RESPONSIBILITIES AND

ACCOUNTABILITIES OF
ENTREPRENEURS
((Business Ethics and Social Responsibility-
SHS)

LEARNING COMPETENCY:

Discuss the responsibilities and accountabilities of entrepreneurs to employees, government,

creditors and suppliers. (ABM_ESR12-IVi-l-3.1)

LEARNING COMPETENCY:
Discuss the responsibilities and accountabilities of entrepreneurs to
employees, government, creditors and suppliers. (ABM_ESR12-IVi-l-
3.1)

Pre-Activity
 Put yourself in a work place either you are a housekeeper in a beach resort, a service crew
in a fast-food chain or any work you have known. Write your responsibilities as an employee and
the responsibilities of the employer in this covid-19 disease pandemic. Write your answer on the
space provided below.

PRE-TEST:
Multiple Choice. Read and analyze each statement below and choose the letter that corresponds
the correct answer.

1. What refers to the duty or obligation to satisfactorily perform or complete a task (assigned by
someone, or created by one’s own circumstances) that one must fulfill, and which has a
consequent penalty for failure?
A. Responsibility B. Accountability
C. Transparency D. Fairness

2. What responsibility of an entrepreneur which make sure that the physical environment of the
workers is well taken-cared of by providing a well illuminated and ventilated workable space for
the employees?
A. Pay wages/salaries and taxes
B. Assignment of right jobs
C. Create and maintain an ergonomic workplace
 D. None of the above

3. Businesses must treat their injured employee with respect and file the claim without
attempting to cause a delay in processing or attempt to deter the worker from filing a claim at all.
A. Facilitate employees’ compensation insurance
B. Support career development
C. Train and educate employees
D. Enforce anti-discrimination law

4. The entrepreneur should provide employment security to the employees of his organization,

which will cause the sense of satisfaction among them and they will work with full interest,
dedication, and commitment and will feel free from the apprehensions of losing a job and will
have the higher degree of faith in the employer.
A. Respect human rights
B. Give rewards and Benefits
C. Give security and employment
D. All of the above

5. The following are responsibilities of an entrepreneur to the government EXCEPT for:

A. Compliance of government rules
B. Payment of taxes
C. Give rewards and benefits
D. None of these
6. What responsibility of the entrepreneurs to pay taxes to the government?
A. Payment of taxes
B. Not to seek political patronage by unfair means
C. Cooperate with government for economic development
D. None of the above

7. Loans are obtained for particular objectives. Hence, entrepreneurs should utilize the loan
amount only for the desired objectives.
A. Obtain loans on reasonable conditions
B. Follow mortgage rules
C. Follow business ethics
D. Poor utilization of debt capital

8. The entrepreneurs have the responsibility to provide regular information to the suppliers
regarding changes happening in the demand of the commodities in domestic or in foreign
markets.
A. Pay fair prices of Goods at a reasonable time
B. Promote healthy competition
 C. Inform about changes in market
D. None of the above

9. Any unhealthy and hostile rivalries among dealers should not be permitted by the
entrepreneur.
A. Motivate indigenous supplies
B. Provide technical advice
C. Inform suppliers of future developments
D. Promote healthy competition

10. What is your analysis of the given statements below?

Statement 1: A supplier is an entity (person or institution) that extends credit by giving
another entity permission to borrow money intended to be repaid in the future. 
Statement II: Mismatching of jobs with employee’s qualification is encouraged.
A. Both Statements are true B. Only Statement 1 is true
C. Only Statement II is true D. Both Statements are false

KEY TERMS!

Responsibility – refers to the duty or obligation to satisfactorily perform or complete a

task (assigned by someone, or created by one’s own circumstances) that one must fulfill,
and which has a consequent penalty for failure.
Accountability – is the obligation to demonstrate that work has been conducted in
compliance with agreed rules and standards or to report fairly and accurately on
performance results vis-à-vis mandated roles and/or plans.

