Sheri Ebner
Professor Shelton
A321
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06 June 2015
Week 1 Assignment 3: Critical Analysis
Part One
Title: Marketing to Children: Accepting Responsibility
Author: Gael O’Brien
Link: http://business-ethics.com/2011/05/31/1441-marketing-to-children-accepting-responsibility/ This article highlights the many issues of marketing to children, especially in the fast food department. Specifically, this article talks about the issue of obesity and McDonalds, which is one of the world’s largest fast food chains. As of late, cities like San Francisco is voting to ban selling toys with fast food for children, especially when it exceeds levels of salt, fat, calories, and sugar. “McDonald’s was accused of deceptive marketing practices to children over the lure of toys as an inducement to buy Happy Meals. Healthy alternatives are available, apple slices in place of fries and milk instead of soda – if kids are willing to eat them. But, there is still the issue of high sodium content in burgers” (O'Brien). The article goes on to say that a campaign was launched in order to fire the famous clown mascot, Ronald McDonald, and encourage headquarters to stop marketing to children by using petitions. This same campaign also requested the chain to directly address the relationship between fast food and obesity. “In his remarks at the meeting, CEO Jim Skinner asserted the company’s right to advertise freely, to offer its menu and lifestyle selections, and leave to parent’s the right to choose what their children eat, saying it is up to personal responsibility. McDonald’s Corporate Social Responsibility (CSR) information indicates the company serves “a balanced array of quality food products and provides the information to make individual choices” (O'Brien). Susan Linn, who is director and co-founder of a national coalition of health care professionals, educators, parents, and others called the Campaign for a Commercial-Free Childhood states that “there is no ethical, moral, social, or spiritual justification for targeting children in advertising and marketing. I don’t believe in any advertising to children” (O'Brien). Cheryl Kiser, who is the former managing director of Boston College’s Center for Corporate Citizenship and current managing director of Babson College’s Lewis Institute adds her take on marketing to children, “CSR has had an enormous influence helping companies reduce their global footprint by addressing human rights and other issues, but companies are socializing kids and the imprint on those kids is not necessarily creating common good outcomes. When we start to imprint early in behaviors and consumer choices things that don’t lead to personal and common good, and that need to be corrected in teen years by good CSR programs, is CSR doing its job” (O'Brien)? As a shareholder and/or employee, it was pretty interesting to read how CEO Skinner for McDonald’s put the responsibility on parents and personal choice. What influences personal choice these days anyway? The media and advertising? On the other hand, McDonald’s is clearly in the business of serving cheap, low-nutrition, convenience food, and its products can in no way align to requirements of a health-aware customer. So what does the CEO do? When shareholders pressure him to come clean, he claims he is simply providing personal choice, when in fact, he is actually influencing it. Basically, it comes down to the more the authority, the higher the tendency to slip behind lowered moral standards. In the end, though, the truth is McDonald’s is a business and, like any other business, their purpose is to turn a profit and please their investors. It is not the responsibility of McDonald’s, or any other business, to monitor what consumers do. Are they marketing to children with the toys in the Happy Meals? Sure they are. They have been doing this for a very long time. What has changed is not how McDonald’s markets to children, but how parents teach their children. There are parents who are too lazy to cook and there are those parents who give their children whatever they want so they don’t have to deal with the temper tantrums. It all comes down to personal choice, as the CEO originally stated. Sure, McDonald’s should have some responsibility, but they have done that by changing some of the food choices in Happy Meals. The rest is up to the parents.

Part Two
Calculating Capital Adequacy Standards a. Define Capital Adequacy Standards

Percentage ratio of a financial institution’s primary capital to its assets (loans and investments, used as a measure of its financial strength and stability. According to the Capital Adequacy Standard set by Bank for International Settlements (BIS), banks must have a primary capital base equal at least to eight percent of their assets: a bank that lends 12 dollars for every dollar of its capital is within the prescribed limits (BusinessDictionary.com).

b. Define Tier 1 & Tier 2

“Tier 1 capital is composed of common equity plus trust-preferred securities minus intangible assets. Tier 2 capital is a bank’s loan-loss reserve amount plus other qualifying securities (e.g. subordinated debt and preferred stock) plus net unrealized gains on marketable securities. Total capital is the sum of Tier 1 and Tier 2 capital” (Melicher and Norton).

c. Explain the International Implications of CAS

The central banks and other national supervisory authorities of major industrialized countries met in Basel, Switzerland, in mid-1988 (Basel I Accord), in 2003 (Basel II Accord), and again in 2010 (Basel III Accord). The objectives were to improve risk measurement and management of large internationally involved banks and to improve the transparency of bank riskiness to customers and other constituencies. As a result, the Bank for International Settlements (BIS) established capital adequacy requirements for banks with international operations based on the use of risk-weighted assets (Melicher and Norton).

d. Why is CAS important?

“The capital that a bank has is an important consideration since it is a measure of the bank’s ability to absorb losses which can arise from bad debts and trading losses. It is also a source for investments in technology and acquisition of other financial institutions. The adequacy of any given capital base depends not only upon the absolute volume of liabilities to be covered, but is also affected by the quality of the bank’s assets” (Amengor).

