing.
• You want to serve as a role model
• It gains the trust of customers
• Employees are more likely to act
ethically
• Acting ethically reduces the risk of
getting sued
Ethics (cont.)
• As a business you should
have a written code of
ethics
• Also you should have
established company
policies and procedures
Responsibilities to
customers
• Treat all customers with
respect
• Be honest
• Avoid exaggerating the merits
of your products or services
• Inform customers of potential
dangers of products
• Handle all disputes fairly
Responsibilities to
customers
• Treat all customers with
respect
• Be honest
• Avoid exaggerating the merits
of your products or services
• Inform customers of possible
dangers of products you sell
• Handle all disputes fairly
Responsibilities to
suppliers
• Treat all suppliers with respect