Class Objectives/Business Relationship Overview (Ch. 9-11) - PowerPoint PPT Presentation

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Class Objectives/Business Relationship Overview (Ch. 9-11)

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2 Identify the ethical issues underlying changes to the ... Newt engineered passage why? Ethical. Yes--? No--? Gov. - Bus. Overview. 40. Political Process ... – PowerPoint PPT presentation

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Title: Class Objectives/Business Relationship Overview (Ch. 9-11)


1
Class Objectives/Business Relationship Overview
(Ch. 9-11)
  • 1. Describe an overview of the legal processes
    to change the social contract.
  • 2 Identify the ethical issues underlying
    changes to the social contract
  • 3. Analyze the levers of power among society,
    government, and business.
  • 4. Analyze the processes of change in relation
    to Information Technology Microsoft cases.

2
RegulationIf it is crazy, why it is happening?
  • Share some stories
  • Defining Ketchup
  • Height of the letters on pickle jars
  • Doctor told me 40,000 gets a law (80,000)
  • If business can buy lobbyists, where is the
    regulation coming from?

3
Primary Sources of American Law
  • US Constitution
  • Statutes, or laws, passed by government
  • Regulations by government agencies
  • Case law

4
Regulatory Law
  • Constitution
  • substantially affect interstate commerce
  • Promote the general welfare
  • Regulatory powers of the states

5
Statutory Law
  • Federal
  • State
  • Uniform Laws by the NCC
  • 200 laws adopted by all the states
  • Uniform Commercial Code -- 1952

6
Uniform Commercial Code (Statutory Law cont.)
  • Commercial transactions
  • Sales, leases
  • Banking Financing
  • Shipping and Warehousing
  • Investments
  • Uniformity among jurisdictions
  • all 50 states, DC, Virgin Islands

7
Administrative Law
  • Congress/Executive Branches create Agencies
  • FTC
  • OMB
  • Rulemaking
  • Investigation and Enforcement
  • Adjudication
  • Administrative Law Judge

8
Supreme Court Interpretations Over Time
  • Power/restricted power of state
  • Commerce issues Affected with the public
    interest
  • Corporations get Equal protection of the laws
  • Monopoly competition is contrary to law
  • Shipping across state lines makes it federal

9
Elements for a Contract--Review
  • Agreement
  • Consideration
  • Contractual Capacity
  • Legality

10
Agreement --Review
  • Offercharter to operate
  • Dartmouth Not terminated by state

11
Agreement (cont.)--Review
  • Acceptance
  • Unequivocal
  • Communication

12
Consideration/Regulation--Key
  • Legally sufficient value
  • Bargained for exchange
  • Both get legal detriment

13
Underlying Reasons for Regulation
  • Changing the Social Contract
  • Flaws in the market
  • Social, Political Other
  • Why the changesETHICS!

14
Define Ethics
  • What
  • Concepts of right and wrong
  • Good and evil
  • To
  • Benefit society, and
  • Improve the human condition

15
Underlying Reasons--Flaws
  • Natural monopolySalt mine, water rightsHispanic
    culture, Kalamazoo hospital
  • Natural resources regulationMuskegon Lumber in
    Chicago
  • Destructive competitionGarbage in Portland
  • ExternalitiesDown the river

16
Underlying Reasons Feel better and safer
  • Quality of lifechild seats, air emissions
  • Protecting individual rights--FDA
  • Resolution of national/global problemsTariffs
  • Regulate/benefit special groupsEEOC
  • Conserve natural resources

17
Historical Patterns
  • Traditional industry regulationCAB
  • Second Managerial Revolution
  • Functions across all industriesCurrent theory

18
Governmental Power
  • Recall the models of business power
  • Evaluate governmental power

19
Governmental Power
  • Prescribe rules of game
  • Major purchaser--542B/8.9T7
  • Contracting power
  • Promotes Subsidizes
  • Owns wealthIn Oregon what do they own?

20
Governmental PowerCont.
  • Architect of economic growth
  • Legal protections
  • Manage through regulations
  • Tax and redistribute wealth
  • Protect National SecurityDrug enforcement
  • National arbiter of disputes
  • Foreign affairs diplomacy

21
The Governmental Regulation Process
  • How are they made
  • Attempts to turn the tide

22
Present and Future
  • Costs benefits of complying
  • Demands for new regulations
  • Mixed economy

23
Airline Degegulation
  • Fair and efficient competition
  • Net gains for major stakeholders of airlines?

24
CAB Fair and Efficient Competition
  • PAT Growth 4, fares down 35
  • Hub and spokedid deregulation do that?
  • Fares unequal for regions/inequitable on planes
  • Low cost carriers disappearing concentration

25
CAB Fair Efficient Competition- cont.
  • New entrants dont
  • Exclusionary pricing
  • CSRs
  • Code sharing
  • Frequent flier
  • Fare discounting
  • Alliances

26
CAB Stakeholders Better/Worse
  • Airline stockholders
  • Airline businesses
  • Customers
  • Fares
  • Service
  • Safety
  • Employee welfare
  • Communities
  • Federal Government

27
Business Government Relationship/Reforming (Ch.
10)
  1. Describe an overview of the legal processes to
    change the social contract.
  2. Identify the ethical issues underlying changes to
    the social contract
  3. Analyze the levers of power among society,
    government, and business.
  4. Analyze the processes of change in relation to
    Information Technology Microsoft cases.

