Group 9- Social

Responsibility/Business Success
through People Development/Success
Stories and Successful
Entrepreneurs/Franchising and
Ecommerce
 SOCIAL RESPONSIBILITY (INTRODUCTION)

Social Responsibility – is an ethical framework that suggests that an entity, be it an

organization or individual, has an obligation to act for the benefit of the society at large.

-The words, “Corporate Social Responsibility” may have entered the Philippine
consciousness only in the past 10 years, but the concept and practices of making profit and
reaching out communities has been far and longer than that.

-As early as 1990s, companies have gone out of their way to make sure their way to make
sure their employees and families are well taken care of.

-In 1950s, when rising companies involved themselves heavily in the welfare of communities
in which they operated.
Bayanihan (cooperation) - it signifies the spirit of
helping each other, a culture of sharing, unity
and cooperation.
SOCIAL RESPONSIBILITY EXPLAINED
- In 1960s, those handling community
relations were removed from the core -The concept of social responsibility has
activities of enterprise.
various meanings to different individuals. For
-In 1970s, the community relation was stir instance, to a banker, his social responsibility
because of Martial Law that pushed more is to lend money even to the poor producers,
Filipino families into poverty. and not only to the rich ones.

-Today, it has become even more

essential for business establishments to
integrate Corporate Social Responsibility
(CSR) activities into their business
strategies should they wish to survive in
these trying times.
 01
What then is the best social
responsibility of entrepreneurs?
 Introduction
Professor Howard Bowen defines it as, “the
obligations of businessmen to pursue their
policies, to make those decisions, or to follow
those lines of actions which are desirable in
terms of the objectives and values of society.”

Howard Bowen is widely regarded as the

father of modern CSR. An American
economist, he's been credited with coining the
term “Corporate social responsibility”.
● Business relationship are measured by fairness, honesty, and justice.

● The entrepreneur must sell quality products at fair price. He must also be
fair with his suppliers by paying them on time as agreed upon. He must
give reasonable profits to stockholders for their investment. He must pay
the correct amount of taxes to the government. He must promote the
welfare of his employees. Equally important is the social responsibility of
the entrepreneur to his community in terms of job creation and
environmental conservation.
HISTORICAL DEVELOPMENT OF
SOCIAL RESPONSIBILITY
● During the ancient times, the Greeks
despised trade and commerce. Only
the slaves and low class citizens were
engaged in business. The Romans had
the same negative attitude towards
business. They preferred to be soldiers
or farmers.
● The Code of Hammurabi regulated
commercial activity. One of the law of
the Code says, ”If a man hires a field
laborer, he shall pay him 8 GUR of
grain per year.”
● During the medieval times, which is
started after the fall of the Roman
Empire in 746 A.D., business
activities were influenced by Christian
doctrines. The Church, then, was a
very powerful institution. The most
famous Christian doctrine was the
compensatory justice of St. Thomas
Aquinas. It is composed of just wage
and just price. According to this
doctrine, the businessman should pay
fair wage to his workers. He should
likewise charge reasonable price for
his products and services.
● In 1700s, the Industrial Revolution
emerged. This further boistered the
growth of capitalism, which had become
strong during the early 1600s. At this time,
the influence of the Church faded away. ● The abuses of businessmen produced
great social philosophers and
reformers, like Robert Owen and Karl
● Children and old individuals worked up to
Marx.
18 hours a day, and they were underpaid.
Prices were high, yet the quality of the
products were very low.
THEORY OF KARL MARX
● He said that workers are the real producers of
goods. He also claimed that the benefits of
production go to the capitalists and not to the
workers. He is one who developed the theory
of Scientific Social Revolution.

● Scientific Social Evolution – is the name

given to a period of drastic change in scientific
thought that took place during the 16th and
17th centuries.

● Communism - is a political and economic

● Karl Heinrich Marx was a German
philosopher, critic of political economy,
historian, sociologist, political theorist,
journalist and socialist revolutionary.
ideology that positions itself in opposition to
liberal democracy and capitalism, advocating
instead for a classless system in which the
means of production are owned communally
and private property is nonexistent or severely
curtailed.
● Capitalism - is an economic system based on the private ownership of the means
of production and their operation for profit. Central characteristics of capitalism
include capital accumulation, competitive markets, a price system, private
property and the recognition of property rights, voluntary exchange and wage
labor.

● Professor Khvostov - a Russian economist claimed that under the capitalism, the
fruits of production belong to the ruling class of capitalist, who own the factors of
production and marketing.

● On the other hand, the workers are producers themselves, but they do not own the
factors of production, except labor. They are forced by unemployment, inflation,
and crises to sell labor at the very low price to the capitalist, who take advantage of
their miserable conditions.
ROBERT OWEN, THE SOCIAL UTOPIAN

· Robert Owen - was a Welsh textile manufacturer,

philanthropist and social reformer, and a founder of
utopian socialism and the cooperative movement.

- He also believed that society must be

completely restructured on the basis of
common ownership, equal rights, and
collective labor.

- In 1820, Owen strived to propagate the

cooperative association of workers. Some
years later, he took active part in the
cooperative and labor movement. In
addition, he preached the ideas of
socialism for 40 years and that makes him
as the “Father of socialism and
cooperatives.”
 Did You
Know This?

Factor 2

Samuel Gompers
THE INFLUENCE OF LABOR UNIONS

Labor union – also known as “labor

organization” is an organization formed by
workers in a particular trade, industry, or
company for the purpose of improving pay,
benefits, and working conditions.
Laissez-faire - is an economic theory from
the 18th century that opposed any
government intervention in business
affairs.

