BA 342 Exam 3 Business and Stakeholders Michael Montemarano Consumers Community Owners Employees and Government How Government Impacts Business Chapter 11 Railroad Example o Governments gave railroad companies land grants in exchange for building inter continental railroad Brief History of Government Intervention in Business o Laissez Faire Hands off Let it be o Development of Trusts during US Industrial Age late 1800s Trust Group of colluding companies o Anti Trust Acts passed by Congress to combat Trusts Sherman Antitrust Act 1890 break up trusts Clayton Antitrust Act 1914 Interstate Commerce Act 1887 Interactions of Business Government Public o Know how each of the three impact each other Clashing Beliefs o Government must do less Government must do more About even as to what the American public believes Government Non Regulatory Influence and Privatization o Through Industrial Policy Industrial Policy government can make policy that helps or hurts businesses ex Loan guarantees government decided they wanted an alternative energy industry so to encourage this they give tax credits and loans to companies Solyndra company backed by Obama admin California Solar Panel manufacturer Went bankrupt and had to default on 535 million loan from tax payers o Supported by Obama China milk scandal underweight cows poor breeding not enough milk or industry So they did an industrial policy where they brought in 102 000 cattle from all over the world Privatization United States Postal Service Pros of Privatizing o More efficient utilization of shareholder money and capital availability Cons of Privatizing o Price Rise dependable service community congregation Government Regulatory Policy o Regulation Act of governing according to rule or bringing under the control of law or constituted authority Reasons for Regulation Control Natural Monopolies Achieving Social Goals Control Negative Externalities Other Regulation can be by local state or federal government o Obesity Childhood Obesity on the rise Caused by Fast Foods and Lack of Exercise among other things Regulate McDonald s Happy Meals Childhood Obesity Issues Public Personal Health issues Self Image Freedom of Choice Cost and Information Government Business Health Care Cultural Image Productivity Impact on Profit costs marketing image o Social vs Economic Regulation Captured Passengers and Regulation Passenger Bill of Rights Passengers can not be kept on a plane for more than 3 hours Total Cost of Regulation Direct Expenditures Compliance Costs Altered Behavior Social Spending Economic Spending Social Regulation Spending 86 Social Regulation Spending o Consumer Safety Security Homeland Security Transportation Workplace etc o 56 Homeland Security 1 Economic Regulation Spending 14 Economic Regulation Spending o Finance Banking Industry Specific General Business o 47 Finance Banking Total of both economic and social is 55 billion dollars Mandate fuel economies for cars How Business Impacts Government Businesses influence Government through Coalitions Lobbying and Political Action o Lobbying In the first amendment Lobbying spending increasing Types of Lobbying Umbrella Lobbying Trade Lobbying Multi Industry coalition to influence policy Ex US Chamber of Commerce Single Industry coalition to influence policy Ex National retail Federation o Walmart Macy s amazon com Target Company Lobbying Singular company lobbying Ex Microsoft IBM Penn State o Coalition Building Political Action Committees PACs Coalition Building Businesses coming together to focus on a particular issue PACs campaigns for candidates Practical Cases Business Retention and Expansion Example o Omni Bedford Springs Resort Spa Business Attraction and Recruitment o REI Sporting Goods BA 342 Exam 3 Michael Montemarano Triple Bottom Line People Profit Planet First Used by author John Elkington o Cannibals with Forks The Triple Bottom Line of the 21st Century Business Kennametal Triple Bottom Line Company the produces drill bits o People o Profit o Planet Safety better productivity increases moral up lower cost due to injuries cleaner Cost Savings increase productivity customer visits moral up better employee interaction public relations Decrease energy needed less waste Issue Framing of Sustainability Sustainable Development Definition o Development that meets the needs of the present without compromising the ability of future generations to meet their own needs Earth Video and Avatar Video Shelter Environment vs Use Up Environment o Stronger Point of View Stewardship Model the responsible management of resources Responsibility can you do the right thing Drivers of Sustainability Population Growth Resource Usage Rate Climate Change o Population Growth 7 Billion people and rising Projected to be 9 Billion People by 2043 o Resource Usage Rate Freedom of the Commons Leads to Tragedy of the Commons Free use of resources lead to overuse Developing Populations desire more businesses assist in supplying greater utility with less resources Developing populations desire more which means businesses will need to supply greater utility with less resources o Climate Change Climate Framing Lenses Financial Political Scientific Intergovernmental Panel on Climate Change IPCC Concluded that world must address GHG emissions and climate change Agreements to address impacts through incentives regulation and peer pressure Examples of Sustainable activities o Geothermal heating Cooling o Lighting and Sustainability LED CFL STD 30 tax credit on geothermal heating wind solar etc Listed best to worst LED lasts longer and has a lower annual cost however costs more per bulb CFL linked to Mercury Poison SkF USA Headquarters Mentioned in class about him visiting plant and him suggesting that they get better lighting and they did and then they thanked him for it Light Bulbs and Stakeholders Individuals Cost Expense monthly safety taxes disposal Companies Decrease carbon footprint productivity liability public relations maintenance costs Government Environment Policy incentive regulation taxes Waste Disposal Energy Savings Corporate Data SAS Company on Sustainability 2 or 3 Exam Questions o Example of excellence in sustainability Solar Farms Sheep underneath to main grasslands o Reducing Energy Demands Product development Elevators developing energy Software innovation Sustainability reporting IBM Structure of Typical Corp Sustainability Journey o 1 Legal Compliance o 2 Strategic Philanthropy o 3 Value Based self