28
Monsanto Company--BioTechnology
  • Is more regulation necessary?
  • FDA
  • USDA
  • EPA
  • What are the advantages and disadvantages?

29
Monsanto Issue Management
  • Social Response
  • Issue Management

30
Patterns of Social Response
  • Rejection
  • Adversary strategy
  • Resistance strategy
  • Compliance
  • Accommodation
  • Proactive strategy

31
Pressures for Social Response
  • Government jaw boning
  • Community interests demands
  • Environmental concerns
  • Competitive responses
  • Stockholder/investor pressures
  • Philanthropy
  • Crises

32
Implementation Procedures
  • Issues Management
  • Crisis management
  • Corporate philanthropy
  • Business in education

33
Issues management
  • What is it?
  • Identify important social issues
  • Potential of concern to the company
  • Develop responses

34
Issues management methodology
  • Intuition
  • Scenario planning
  • Probability/Impact matrix
  • Setting priorities
  • Shaping public opinion
  • Legislation
  • Compliance

35
Reforming the Regulatory Process
  • Congressional legislation is more deficient than
    administration
  • Government vs. Business expertise
  • Rely more on the free market
  • Privatize
  • Deregulate
  • Incentive controls

36
Reforming the Regulatory Process (cont.)
  • Recent Congressional Initiatives
  • Cost/Benefits, easing, planning
  • Improve administration
  • Mining and Western lands issues
  • Reduce conflicts among administration
  • Increase speed of decisions
  • Performance based management

37
Class Objectives/Political Process (11)
  1. Describe an overview of the legal processes to
    change the social contract.
  2. Identify the ethical issues underlying changes to
    the social contract
  3. Analyze the levers of power among society,
    government, and business.
  4. Analyze the processes of change in relation to
    Information Technology Microsoft cases.

38
Archer-Daniels-Midland
  • EthanolMBTE
  • 10 gas mix reduces emissions
  • Renewable, less dependent on oil
  • 5.4 tax credit/gallon
  • Tax credit for production
  • Case against
  • 7B lost revenue
  • Public pays more for corn
  • Public pays more for beef

39
ADM/Ethanol Reform Ethics
  • Reform
  • House opposed
  • Senate approved
  • Newt engineered passagewhy?
  • Ethical
  • Yes--?
  • No--?

40
Political Process
  • Shaped by balance of powers rights
  • Historical diffusion of business political levers

41
Lobbying vs. Special Interest Groups
  • Business--Money/Money/Money
  • Peak Trade Associations
  • Lobbying
  • ElectionsPACs Loopholes
  • Special interest groups evolvecourts actions
    ethics

42
Federal Express--Legislation
  • LegislationICC Act dropped express
  • RLA
  • Railroads and express company(s)
  • Minimal protection for unions/workers
  • NLRA
  • Protection for unions/workers in organizing
  • City by city
  • Truck drivers are non-air carrier?
  • Far more drivers than pilots
  • Air express is their business

43
Federal Express--Lobbying
  • Republicans
  • Technical oversight
  • Democrats
  • Attack on workers rights
  • Solely to profit one company
  • Tactics
  • FAA bill--19B
  • Conference committee, Hollings, 8-6
  • Filibuster by Kennedy
  • Democrats 17 joined to kill it

44
Anti-trust Theories
  • Structure--Avoid concentrations
  • Structure sales or assets as
  • Result Inflation, inefficiencies, no competitors
  • PerformanceSeek efficient business performance
  • Innovation, lower costs/prices, capacity,
    profit, service

45
U.S. Merger Guidelines
  • Market definitionstructure in regions products
  • Adverse competitive effectsperformance
    collusion anti-competitive?
  • Entrystill possible?
  • Expected efficiency gainspassed on to consumers?

46
MicrosoftISPs CSPs
  • DOJ
  • IE primarily/exclusively/better
  • ISP gets positioning power
  • MS
  • Cross licensingmutual benefit
  • Where is the harm?

47
MicrosoftOEMs
  • DOJ
  • Restricted OEM changes to Windows
  • Structure theory
  • MS
  • Standard practice no modifications
  • Where is the harm?
  • Concentration is less 1 of PC Industry
  • Service, costs, prices, innovation

48
Class Objectives
  • Describe an overview of the legal processes to
    change the social contract.
  • Identify the ethical issues underlying changes to
    the social contract
  • Analyze the levers of power among society,
    government, and business.
  • Analyze the processes of change in relation to
    Information Technology Microsoft cases.
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