Environmental Protection Agency
Answers to Questions
- On Corporate Size and Power – What are the pros and cons of a laissez faire economy? Explain the philosophical meaning behind the commerce Clause in Article I, Section 8 of the US Constitution. What law and what government agency monitors corporate size through mergers or acquisitions? Explain the basic model of the Herfindahl Index and provide a simple scenario.
- The term “laissez-faire” economics essentially refers to the act of government “keeping their hands off” of business as much as possible, outside of what is needed to ensure that the business complies with the law. Laissez faire economics are often equated to “free market” economics, which essentially refers to the government completely refraining from involvement in business.
Some positive aspects do exist within a laissez faire economy. If business owners have fewer rules with which to comply, then they can respond more quickly to events that affect their business operations. In addition, prices in that area of the business market might remain lower. However, it is possible that an essentially laissez faire economy was responsible for the U.S. Great Depression, in that businesses were not readily capable of responding to an economic downturn and the business owners did not respond to the downturn by investing money in their businesses rather than allowing their businesses to reduce inside or to close.
- The Sherman Act and antitrust law both cover corporate size limitations. The Sherman Act, passed in 1890, is a Federal law that places limitations on the Federal government’s powers to do business on its own behalf. The Sherman Act is that which provides the primary source of antitrust law (Cornell Law School par. 2). The United States Congress has control over this aspect of law, while the Federal Trade Commission actually polices businesses to ensure that the laws are obeyed.
- Article 1, Section 8 of the United States Constitution is intended to regulate the “commerce” of the United States with other countries, between the states, and with Indian nations. Although there is clearly a financial aspect of this particular section, Article 1, Section 8 is also clearly intended to regulate non-monetary commerce, such as postal movement and the sciences and arts. In a sense, Article 1, Section 8 controls movement of goods and of certain individuals, as well as of the troops protecting this country.
- The Herfindahl-Hirschman Index (HHI) is a formula used to determine the concentration of a particular market. According to the United States Department of Justice (USDOJ) the HHI is represented by a larger number when a relatively few firms form a particular market and there is a disparity in the percent of business that each firm controls. For example, assume that Dog Biscuit Super Store makes up 50% of the market, Baking for Fido makes up 30% and Doggy Mom and Pop makes up the remaining 20%. The HHI formula of percentages squared then summed would look like this: 502 + 302 + 202 = 3800. Because this market reflects an HHI of over 1800 it represents a concentrated market. However, if that same market contained seven firms, with 15%, 10%, 10%, 15%, 10%, 20%, and 20% of the market share, using the formula of 152 + 102 + 102 + 152 + 202 + 202 = 1450, then the market would only be moderately concentrated. As can be seen, the larger the number of firms being used in the formula and the smaller the percentages used to represent those firms, and the smaller the number used to represent the concentration becomes.
On Managing the Environment – Discuss the how the Clean Air Act is implemented through the Environmental Protection Agency (EPA). Provide a scenario how the government can manage problems like pollution through the four alternative approaches such as: environmental standards, market-based mechanisms, information disclosure, and civil and criminal enforcement. Which is best? Why?
Both the United States federal government and the United States Congress acted to form the Environmental Protection Agency (EPA) nearly forty years ago. The EPA was made responsible for a two-pronged effort. First, the EPA became responsible for cleaning up the polluted areas that already existed in the nation. Second, the EPA became responsible for creating legislation to prevent future significantly polluted areas (U.S. Environmental Protection Agency “About Us”).
The EPA implements the Clean Air Act by setting limits on potentially polluting emissions that can be released into the air. They also set limits on the permissible level of detectable pollutants in the air in any locality at any one time. In addition to helping set these local laws, according to the EPA website, the EPA can assist “state, tribal, and local agencies by providing research, expert studies, engineering designs, and funding to support clean air progress” (Environmental Protection Agency [EPA] “Understanding the Clean Air Act). Finally, the EPA approves the state and local air pollution prevention plans.
The government can manage air pollution through the four methods described above: environmental standards, market-based mechanisms, information disclosure, and civil and criminal enforcement. For example, if an area has fair to good air quality on some days, while it has poor air quality that might be a danger to sensitive individuals on others, the government has several options.
First, they might consider sending local inhabitants newsletters or flyers that explain the situation in clear and easy-to-understand English. Doing so would ensure that a few people would read the flyer and would perhaps retain the information. A few might also retain the information long enough to make a plan to deal with the bad days, although not many of them would think to find ways to prevent those days. Although education is a positive thing, it is nothing upon which this situation can rely.
Second, the state or federal government can set environmental standards with which the local government must comply. However, guidelines are nothing if individuals are unable or unwilling to comply with it. However, setting environmental standards is a starting point for actually getting things done.
Third, the government can provide the citizens with an appealing way to comply with these laws. For example, the government can provide free bus passes for commuters on days with poor air quality or they can provide citizens with tax benefits or with rebates for repairs if they bring their vehicles into compliance.
