BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

WEEK 1-LESSON 1

Business ethics - refers to implementing appropriate business policies and practices with
regard to arguably controversial subjects.
- some issues that come up in a discussion of ethics include corporate governance,
insider trading, bribery, discrimination, social responsibility, and fiduciary
responsibilities.
- the law usually sets the tone for business ethics, providing a basic guideline that
businesses can choose to follow to gain public approval.

The concept of business ethics began in the 1960s as corporations became more aware of
a rising consumer-based society that showed concerns regarding the environment, social
causes, and corporate responsibility. The increased focus on "social issues" was a hallmark of
the decade.
Since that time period, the concept of business ethics has evolved. Business ethics goes
beyond just a moral code of right and wrong; it attempts to reconcile what companies must do
legally versus maintaining a competitive advantage over other businesses.
An organization is a system that groups people together towards establishing a
common goal. Business organizations are centered on creating goods and services for profit.
services for profit.
Types of Business Organizations:
1. Conglomerate - a group of unrelated companies under one umbrella. A parent company
owns a controlling stake in each company which conducts business separately. (e.g.,
Restaurant, shoe store, travel agency, etc.)
2. Cooperatives -business entities owned by their members who purchase shares to join them.
They are usually established because of a need existing among a number of persons who wish
to acquire goods and services at a reasonable cost. (e.g., Retail Consumer cooperatives and
Producer cooperatives)
3. Franchise – an agreement between the person requesting permission to set up business and
the parent company to allow the franchisee to sell its product or services. Many multinational
companies expand into new regions through franchises. (e.g., Jollibee, McDonalds, Choking,
etc.)
4. Government department – includes the government ministries that are very important to
the running of government. (e.g., The Ministry of Finance and Education)
5. Local and municipal authorities – these bodies fulfill local needs and allow for more
balanced local development. (e.g., The Kingston and St. Andrew Corporation (K.S.A.C) in
Jamaica)
6. Nationalized industries – are government owned and controlled businesses. They provide
essential services such as water, electricity and transportation. They carry out duties such as
cleaning gullies and drains and fixing community roads. (e.g., water company providing
standpipes to rural communities)
7. Partnership – formed legally by a minimum of two and a maximum of twenty persons in a
business. (e.g., Red Bull selling energy drinks)
ASSIMILATION
Starting a business requires a lot of hard work. Therefore, persons must be ready when
deciding to start up a business to dedicate a lot of time and energy to the start-up. It is also very
costly and therefore capital will have to be identified to inject into a new business.
Some Reasons for Starting a Business. (Mindshapers Co., Inc)
1. Being your own boss where you can make decisions about the direction and operation of the
business.
2. Financial independence where starting the business would give you the opportunity to be a
successful businessperson and achieve financial independence.
3. Self-actualization/Fulfillment in which owning and operating a successful business will give a
feeling of accomplishment.
4. Creation of employment for relatives, friends and community members which can assist in
providing jobs for persons in communities with high levels of unemployment.
5. Use of skills and knowledge for yourself where the skills, knowledge and experience that you
have acquired can be put to work for you.