Chapter 4
Social Responsibility of
Business and Government
Consumer Bill of
Rights
Consumer Advocates
“Who watches out for the
consumer?”
Private, Government,
Regulatory Agencies,
Magazines,
Who is a Consumer? You are!!!
Who is a consumer advocate? A party who
stands up for another party and defends
them.
Who is an advocate for you as a consumer?
First and foremost…
you
are!!!
Let’s review your
rights…and
Consumer rights and
responsibilities
To be informed-compare, evaluate
To choose carefully-shop around-quality, brands To use products safely-read labels, follow instrux To be heard and speak out - letter of complaint To seek remedy and have problems corrected –
repair, reimburse, or replace
To consumer education – read, compare, be aware
of illegal practices, use consumer publications
To service-expect convenience, courtesy,
responsiveness to problems and needs
Consumer Bill of Rights
continued
The Right to Be Informed
– Consumers have the right to be informed of what
a product is and its functions.
The Right to Safety
– Consumers have the right to be protected from
harm while using a product or service.
Consumer Bill of Rights
continued
The Right to Choose
– Consumers have the right to choose what to buy
among a variety of products and services.
The Right to Be Heard
– Consumers have the right to talk with businesses
about products or services they offer. Consumers may share their comments, complaints, concerns, or questions.
Consumer Bill of Rights
continued
The Right to a Remedy
– Consumers are assured that they can seek legal
remedy when they encounter a problem or defective product.
– What is a guarantee? (A promise that a product
meets certain quality.)
– What is the difference between an express and
an implied warranty?
Consumer Bill of Rights
continued
The Right to Consumer Education
– Consumers have the right to be informed about
how their purchasing decisions impact them personally and the economy.
The Right to Service
– Consumers have the right to receive goods and
services at the promised level by companies.
Consumer Bill of Rights
What is the purpose of the consumer bill of
rights?
The consumer bill of rights protects consumers
from unfair business practices.
Speaking out - Letter of Complaint
Use positive tone since letter is negative by
nature
Three basic paragraphs
– What happened
– What action do you want receiver to take?
Refund, repair, replace
– Positive closing
How will they reach you?
How consumers make a difference
Social awareness due to consumer and media
exposure
– MADD- Mothers Against Drunk Driving
– “Erin Brockovich” –polluted ground water
Boycotts- large # of consumers refuse to buy
– “Dollars vote” concept
– Prices go down – ex: gas prices
– Business may fail - ex: clothing made using child labor
Social Responsibility
Socially responsible practices of businesses
include practices that positively impact
communities.
Common social responsibilities addressed:
− Environmental protection − Workplace diversity
− Job safety
− Employee wellness
Social Responsibility
continued
Companies can contribute to environmental
protection by
– Implementing actions to conserve natural
resources
– Minimizing pollution of air and water resources
What is an example of an organization or
action that protects the environment?
Environmental Protection Agency
EPA enforces and provides standards for air and water quality. www.epa.gov
Recycling and Conservation
Save the
earth. It's the
only planet
with
Recycling?
Aluminum cans, metals – new aluminum products, structural
products
Animal wastes- fertilizers
Yard/kitchen wastes- compost for gardens Plastic bottles – carpet, auto parts, fiberfill
Newspaper- newsprint, insulations, paperboard
Construction waste, tires- pressboard, roads, playground mulch Furnishings & clothing- reused by another person (Goodwill,
Salvation Army, Kidney Foundation, garage sales)
QUOTE- POLLUTION
"It isn't pollution that's harming the
environment. It's the impurities in our air and
water that are doing it."
Federal Citizen Information Center
Purpose: to provide American citizens with a
catalog of federal publications available
May order info on-line
Located in Pueblo, Colorado
Phone # 1-888-8PUEBLO
http://www.pueblo.gsa.gov/. United States
Workplace Diversity
Workplace diversity exists in a company
when the employees represent a variety of
groups including women, ethnic groups,
physically challenged, and older workers.
What is an example of an organization or
action that enforces workplace diversity?
WORKFORCE DIVERSITY
The American with Disabilities Act (ADA) enforces
regulations to accommodate people with disabilities.
The Age Discrimination in Employment Act protects
employees 40 or over from employment decisions based on their age.