- The driving principle behind laissez-

faire, a French term that translates
to "leave alone" (literally, "let you
do"), is that the less the
government is involved in the
economy, the better off business will
be, and by extension, society as a
whole. Laissez-faire economics is a - They demanded for better working
conditions and security of tenure.
key part of free-market capitalism.
However, the government was
more supportive on the side of the
employers.
 THEORIES ON SOCIAL RESPONSIBILITY

1. Economic Model - this is based on the traditional concept of business. That is,
the primary objective of the business is to earn reasonable profit, as well as to offer
quality good and services, and to provide employment.

- This model claims that society will benefit most from the business if left alone in
its operations. Business has done its social responsibility to the needs of the
consumers, by creating job and by paying taxes to the governments. Such taxes
are being used by the government for social services.

2. Socio-economic model – refers to the concept that a business should not only
focus on earning profits but must also look after the effects of its decisions and
functioning on society.
- It believes that businessmen have their
responsibility to stockholders, as well as to
their employees, customers, suppliers, and
the general public. It stresses not only profit,
but also the implications of business
decisions on society.
- The social responsibility of socio-
economic is maximizing profit is the
second priority, the first priority is
protecting and improving society’s welfare
3. Classical Model – argues that society is
best served by a variety of institutions, each of
which serve a particular function. The primary
function of corporations should be economic
rather than social.
- An enterprise is socially responsible if it
stresses to use, as efficiently as possible, the
resources at its disposal, in producing goods
and the services that society needs, at a
price consumers are willing to pay.
- The social responsibility of classical is to
minimize the profit.
Milton Friedman

Milton Friedman was an American economist and statistician who

received the 1976 Nobel Memorial Prize in Economic Sciences for his
research on consumption analysis, monetary history and theory and the
complexity of stabilization policy.

- He also a follower of the classical view. He said that there is only

social responsibility of business to use resources and engage in
activities design for profit, so as long as it stays within the rules of the
game.
 ARGUMENTS FOR SOCIAL RESPONSIBILITY

1. Business cannot and should not ignore social problems because it is a part of the
society.

2. Business has resources, like financial, technical, and managerial, that are required
for solving social problems.

3. Business can earn more profits in the long run by helping eliminate or reduce
social problems.

4. Business can expect less government intervention if it performs its social

responsibility.
ARGUMENTS AGAINST SOCIAL
RESPONSIBILITY

1. Business managers are primarily 3. The effects of social problems on society

responsible to stockholders. Thus, their job is very general, business should not be
is to earn profit for their investors. expected to solve social problems. This is
their fundamental responsibility to the voters.

2. The resources of the enterprise – time,

money, and talent should be used to
maximize profit, not to solve the problems
of society.
THANK YOU FOR LISTENING:)
SOCIAL RESPONSIBILITY TO CONSUMERS

If there are human rights, there are also consumer

rights. However, consumers are not strong in
protecting their rights againsts capitalists
exploitations. Although there are now several
organizations of consumers, their power is hardly felt.
It was president John Kennedy who introduced the
four basic rights of consumers. These are:

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 1. The Right to Safety - This means products are safe for their intended
use, contain clear and complete instructions for their proper use, and
have been tested by the manufacturers for quality and reliability.

2. The Right to be Informed - This refers to the availability of complete

and correct information about the use of the products.

3. The Right to Choose - It is the policy of the government to

encourage competition among sellers or producers, so that
consumers can choose the best products in the market.

4. The Right to be Heard – This is based on the concept that “ The

Customers is Always Right “ Sellers should listen to their buyers and
act immediately on their complaints.
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 SOCIAL RESPONSIBILITY TO COMMUNITY

The price of the economic growth is destruction of the

enviroment through pollution of the air, land, and
water. Such pollution has adversely affected the
lives of both human and animal lives, as well as
those of the plant kingdom.

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 OTHER SOCIAL RESPONSIBILITIES
1. EMPLOYMENT- Business enterprise should adapt the
policy of “ equal opportunity employment”. This means
there are no discriminations againsts race, sex, And
religion

2. Education and Training- Business organizations,

particularly the big and successful ones, should
contribute their resources to the education and training
of the poor and disabled persons in the community.

3. Community Development- The business organization is

very much a part of a community.

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Business Ethics
Ethics is a study of right or wrong. It is a moral choice by an
individual. In business, it is the application of moral standardson
business decisions and actions.

A Code of Ethics For Business

Philippines Business over the years has increasingly felt the need for
a Code of Ethics to guide it in the conductsof its business. This need
has been expressed often by its leaders during conventions and
forums where discussions are dentered around problems and issues
affecting business and industry.

Preamble
This Code of Ethics has been formulated impelled by the belief that
man has a dignity that must be respected, and that all the resources
of the earth have been created for his growth and development.
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 THE CONCEPTS

Business, which embraces commerce and industry, is not

an accidental human activity, but an integral element of
the social order. Those engaged in business should
therefore, recognize the following basic concepts:

1. All business is essentially an expression of human relationship, not

only with those who work in the enterprise, but also with those
who own and provide financial resources, with those who supply
it with materials and services, with those who buy it’s products
and services with the government.

2. The owners, management, the work force, the suppliers and

subcontractors, the customers, and the government contribute to
the performance of the business enterprise, and are therefore,
entitled to receive the proper worth of their contributions.

