BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

ABM 12-1 | S.Y ‘23-‘24 | SEM 2 Q4 | REVIEWER

Lesson 1: Responsibilities and Accountabilities including overtime, sick leave, and

of Entrepreneurs vacation wages.
Business Ethics
This pertains to ethical guidelines and Social Responsibility of Entrepreneur
moral or ethical problems that can occur in a towards Government
business environment.
It employs diligently to all positions of
business conduct and has relevance to the act
of individuals and the whole business
organization.
It deals to know what is right or wrong in
the workplace and gives emphasis on doing
what is right.

Responsibility
This refers to the duty or obligation to
satisfactorily perform or complete a task that is
assigned by someone or created by one's own
circumstances which one must fulfill.
Accountability
It is the obligation of an individual or an
organization to account for activities and accept
blame for failures.
Social Responsibilities of Entrepreneurs
➢ Entrepreneurs have strong responsibility
to the government by complying with
government rules like licenses for
operation, price determination, and
production. They should honestly pay
different taxes such as income tax, sales
tax, excise, tariff duties, and wealth tax.
Social Responsibility of Entrepreneur
towards Suppliers

➢ They supply raw materials, machinery,

and labor. With that, they must pay fair
prices of goods and pay on time. They
should inform suppliers of future
development and changes in the demand
of commodities.

