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UCCS / Business / BGSO 4000 / kaitlyn deghetto

kaitlyn deghetto

kaitlyn deghetto


School: University of Colorado Colorado Springs
Department: Business
Course: Business, Government & Society
Professor: Kaitlyn deghetto
Term: Fall 2016
Tags: business, Marketing, Government, and Society
Cost: 50
Name: Business, Government and Society Exam 2 Study Guide
Description: Study guide covering chapters 9-18
Uploaded: 12/10/2016
10 Pages 235 Views 0 Unlocks

• What are the two broad areas of business involvement in politics?

• Why is the first amendment so important, as it relates to businesses’ involvement in politics?

• Where do libertarians fall on the ideologies spectrum (both personal and economic freedom)?

Business, Government and Politics Exam 2 Study Guide Chapter 9: Business in Politics  • Where do libertarians fall on the ideologies spectrum (both personal  and economic freedom)? • Libertarians believe iWe also discuss several other topics like uiuc econ 102
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n highly in economic freedom as well as personal freedom. You’re Gary Johnsons, if you will.  • Why is the first amendment so important, as it relates to businesses’  involvement in politics? • The first amendment protects the right of businesses to  organize and press its agenda on government. It also  protects the freedom of speech, freedom of the press,  and freedom of assembly, all of which are critical in  pressuring government. • What are the two broad areas of business involvement in politics? • The two broad areas are lobbying, which is when a  business exercises influence by advocating positions to  lawmakers and officials, and electoral activity/process, in  which businesses work to elect or defeat candidates.  • What is an earmark? • An amount of money for a project added into an  appropriations bill by any member of the Senate or House of Representatives  • Describe the following: contact, background, and grassroots lobbying… (Google article) • Contact lobbying: direct interaction with government  officials or staff in meetings, phone calls, or e-mail. • Background lobbying: indirect lobbying activity designed  to build friendly relations with lawmakers, officials, and  staff • Ex. Sponsor fundraisers, work in campaigns, etc.  • Grassroots lobbying: the technique of generating an  expression of public, or “grassroots,” support for the  position of company, industry, or any interest  • What is quid pro quo bribery?• Bribery where there is an agreed upon exchange, one  thing for another, between parties. Usually when a gift is  given, it is reciprocated by an action.  • What are Super PACs? Review cases and laws leading up to this. • Super PACs are a type of independent political action  committee which may raise unlimited sums of money  from corporations, unions, and individuals (both for profit and not-for-profit) for the purpose of making independent expenditures. They are not permitted to contribute to or  coordinate directly with parties or candidates.  • McCutchen v. FEC? • Eliminated the aggregate limit set on the contributions an individual can make over a two-year period. • There’s a lot of information here. Make sure you review all the laws  and recent changes affecting businesses’ involvement in politics.  Chapter 10: Regulating Business  • What are the arguments for and against government regulation of  business (benefits and costs)? – Without regulations, at an aggregate level, business  could not operate easily and society would not prosper.  Regulation has reduced discrimination, improved the  environment, freed competition, reduced corruption,  banned dangerous products, strengthened the banking  system, cut workplace fatalities, helped the elderly,  controlled communicable diseases, and much more.  – The costs for federal regulation is massively expensive,  totally $876 billion in 2000, or 8.6 percent of the GDP.  This is the money business has spent to follow all the  rules imposed by federal agencies. The cost of  administrating the regulatory process is also huge.  Another cost of regulation that is damaging, yet hard to  quantify, is the impact regulation has employment,  productivity and innovation. In 1992, when the FDA  ordered a decided to order a moratorium on the use of  silicone gel breast implants, the company Dow Corning  went bankrupt. This resulted in the loss of over 1000 jobs, evaporation of shareholder equity, and dampening  of research into new uses of silicone body parts.  • Externality (Regulating Business):  – Costs of production borne not by the enterprise that causes them but by society. Examples of this? • When a company dumps its waste into a river, it is  left unaffected yet the community takes the full  brunt of the contamination. If the company were  clean up its mess, the pollution-control equipment  needed would put it at a cost disadvantage against  its competitors. This disadvantage can be removed  with regulation by forcing all companies to bear the  cost.  • Know the major regulatory agencies that we discussed and, in general,  what they do (i.e., EPA, SEC, FDA, FEC, EEOC, CSPC, FTC) – Environmental Protection Agency (EPA): created for the  purpose of protecting human health and the environment – Securities and Exchange Commission (SEC): enforcing the federal securities laws, proposing securities rules, and  regulating the securities industy, the nation’s stock and  options exchanges, and other activities and  organizations.  – Food and Drug Administration (FDA): responsible for  protecting and promoting public health through the  control and supervision of food safety, tobacco products,  dietary supplements, prescription and over-the counter  pharmaceutical drugs, vaccines, biopharmaceuticals,  blood transfusions, medical devices, electromagnetic  radiation emitting devise, cosmetics, animal foods & feed and veterinary products.  – Federal Elections Commission (FEC): founded to regulate  the campaign finance legislation in the United States – Equal Employment Opportunity Commission (EEOC): federal agency that administers and enforces civil rights  laws against workplace discrimination. The agency  investigates discrimination complaints based on an  individual’s race, color, national origin, religion, sex, age, disability, gender identity, genetic information and  retaliation for reporting, participating in, and/or opposing a discriminatory practice.  – Consumer Product Safety Commission (CSPC): an  independent agency that seeks to promote the safety of  consumer products by addressing “unreasonable risks” of injury, developing uniform safety standards, and  conducting research ito product-related illness and injury. – Federal Trade Commission (FTC): established to enforce  the promotion of consumer protection and the elimination and prevention of anticompetitive business practices.  Basically, competition is good, monopolies are a no-no.  • Know the process of how regulation is made.  – Federal regulation starts out in Congress. When a bill  containing regulatory authority is passed by both houses  and signed by the president, that new authority is  assigned to a regulatory agency, either an independent  commission or an executive branch agency.  – Screw it, in short, regulation starts in Congress, then  becomes a bill, and later on down the road, is signed into  law. Boom! Legislation! • What are the main objectives of the FTC antitrust laws? In what ways  do they get involved with business? – The main objectives are to promote competition, protect  consumers and prevent anticompetitive business moves.  – They work to prevent price fixing and predatory pricing  between companies.  • What are subsidies? Why are the used? Benefits and criticisms?  – A subsidy is a sum of money granted by the government  or a public body to assist an industry or business so that  the price of a commodity or service may remain low or  competitive  – They can be used for farming, renewable energy, and big  business Labor, Consumer (covers chapters 15, 16 and 17)• What is consumerism? • Consumer has two meanings: • A movement to protect the rights and powers of  consumers in relation to sellers  • The pursuit of material goods beyond subsistence  shapes social conduct  • Materialism, capitalism, individualism, your  things define you and give you meaning  • Relates back to environment sustainability • BUT successful products and services create  VALUE for consumers • Explain outsourcing and offshoring. • Outsourcing is the transfer of work from within a  company to an outside supplier  • Offshoring is the transfer of work from domestic to a  foreign location or to a foreign supplier  • Ex. Apple and its suppliers in China • Arguments for/against protecting workers vs. granting firms flexibility. • • What was the purpose of the Civil Rights Act of 1964? • The Civil Rights Act of 1964 outlaws the discrimination of  an individual based on their race, color, religion, sex, or  national origin.  • What are affirmative action policies? Reverse discrimination? • Affirmative action policies seek out, encourage, and  sometimes give preferential treatment to employees in  groups protected by Title VII • Reverser discrimination is the practice or policy of  favoring individuals belonging to groups known to have  been discriminated against previously  • Know the different types of sexual harassment (quid pro quo and  hostile environment).• Quid pro quo: a situation, defined as illegal, when  submission to sexual activity is required to get or keep a  job • Hostile environment: a situation, defined as illegal, where sexually offensive conduct is pervasive in a workplace,  making work unreasonably difficult for an affected  individual  • Diversity and team performance • Diversity within a team can produce tensions derived  from attitudes of racism, sexism, and ethnic biases.  