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 • The resources employed by a business enterprise are financial ,
technological, and human.

• Business Enterprise has a public responsibility to use all his

resources efficiently.

• Competition and inventiveness are essential for the

maintenance and continuing improvement of the quality of
goods and services, for growth and for technological progress.

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TOWARDS THE EMPLOYEES

Those responsible for business policy should consider not only the
interesr of the owners of the business , but also the interests of those
affected by the activities of the business.

Business shall recognize the unique position of employees as

individuals with a vital stake in there, and at the same time with
inherent obligations to their own families, and provide:

◎ For recognition that, although rates of pay may

often be determined by union, economic, economic,
and legal pressures, wages and salary policy should
be based on the right of the employees to a fair
and improved standards of living, irrespective of
race, sex, age, and creed.

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◎ For a fair recruitment practice that affords equal opportunity to
all qualified job seekers;

◎ For job security, adequate compensation for employees in

cases of separation and retirement, and for the opportunities
for fringe benefits

◎ For a safe and healthy atmosphere in the work environment

conducive to the physical and moral well-being and growth of
the employees;

◎ For conditions in which human potentials and relationships

can be developed at all levels of the work force, with a view of
providing therein a sense of purpose and achievement, and

◎ For participatory element so that the knowledge, experience,

and creativity of all who work in the enterprise may contribute
to the decision-making process.
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TOWARDS THE CUSTOMERS:

Business shall, in the production of goods and

services:

◎ Strive after a quality that will enable them to serve

their purpose efficiently and effectively;
◎ Avoid anything that would be detriemental to the
health, safety or growth of the proper user or
beneficiary of such goods and services; and
◎ Seek to apply or make use of the discoveries and
inventions of science with adaptations that will
improve their products or services, thereby
benefitting customers/users and increasing their
number.

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◎ Deliver the product or service in the quality,
quantity, and time agreed upon, and at a reasonable
price, and avoid the creation of artificial shortages,
price manipulation, and like practices;

◎ Establish an after-sales and complaints service

commensurate with the kind of product or service
supplied and the price paid; and

◎ Ensure that all mass media, promotional, and

packaging communications be informative and true,
and take into account the precept of morality and
the sound cultural values of the community, and
manifest respect for human dignity.
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 Towards the Suppliers

Business shall ensure:

◎ that terms of all contracts be clearly stated and unambiguous, and honored in
full, unless terminated or modified by mutual consent;
◎ that abuse of economic power in dealing with a smaller concern be avoided,
and that, in all cases, terms of payment be strictly ang fully observed. In
general, payment should always be made promptly at the agreed time or, if
no specific time is agreed upon, as quickly as may be reasonable, given the
circumstances; and
◎ that no suppliers be encouraged to commit his resources for apparently long-
term purposes, unless there are reasonable guarantees that the orders he
receives from the business enterprise will not be terminated arbitrarily.

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Towards the Owners and Other Providers of Capital
In the interest of the owners and other providers of capital, business
shall;

● provide an adequate rate of return to those contributing capital of the

enterprise, and ensure the security of their investment;
● use their financial resources to provide goods and services responsibly and
efficiently;
● furnish the owners and other providers of capital with such information as
they may reasonably require, provided that it does not adversely affect the
security or efficiency of the business; and
● pursue the specific objectives of the owners and other providers of capital;
provided that these do not run-contrary to any of the principles stated
herein.

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 Towards the Local and National Government

Although it is the responsibility of the government to enact

legislation and formulate implementing policies and programs, it is
the duty of business;
◎ to participate in the discussion of proposed legislation and/or its
implementation affecting sectored, regional, national, and
international interest; and
◎ to propose around policies in the use of human and material
resources.

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 Towards Society in General

Business shall recognize in their decision-making the interest of the

general public and, realizing that they are utilizing to an important
degree the nation’s resources, shall:
◎ take regular stock of their response to the basic needs of the
society and thus, ensure that these needs are taken into account
in all policy-making decisions;
◎ do their best to ensure that the way they employ their resources
benefits society in general, and does not conflict with the needs
and reasonable aspirations of the communities in the areas
where they operate.;

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◎ pay proper regard to the environmental and social
consequences of their business activity, with special
attention to the duty of renewing resources where possible,
and minimizing waste and pollution, and not sacrifice safety
or efficiency in the interest of short-term profitability;
◎ consider the human and social costs of mechanization and
technology; and
◎ establish a policy allowing employees, within reasonable
limits to contribute to the public and community service
during the work time.

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Some Ethical Principles for the Professional Manager

The concepts and principles for the conduct of business

outlined in this document are commended to the managers of
business enterprise. Thus, although the manager is expected to
act in the best interest of the business, he cannot be expected
to act in a manner that is contrary to the law or to his
conscience.

In particular, the manager should:

◎ acknowledge that his role is to serve the business enterprise

and the community;

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◎ avoid all abuse of executive power for personal gain, advantage, or
prestige;
◎ reveal the facts to his superiors whenever his personal business or
financial interest become involved with those of the company;
◎ establish a policy regarding conflicts of interest based on the principles
that decision should be made in the best interest of the business
enterprise, and decision-makers should be on their guard, against
allowing personal considerations to distort their judgement;
◎ not tolerate any form of illegal data gathering or any form of inducement
that tends to distort normal commercial judgment;

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◎ recognize that his subordinates have a right to information on
matters affecting them, and make provisions for its prompt
communication, unless such communication is likely to
undermine the security and efficiency of the business;
◎ fully evaluate the likely effects on employees and the
community of the business plans for the future before taking a
final decision; and
◎ cooperate with his colleagues and not attempt to secure
personal advantages at their expense.