The Equal Employment Opportunity Commission
(EEOC) protects against workforce discrimination.
Companies providing workforce diversity training to
employees.
JOB SAFETY
Job Safety is ensuring work environments
are risk-free of accidents.
What is an example of an organization or
action that enforces job safety?
What is an example of an organization or
action that enforces job safety?
The Occupational Safety and Health Administration
(OSHA) gives surety to safe and healthful working conditions for men and women.
A company’s schedule cleaning of bathrooms used by
employees three times a day.
Employees who work in a plant that manufactures
chemical are required to wear proper clothing to protect from skin irritations
EMPLOYEE WELLNESS
Employee Wellness programs are offered by
employers to maintain a healthy workforce.
What are some examples of employee
wellness activities? Stop smoking and
weight-loss counseling
Social Responsibility
Evaluation
Benefits
– Expanded justice for groups of a
society.
– Enhanced company image.
– Reduced need for government
actions.
– Improved quality of life in a
community and around the world.
– Increase awareness of social
issues among workers, consumers, and others.
Social Responsibility
Evaluation - COST
The costs of providing
social programs must
be realistic to allow a
business to earn a
profit.
Business Ethics
What is the purpose of business ethics?
Business ethics address the conduct of
business and employees.
Ethics
Guidelines for responsible business conduct addresses the following questions:
– Is the action illegal?
– Does the action violate professional or company standards? – Who is affected by the action and how?
– http://www.youtube.com/watch?
v=CUCSK1QFwts&feature=related&safety_mode=true&pers ist_safety_mode=1&safe=active
Government
protection
Government Protection
How are workers protected in their work
environments by the government?
Safe work conditions
Minimum standards for buildings,
machines, and chemicals
Government Protection continued
A
contract
is an agreement usually between two
parties to exchange goods or services for
something of value, usually money.
What are the elements of a contract?
6 Elements of a Contract
1.
Offer
– Proposal by one party to another with intent to create
a legal binding agreement
2.
Acceptance
– an unqualified willingness to go along with the offer
3.
Genuine Agreement
– if a valid offer is met by a valid acceptance then a
genuine agreement exists
– Can be destroyed by fraud, misrepresentation,
duress, or undue influence
4. Capacity
– Legal ability to enter into a contract
– Ex Minor, mentally ill, drunk, drugs
5. Consideration
– Must exchange something of value in order to create
a bond
6. Legality
– Must be permitted by law
– Courts will not enforce an illegal contract
33
Government Protection continued
The government enforces contracts between
businesses and individuals by ensuring agreed
upon work and the exchange of money or other
means are completed.
Examples of when contracts are used:
– Buying an automobile
– Leasing a building
– Buying inventory
Oral vs. Written Contracts
Statute of Frauds – Requires that some
contracts must be in writing
Contracts to pay debts of others
Contracts to pay debts of deceased persons
Contracts requiring more than a year to perform
Contracts to sell real property
Contracts for sale of goods over $500
Prenuptial contract (contemplation of marriage)
Express vs. Implied warranty
• An express warranty is a verbal promise by a
company about the specific quality performance of a product.
• An implied warranty may not be verbally
communicated but is understood to apply anyway.
Government Protection continued
Intellectual property protected by the
government are:
– Copyrights (creative works of artists, authors)
Lifetime + 70 years
– Patents (right to make, use or sell the item for 17
years)
– Trademarks (registered words, letters or symbols
Copyright- a published poem titled
Still I Rise
by
poet Dr. Maya Angelou
Patents- Nike’s production of the footwear
Trademarks- Starbucks symbol found on coffee
cups
38
Consumer Product Safety Commission
(CPSC)
Established 1972 Federal Agency Purpose:
– Set standards for product safety
– Promoting safety from unreasonable risk of injury from products
– Testing products
– Initiate recalls of unsafe products from the marketplace
– Conducting research and education programs
What are some recent research recalls? Go to
Underwriters Laboratories
Tests electrical and other
consumer products
Consumer Safety
Can you think of places you
have seen the UL label?
Underwriters
Federal Trade Commission
(FTC)
www.ftc.gov
Founded in 1914
Federal Agency
Purpose:
– To protect business and consumer from
unfair competition (advertising, fraud, bait and switch, etc.)