Fourth, the local and state governments can put civil and criminal legislation into effect and enforce it. For example, that locale could set legislation demanding that all cars over a certain age be tested for emissions by a certain date. The legislation could have several parts with different compliance dates, including having all cars tested by a certain date, requirements for cars that have failed, and other practical requirements that would lower pollutants in the air. After the required dates all cars in that locality must have the required paperwork, hangtags, or stickers or the owners could be ticketed or fined, or might even lose their license.
It is readily apparent that any one of these things is inadequate on its own. The best method of handling the situation is to do all four of them in a stair-step fashion, so that the local citizens are more readily accepting of them. However, if only one can be selected, the third option seems the best in this situation. It requires that the citizenry do absolutely nothing and bear no expense, however, it has a practical effect on the air quality by reducing the amount of fuel emissions that enter the air. While the fourth option is actually the best in the long run, the third option does not require any significant investment on the part of the locale, either, and it can be set into place while testing facilities are being built.
On Intellectual Property and the New BGS Model (Business, Government, Society) – What is intellectual property and how is it protected in the United States? Suppose you have a great idea and what to protect it – what can you do? And finally, you are now the CEO of Toyota. What are the five most important issues you must teach your team to be the benchmark for Global Corporate Citizen – in other words, what is your corporate model for business, government, and society. ( The five issues can be anything that you think is important such as eithics or responsibility to society)
Intellectual property is the term used to describe something, such as a written document or other creations, which is created from the independent thought processes of a particular individual. However, just because a person thought of a particular creative work, that person is not necessarily entitled to the rights for that particular creation. A student or a professor working at a college might have signed away intellectual property rights for creations developed during his or her enrollment or employment there.
As another example, if a person works for a software company and develops a system that is unrelated to the system upon which he or she was working while “on the clock,” even if that person creates this new system on breaks or lunchtime it is probable that the system belongs to the company for which the person works.
In addition, intellectual property rights and protection are different for individuals who develop inventions that are covered by trademarks and patents than they are for individuals who create written or artistic work. Writers, artists, singers, and film makers would be protected by copyright law, rather than by trademarks and patents (World Intellectual Property Organization [WIPO] What is Intellectual Property?).
If a person has a really good idea for an invention, he or she has to realize that ideas alone can not be trademarked, patented, or copyrighted. After all, the Earl of Sandwich probably was not the first one to put meat between two slices of bread, but the sandwich has his name, so he did something to get his creativity recognized. What can be protected is the manner in which an idea is expressed.
When an idea is formulated and then followed up on, the goods, service, or creative work can be protected under the law (United States Patent and Trademark Office). Although it is possible, allegedly to “self copyright” a written work by sealing a copy in an envelope and mailing it to yourself, the best way to protect such a work is by contacting the Copyright Office and send in a completed application. The creator should protect other inventions by sending an application to the United States Patent and Trademark Office.
The term “global corporate citizenship” has different meanings in different corporate settings, so not every business defines its best practices in the same way. However, according to the World Economic Forum CEOs, “certain broad areas of action for corporate citizenship can be identified” (6). These areas include:
- Good corporate governance and ethics
- Responsibility for people
- Responsibility for environmental impacts,
- Broader contribution to development
- Core business operations
- Host communities, and
- Industry associations
All of these things are of great value in global corporate citizenship. If I were CEO of Toyota, however, I would choose to be concerned with governance and ethics, responsibility for people and for environmental impacts, host communities, and industry associations. I feel that it is important to comply with ethical practices within the business and to comply with laws of the land–corruption, such as what was seen in the Enron scandal, has no business in good corporate practices.
In order to be good members of society, it is just as important for businesses as it is for individuals to take responsibility for their actions. It is even more important, in fact; after all, businesses can have a larger effect on the lives of a larger number of people. Finally, it is important to remember that “industry associations” would not merely include those organizations that correspond directly to the act of doing business. Instead, it would also include membership in the chamber of commerce and other leadership groups in which a corporate leader can have a positive impact on the community or industry in which his or her business operates.
Cornell Law School. Wex, Antitrust: An Overview. 2 June 2007. <http://www.law.cornell.edu/wex/index.php/Antitrust>.
United States Department of Justice. The Herfindahl-Hirschman Index. 2 June 2007. <http://www.usdoj.gov/atr/public/testimony/hhi.htm>.
United States Environmental Protection Agency. The Plain English Guide to the Clean Air Act: Understanding the Clean Air Act. 2 May 2007. 2 June 2007. <http://www.epa.gov/air/caa/peg/understand.html>.
United States Patent and Trademark Office. What Are Patents, Trademarks, Servicemarks, and Copyrights? 12 May 2004.
World Economic Forum. Global Corporate Citizenship: The Leadership Challenge for CEOs and Boards
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World Intellectual Property Organization. About WIPO: What is Intellectual Property? <http://www.wipo.int/about-ip/en/>.