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DSST Business Ethics and Society 2

Companies with social issues such as affirmative

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companies with social issues such as affirmative action, environmental protection and employee relations 59) Types of Government Influence over business – a) Regulatory b) Nonregulatory 60) Two Policy Tools that the government uses to influence business are (which are nonregulatory) a) Privatization – to turn parts of the government over to private companies, which are working for profit, tend to be smaller and more efficient than government b) Industrial Policy – coordinated targeting - the selection of firms, projects or industries for special treatment, which is combined with a government plan to influence industrial structure in specific ways b.i) When the US auto makers are lobby the government for tariffs on foreign imports and reduced taxes for themselves they are asking for an industrial policy b.ii) 5 schools of thought for industrial policy: (b.ii.1) Accelerationists – those who wish to back winners in “sunrise industries” (high-tech another name for sunrise industries) - they want to accelerate changes already indicated by the marketplace (b.ii.2) Targeters – focus on a select group of industries to transform them into engines for economic growth (b.ii.2.a) Finance, medical equipment, agriculture, industry, etc. (b.ii.3) Central planners – would tie industrial policy more closely with macroeconomics policies (b.ii.3.a) Real world centrally planned economies include the economies of North Korea, Cuba, and the former Soviet Union (b.ii.4) Adjusters – offer assistance to “sunset industries” in exchange for assurances that they would offer retraining and relocation assistance to employees, modernize and reduce waste (b.ii.4.a) Sunset industries are those of mass production, such as automobiles and steel (b.ii.5) Bankers – advocate a Federally backed industrial development bank (b.ii.5.a) This bank would provide capital, money that could be invested for 5-10 years in a high risk venture 61) Sherman Anti-Trust Act (written in vague terms) further defined in Clayton Act in 1914 (Anti-Trust Legislation) a) Prohibits price discrimination b) Tying and exclusive agreements c) The acquisition of stock in another corporation when the result is to lessen competition or create a monopoly 62) Federal Trade Commission Act of 1914 – created to investigate and enforce laws such as the Sherman Anti-Trust Act and the Clayton Act – Anti Trust Legislation a) Example of Anti-Trust Legislation – intended to prevent anyone from gaining control over the competition or harm consumers b) Sought to break up the powers of huge companies such as Standard Oil c) Federal Trade Commission has the power to: c.i) advise businesses on the legality of a proposed activity relative to antitrust law c.ii) to issue consent decrees, in which it agrees not to impose severe penalties in result for an end to the violation c.iii) Issue cease and desist orders c.iv) Or bring civil actions to court against a violator 63) William Taft (replaced Theodore Roosevelt as President) a)
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