– To enforce antitrust laws (monopoly) – To enforce truth in lending laws (credit) – To enforce truth in labeling laws
(consumerism)
Have you ever been the victim of unfair
Environmental Protection Agency
www.epa.gov
Federal Law
– Environmental Protection
Act (1970)
Purpose:
– Sets, monitors, and
enforces environmental standards
– Researches the effects
Federal Aviation Administration
(FAA) www.faa.gov
1934 – started as Bureau of Air Commerce Expanded in 1938 by Civil Aeronautics Board Became Federal Law in 1948 under Federal
Aviation Act (due to mid-air collisions air traffic controllers became licensed and regulated)
Purpose
– To set safety standards – To license pilots
– To regulate and monitor aircraft safety
– Ensure safe navigation for pilots and aircraft
Enforced through Department of Commerce
(one of federal cabinet offices)
Federal Communications Commission
(FCC) www.fcc.gov
Established in 1934
Federal Agency
Purpose-– To license radio and
television stations
– To oversee interstate and
international telephone and telegraph operations
Example: special
telephone taxes-
Equal Employment Opportunity
Commission www.eeoc.gov
Established in 1964
(Civil Rights Act)
Federal Agency Purpose:
– Enforces laws prohibiting
job discrimination on the basis of:
– Race, Color, Religion,
Federal Reserve Board
www.federalreserve.gov
Established in 1913 aka “The Fed”
Purpose:
– Set monetary and credit policies
– Regulate banks in the Federal Reserve System
All national banks
– Control money supply, regulate interest rates, stabilize
economy
Do you know which branch of
the Federal Reserve services the Raleigh area?
Food and Drug Administration
www.fda.gov
Established 1906, expanded 1931
Federal Agency
Purpose-– Approve and issue licenses for manufacturing and distribution of
new products in market
– Setting and maintaining the purity and safety standards for foods,
drugs, health aids and cosmetics
– Inspecting product manufacturing facilities – Ensure accurate labeling
– Removing unsafe products from the market
What book created uproar and led to founding of FDA? The Jungle, by Upton Sinclair
Interstate Commerce Commission
Surface Transportation Board
Federal Agency established 1887
Became Surface Transportation Board (STB) in 1995 Affiliated with the U.S. Department of Transportation. Jurisdiction over:
– Railroad rates, service issues, mergers, sales – Trucking company and moving van rates
– Intercity passenger bus financial, and operational matters
Purpose:
– To set rates, routes and rules for interstate trucks, railroads
and businesses
– To improve transportation safety through research,
monitoring vehicles and manufacturers for safety issues (emissions, tires, weight, fuel consumption)
Ever see weigh stations on the interstate?
National Labor Relations Board
(NLRB)
www.nlrb.gov
Established 1935
Federal Agency
Purpose:
– To protect employees against unfair labor
practices
– To investigate unfair labor practices
– To regulate labor unions (collective bargaining by
Nuclear Regulatory Commission
(NRC)
www.nrc.gov
Began in 1946 as Atomic Energy
Commission
Expanded in 1974 as NRC Federal Agency
Purpose:
– Set standards and regulate the
operation of nuclear power plants
– Issue licenses for nuclear power plants
Locally- Duke Power (McGuire
Occupational Safety and Health
Administration (OSHA)
www.osha.gov
Founded in 1970
Federal Agency
Purpose:
– To promote health and safety in the workplace
– To set standards of safety
– To investigate violations and assess penalties for
Securities and Exchange Commission
(SEC)
www.sec.gov
Founded in 1934
Federal Agency
Purpose:
– To regulate stock exchanges
– To oversee investment companies and
brokers
– To protect investors
United States Postal Service
(USPS)
www.usps.com
Established in 1775 by Ben Franklin Federal Agency
Purpose:
– To distribute domestic and international
parcels to the public
– To protect consumers against mail fraud and
United States Department of
Agriculture (USDA)
www.usda.gov
Federal Agency
Established in 1862 by Abraham Lincoln
Purpose:
– Ensures product safety for meat, poultry, dairy
and agricultural products-fruits, vegetables
– Research and regulate production &
processing of fresh foods
– Stewardship of national forests and
rangelands
– Research in human nutrition & new crop
technologies
– Lead anti-hunger effort with “STAMP OUT
Attorney General (AG)
The attorney general
– Protects citizens from fraud and criminal acts – Stop actions of individuals or corporations by
injunctions, cease and desist orders
– Files criminal actions/lawsuits against violators of
legal statutes
Government’s lawyer for the people
AG for each state and the federal
Office of the Attorney General
www.usdoj.gov
Created by Judiciary Act of 1789
Evolved into the head of the Department of Justice
and chief law enforcement officer of the Federal Government
Who is the NC Attorney General?
