Business Society Study Guide Test 3 CHAPTER 6 Globalization Refers to the increasing movement of goods services and capital across national borders Globalization is a process that is an ongoing series of interrelated events International trade and financial flows integrate the world economy leading to the spread of technology culture and politics Factors that lead to the acceleration of globalization Technological innovation facilitates communication Transportation systems enable the fast and cheap movement of g The rise of major transnational corporations Well capitalized firms s from one place to another are better than small firms Social and political reforms New opened regions to world trade Benefits and Cost associated with Globalization Not all people and organizations believe that globalization is a positive force Some benefit from it others don t Benefits 1 Increase economic productivity more is produced with the same effort David Ricardo Theory of comparative advantage Competitive advantage can come from sources like natural resources infrastructure skills education or experience 2 Reduce prices for consumers worldwide access to especially expensive goods 3 Benefits the Developing world helps entrepreneurs by giving all countries access to foreign invest funds to support economic development 4 Transfer technology and innovation 5 Spreads democracy and freedom Global commerce can reduce military conflict Cost 1 Job insecurity Outsourcing offshoring 2 Environment Environmental and labor standards may be weakened as companies seek manufacturing sites where regulations are most lax Companies also seek for weak regulation of occupational health and safety hours of work and few rights for unions 3 Difficulty for individual nations to make their own rules 4 Make us all the same Erodes regional and national cultures and undermines cultural linguistic and religious s diversity 5 Despotism Transnational corporations are often drawn to nations governed by antidemocratic or military regimes because they are so effective at controlling labor and blocking efforts to protect the environment CHAPTER 14 Rights that shareholders have in a corporation To receive dividends if declared To vote on Members of board of directors Major mergers and acquisitions Charter and bylaw changes Proposals by stockholders To receive annual reports on the company s financial condition To bring shareholder suits against the company and officers To sell their own shares of stock to others Ways shareholders activism attempted to influence the behavior of Corporate Boards Institutional investors pension mutual funds endowment funds and the like have taken action directly to protect their own interest Selling a large block of stock could seriously depress its price therefore the value of the institution s holdings Accordingly institutional investors have a strong incentive to hold heir shares and organize to change management policy Social responsibility investment Refers to the use of stock ownership as a strategy for promoting social objectives This can be done in two ways Stock screening shareholders wishing to choose stocks based on social or environmental criteria often turn to screened funds and sponsoring social responsibility shareholder resolutions This is a resolution on an issue of corporate social responsibility placed before stockholders for vote at the company s annual meeting It allows stockholders to place resolutions concerning appropriate social issues such as environmental responsibility or alcohol and tobacco advertising in proxy statement sent out by companies Stockholder Lawsuits Derivative lawsuit if owners think that they or their company have been damaged by actions of company officers or directors they have the right to bring lawsuits in the courts either in behalf of themselves or on behalf of the company Shareholder Lawsuits Initiated to check many abuses including insider trading and inadequate prince obtained for the company s stock in a buyout or lush executive pension benefits CHAPTER 15 Reasons that have given rise to the consumer movement Complex products have enormously complicated the choices consumers need to make whey thy go shopping Services as well as products have become more specialized and difficult to judge When businesses try to sell either products or services through advertising claims may be inflated or they may appeal to emotions Some businesses have ignored product safety 5 Rights of the consumer and how they have been reflected in the Goals of Consumer Laws 1 The right to be informed 2 The right to safety 3 The right to choose 4 The right to be heard 5 The right to privacy Consumer protection laws are safeguards that reflect the goals of government policymakers and regulators in the context of the five rights of consumers outlined above Information protections Direct hazards protections Pricing protections Liability protections Liability protections Privacy protections Other protections Deceptive advertising is illegal in most counties Manufacturers may not make false or misleading claims about their own produce or a competitors product withhold relevant or misleading information or create unreasonable expectations Challenges businesses have advocated to reform product liability laws Class Action Fairness Act first significant reform of product liability laws in many years Most large class action lawsuits were moved from state to federal courts Attorneys in some kinds of cases were paid based on how much plaintiffs actually received or on how much time the attorney spend on the case Set up uniform federal standards for determining liability Shift the burden of proving liability to consumers Require the loser to pay the legal cost of the winner Establish liability shields for certain kinds o products Limit punitive damages CHAPTER 16 Rights employees have in the workplace 1 Right to organize and bargain 2 Right to a safe and healthy workplace 3 Right to privacy 4 Duty to discipline fairly and justly 5 Right to blow the whistle free speech speak up 4 main reasons for informing d media 6 Right to equal employment opportunity 7 Right to be treated with respect for fundamental human rights Employee privacy current issues that have caused controversy Electronic Monitoring Office Romance consensual relationship Drug and alcohol Abuse drug testing used for reemployment screening random testing of employees and testing for cause Employee assistance programs EAPs