Social Responsibility of Entrepreneur to

the Creditor
Social Responsibility of Entrepreneur
towards Employees and Workers
➢ Entrepreneurs have the responsibility to
pay their employees at least the
minimum hourly wage according to
locality and pay each employee money
owed from working per pay period
BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
➢ They should gain loans on reasonable
conditions. They should follow mortgage
rules and business ethics with proper use
of debt capital. They should religiously
pay the installment and interest until the
repayment of loan.
Social Responsibility of Entrepreneur
towards Customer/Consumer/General
Public
➢ The general practice is that the customer
or consumer is always right. It is essential
that the entrepreneurs fulfill social
responsibilities towards the customers or
consumers.
➢ The entrepreneurs should provide
commodities and services, according to
the desires and needs of the consumers,
at affordable prices by determining fair
prices for commodities and delivery of
goods and economic services.
➢ Another consideration is the packaging.
It should be packed well. Publish what is
right and make truthful advertisement
because customers depend on what they
see in commercials.
➢ Entrepreneurs should re-address quickly
the complaints of the customer.
➢ Some entrepreneurs establish
organizations to protect the interests of
the consumers whose membership is
voluntary.
➢ The entrepreneur should avoid hoarding
practices for the sake of maximization of
profits.
Social Responsibility and Accountability
towards stakeholders
➢ Whether it is the private or public sector,
they should make efforts to upgrade and
improve the conditions of surrounding
areas like by offering employment and
helping the needy one.
ABM 12-1 | S.Y ‘23-‘24 | SEM 2 Q4 | REVIEWER
Lesson 2: Ethical Issues in Entrepreneurship
What do Ethical Issues in Entrepreneurship
mean?
refer to a situation, problem, or dilemma
that pushes a person or a group of people like
an organization to choose between what is right
or wrong.
Ethical Issues:
1. Nepotism
➢ Nepotism is a favor given to the
immediate relatives, extended families,
or family friends in various activities such
as business, politics, sports, religion, and
others.
2. Intellectual Property: Copyrights,
Patents, and Trademarks
Intellectual property is a result of the
creative thinking of a person or groups to
formulate original ideas/content or products that
are legally protected by law.
➢ Copyright infringement means using a
copyrighted work without asking for the
permission of the copyright owner.
➢ Patent is the granting of a property right
to an inventor or creator by the sovereign
law.
➢ Trademark is a registration that allows
the owner to use a name, symbol, image,
or jingle on a specific product or services.
3. Harassment and Discrimination in the
Workplace
➢ Fairness in the workplace is essential for
the employees to work productively.
Entrepreneurs must not ask too much
from their employees as it is considered
abuse. They must treat their employees
fairly regardless of their position.
 BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
4. Unethical Accounting Practices
➢ Other companies or organizations
practice unethical accounting practices
which is called “cooking book”.
5. Contracts
➢ Most businesses are likely to have some
collaboration with tort law part of the law
that protects the rights of people not to be
harmed physically, financially, or in any
other way, such as a breach of privacy.
6. Antitrust law
➢ This is also called competition law. It is
created to make sure that one competitor
does not abuse his power and position in
the business world to restrict competitor’s
access to the market.
7. Fraud: Truthfulness and Full Disclosure
➢ A business that creates or sells products
or services must be responsible enough
to fully disclose the truth about its
products and services.
8. Conflict of Interest
➢ A conflict of interest is a situation in which
a person or an organization is involved in
multiple interests in financial
investments, work obligations, and
personal relationships, and these
interests may have a conflict with each
other.
Lesson 3: Models of Social Responsibility
What is Social Responsibility or Corporate
Social Responsibility (CSR)?
➢ It is an individual’s or a social entity’s
accountability and responsibility to
maintain a certain behavior and to
ABM 12-1 | S.Y ‘23-‘24 | SEM 2 Q4 | REVIEWER
contribute to the development of society
as a whole.
➢ It means individuals and social entities
such as societies, organizations, and
companies have a duty to act in the best
interests of their environments and
society as a whole.
Models of Social Responsibility or Corporate
Social Responsibility (CSR)
➢ The purpose of these models is to design
and execute the CSR process and to
enable its monitoring and control.
➢ By implementing CSR models in their
operations, businesses increase their
adaptability to internal and external
changes in the environment.
➢ This helps to promote positive changes
and to cause progress in socio-economic
parameters.
First Aid Essentials
Carroll’s pyramid CSR model
➢ This is one of the leading CSR models. It
is formally known as the model of
Carroll’s four-part pyramid. The major
focus of the model is to embrace the
complete spectrum of expectations that
society has from a business, defining
them and dividing them into different
categories.
➢ Economic responsibility is the most
important one.
➢ Legal responsibility is the second priority.
 BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
➢ Ethical responsibility refers to the
responsibilities and obligations that are
not legally codified but should be
performed for the greater good.
➢ Philanthropic responsibilities, which are
supposed to be discretionary in nature,
are assigned the least priority.
The Intersecting Circles Model of CSR
➢ Schwartz and Carroll (2003) proposed
this model to illustrate the fact that when
it comes to CSR, none of the aspects are
more important than the other.
The Concentric Circles Model of CSR
This model is in agreement with what
Logsdon and Wood (2002) stated, ‘CSR is a
concept supporting social control of business
that resides and operates inside business itself,
with the aim of protecting and enhancing the
public welfare as well as private interests.’
ABM 12-1 | S.Y ‘23-‘24 | SEM 2 Q4 | REVIEWER
➢ The move from the outer circle to the
inner circle reflects the control that
society needs to impose on standards of
business activity to ensure social
progress through proper functioning of
the business core.
➢ The move from the inside to the outside
represents the internalization of social
norms that reside and operate within the
business as affirmative or positive duties.
Redman’s model
➢ called ‘Environmental integrity and
community health model’.
➢ It focuses more on environmental
integrity and human health.
Ackerman Model 1976
➢ focuses more on internal policy goals and
their relation to these responsibilities.
Friedman model
➢ business owners should perform his duty
well as he is performing a social as well
as moral duty.
Lesson 4: Framework of Social Responsibility
Each firm has unique characteristics and
circumstances that will affect how it views its
operational context and its defining social
responsibilities. Each will vary in its awareness
of CSR issues and how much work it has
already done towards implementing a CSR
approach.
TASK 1 Conduct an Assessment
Gather and examine relevant information
about the firm’s products, services, decision-
making processes and activities to determine
where the firm currently is with respect to CSR
activity and to locate its ‘pressure points’ for
CSR action.
 BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
A proper CSR assessment should provide an
understanding of the following:
• the firm’s values and ethics.
• the internal and external drivers
motivating the firm to undertake a more
systematic approach to CSR.
• the key CSR issues that are affecting or
could affect the firm.
• the key stakeholders who need to be
engaged, and their concerns.
• the current corporate decision-making
structure, its strength, and inadequacies
in terms of implementing a more
integrated CSR approach.
• the human resource and budgetary
implications of such an approach
• existing CSR-related initiatives.
TASK 2 Develop a Strategy
A strategy is a road map for moving
ahead on CSR issues. It sets the firm’s direction
and scope over the long term with regard to
CSR.
A good strategy identifies the following:
• overall direction for where the firm wants
to take its CSR work
• the stakeholders and their perspectives
and interests
• a basic approach for moving ahead
• specific priority areas
• a timeline for action, responsible staff,
and immediate next steps
• a process for reviewing and assuring
outcomes
TASK 3 Develop Commitments
Commitments are policies or instruments
a firm develops or signs on to that indicate what
the firm intends to do to address its social and
environmental impacts.
These commitments are developed at the point
when a firm moves from planning to doing
namely:
ABM 12-1 | S.Y ‘23-‘24 | SEM 2 Q4 | REVIEWER
• They ensure that the firm’s corporate
culture is consistent with CSR values.
• They help align and integrate the firm’s
business strategy, objectives and goals.
• They provide guidance to employees
about how they should conduct
themselves.
• They communicate the firm’s CSR
approach to business partners,
suppliers, communities, governments,
the general public and others.
TASK 4 Implement Commitments
Implementation refers to the day-to-day
decisions, processes, practices and activities
that ensure the firm meets the spirit of its CSR
commitments thereby carries out its CSR
strategy.
If CSR commitments can be called
‘talking the talk,’ then implementation is ‘walking
the walk.’
TASK 5 Report and Verify Progress
Reporting is communicating with stakeholders
about a firm’s management and performance of
economic, environmental and social aspects.
Verification (also known as conformity
assessment or assurance) is a form of
measurement that can take place in number of
ways: internal audits, industry (peer) and
stakeholder reviews, and professional third-
party audits.
TASK 6 Evaluation and Improve
An evaluation tracks the overall progress
of a firm’s CSR approach and forms the basis
for improvement and modification.
 BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
ABM 12-1 | S.Y ‘23-‘24 | SEM 2 Q4 | REVIEWER

Implementation Framework