Senior High School

Specialized

Republic of the Philippines

Department of Education
Region I
SCHOOLS DIVISION OF ILOCOS NORTE

Business Ethics and

Social Responsibility
Quarter 4 – Module 11:
Frameworks of Social
Responsibility

SDOIN_Specialized_ABM_Q4_BESR12_Module11
 What I Need to Know

Business ethics is sometimes confused with corporate social responsibility or CSR.

Although the two are related, they are not quite the same. It is important to understand how
they are different from as well as how they are related to each other. We will begin by clarifying
what corporate social responsibility is because this will help us understand how business
ethics and corporate social responsibility are related.

After going through this module, you are expected to:

1. define what a sound business practice is and social responsibility.
2. identify some key concepts to consider in formulating a social responsibility
framework that reflects sound business practices.
3. cite examples of social responsibility that reflects a sound business practice.
4. formulate a framework of social responsibility that reflects the practice of sound
business.

What I Know

Choose the letter of the best answer. Write the chosen letter on a separate sheet of paper.
1. This is considered as the highest criterion of social responsibility because it goes
beyond societal expectations to contribute to the community's welfare.
A. economic responsibilities
B. legal responsibilities
C. ethical responsibilities
D. discretionary responsibilities
2. This concept includes behavior that is not necessarily codified into law and may not
serve the organization's direct economic interest.
A. economic responsibilities
B. legal responsibilities
C. ethical responsibilities
D. discretionary responsibilities
3. This concept emphasizes the business expectations to fulfil their economic goal within
the legal framework.
A. economic responsibilities
B. legal responsibilities
C. ethical responsibilities
D. discretionary responsibilities
4. This view argued that a company should be operated on a profit-orientation basis where
its mission is to increase its profit if it stays within the rules of ethics.
A. Economic responsibilities
B. Legal responsibilities
C. Ethical responsibilities
D. Discretionary responsibilities

5.This is a business practice of the organization that accounts for the social and
environmental impacts that the business operation creates.
A. Corporate Social Responsibility
B. Legal responsibilities
 C. Ethical responsibilities
D. Discretionary responsibilities

Formulate Framework of Social

Lesson Responsibility that Reflects the
1 Practice of Sound Business

What’s In

Previous lessons taught us the different models and framework of social

responsibility. But what really are the responsibilities of the business organization?

Now, let's learn basic ideas that will help you formulate a framework of social
responsibility that reflects the practice of sound business.

Let’s have a Drill!

Recall ethical ideas from previous lesson and try to connect it with the current lesson.

Activity 1. Read Me

Instruction: Read the given situation below and answer the to questions that follows:

TBC Company in General Santos City initiated a feeding program that aims to feed less
fortunate students as part of their Corporate Social Responsibility (CSR) program. The
company identified undernourishment as the main cause of poor school performance of
the students. With this they provide free lunch to every underweight student every day,
prepared by volunteers following the menus provided by the company.

1. What model of corporate social responsibility is executed by the company? Why do

you think so?
__________________________________________________________________________________

2. What do you think are the main goals of TBC Company in their Corporate Social
Responsibility (CSR) program? Cite at least three.
_________________________________________________________________________________
3. What are the impacts of the TBC Company's feeding program to the community?
Cite at least three.
___________________________________________________________________________________

4. As a buyer, are you more likely to buy something from a company that supports a
cause like TBC Company or a cause that is important to you? Why?
__________________________________________________________________________________

5. If you were the head of the TBC Corporate Social Responsibility (CSR) program.
What are your main considerations in formulating the CSR program of the
company? Give at least three:
___________________________________________________________________________________
 What is New

Social responsibility is an ethical framework in which a person works and

cooperates with other people and organizations for the benefit of the community.[1]
An organization can demonstrate social responsibility in several ways, for instance,
by donating, encouraging volunteerism, using ethical hiring procedures, and making changes
that benefit the environment.
Social responsibility is an individual responsibility that involves a balance between
the economy and the ecosystem one lives within,[3] and possible trade-offs between economic
development, and the welfare of society and the environment. Social responsibility pertains
not only to business organizations but also to everyone whose actions impact the
environment.Source: https://en.wikipedia.org/wiki/Social_responsibility
A sound business idea may be defined as the economic opportunity which is within
the reach of the entrepreneur, and which will provide him with a desirable value. An
entrepreneur who is well grounded in the concept of sound business ideas will be able to save
time, effort, and money in pursuing his goals.Source:
https://www.scribd.com/document/430763172/Entrep#:~:text=Sound%20business%20idea%20may
%20be,him%20with%20a%20desirable%20value .