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 Chapter 13

Business Success
Through People
Development
 Introduction
❑ People play a vital part in the internal and social system processes of
an organization. These systems may consist of individuals and
groups who are dynamic and are flexible enough to adapt to
changing conditions.
❑ People are the living, thinking, and feeling beings who work in an
organizations exist to achieve its objectives. Thus, it is said that,
organizations exist to serve people, rather than people existing to
serve the organization.

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 Motivating People

People perform in accordance with the expectations of their

superiors. If they are told that they are winners, they become
winners. If they are told that they are losers, they become losers,
Label an employee inefficient and he will start acting like one.

Example:
A research made by Warren Bennie in his book, The Unconscious
Conspiracy, shows that in a study of school teachers, those who
held expectations of their students have increased 25 points in the
students’ IQ scores.

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 Positive Reinforcement
Not a few enterprises have negative attitudes on their employees.
They scold their employees for poor performance. They instill fear
among their employees. Although they encourage risk-taking
ventures, they punish even tiny failures.
On the other hand, successful enterprises let their employees feel
they are winners. And they design systems to reinforce such
positive attitudes.
Example:
At the IBM, management ensures that 70 to 80 percent of its people
meet their quotas. The systems of successful corporations are not
only tailored to create winners, but also reward and celebrate the
winning through monetary and non- monetary incentives. The
President of IBM gives a check on the spot for achievement he
observes.
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EMPLOYEE’S EXPECTATION FROM MANAGEMENT
-Security of tenure
-Oppurtunities for advancement as business grows
-Treatment as human being- respect and dignity
-Participation in decision making
-Sharing of authority and responsibility
-Open and sincere communication
-Rewards for achievements
-Opportunities for personal growth
-Infusion of a sense of pride in a job well done
-Involvement in setting precise goals
 HOW TO GET PEAK PERFORMANCE
A. Careful placement- an employee should be given a job tailored to his
competence and interest. It is easier to motivate an employee who
loves hiswork.

B. Keep the employee informed- management should give the

employee sufficient and necessary information to perform his job well.

C. Opportunities for participation- an employee who participates in

planning and decision making within in competence gets feeling of
importance and a sense of achievement.
D. High Standard of performance- a job that makes a high demand on
employees challenges them to improve their performance.

E. Give them responsibility- many believes that giving satisfaction to

employees motivates them to peak performance.
FEATURES OF EXCELLENT ENTERPRISES
1.They solve their own problems- the standard operating procedures is
“Do it”,fix it, try it.” Whenever there is a big problem, the best senior
executives study the problem, come up with an answer, and implement it.

2. The customer in No.1 at the IBM Corporation, the customer is always the
first priority. And the customer is always right. IBM and other execellent
enterprises
learn more their customers.

3. They develop the spirit of entrepreneurship. They encourage risk-taking and

innovation in their business organization.

4. Productivity through people. Excellent enterprises are people oriented to

them their employees are the most valuable asset. They teat their employees
as a adults and as partner.
5. The Philosophy of the enterprise. Excellent companies
expect and demand superior performance from their people.
At Apple Computer , they hire great people, and they
create an invironment where their people can make mistake
and grow.

Here are some modifies basic values

of excellent companies:

● A belief in being the best

● A belief in doing the job well
● A belief in the importance of
people
● A belief in informal and
friendly atmosphere to enhance
communication
● A belief in the importance of
economic growth and profits
A belief in corporate social
responsibility
6. They stick to business in which they are competent. Not a few successful
companies branch out other kind of business with which they are not familiar for
the sake of diversification.

7. Simplicity. Execellent companies are elegantly simple. Their organizational

structure is simple. The central stuff is small. Such simplicity enhance flexibility.

8. Simultaneous centralization and decentralization. They

provide maximum individuals independence, but they strictly
require compliances to their few core values, such as
excellent quality and service, respect for individuals, the
sovereignty of the customers and others.
SUCCESS TECHNIQUES OF FAMOUS PEOPLE
A.Positive Assumption. Assume the best, and then work to make your
assumption true. Assume you can do it, and then go about finding a way to
get it done. Your assumptions exert a powerful influence on your thoughts,
actions and perceptions.

B. Visualization. as the word suggests is the art of representing information in

visual form like diagrams, charts or images. The visuals are usually supported by
narration from the presenter.

C. Alternative repetition. This is a sincere request supported by

conviction and faith.If success is desired, in plant thoughts of success
into the subconscious mind.

D. Dynamic first impression. First impression count much. This is also

true in business dealings.
GOOD CHARACTER CREATES SUCCESS
A. Integrity
B. Faith
C. Enthusiasm
D. Discipline
E. Appreciation

THE POWER OF PRAYER

Sincere prayer provides us with a deep sense of security,
guidance, strength and pure happiness. We should pray to God, not
to give us money, but to give strength and opportunity to earn
money.
 CHAPTER 15

FRANCHISING
 TYPES OF
FRANCHISES

• BUSINESS FORMAT
• PRODUCT FRANCHISES
• MANUFACTURING FRANCHISING
 FRANCHISING
● IS A METHOD OF DISTRIBUTING PRODUCTS OR SERVICES
●FRENCH WORD FRANCHIR , WHICH MEANS “FOR FREE”.
FRANCHISE- THE CONTRACT BINDING THE TWO PARTIES.

