Learning Module for Business Ethics

Lesson 4: The Responsibilities and Accountabilities of Entrepreneurs

Learning Objectives:

At the end of the week, it is expected that the learners must be able to:

1. Identify responsibilities to the business organization he/she belongs to;

2. Explain the importance of these responsibilities and accountabilities.

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There are a lot of responsibilities of an entrepreneur to his employees. Among of these

are the following:

1. Sensible and Attractive Salary – the company should have attractive compensation
packages to attract more potential talents to join the organization who can be of help in
the achievement of the long-term goals of the company. This can be also a source of
motivation for employees to do the job well assigned to them according to the plans of
the organization.

2. Assignment of Right Jobs

Taking into consideration the technical and the educational background of the employees
in assigning them to the job where they are good at. No mismatching of jobs with
employees’ qualification.

3. Provide Security of Employment

The entrepreneur should give their employees job security in the organization so that
these employees will be motivated to work with utmost dedication and commitment.
Employees will no longer have fear to lose the job and thus, develops higher degree of
faith with their employer.

4. Provide Best Working Environments

Making sure that the physical environment of the workers are well taken-cared of by
providing good lighting, proper temperature and workable space for the employees is an
accountability by the entrepreneur. This will make the workers comfortable working in
their own department.

5. Assumption of Welfare Arrangements

Entrepreneurs are also responsible in the welfare of their employees. It is their

accountability to provide financial support during sickness, old age, accidents and even
death. Even at the time of health crisis where there are unemployment, employers should
also provide financial assistance.

6. Humane Behavior towards employees

Employees should be treated compassionately by allowing them to practice their rights

and enjoy being workers of the company. Entrepreneur should create humane workplace
necessary for the workers to do the things that they are tasked to do.

7. Formation of Small Business Relations

Establishment of good relationship with the employees to protect the interests of

everyone. An organization with good industrial relations may have effective
communication lines which is very important in any organization.

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8. Participation in Profits and Management

There are instances when employers share their profits to the employees. This is based on
the principle that profit of the organization is not of the owner alone but also for the rest
of the employees of the organization. This can be one of the responsibilities of the
entrepreneur.

9. Definite Service Surroundings

The employees should also have full knowledge of all these service conditions that may
cover promotions, appointment, penalties, suspensions and dismissals as well as
retirements, service period. There must be clear and well-defined structure of these areas
of employment.

10. Espouse Incentives Wages Structure

One way of inspiring employees to aspire for higher quality of work is to give them
incentives and salaries. These provisions will be beneficial to both the workers and the
enterprise.

On the other hand, entrepreneurs also have responsibilities to their suppliers and creditors.
Entrepreneurs are accountable of the following:

1. Pay Fair Prices of Goods at a reasonable time – Entrepreneurs have the responsibility
to pay for the agreed prices with the suppliers. This helps in the establishment of good
relationship with the suppliers. On the other hand, it is also the responsibility of the
entrepreneurs to pay their creditors at an agreed term.

2. Inform about Changes in Market – Information on the Changes in the market should
be provided by the entrepreneur to his supplier especially on the demands of the
commodities.

3. Give Guarantee of Minimum Price - The entrepreneurs should give the assurance of
lowest prices to the suppliers so that the certainty of the price will be sustained.

4. Provide Technical Advice -The entrepreneur has the responsibility to provide procedural
assistance his suppliers for the creation of new and replaced supplies.

5. Inform Suppliers of Future Developments – Provision of information on future

growths to the suppliers so that suppliers will be aware of these circumstances and that
they will develop themselves in line with the changes of the business environment.

6. Promote Healthy Competition – Any unhealthy and hostile competitions among

suppliers should not be allowed by the entrepreneur. This is one of the accountabilities of
an entrepreneur to his creditors and suppliers.

Finally, entrepreneurs also have responsibilities and accountabilities to their clients. Customers
are the most important factors of the business. Thus, it is only important that entrepreneurs
should take care of them. The following are the responsibilities of the entrepreneurs to the
customers.

1. Determination of Fair Prices – Entrepreneurs should identify just process for the goods
and services so that customers will develop trust on the product and in the long run, they
also develop loyalty to the business as well as to the product.

2. To Render Good and Economic Services – Good customer service is very important in
a business. It is the responsibility of the entrepreneurs to provide good and cheaper
services to the customers.