What is It

One of the common business practices is the integration of ethical, social,

environmental, and other global issues into its business operations as well as considers
interaction with their stakeholders such as employees, customers, shareholders, investors,
local communities, and government. Socially responsible business practices are corporate's
activities whose main purpose is for individuals, community, or the environment to benefit.
These may include sponsorship, grants, product donation, corporate volunteering, and
community engagement.

Stakeholders all over the world expect their favorite brands to engage somehow in
responsible activities. That is, they value those boards that invest in social and beneficial
projects. One example could be a company giving back to the community. Another one
comes from grants. Regardless of the nature of the aid, social business has the purpose to
deliver a tangible and measurable impact.

Moreover, it’s not about supporting or advocating whichever cause. As a matter of

fact, companies must carefully select those projects that best align with their own culture
and mission.

Corporate Social Responsibility (CSR) is purposely created by companies to contribute

to the sustainable development that are economically, socially, and environmentally that is
beneficial to stakeholders. Some evidence to corporate social responsibilities practices to
business performance points out also to the non-financial benefits of every business entity.
Some argued that socially responsible practices can have a positive impact on the
organization by improving the recruitment and retention of their employees, managing
environmental risks by reducing harmful accidents, and differentiating brand to achieve
greater consumer loyalty.
 Business sound practices may also result not only for financial returns to the owners
but also social and environmental benefits for the greater society. Good business sense is
evident to business organization that earns good reputation from doing their social
responsibilities. A good reputation earns a positive image from the public, which may affect
the public's purchase decisions This measures the sound business practices of a certain
company.

The following are some key concepts to consider in formulating a social

responsibility framework that reflects sound business practices:

1. Duty not to cause harm.

Every business organization has a duty not to cause harm; even if an action may result
to avoidable harm, it is not explicitly prohibited by law. If it will cause harm to property or
person and if it can be avoided by doing due care or proper planning, then both law and
ethics will determine if the company will be liable or not for violating its responsibilities.

Source: Fernandez, Mario Rosario C. 2020 Business Ethics and Social Responsibility second edition
Diwa Senior High School series p 88-89

For example, in 2018, the Food and Drug Administration(FDA) issued an advisory
that warned the general public about a possible contamination of a well-known imported
brand of canned meat. Its manufacturers issued a recall order of a product batches which
may contain pieces of metal inside them. The FDA advisory also instructed consumers to
immediately destroy or return the product to the establishment where they purchased the
product, and to report it to the FDA if it’s among the affected products batches. ( note: For
more information, you may visit https://ww2fda.gov.ph/index.php/advisories-2/food-
2/510118-fda-advisory-n0-2018-193-recall-of-spam-classic-and-hormel-food-black-label-
luncheon-loaf-due-to-possible-contamination.)

In the given example, the manufacturer took responsibility and immediate action by
issuing a recall even if it incurred costs to conduct the recall and it could damage the
company’s brand and reputation. This goes to show that the company took positive action so
that no harm is done to its consumers.

2. Responsibility to Prevent Harm.

There are instances when a company does not cause harm but has the potential or
the capability to prevent harm from occurring. It is a company’s ethical responsibility to
prevent harm from happening. This is often referred to as the duty of care of an organization.
All organizations have the duty to their stakeholders-employees, stockholders, and the
society, in general. A positive action such as having an organizational policy or specific rules
and regulations is an example of addressing this level of social responsibility.

Source: Fernandez, Mario Rosario C. 2020 Business Ethics and Social Responsibility second edition
Diwa Senior High School series p 89

3 Responsibility to Do Good
To do good things and make society a better place encourages the
companies to provide solutions to social issues or to give back to the society
(e.g., lack of access to education, poor hygiene) and giving support to
education, arts, and culture are some examples of activities or programs that
business organizations can do in line with this responsibility.
Source :Fernandez, Mario Rosario C. 2020 Business Ethics and Social Responsibility second
edition Diwa Senior High School series p 89

Total Corporate Social Responsibility Framework Putting first into

consideration this social responsibility framework helps evaluates an
organization's social performance that will result to a good sense business
 practice. Remember every company wants to establish a good sense of
business social responsibility to their customers or community.
Accordingly, these responsibilities are ordered from bottom to top in
this framework.
1. Economic responsibilities
This is the primary responsibility of the company that needs to consider since
company's main goal is to help the economy's development, generate employment, and
provide goods or services for public use and consumption. Those economic
responsibilities stipulate profitability or does what is required by global capitalism.