FRANCHISOR-WHO ESTABLISHES THE BRAND'S TRADEMARK OR TRADE

NAME AND A BUSINESS SYSTEM

FRANCHISEE- WHO PAYS A ROYALTY AND OFTEN AN INITIAL FEE FOR THE
RIGHT TO DO BUSINESS UNDER THE FRANCHISOR'S NAME AND SYSTEM.
 BUSINESS FORMAT FRANCHISES

IN BUSINESS FORMAT FRANCHISES , A COMPANY EXPANDS

BY SUPPLYING INDEPENDENT BUSINESS OWNERS WITH AN
ESTABLISHED BUSINESS, INCLUDING ITS NAME AND TRADEMARK.
THE FRANCHISER COMPANY GENERALLY ASSISTS THE INDEPENDENT
OWNERS CONSIDERABLY IN LAUNCHING AND RUNNING THEIR
BUSINESSES. IN RETURN, THE BUSINESS OWNERS PAY FEES AND
ROYALTIES. IN MOST CASES, THE FRANCHISEE ALSO BUYS SUPPLIES
FROM THE FRANCHISER. FAST FOOD RESTAURANTS ARE GOOD
EXAMPLES OF THIS TYPE OF FRANCHISE.
PROMINENT EXAMPLES INCLUDE MCDONALDS, BURGER KING, AND
PIZZA HUT.
 PRODUCT FRANCHISES

○WITH PRODUCT FRANCHISES, MANUFACTURES CONTROL HOW RETAIL

STORES DISTRIBUTE THEIR PRODUCTS. THROUGH THIS KIND OF
AGREEMENT, MANUFACTURERS ALLOW RETAILERS TO DISTRIBUTE THEIR
PRODUCTS AND TO USE THEIR NAMES AND TRADEMARKS. TO OBTAIN
THESE RIGHTS, STORE OWNERS MUST PAY FEES OR BUY A MINIMUM
AMOUNT OF PRODUCTS. TIRE STORES, FOR EXAMPLE, OPERATE UNDER
THIS KIND OF FRANCHISE AGREEMENT.
 MANUFACTURING FRANCHISES

●a franchiser grants a manufacturer the right to produce and sell goods

using its name and trademark. this type of franchise is common among
food and beverage companies. for example, soft drink bottlers often
obtain franchise rights from soft drink companies to produce, bottle,
and distribute soft drinks. the major soft drink companies also sell the
supplies to the regional manufacturing franchises. in the case of coca
cola, for example, coca cola sells the syrup concentrate to a bottling
company, who mixes these ingredients with water and bottles the
product, and sells it on.
THE DIFFERENT TYPES
OF FRANCHISING
RELATIONSHIPS
*MANUFACTURER-RETAILER RELATIONSHIPS
*MANUFACTURER- WHOLESALER RELATIONSHIPS
*WHOLESALER- RETAILER RELATIONSHIPS
*RETAILER- RETAILER RELATIONSHIPS
MANUFACTURER –RETAILER RELATIONSHIPS

●IT IS WHERE THE RETAILERAS A FRANCHISEE, SELLS THE

FRANCHISERS PRODUCT DIRECTLY TO THE PUBLIC.
●EX. MOTOR VEHICLES DEALERSHIPS
 MANUFACTURER- WHOLESALER
RELATIONSHIPS

●It is where the franchisee under license, manufactures and

distributes the franchiser’s product
●Ex. Soft drink bottling arrangements
WHOLESALER- RETAILER RELATIONSHIPS

●IT IS WHERE THE RETAILER AS FRANCHISEE, PURCHASES

PRODUCTS FOR RETAIL SALE FROM A FRANCHISER WHOLESALER
●EX. HARDWARE AND AUTOMOTIVE PRODUCT STORES
RETAILER- RETAILER
RELATIONSHIPS
It is where the franchiser markets a
service or a product under a common name
and standardized system, through a network
of franchisees. This is classic business
format franchise
 HISTORY OF FRANCHISING
Franchising dates back at least 1850.
One early example was in historic hotels in south wales where
franchising agreements between hotels and breweries.
Franchising operations in the Philippines started in early 1900.
With the entry of singer sewer machines, and eastman kodak.
Philippines franchise association (PFA)- is the voluntary self
regulating-governing body for franchising in the philippines.
HOW MUCH DOES IT COST TO BUY A FRANCHISE
THE FRANCHISEE HAS TO PAY SOME MONEY, AND THE TYPICAL
COSTS OR EXPENSES INVOLVES THE FOLLOWING:

❖INITIAL LICENSING FEES

❖SECURITY DEPOSITS
❖BUILDING COST FOR THE OUTLET
❖PRE OPERATING EXPENSES
❖INITIAL OPERATING CAPITAL
●FRANCHISE FEES- ONE TIME PAYMENT MADE BY A
FRANCHISEE TO THE FRANCHISOR FOR JOINING THE
FRANCHISE SYSTEM UPON SIGNING THE FRANCHISE
AGREEMENT.

●ROYALTY FEE- IS AN ONGOING FEE THAT THE

FRANCHISEE PAYS TO FRANCHISOR.
IS BUYING A FRANCHISE BETTER THAN
PUTTING UP INDEPENDENT BUSINESS ?