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3. Standardization of Goods – The entrepreneurs should make sure that the product or the
goods bought by the customers are in good condition so that it will not provide danger to
the customers when they use it. Goods and services should pass the quality standards set
by the company as well as the government.

4. Best and Economic Packing of Products – Packaging is an important marketing

strategy. The goods and services should be packed well to prevent damage of the product.

5. Right and Truthful Advertising – Truthful and honest in advertising are very essential
in marketing the product. It is a moral and a social responsibility of the entrepreneurs.

6. To Avoid Adulteration, Low Weight and Measurement of Products –Products should

be produced following the specific designs set by the quality standards of the company.
Tarnishing of live-saving goods such as medicines are harmful to life.

There are also responsibilities and accountabilities of entrepreneurs to the government.

1. Compliance of Government Rules – The entrepreneur should be law abiding. Whatever

will be required by the government, the entrepreneur should comply with it in accordance
with the law.

The entrepreneur should comply with the laws concerning attainment of licenses for a
particular business, running of the business, price identification and even production of
goods and services.

2. Payment of Taxes – Any business is taxed by the government. The entrepreneur should
follow the imposition of taxes such as income tax and sales tax. There should be honest
declaration of income so that it will be taxed accordingly.

3. Not to Seek Political Patronage by Unfair Means – It is the responsibility of the

entrepreneur not to seek for any political support through provision of unnecessary
economic help to any political party or politicians especially during elections.

4. Work together with Government for Commercial Development

The entrepreneur should cooperate to the government by appropriate application of

existing resources in harmony with the government objectives. For example, the
Philippine government aims to increase employment for retrenched employees during the
health crisis. Therefore, the entrepreneur should help the government achieve its aims.

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 Learning Module for Business Ethics

Lesson 5: Major Ethical Issues in Entrepreneurship

Learning Objectives:

At the end of the week, it is expected that the learners must be able to;

1. Discuss the major ethical issues in entrepreneurship;

2. Formulate a morally defensible position on ethical issues in entrepreneurship;

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The following are the most common ethical issues encountered by
entrepreneurs:

Favouritism/Partiality

Entrepreneurs should not be biased when it comes to hiring employees and in making decisions
in other aspects. You don’t hire a less qualified job candidate because he is related to you or
because he is your favorite. It is not only unethical but you are also hiring someone who is not
best for the position.

Copyright Violation

The mistake of infringing copyrights of other businesses is an abuse of the law. It is important
that you should ask permission from the rightful owner before you use their own creations for
business.

Overworking Your Staff

Entrepreneurs asking too much work from their employees without even understanding their
situations is unethical. Entrepreneurs should know their limit in assigning workloads to their
employees.

Tax Accounting and Dishonesty of Expenses

Dishonesty in declaration of assets and income just to get lower tax is unethical. It is important
that the entrepreneur should not mix personal and business expenses. Not doing it right mind end
up in trouble with the law.

Claiming Income

Hiding income generated and not declaring it may hamper the business because it will deprive
the government from collecting from these entrepreneurs. This qualifies as unethical because
there is dishonesty in this situation.

Hiding Blemishes During Fundraising

It can be very tempting to slightly exaggerate things while on the hunt for investment and it is a
very slippery slope with no real upside. You either lose credibility/trust later on or commit
yourself to an unrealistic timeline that will only frustrate those who have bought into your dream.
Be optimistic but realistic with where challenges might occur. Openness and honesty help ensure
a good fit.

Merging Personal and Business Accounts

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Never merge personal income with business income. Entrepreneurs should be sensible with their
expenses. Proper payroll or paying quarterly taxes should be observed.

Hiring someone to write fake reviews

Hiring people to write fake reviews about the company is unethical. There also companies being
paid just create fake survey results just like TV ratings. This action is not ethical because these
businessmen are giving fake information about their company just to appear positive online.

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 Learning Module for Business Ethics

Lesson 6: Models and Framework of Social Responsibility in the Practice of

Sound Business

Learning Objectives:

At the end of the week, it is expected that the learners must be able to:
1. Discuss the models and framework of social responsibility; and
2. Formulate a framework of social responsibility that reflects the responsibility of
sound business.

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The four Models and Frameworks of Social Responsibility of Kimberly Leonard

(2019) are the following:

1. Economic Model – this model is followed by entrepreneurs on the purpose to increase

the profit of the company. This is otherwise known as the profit-based social
responsibility of the business. A business is an organization that produces goods and
services. In this connection, the society and the community benefits from it because jobs
are created and wealth is collected.