Orjalo, V. & Frias S. (2016). Business ethics and social responsibility: principles, policies,
programs, and practices. Quezon City, Philippines: The Phoenix Publishing House, Inc. 42-43

2. Legal responsibilities. Every entity is reminded that all their operations should be
within the bounds of law. They make sure that their entire corporate social
responsibility programs follow the rules and regulations dictated by the law.

3. Ethical responsibilities Ethical responsibility includes behavior that is not necessarily

dictated by the law and may not be the organization's direct economic interest.
4. Discretionary responsibilities This is organization's voluntary desire to make social
contributions that are not mandated by economics, laws, or ethics. This responsibility
is considered as the highest criterion of social responsibility because it is beyond
expectations to contribute.

Framework of Socially Responsible Businesses

1.Google’s CSR Framework

Google’s stakeholders are diverse because of the company’s wide array of products.
The company’s diversification includes its original products, such as Google Search, as well
as recent products like Google Glass and Google Fiber Internet and cable television service.
The firm’s stakeholders come from different. groups impacted through these varied
businesses. To maintain its leadership as an innovative technology firm, Google must address
the interests of its stakeholders through suitable corporate social responsibility (CSR)
policies. The company’s current CSR efforts are comprehensive and satisfactory, based on
international standards and expectations. Still, there is room to improve these CSR efforts
to make Google a stronger contender in the international arena.

Google’s Stakeholder Groups

Google has many stakeholders, but they can be grouped based on shared interests. Many
of the company’s CSR programs are directed toward these stakeholder groups. Google
considers the following as the most significant stakeholders:

1. Users
2. Employees
3. Advertisers and other customers
4. Investors
5. Governments
6. Communities

The list above is arranged to indicate the priority or importance of the stakeholders
based on Google’s CSR efforts. These stakeholders affect the company by pushing for the
satisfaction of their interests. Google considers. Users as the most significant in terms of their
effect on the firm.
A Users: Google’s Top-Priority Stakeholders
 Users are individuals and organizations that use Google’s products. In general, these
stakeholders do not necessarily pay the company. For example, users include people who use
Google’s search engine and Chrome. This stakeholder group is interested in the usefulness
of the company’s products. These stakeholders are important because their behaviors define
the company’s popularity. Google’s popularity corresponds to the firm’s business value.

In Google’s business philosophy, users are the top priority in its CSR efforts. The
company’s philosophy states: Focus on the user and all else will follow. Thus, users are the
core stakeholders in Google’s business. Every product is developed with the users’ needs in
mind. In this way, the firm’s CSR efforts effectively address the stakeholder group of users.

B. Employees

Employees are the second priority among Google’s stakeholders. Employees are
interested in proper compensation and a rewarding experience in working for the company.
For example, many workers want to work for Google because the company is perceived as
one of the best firms to work for. This stakeholder group is important because they define the
company’s capabilities, such as the capability to innovate rapidly.

Google’s CSR efforts address the interests of its employees as a major stakeholder
group through competitive compensation and a fun workplace design. The company’s
compensation strategy includes high salaries and various. incentives and benefits, such as
free meals and flexible workflows. Google’s facilities are also fun workplaces where workers
can exercise, play games, and enjoy sharing ideas with each other. Also, the company
indirectly addresses the working conditions of suppliers’ employees through the Google
Supplier Code of Conduct, which covers concerns on employment practices and occupational.
health and safety. Thus, Google’s CSR efforts effectively satisfy the interests of employees as
stakeholders in the business.

C. Advertisers and Other Customers

Google’s success is based on the ability of the firm’s CSR efforts to satisfy the needs
of advertisers and other customers as a stakeholder group. Advertisers are the main source
of the company’s revenues. These stakeholders are. interested in getting effective services,
such as effective online advertising. campaigns. Advertisers and other customers are an
important stakeholder group because they directly determine Google’s financial performance.

Google’s CSR efforts address the interests of advertisers and customers based on the
firm’s popularity. As noted, the prioritization of the stakeholder group of users makes the
company popular. In turn, this popularity increases the firms.
market reach and effectiveness. Thus, advertisers and other customers benefit more from the
firm’s services. Google’s holistic CSR efforts satisfy the interests of the stakeholder group of
advertisers and other customers.

D. Investors

Since it went public in 2004, Google now considers investors as a major stakeholder
group influencing CSR activities. Investors are interested in ensuring that Google grows its
profits. Investors are important stakeholders because they determine the availability of
capital that the company uses in its business.