● Franchising provides people with better chances of

success than they would set up their own
business
ADVANTAGES OF BUYING A FRANCHISE
•There is a proven business system that is passed on to franchisee.
•Business set-up mistakes are minimized.
•The franchiser mentors the franchisee throughout the term of the franchise.
•The franchisee rides on an established and successful brand.
•There is reduction of risk you will be taking for your investment.
•They get better deals on supplies.
 THE RULES ON FRANCHISING FEES
THERE ARE TWO GROUPS INVOLVE IN A FRANCHISE:
•FRANCHISER – A person or company leasing the rights to business name and system.
•FRANCHISEE – The person who purchase it.
. The right to the franchise is sold by the franchiser to the franchisee for an initial
sum of money, often called the up-front entry fee or franchise fee. this money will be
paid once the contract has been signed.
The contract (franchise agreement) typically details the responsibilities of
both franchiser and franchisee, and usually for a specific length of time (typically 7
years).
RULES ON FRANCHISING FEES
•The initial franchise fee does not include anything, except the rights to use
the name and system and sometimes training, procedures, manuals, and
other assistance like site selection.
•It does not include any of the necessary inventories, furniture's, fixtures and
real estate.
•The franchisee must pay the franchiser royalty fees, or other on-going
payments.
THE RULES ON RESTRICTIVE COVENANTS

●The success of the most franchises is based on the

operating systems methods and products produced. for this
reason franchiser must protect their proprietary information
and trademarks.
●In order to do this, they establish restrictive covenants for
their franchisees.
WHAT IS A SUCCESFUL FRANCHISE ?
● A successful franchise is one where the franchiser
has developed a system and procedure that works. it
means he has defined his market research, established a
niche, develop an operation manual, perfected a training
program and put up a research and development team
that has successfully launched products introduced new
ones, and made the brand competitive.
HOW DO WE SELECT THE RIGHT FRANCHISE ?
there are several steps to be followed, begin with the weeding process..
•Think about the work environment you are interested in, and the requirements to run a
business.
•Involve your family or any friends and associates you may want to pull into the business.
•Write down your objectives
•Visit some of the franchising website.
•When you get the list to put together, begin with contacting the franchisers for additional
information. one thing to keep in mind throughout this process is that while you are shopping
for a franchise, those franchises are also out there shopping for franchisees.
THE FRANCHING PROCESS
1. The franchiser will send you brochure and other materials, and
most likely request that you complete a questionnaire.
2. Evaluation of the company’s uniform franchise offering circular
(UFOC). the federal trade commission (FTC) requires that this
document be provided to disclosed detailed infos. about the
franchiser at least 10 days prior to any franchise purchase.

THAT INFORMATION INCLUDES:

▪ The franchiser, its predecessors, and its affiliates

▪ Business experience/history
• Litigation
• Obligation to participate In the actual operation
of the franchise business
• Bankruptcy
• Restrictions on what the franchisee may sell
• Initial franchise fee
• Renewals, termination, transfer, and dispute
• Other fees
resolution
• Initial investment
• Public figures
• Restrictions on sources of product and services
• Earnings claim
• Franchisee’s obligations
• List of outlets
• Territory
• Financial statements
• Trademarks
• Contracts
• Patents, copyright, and proprietary information
• Receipt

3. Visit as manyof the franchiser’s existing franchisees as you can. Meet directly with the
owner of each establishment, and pay close attention to the opinion of the franchiser. Ask
the owners about the support they get on an on-going basis, as well as the training and
assistance they receive when they first purchase the franchise.

4. Review the franchiser’s business plan, operations, manuals, and market analysis. try to
meet the franchiser in person.
WHAT IS A FRANCHISE
AGREEMENT ?
It is a contract that
binds the franchiser and the
franchisee to the franchise
relationship, and indicates the
terms and conditions of the
franchise.
WHAT SHOULD I LOOK FOR IN THE DOCUMENTS ?

•THE SITE/ LOCATION

•THE PROJECTED FINANCIAL PLAN
•THE FRANCHISE AGREEMENT
 QUESTIONS YOU MAY ASK TO THE
FRANCHISER AND THE FRANCHISEE:
For franchiser: For franchisees:
• How long have you been in the business ? • How did you decide on getting this franchise?
• Where is your first franchise branch ? • How many franchise outlet are you opening ?
• How much is the total investment ? • What king of support do you get from the
• How do I apply for a franchise ? franchiser ?
• When do I see the documents for my • Given another chance, will you get the same
review ? franchise?
• What kind of support do I receive when I • Are you in touch with your fellow franchisees?
become a franchisee?
• What niche does your company have?
• How often do you meet with franchisees?
HOW TO MANAGE A FRANCHISE BUSINESS
-Make sure that the business runs according to the
standard set by the franchiser.

The Philippine Franchising Association Advisory

The Philippine franchising association of the Philippines
(PFA) id the forefront of promoting franchising business in the
Philippines and advises prospective entrepreneurs going into
franchising.
TIPS IN BUYING A FRANCHISE
✓ Get a good accountant
✓ Ask questions for more information and clarification
✓ Review the franchiser‘s audited financial statements over the
past three years.
✓ Get the names, phone numbers and addresses of their
franchises who have left the system.
✓ See samples of past contracts.
✓ Examine the details of financial aspects
E COMMERCE
 What is E-COMMERCE ?