2. Philanthropic Model – The entrepreneur, just like any other individuals, is free to
contribute to social causes in form of philanthropic action. Although corporations and
businesses have no obligations to contribute to social causes, it may be contributory to its
good reputation. Businesses are encouraged to do charitable works because it does not
only help the community but it also helps the company to have good public relations, tax
deductions and good will.

3. Social Web Model (Ethical) - It projects business as a citizen of the society in which it
functions as such. Just like all members of a society business must obey to the normal
ethical duties that every citizen of the community faces. It is the duty of the corporation
to comply with the law of the community.

4. Integrative Model –There is combination of social goals with economic objectives of the
organization. Most of the successful corporations have recognized that some for-profit
organizations also have social goals as a fundamental part of the organizational strategy.

Carroll's pyramid model of corporate social responsibility (Carroll, 1991).

Lesson 7: Importance of Establishing Business beyond Profit

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 Learning Module for Business Ethics

Learning Objectives:

At the end of the week, it is expected that the learners must be able to:
 Explain the importance of the establishment and maintenance of a business as a
source of job opportunities and financial freedom;
 Express appreciation of the importance of a business enterprise as a vehicle for job
opportunities and financial freedom; and
 Create an action plan to assist an existing small business enterprise to practice
ethics and social responsibility

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Job Creation as Corporate Social Responsibility

Job creation is the process of creating new jobs, especially to provide work for people in
the community through establishment of enterprise. It is the responsibility of the corporation or
businesses to think beyond profit for the reason that it helps the community where the business is
located to generate jobs for the people. The say that corporate social responsibility that created as
an act of protecting the profit of the company is not a realistic social responsibility and it is not a
genuine work towards doing something good for the world. Rather than a promotional act
intended to exhaust out the race and win over customers, philanthropic actions should be a
demonstration of what the company really wants to do sincerely. Included in these actions is the
generation of jobs that could help the people within the community earn a living. Thereby,
improving their life’s situations.

Financial Freedom

Financial freedom is to have enough savings and cash on hand to sustain the kind of life
we desire for ourselves and our families. This means that a person should have a rising amount
of money to manage a career that we want to have without being focused earning a fixed salary
every year.

Attaining financial freedom can be very tough especially when you have growing debt,
cash emergencies, medical issues and overspending. This can be countered through careful
management of money. Good planning applies effectively in achieving this financial freedom.
According to Matt Danielsson, there are important points to consider in achieving
financial freedom. Among of these are the following:

1. Set Life Goals – a person should have goals and make these goals specific like at what time of
your life will you want to achieve it. It is good that these goals should be written down so that it
will serve as guide to achieve it.

2. Make a Budget – working on a budget is more reliable than anything else. Sticking to it is the
most effective way to make sure that all your bills are paid and your money will be monitored.
Make this as a regular routine because it supports you goals and strengthen you finances

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3. Pay Off any Financial Obligations – high interest loans are very lethal to accumulation of
wealth that is why it is essential that you have to pay the balance each month. Paying on time
will also help business to have good reputation in terms of payment of debt.

4. Create Automatic Savings – enrollment in a retirement plan and other similar activity will
help you build your finances in the future. It is also good to have savings as an emergency fund
to prepare for unexpected expenses in the future.

5. Start Investing Now – there is no other way of growing your money than to invest no matter
how small your money is. The principle of compound interest will help you build financial gains.

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6. Watch Your Credit – it is important to pay attention with your credits because these
determines what interest rate you are offered when you decide for your next loan. Always
monitor your credit performance because the way you respond to your creditors will either ruin
or elevate further your good name. Thus, the entrepreneur builds a good reputation to his
creditors.

7. Negotiate – some people are very conscious about negotiating for goods and service because
to some entrepreneurs this will make them look not charming to creditors and suppliers.
Negotiating could actually help entrepreneurs save thousands of money each year. An
entrepreneur has to be open for negotiation especially when buying bulk orders to open the doors
for discounts. This can be helpful in achieving your financial freedom.

8. Continuous Education – Educate yourself on government policies and other laws that
governs business activities to make sure of the maximization of all tax deductions. Thus, saving
money in return.

9. Proper Maintenance – There should be proper maintenance of your assets to maintain

the marketability of these assets. Once you decide to sell these assets, you can still sell it at a
higher amount because it is well maintained.