Chapter 18: Corporate Governance  • Who are the major players? • The major players are the executives, board of directors  and shareholders • Theory vs. reality – which group is the most powerful? • In theory, shareholders are the ones who hold the most  power  • In reality, however, board of directors control most of the  power • Mechanisms used to align CEO and shareholder interests & deter self interested behavior? • Directors’ responsibilities? …what about shareholders’ rights? • Director’s responsibilities/duties: • Approve the issuance of securities and the voting  rights of their holders • Review and approve the corporation’s goals an  strategies • Select the CEO, evaluate his/her performance, and  remove that person is necessary • Give advice and counsel to management  • Create governance policies for the firm, including  compensation policies• Evaluate the performance of individual directors,  board committees, and the board as a whole • Nominate candidates for election as directors  • Exercise oversight of ethics and compliance  programs  • Shareholder responsibilities/duties: • Sell their stock • Vote to elect directors and on other corporate issues • Receive information about the corporation  • Receive dividends  • Sue the corporation if directors and officers commit  wrongful acts • Acquire residual assets in case of bankruptcy • Can propose resolutinos for a vote at the annual  meeting • Executive compensation • Includes base salary, cash incentives/bonus, stock, a  retirement plan and other stuff. • SOX and Dodd-Frank – after what events were they enacted? In  general, what are they? • The Sarbanes-Oxley Act was enacted in 2002, after the  Enron fraud scandal, to prevent financial fraud in  corporations. It mandated stricter financial reporting and  greater board oversight  • The Dodd-Frank Act, enacted after the Lehman Brothers  bankruptcy in 2008, the largest bankruptcy filing in U.S.  history, is a statute Congress made to reform financial  regulation and prevent another financial crisis such as  those that occurred in 2007 through 2008.  Chapter 11 & 12: MNCs and Globalization  • Globalization, multinational, FDI - know the meanings.• Multinational Corporation (MNC): an entity headquartered in one country that does business in one or more foreign  countries  • Globalization: growth in the network of human  interaction…economic, political, social, military, scientific, or environmental interdependence to span worldwide  distances • Integration • Public and private initiatives  • Foreign Direct Investment (FDI): a firm directly invests  (beyond exporting, franchising, and licensing) in a market outside its home country  • Partial or full control of foreign assets with the  intention of long-term presence (10%+) • Corruption? Foreign Corrupt Practices Act (FCPA)? • Corruption is the debasement of integrity for money,  position, privilege, or other self-benefit  • “misuse of public power for private gain” • The FCPA has made it illegal to bribe government officials and political candidates  • There is an exception for facilitating payments (e.g.,  small sum paid to connect utilities)  • What are the arguments for and against free trade agreements? Types  of agreements?  • Types of trade agreements: • Trans-Pacific Partnership • Transatlantic Trade and Investment Partnership • General Agreement on Tariffs and Trade • World Trade Organization  • Arguments for tree trade: • Specialization (focus on what you’re good at)• All countries benefit – law of comparative advantage • Increase growth and FDI • Lower the cost of goods and services for consumers  with more options • Assistance for developing and smaller nations (think EU) • Build friendly relations with other nations • Higher wages when compared with domestically  focused firms/sectors • Arguments against free trade: • Discriminates against non-member countries &  discourages globalization • Hurts small firms & less developed partner countries • Job loss (approximately 13% from trade - NYT,  automation and efficiency gains…) • Protect growth of certain industries • Protect from “dumping” • What are motives for international expansion? What are some of the  challenges? • Motives for international expansion include: • Use of current resources and access to new  resources  • Seeking to expand or develop new markets  • Competitive rivalry  • Crowded domestic markets  • Reduce risk  • Learning  • Centers of excellence  • Challenges:• Cultural differences  • Child labor, working conditions  • Political risk – stability  • Corruption  • Weak “institutions” – economy, infrastructure,  regulations  • International entry modes • Exporting: sending goods/services from one country to  another for distribution, sale, and services  • Licensing: leasing the right to use the firm’s IP to a firm  doing business in the targeted international market  • Franchising: licensing of a good/service AND business  model to partners for specified fees • Other contract modes: contract manufacturing  • Alliances & JVs: home and host country firms work  together. JVs form a separate legal entity  • Greenfield Venture: starting from scratch; more control  (proprietary technology) • International Acquisition: acquire a current business;  entry is much faster; cultural distance can be an issue  • Informal economy

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