DISCUSSION
RESPONSIBILITIES and ACCOUNTABILITIES of
ENTREPRENEURS
To Employees, Government, Creditors and Suppliers
An entrepreneur is one who organizes, manages and assumes the risk of an enterprise. An
entrepreneur should be aware of the ethics and social standards in business and should follow
them.
A. Employee
Employees are the true assets of an organization. They are the ones who contribute
effectively towards the success of every business so, in return entrepreneur has responsibilities
and accountabilities to fulfill for the safety and welfare of their employees.
The following are the responsibilities and accountabilities of an entrepreneur to his/her
employees.
1. Pay Wages/Salaries and Taxes
The company should have an attractive compensation packages to attract more potential
talents who can be a help in achieving organization’s long-term goals.
Entrepreneurs have the responsibility to pay their employees of their business at least the
minimum hourly wage in their locality. Wages/salaries should always be on time and without
delay so as the employees can meet their individual obligations thus, motivates them to stay and
do well in the business.

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 or aligned with their skills and abilities.
Mismatching of jobs with employee’s qualification is discouraged.

3. Create and Maintain an Ergonomic Workplace

Entrepreneurs must also make employees aware of areas in their business that have a high
risk for injury and train their employees in safety procedures to minimize the risk of injury.
Working environment that are properly ventilated and illuminated improve employee’s
performance, their health and well-being.

4. Facilitate Employees’ Compensation Insurance

When injuries occur through no fault of their employees, it’s their responsibility to file a
claim with their employees’ insurance provider. Businesses must treat their injured employee
with respect and file the claim without attempting to cause a delay in processing or attempt to
deter the worker from filing a claim at all.

5. Support Career Development

Career development is providing support and encouragement for employees to enhance
their skills and capabilities as an employee. Provide a human resources development system that
supports the careers of employees, a self-development support program, and transfer
opportunities for willing employees.

6. Train and Educate Employees

Acquisition of new knowledge and skills through the professional and personal
development of employees is a prerequisite and a guarantee of business’s success. Professional
development also includes dialogues with colleagues, peer mentoring and peer collaboration for
achieving business’s goals.
Every individual wants to develop. So, the responsibility of the entrepreneur is that he
should make all possible efforts for the individual development of the employees and may
impartially provide them equal opportunities for that. These opportunities include imparting
education and Training, give timely promotions, transfers at the right time and their participation
in the management of the business, etc.
7. Enforce Anti-Discrimination Law
Employees cannot be disadvantaged, dismissed, or not given employment for any reasons
mentioned. Any problems or issues that arise with guests or colleagues from overseas may
require involvement of embassies, government agencies, local cultural groups, or diplomatic
services to help resolve them.

8. Respect Human Rights

Business operations are interrelated with a wide range of people and societies throughout
the world, and implements and enforces a code of conduct that fosters respect for human rights.

9. Give rewards and Benefits

Reward employees fairly and attractively, in line with the prevailing conditions on the
local market. Gather data from the labor market on a regular basis, ensuring that reward
structures remain competitive. Employees are more likely to strive in their work if there is
anticipated reward, they’ve value, such as salary increase, bonus, and promotion, rather than if
there is none.
It is also mandated in the Labor Code of the Philippines that entrepreneur should pay
fringe benefits such as PhilHealth, Social Security, PAG-IBIG, taxes out of employees’
wages/salaries for each employee working in their business.
Recognition boosts esteem and morale in which employees feel important, satisfied, and
inspired. Recognizing employees for accomplishments can be an important reason for employees
to stay.
Providing these benefits motivate many employees to stay and do well in the business.

10. Give security of Employment

The entrepreneur should provide employment security to the employees of his
organization, which will cause the sense of satisfaction among them and they will work with full
interest, dedication, and commitment and will feel free from the apprehensions of losing a job
and will have the higher degree of faith in the employer.