www.ncdoj.gov
Who is the US Attorney General?
Public Utilities Commission
Regulates prices and production of natural gas and
electricity
a governing body that regulates the rates and
services of a public utility. (natural gas, electricity)
may be owned by the consumers that it serves OR
may be a stockholder owned utility either publicly
Licensing
Why require licenses?
– Prove knowledge of subject area – Prove identity
– Raise revenues ($)
Professional licensures:
– Nurses, doctors, medical personnel
– Realtors, insurance agents, stock brokers, attorneys – Plumbers, electricians, contractors
Other licenses:
– Hunting, drivers, pets, vehicle tags, open retail business,
passports, marriage
Weights and Measures
Standardized measurements
– Pounds, Ounces, Miles, Feet, Inches – Grams, Liters, Kilometers, Meters
Food products-prepackaged or fresh
– Steak at $10 per pound…I want accurate weight!
Vehicles-fuel pumps, air pumps, pressure, speed Hospitals-input, output, pharmacies, medicines
Can you think of other places that standardized
National Highway Traffic Safety
Administration
Division of Department of Transportation
(DOT)
Regulate highway safety standards
Research fuel consumption (estimated
mpg-miles per gallon) and ways to save fuel
Investigate consumer complaints
Research on ways to increase highway
Better Business Bureau (BBB)
Established in 1912
Non-governmental agency with both
state and federal levels
Purpose:
– To accept consumer complaints about
business dealings
– To keep records available to public – To inform the public about unfair trade
practices and issues
– to remedy problems or fulfill promises for
Consumer Reports Magazine
www.
consumerreports.org
Established as Consumer’s Union in 1954
Expert, independent, profit,
non-governmental periodical
Purpose:
– To research products for safety and quality – To inform the public about safety and quality
issues for products available to the public
– To provide access through the magazine and
Consumer Reports ®
ConsumerReports.org and Consumer
Reports ® published by Consumers Union
Mission:
– To work for a fair, just and safe marketplace for all
consumers
– To empower all consumers to protect themselves
Consumer Federation of America
(CFA)
www.consumerfed.org
Founded in 1968
Part of the “consumer movement” Purpose:
– To advance the consumer interests through research,
education and advocacy
– To scrutinize business practices, products and services – To raise awareness through the news media
– To defend the interests of the public at large
Associated with Ralph Nader
Headquartered in Washington, DC with state and
Ralph Nader
“Father of the Consumer Movement”
Graduate of Princeton Law Became consumer
advocate in 1963 due to concern for public welfare
Wrote book- Unsafe at Any
Speed in 1965 about the Chevrolet Corvair that led to the passage of national auto safety standards
Consumer Movement Issues
“Nader’s Raiders” were instrumental in establishing:
– Freedom of Information Act (1966)
– OSHA (1970)
– EPA (1970)
– CPSC (1972)
Publicly and actively addressed environmental and
health issues such as :
– oil pipeline safety, baby foods, insecticides, mercury
Actual Instructions to Consumers:
On a package of peanuts given to US Air passengers.
“ Instructions: Open package, eat nuts.”
Why do you think the package has this warning?
Warning on a Korean kitchen knife:
“Keep out of children”
Dilbert Ethics
http://www.youtube.com/watch?
v=0WTkltRfphM&safety_mode=true&persist_saf
ety_mode=1&safe=active
http://www.youtube.com/watch?
feature=fvwp&v=ds1NnDC18_4&NR=1&safety_
mode=true&persist_safety_mode=1&safe=active