Part Three 1. Describe what is meant by “ethical behavior”. Acting in ways consistent with what society and individuals typically think are good values. Ethical behavior tends to be good for business and involves demonstrating respect for key moral principles that include honesty, fairness, equality, dignity, diversity and individual rights (Businessdictionary.com).

2. Explain how ethical companies influence a firm’s shareholders and employees. “Ethical conduct and business performance have been related in many ways. Organizations are facing increased pressure from their stakeholders including customers, employees, and investors. On the average, U.S. corporations now lose half of their customers within five years, half of their employees within four, and half of their investors within less than a year” (Ferrell). “An ethical work climate will not only have a positive effect on employee commitment to quality, but will also have a positive effect on the firm’s competitive position. One measure of quality is a customer satisfaction index score. The impact on a company’s image as well as its ability to attract new customers will be determined by service quality improvement. Companies with a high quality customer satisfaction score include Mercedes, BMW, Saturn, Waterford Crystal, Sony, and Timberland. These companies maintain high product quality through a corporate culture that focuses on building high integrity relationships with employees, suppliers, and customers” (Ferrell).

Part Four
*Identify and briefly describe the financial functions in the U.S. financial system.
The financial system is a complex mix of financial intermediaries, markets, instruments, policy makers, and regulations that interact to expedite the flow of financial capital from savings into investment (Melicher and Norton). Components | Financial Functions | Monetary System | Creating money, transferring money | Financial Institutions | Accumulating savings, lending/investing savings | Financial Markets | Marketing financial assets, transferring financial assets |

Part Five
*Creating a SBA Report
1. Provide a summary of the overall SBA process.
Because I already have a small business, I previously set up an account with the SBA. It was real easy to just log in and go right to where I needed to be. This website was very useful in that it explained everything that needs to be in your business plan to be successful as well as providing outside links for other important details, such as getting your business name registered. I have had this experience personally and I have my certificate from the State of Ohio to prove it. This was also a very smooth process. As soon as I paid my fee, I had results in less than two weeks. I created my business based on what the SBA showed me to do, they have videos as well. This made it even easier to get my business done and I was even able to find out how to get my Tax ID number. Overall, the process to get into the SBA is very easy, and I had no issues, and the process to get started with your own small business was all self-explanatory and within about 5 minutes, I was where I needed to be to create a business plan, choose my business structure, getting my business name registered, and even find out ways to get funds for my business, such as small business loans, which can be very useful. a. What is the intent?

The intent of this website is to direct people in the direction they need to go in to get a small business started and continue maintaining it through this website. This website provides documents and tutorials that will walk anyone through the process of beginning a business.

b. Why is it important?

People are always going to want to start businesses. This is pretty much a fact. So it is definitely helpful to know where to go to get an easier start to your new business. I feel that this is important because then it can be done legally and usually with no issues. The State of Ohio offers professionals that will even do the paperwork for you, if you pay the right price, of course. But, just think about how easy that is, to have experts do the major work for you. These services become even more important to business owners that do not have a lot of time left after all the daily duties to do paperwork, especially when the person might be very new to beginning a business, like I am. This is how it works to get licenses and permits.

c. What do you see as the most important step and why?

I feel that the important step for me was just getting started. My second vote goes to getting your business name registered successfully. You want to make sure it is a name that is free to used and not in close relation with any others in the area. This can cause lots of trouble if you are not careful.
2. In your report, briefly review each step and outline the main points. Go to https://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-register-your-busi; Click on LOG IN, and input your username & password; Look to your left and you will see a section containing all of the necessary links to creating a new business or maintain an already made business. Once the proper title is located, click, and continue with what you set out to accomplish. Not many other steps involved…

Works Cited & References
Administration, U.S. Small Business. www.sba.gov. 2015. 06 June 2015. <https://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-register-your-busi>.
Amengor, Edem Cudjoe. "Importance of Liquidity and Capital Adequacy to Commercial Banks." n.d. 06 June 2015. <www.charteredeconomists.org>.
BusinessDictionary.com. "Capital Adequacy Standards." 2015. www.businessdictionary.com. 06 June 2015. <http://www.businessdictionary.com/definition/capital-adequacy.html>.
Businessdictionary.com. "Ethical Behavior." 2015. www.businessdictionary.com. 06 June 2015. <http://www.businessdictionary.com/definition/ethical-behavior.html>.
Ferrell, Linda Dr. "Ethical Leadership." n.d. www.lindaferrell.com. 06 June 2015. <http://lindaferrell.com/lead.html>.
Melicher, Ronald W. and Edgar A. Norton. Introduction to Finance. Hoboken, NJ: John Wiley & Sons, Inc., 2014. Textbook.
O'Brien, Gael. "Marketing to Children: Accepting Responsiblity." 31 May 2011. www.business-ethics.com. 06 June 2015. <http://business-ethics.com/2011/05/31/1441-marketing-to-children-accepting-responsibility/>.
Shelton, Doug. Weekly Lectures. 2015. Lectures. 06 June 2015.