B. Government
In Business, the responsibilities of entrepreneurs towards the government, professional
institutes, and other business institutions are very essential. The government sets the targets for
the balanced and rapid economic development of the country.
Responsibilities and accountabilities of entrepreneurs to the government are:
1. Compliance of government Rules
The rules framed by the government for business should be fully complied with. The
entrepreneur should follow the laws regarding obtaining licenses for a specific business, the
operation of the business determination and production and etc.
2. Payment of Taxes
The government imposes various types of taxes, like, income Taxes, sales tax, excise tax,
tariff duties and wealth tax on the entrepreneur and business, for raising financial resources.
Entrepreneurs should honestly pay these taxes.

3. Not to correct the Government Machinery

The government appoints the officers to implement its policies. The social responsibility
of the entrepreneur is that he may not correct the government officers and employees for getting
wrong favors or some Anti-Social purposes.

4. Not to Seek Political Patronage by Unfair Means

The responsibility of the entrepreneurs is that they do not seek political patronage by
providing undue economic help to any political party or politicians during elections. By giving
anti-social activities with political patronage hits the democratic values.

5. Cooperate with Government for Economic Development

The government sets the targets for the balanced and rapid economic development of the
country. For that, the entrepreneur should provide cooperation to the government by proper
utilization of available resources in accordance with the government targets.

C. Creditors
A creditor is an entity (person or institution) that extends credit by giving another entity
permission to borrow money intended to be repaid in the future. 
Various plans are prepared for development and expansion of the business and for that
various projects are also formulated. For their completion, capital is the foremost requirement,
which is fulfilled through loans from the individuals, Financial Institutions and Banks.

Responsibilities and accountabilities of Entrepreneur towards creditors are:

1. Obtain Loans on Reasonable Conditions
Some certain conditions are required to be fulfilled to obtain any type of loan. These
conditions should be reasonable, both for the creditors and the business organization.

2. Follow Mortgage Rules

The creditors provide loans in secured and unsecured forms. If the creditor has provided
the secured loan on the mortgaged property, the entrepreneur should follow the rules of
mortgaged property.

3. Follow Business Ethics

Both the entrepreneurs and creditors should follow the business ethics in providing loans
and in repayment of loans. The loan procedures should be honestly complied with.

4. Proper Utilization of Debt Capital

 Loans are obtained for particular objectives. Hence, entrepreneurs should utilize the loan
amount only for the desired objectives. The loan amount should not be utilized by small
entrepreneurs for unproductive activities. Not only that, but loan capital should also be invested
only for objectives and projects specified for the loans. Loan capital should be utilized with
the utmost economy.

5. Regular Payment of Instalment and Interest

The entrepreneurs should pay loan installments and interest regularly, according to
repayment conditions. If installments and interests are not paid timely, the loan burden goes on
increasing and it also has an adverse effect on the reputation of the business organization.

D. Suppliers
The services of the suppliers are also important for any business because they supply raw
materials, machinery, labor, and other materials. Without hem, the smooth operation of the
business is quite difficult.
Entrepreneurs’ responsibilities and accountabilities towards their suppliers are the
following:

1. Pay fair prices of Goods at a reasonable time

The entrepreneurs should pay reasonable prices for the materials purchased from the
suppliers. Often, the farmers provide cotton, sugarcane, and jute etc. to various industries, for
use as raw materials. However, the Industrialists pay them very low prices for these
commodities.
Entrepreneurs should pay reasonable prices for this type of raw material.
The responsibility of the entrepreneurs is that payment to the suppliers may be made in time so
that they may not have to face financial difficulties and may carry out their operations efficiently
and smoothly.

2. Inform about Changes in Market

The entrepreneurs have the responsibility to provide regular information to the suppliers
regarding changes happening in the demand of the commodities in domestic or in foreign
markets. So that the suppliers may make necessary changes in their manufacturing projects,
according to the requirements.

3. Give guarantee of Minimum Price

The entrepreneurs should give the guarantee of minimum prices to the suppliers so that
they may feel assured about the certainty of the price and may continue to maintain their will
power.

4. Provide technical Advice

 The entrepreneur has the responsibility to provide technical assistance to the suppliers for
the production of a new and substitute or replaces supplies/commodities. The entrepreneurial
organizations and Institutions and suppliers together should short research projects.