Google’s CSR efforts focus on providing useful products. While these efforts satisfy
stakeholders like users and advertisers or customers, they also satisfy Google’s investors.
The usefulness of these products makes them popular, widely used, and profitable. In
addition, Google’s research and development strategies can be considered as part of the firm’s
holistic approach to its corporate social responsibilities. These R&D strategies aim to provide
useful products that are profitable.
E. Governments

Governments are a major stakeholder group. They affect Google through regulations.
The company deals with many governments because its business is global. As stakeholders,
and governments are interested in ensuring Google’s regulatory compliance. These
stakeholders are important because they can. approve or prohibit Google’s business
operations in their areas. Google’s holistic CSR approach involves an emphasis on following
the law. The company’s business philosophy states: You can make money without doing evil
to follow this philosophy, the firm ensures that all its business activities comply with
regulatory requirements. Thus, Google’s CSR policies satisfy the interests of governments as
stakeholders.

F. Communities

Communities are also stakeholders in Google’s business. Communities are interested

in direct or indirect benefits that they get from the company. Theoretically, firms can benefit
communities through charity programs, philanthropy, and related activities. Communities
are important stakeholders because they can affect customers’ perception and response to
Google’s products.

Google’s CSR efforts include charity programs through Google.org, which has already
provided more than $100 million in grants and investments. Google.org aims to address
climate change, global public health, and global poverty. In addition, to address the
stakeholder group of communities, Google also includes international environmental
standards and ethics in its Supplier Code of Conduct. These efforts also relate to the firm’s
philosophy: You can make money without doing evil. Thus, the company’s CSR efforts have
considerable effectiveness in satisfying the interests of the stakeholder group of communities.

2. Total Corporate Social Responsibility Framework

Here is a model for evaluating an organization’s social performance. The

model indicates that total corporate social responsibility can be subdivided into
four criteria economic, legal, ethical, and discretionary responsibilities.
Source: Referred from https://course.lumenlearning.com/boindless-management/chapter/Corporate-
Social-Responsibility/

What’s More

The spreadhead sound business practice is divided into three subtopics:

1. Integrity and transparency

“Do what you say and say what you do” and” A deal is a deal” are key
mottos at Filipinos. Filipinos attaches great value to clear and transparent communication
with all stakeholders.
2. Leadership

The Filipinos are inspiring and motivate based on conviction and values.
Leaders set a good example, are proactive, and take responsibility. They put the strategy into
practice, are result-driven and are open to self-reflection.
3. Responsible Procurement
In tendering procedures, or when entering contracts clients and suppliers
will be asked about the sustainability of their product it transparent, how it is produced and
is it responsible.
 STANDARDS OF SOUND BUSINESS
STANDARD 1- Corporate Governance

Credit unions must effectively direct, oversee, and manage their business
activities and ensure the performance, accountability, and integrity are achieved.

STANDARD 2- Strategic Management

Credit unions must ensure that business operations are effectively planned,
executed, and monitored.

STANDARD 3- Risk Management

Credit unions must have a comprehensive approach to identifying, managing,

and controlling business and operating risk

Risk management practices should address at minimum, the following risk:

1. Human Resource Risk

2. Credit Risk
3. Asset/Liability Structure Risk
4. Foreign Exchange Risk
5. Capital Management Risk
6. Liquidity Management Risk
7. Outsourcing Risk
8. Information Technology Risk
9. Fiduciary Risk
Source: Baguillas, Jonalyn C. (2017).DIWA Senior High School Series. Business Ethics. DIWA Learning
System Inc. 35-37

What I have Learned

This time let's see if you can still recall the lesson presented in this module. Read
and follow the instruction carefully.

Activity. Self-Check

Instruction: Write TRUE if the statement is correct and FALSE if it is not. (10pts.)

1. Society benefits from business organizations that do good and practice their social
responsibility.

2. Economic responsibility is the primary responsibility of the company that needs to

consider since company's main goal is to help the economy's development, generate
employment, and provide goods or services for public use and consumption.

3. The social responsibility to do good things and make society better place encourages
companies to provide solutions to social issues, or simply to give back to society

4. Corporate Social Responsibility (CSR) is purposely created by companies to contribute

to the sustainable development that are economically, socially and environmentally that
is beneficial to stakeholders.

5. Discretionary responsibility is considered as the highest criterion of social

responsibility because it is beyond expectations to contribute to community.
 What I Can Do

Good Job!
Let's have another activity which will help you apply your new knowledge from this
module into real life situation.
Activity 5. Apply It in Real Life.
Instruction: Carefully read the given situation. Formulate a framework of social
responsibility that you think will reflect a sound business practice.