 E-Commerce in the Philippines started when Republic Act

8792, known as the the Philippine Commerce Law, was
signed into a law last June 14,2000. This bill was approved to
make the country part of legitimate player in the global
marketplace. The Philippine Internet community has played
a major role in pushing for its passage of the law and it took
effect last June 19,2000. The Philippines is the fourth Asian
Country to pass an e-commerce law.
 E-commerce law is that; it gives legal recognition of data
messages, electronic documents, and electronic signatures; It
allows the formation of contact in electronic form, it also
makes banking transactions done through ATM switching
networks absolute once consummated; parties are given the
right to choose the type and level of security methods that suit
their needs; provides the mandate for the electronic
implementation of landing, non –negotiable seaway bill, chapter
party bill of landing; mandates the government to have the
capability to do e-commerce within two years before June 19,
2002; and it mandates RP Web to be implemented.
Background Information of E-Commerce

 Computer has been the major focus of the higher

learning in all public and private schools,and integrated
Information and Communication Technology (ICT) in almost
its entire course curriculum.
 “ICT have created new business opportunities and
brought about major changes in the way people leave,
learn, think, work, and do business and their relationship
with others. The expanding power of computer has lead to
many scientific breakthroughs and their commercialization.
ICT has linked communities across the globe, broken down
economic and emergence of a borderless world of global
village’’.
 Personal computers, cellular phones, Internet, and
pagers are some of the newest products of globalization.
These gadgets are the most excellent tools to rapid
information and technology diffusion. It is through these
where me communication around the globe become possible
in just a click and press of a hand.
 Technology as product of science plays an important role in the current
system of education.
The borderless learning environment referred to as “Distance Education
Programs” employ a mode of instructional delivery that brings down the
classroom walls, and allows students to access worldwide information through
on-line education delivery system.
 New strategies and alliances in ICT has wider and broader scope of
information, it leads to the increase of available information and knowledge for
students and learners.
 Educational system in our country has to open up to the outside world and
strengthen their linkages with the academe and institution abroad.
Development and Initiatives in E-commerce, World Wide, and ASIAN.

 The Development/ trend in transaction values.

It was expected that the higher growth rates for Asia/Pacific representing 86.5%
compared to the world’s growth rates, which is 58.4% in the past years.
The Development of Infrastructure aspects.
Mann, et.al (2000) has identified three infrastructure systems on which the
growth of e-commerce depends. Only when these systems are dependable and
safe will be conducting business electronically flourish:
 Communication Infrastructure
The ease of non-line ordering depends on the state of the communication
infrastructure. In examining the developments in the communication
infrastructure of e-commerce, It is useful to the organize this form the sellers
and buyers point of view.
Payments Infrastructure
Once consumers decide to buy, the next hurdle is whether payments can be
made in an orderly, timely, and secured manner.
 Distribution and Delivery Infrastructure
Once the payment is cleared, the next concern is too see whether the goods are
delivered fast and in good shape. The speed of electronic ordering and payment
system will be negated by ann inefficient and unreliable delivery system.
The Socio-Economic,Cultural, and Legal Environment.

 Over and above the three infrastructure system is the social, cultural, and
legal environment within which these activities occur. One way of characterizing
the socio-economic and cultural dimension of e-commerce is through the level
of access and acceptance of electronic transaction by the population.

 The affordability of being on-line

This one is related to the cost of getting on-line relative to per capita income. It
is obvious that connectivity, however, is defined as a positive function of the
level of income.
 The level of comfort in doing electronic transactions
This is associated with the level of education and diffusion of the use of the
Internet among the population. The state of communication infrastructure in
ASEAN countries described above reflects the extent of connectivity. It is
obvious that the large disparities in level of development. Cultural acceptability
is much more difficult to measure.

The legal environment governing electronic transactions

The ASEAN countries, which have enacted e-commerce related laws, which
include Singapore, Malaysia, Philippine, and Thailand, is on the verge of
enacting an e-commerce legislation. Indonesia is also currently working on an e-
commerce legislation.
File Edit View

Eva A. Sanchez

E-Commerce
Business
Models
Module 9

Page 01
File Edit View

Business-to-Business
This implies selling of products and
services between corporations and
the automation of system involved.

Page 02
File Edit View

Business-to-Consumer
It involves interaction and transaction

between a company and the consumer,

focus is placed on selling goods and

services and marketing to the consumer.

Page 03
File Edit View

Government-to-Business
the interactions and transactions between

the government and business; like the on-

line payment of taxes, and licences, and

fees, government bidding, and application

for clearances and permits.

Page 04
File Edit View

A trend of business in this advent of

Getting Your new technology is to offer their

products and services electronically,
Business on a practice known as electronic
the Web commerce, commonly referred to as
"e-commerce"

Page 05
File Edit View

Consideration
There are three steps to analyze
when looking at the creation of an
Implementation on-line business: Consideration,
Implementation, and Finalization

Finalization

Page 06
File Edit View

• Consideration
Consideration

How does a business know whether they

should engage in such practice?
Implementation
• What is the idea for the business?
• Is it a product or service?
• What is the name of it?
• Will you emphasize price, quality, service, or quantity?
Finalization
• What is the target market?

Page 07
File Edit View

2. Implementation
Consideration

• The key to successful start of

Implementation
business on-line is choosing the

right web host.

• Start building your site.

Finalization

Page 08
File Edit View

3. Finalization
Consideration

Market your on-line business.

Implementation • Join a search engine and find a fee for
placement;
• Contract with affiliate sites and programs;
• Advertise;
• Virally Market; and
Finalization
• Use promotions

Page 09
 File Edit View

Five Strategies for Selling On-line

Varieties of methods of

• Rethinking selling have been used and

are being used to increase
Revenue their market and their

Streams Return of Investment (ROI).