5. Inform Suppliers of Future Developments

The Entrepreneur should provide information about possible future development to the
suppliers so that they will be aware of these circumstances, thus, develop and become capable of
increasing their resources so as to meet the increasing demand in the future.

6. Promote Healthy Competition

The entrepreneur should not encourage unhealthily and hostile competitions among the
suppliers, for the sake of obtaining goods from them at the minimum price, only healthy
competition should be encouraged.
Besides, encouragement should be provided to individual suppliers and institutional suppliers.

REMEMBER KEY IDEAS!

A. Responsibilities of an Entrepreneurs to his/her Employees:
 Pay wages/salaries and taxes
 Assignment of right jobs
 Create and maintain an ergonomic workplace
 Facilitate employees’ compensation insurance
 Support career development
 Train and educate employees
 Enforce anti-discrimination law
 Respect human rights
 Give rewards and Benefits
 Give security of employment
B. Responsibilities of an Entrepreneurs to the Government:
 Compliance of government rules
 Payment of Taxes
 Not to correct the government machinery
 Not to seek political patronage by unfair means
 Cooperate with government for economic development
C. Responsibilities of an Entrepreneurs to their creditors:
 Obtain loans on reasonable conditions
 Follow mortgage rules
 Follow business ethics
EVALUATION:
Multiple Choice. Read and analyze each statement below and choose the letter that corresponds
the correct answer.

1. It refers to the obligation to demonstrate that work has been conducted in compliance with
agreed rules and standards or to report fairly and accurately on performance results vis-à-vis
mandated roles and/or plans.
of an individual or an organization to account for its activities, accepts responsibility for them,
and to disclose the results in a transparent manner?
A. Responsibility B. Accountability
C. Transparency D. Fairness

2. What responsibility of an entrepreneur to pay their employees of their business at least the
minimum hourly wage in their locality?
A. Pay wages/salaries and taxes
B. Assignment of right jobs
C. Create and maintain an ergonomic workplace
D. None of the above

3. What responsibility of an entrepreneur in which employees cannot be disadvantaged,

dismissed, or not given employment for any mentioned.
A. Facilitate employees’ compensation insurance
B. Support career development
C. Train and educate employees
D. Enforce anti-discrimination law

4. Reward employees fairly and attractively is one of the responsibilities of an entrepreneur to

his/her employees.
 A. Respect human rights
B. Give rewards and Benefits
C. To give security and employment
D. All of the above

5. The following are responsibilities of an entrepreneur to the government EXCEPT for:

A. Compliance of government Rules
B. Payment of taxes
C. Assumption of welfare arrangements
D. None of these

6. What responsibility of the entrepreneurs which is not to seek political patronage by providing

undue economic help to any political party or politicians during elections?
A. Payment of taxes
B. Not to seek political patronage by unfair means
C. To cooperate with government for economic development
D. None of these

7. Loans should always be paid in on the maturity date, which facilitates regular capital flow in
the business society and also saves the Banks and Financial Institutions from adverse effects.
A. Obtain loans on reasonable conditions
B. Follow mortgage rules
C. Repayment of loan
D. Poor utilization of debt capital

8. The entrepreneurs have the responsibility to provide regular information to the suppliers
regarding changes happening in the demand of the commodities in domestic or in foreign
markets.
A. Pay fair prices of Goods at a reasonable time
B. Inform about Changes in Market
C. Give guarantee of Minimum Price
D. Motivate Indigenous Supplies

9. Any unhealthy and hostile rivalries among dealers should not be permitted by the
entrepreneur.
A. Motivate Indigenous Supplies
B. Provide technical Advice
C. Inform Suppliers of Future Developments
D. Promote Healthy Competition

10. What is your analysis of the given statements below?

 Statement 1: The Entrepreneur should not provide information about possible future
development to the suppliers, in time, so that they mold themselves according to the changing
circumstances.
Statement II: Entrepreneur should provide cooperation to the government by proper
utilization of available resources in accordance with the government targets.

A. Both Statements are true B. Only Statement 1 is true

C. Only Statement II is true D. Both Statements are false