In the year 2022 several calamities hit the Philippines such as earthquake
magnitude 6.5 that severely cause massive destructions to the lives of every Filipinos.
As a newly hired apprentice in the company, you are task to present a framework for
the company's Corporate Social Responsibility program to help a community to
recover. The instruction given to you is to formulate simple social responsibility
framework that reflects a good sound business practice of the company. Present your
proposal using info graphics. Carefully label all the key concepts you consider in
formulating your social responsibility program for the company.
Source: Retrieved from https://course.lumenlearning.com/boundless-
management/chapter/corporate-social-reponsibility/

Assessment

Multiple Choice. Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.

1. What are the primary areas considered in integrating ethical, social, environmental,
and global issues into business operations?
A. Economic, legal, and ethical responsibilities
B. Ethical, social, environmental, and legal responsibilities
C. Economic, environmental, and discretionary responsibilities
D. Economic, legal, and discretionary responsibilities

2. Socially responsible business practices aim to benefit which of the following? A.

Shareholders and investors
B. Employees and customers
C. Local communities and government
D. All of the above
3. What do stakeholders expect from their favorite brands in terms of responsible
activities?
A. Strict adherence to laws and regulations
B. Alignment with the company's culture and mission
C. Maximum financial returns
D. Unrestricted support for all charitable causes
4. What is the main purpose of Corporate Social Responsibility (CSR) as mentioned in the
text?
A. To maximize financial returns for the company
B. To engage in any charitable activities available
C. To contribute to sustainable development beneficial to stakeholders
 D. To differentiate the brand in the market
5. How can socially responsible practices positively impact an organization, according to
the text?
A. By increasing environmental risks
B. By reducing employee recruitment
C. By improving employee retention and loyalty
D. By eliminating all financial risks

6. Good business sense is evident in organizations that earn a positive image from the
public. This image may affect which of the following?
A. Stakeholder interests
B. Employee satisfaction
C. Public purchase decisions
D. Government regulations
7. What is the first key concept mentioned for formulating a social responsibility
framework in the text?
A. Legal responsibilities
B. Ethical responsibilities
C. Economic responsibilities
D. Discretionary responsibilities

8. According to the text, what is the primary responsibility of a business organization?

A. Ethical responsibilities
B. Legal responsibilities
C. Economic responsibilities
D. Discretionary responsibilities
9. Which responsibility is considered the highest criterion of social responsibility in the
text?
A. Economic responsibilities
B. Legal responsibilities
C. Ethical responsibilities
D. Discretionary responsibilities
10. What does "duty not to cause harm" mean in the context of business organization
social responsibilities?
A. Businesses should never engage in any activities that could potentially cause harm.
B. Businesses are allowed to cause harm if it is explicitly prohibited by law.
C. Businesses should avoid causing harm when possible and consider legal and ethical
implications.
D. Businesses should cause harm if it leads to economic benefits.

11. Which responsibility focuses on behavior not necessarily dictated by the law and may
not directly benefit the organization's economic interests?
A. Economic responsibilities
B. Legal responsibilities
C. Ethical responsibilities
D. Discretionary responsibilities

12. What is the purpose of the "Legal responsibilities" in the CSR framework, as mentioned
in the text?
A. To maximize financial returns.
B. To ensure compliance with laws and regulations.
C. To engage in voluntary social contributions.
D. To align with the organization's culture and mission.

13. What do "Ethical responsibilities" include, according to the text?

A. Behavior dictated strictly by the law.
B. Actions beyond the organization's economic interests.
C. Voluntary social contributions.
D. Compliance with legal requirements.

14. Which responsibility involves an organization's voluntary desire to make social

contributions beyond legal and ethical requirements?
A. Economic responsibilities
B. Legal responsibilities
C. Ethical responsibilities
 D. Discretionary responsibilities

15. In the CSR framework provided in the text, which responsibility is considered the
highest and goes beyond expectations?
A. Economic responsibilities
B. Legal responsibilities
C. Ethical responsibilities
D. Discretionary responsibilities

Additional Activities

Directions: Read and analyze the quotes on social responsibility by famous personalities
and write your comments after every quote

1.We have a social responsibility a constitutional opportunity and a moral obligation to

help others. By Janie Lewis

2.Together with the social responsibility of business, thereis also the social
responsibility of consumer. Every person ought to have the awareness that purchasing
is always a moral and not simply in economic act. By Pope Francis