Page 10
 File Edit View

Five Strategies for Selling On-line

Companies reinvent the way

they do business, changing
2. Reengineering the how they distribute goods,

and how they collaborate

Business
within the company and with

suppliers.

Page 11
 File Edit View

Five Strategies for Selling On-line

E-Commerce provides a
3. Empowering venue for buyers to have
the best choice and best
Customers
prices for products.

Page 12
 File Edit View

Five Strategies for Selling On-line

Merchants have become

4. Providing more creative in providing
value-added services to
Customer Service
generate customer loyalty.

Page 13
 File Edit View

Five Strategies for Selling On-line

The web is not just for the

technology savvy; it is also for

5. Joining the men, women, and children of

different countries, religions,
Global Economy and nationalities participating

in the new market.

Page 14
File Edit View

Issues and
Challenges
• Infrastructures - including
communications, payments and
distribution; and
• Socio-economic, cultural, and legal
environment

Page 15
File Edit View

• Infrastructure aspect
The business side is less of a problem
of e-commerce
compared to the consumer side of the
communication infrastructure. Business
will put up more e-commerce servers as
necessary when they feel they can benefit

from them. The consumers, however, will

be limited by their capacity to pay.

Page 16
 File Edit View

2. Socio-economic, cultural,
and legal environment All over the world, surveys shows
that there is still a lot of anxiety over
the extent of protection of e-
commerce players have with
existing legal environment.

Page 17
File Edit View

Taxation poses another formidable

challenge
Since tariffs are going down with
liberalization, the government is looking for
new forms of tax bases. E-commerce poses
the challenge of a rapid growing, but largely
"invisible" transactions. This is particularly
true for goods that are "digitally delivered."
Confusion that may arise due to the nature
of E-commerce transactions may lead to
inappropriate taxation that can inadvertently
stifle the growth of e-commerce.

Page 18
File Edit View

Any questions?

Page 19
File Edit View

Eva A. Sanchez

E-Commerce
Business
Models
Module 9

Page 01
File Edit View

Business-to-Business
This implies selling of products and
services between corporations and
the automation of system involved.

Page 02
File Edit View

Business-to-Consumer
It involves interaction and transaction

between a company and the consumer,

focus is placed on selling goods and

services and marketing to the consumer.

Page 03
File Edit View

Government-to-Business
the interactions and transactions between

the government and business; like the on-

line payment of taxes, and licences, and

fees, government bidding, and application

for clearances and permits.

Page 04
File Edit View

A trend of business in this advent of new technology is to offer their

Getting Your products and services electronically, a practice known as electronic

Business on commerce, commonly referred to as "e-commerce"

the Web

Page 05
File Edit View

Consideration
There are three steps to analyze
when looking at the creation of an
Implementation on-line business: Consideration,
Implementation, and Finalization

Finalization

Page 06
File Edit View

• Consideration
Consideration

How does a business know whether they

should engage in such practice?
Implementation
• What is the idea for the business?
• Is it a product or service?
• What is the name of it?
• Will you emphasize price, quality, service, or quantity?
Finalization
• What is the target market?

Page 07
File Edit View

2. Implementation
Consideration

• The key to successful start of

Implementation
business on-line is choosing the

right web host.

• Start building your site.

Finalization

Page 08
File Edit View

3. Finalization
Consideration

Market your on-line business.

Implementation • Join a search engine and find a fee for
placement;
• Contract with affiliate sites and programs;
• Advertise;
• Virally Market; and
Finalization
• Use promotions

Page 09
 File Edit View

Five Strategies for Selling On-line

Varieties of methods of

• Rethinking selling have been used and

are being used to increase
Revenue their market and their

Streams Return of Investment (ROI).

Page 10
 File Edit View

Five Strategies for Selling On-line

Companies reinvent the way

they do business, changing
2. Reengineering the how they distribute goods,

and how they collaborate

Business
within the company and with

suppliers.

Page 11
 File Edit View

Five Strategies for Selling On-line

E-Commerce provides a
3. Empowering venue for buyers to have
the best choice and best
Customers
prices for products.

Page 12
 File Edit View

Five Strategies for Selling On-line

Merchants have become

4. Providing more creative in providing
value-added services to
Customer Service
generate customer loyalty.

Page 13
 File Edit View

Five Strategies for Selling On-line

The web is not just for the

technology savvy; it is also for

5. Joining the men, women, and children of

different countries, religions,
Global Economy and nationalities participating

in the new market.

Page 14
File Edit View

Issues and
Challenges
• Infrastructures - including
communications, payments and
distribution; and
• Socio-economic, cultural, and legal
environment

Page 15
File Edit View

• Infrastructure aspect
The business side is less of a problem
of e-commerce
compared to the consumer side of the
communication infrastructure. Business
will put up more e-commerce servers as
necessary when they feel they can benefit

from them. The consumers, however, will

be limited by their capacity to pay.

Page 16
 File Edit View

2. Socio-economic, cultural,
and legal environment All over the world, surveys shows
that there is still a lot of anxiety over
the extent of protection of e-
commerce players have with
existing legal environment.

Page 17
File Edit View

Taxation poses another formidable

challenge
Since tariffs are going down with
liberalization, the government is looking for
new forms of tax bases. E-commerce poses
the challenge of a rapid growing, but largely
"invisible" transactions. This is particularly
true for goods that are "digitally delivered."
Confusion that may arise due to the nature
of E-commerce transactions may lead to
inappropriate taxation that can inadvertently
stifle the growth of e-commerce.

Page 18
File Edit View

Any questions?

Page 19