San Agustin Diocesan Academy Inc.

Jaen, Nueva Ecija

Senior High School Department

S.Y. 2020-2021
Learning Area: Business Ethics and Social Responsibility
Semester: Second
Quarter: Second
Grade Level: Twelve
Module No. 1
Week & Date: Week 1 – March 22-26, 2021

Module’s Objectives:

A. Content Standard: The learner will be able to understand the models and frameworks of social
responsibility in the practice of sound business.
B. Performance Standard: The learner will be able to identify responsibilities to the business organization.
C. Learning Competencies: At the end of this module, you should be able to:
1. Discuss the responsibilities and accountabilities of entrepreneurs to:
a. employees
b. government
c. creditors
d. suppliers
e. consumers
f. general public
g. other stakeholders

Focus: The Responsibilities and Accountabilities of the Entrepreneurs

 Corporate Social Responsibility
 Responsibilities and Accountabilities of the Entrepreneurs

List of References:
Aliza, R. (2017). Business Ethics and Social Responsibility. 1st ed. Rex Printing Company, Inc.
Business Jargons (2020). Corporate Social Responsibility. Retrieved December 28, 2020 from
https://businessjargons.com/corporate-social-responsibility.html
Googlesir (2020). Social Responsibility of Entrepreneurs towards Government & Institutions. Retrieved
December
28, 2020 from https://www.googlesir.com/social-responsibility-of-entrepreneurs-towards-government-
institutions/
Googlesir (2020). Responsibility of Entrepreneur towards Suppliers, Creditors and Depositor. Retrieved
December
28, 2020 from https://www.googlesir.com/responsibility-of-entrepreneur-towards-suppliers-creditors-and-
depositor/
Googlesir (2020). Responsibility of Entrepreneur towards Customers. Retrieved December
28, 2020 from https://www.googlesir.com/social-responsibility-of-entrepreneurs-towards-customers/
Googlesir (2020). Responsibility of Entrepreneur towards Society & Local Community. Retrieved December
28, 2020 from https://www.googlesir.com/social-responsibility-of-entrepreneurs-towards-society-local-com
Nicky LaMarco (2019). Responsibilities Business towards its Employee. Retrieved December 28, 2020 from
https://smallbusiness.chron.com/responsibilities-business-toward-its-employees-25364.html
Nicky LaMarco (2019). Managing Employees. Retrieved December 28, 2020 from
https://smallbusiness.chron.com/important-hr-rules-laws-61329.html
Startup Guide Ionos (2019). Corporate Social Responsibility. Retrieved December 28, 2020 from
https://www.ionos.com/startupguide/grow-your-business/corporate-social-responsibility/

Learning Content

Challenge Question: How entrepreneurs manage their responsibility and obligation towards to public?

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Unlocking of Learning Difficulties:

Backlash - a strong and adverse reaction by a large number of people, especially to a social or political
development
Cohort - a group of people banded together or treated as a group
Costlier - costing a lot; expensive
Exorbitantly - (of a price or amount charged) unreasonably high
Federal - having or relating to a system of government in which several states form a unity but remain
independent in internal affairs
Indigenous - originating or occurring naturally in a particular place; native
Inherit - receive (money, property, or a title) as an heir at the death of the previous holder
Intermediary - a person who acts as a link between people in order to try to bring about an agreement or
reconciliation; a mediator
Jute - rough fiber made from the stems of a tropical old plant, used for making twine and rope or woven into
sacking or matting.
Mandate - an official order or commission to do something
Mishap - an unlucky accident
Pioneer - a person who is among the first to research and develop a new area of knowledge or activity
Spectrum - a wide range
Vested - secured in the possession of or assigned to a person

Module’s Lecture:

Entrepreneurs are usually the pioneers of their own businesses assuming all the risks and reward of the business.
But sometimes they could also work with other established organizations, though not as an employee but as an
independent partner.

Being an entrepreneur also requires them to be the point man for the company, networking with other
professionals, and attending speaking events and developing the image which people will associate the brand with
online and offline. It also involves providing leadership and direction for the organization.

In this module, we will discuss the responsibilities and accountabilities of entrepreneur.

Let us start discussing the overview of Corporate Social Responsibility (CSR). But before that, let us define
first the words responsibility, and accountability.

What is responsibility?

Responsibility refers to the duty or obligation to satisfactorily perform or complete a task (assigned by someone,
or created by one's own circumstances) that one must fulfill, and which has a consequent penalty for failure.

What is accountability?

Accountability refers to the obligation of an individual or an organization to account for its activities, accept
responsibility for them, and to disclose the results in a transparent manner.

What is corporate social responsibility?

Corporate social responsibility (CSR) is the internationally regarded concept for responsible corporate
behavior – although it is not clearly defined. In a nutshell, CSR refers to the moral and ethical obligations of a
company with regards to their employees, the environment, their competitors, the economy and a number of other
areas of life that its business affects.

When your small business adds employees, then the business and you as the owner inherit some responsibilities to
those employees according to the mandate of both the federal government and your state government. These
responsibilities exist on a broad spectrum and include a variety of things, including the payment of those
employees as well as ensuring that their work environment is as safe as possible. If you neglect these
responsibilities, the legal costs could be high, and could include the loss of your permits and business licenses.

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What are the responsibilities and accountabilities of businesses to their employees?

Companies have a duty to their employees to ensure a pleasant working environment and, in addition, to make
information sufficiently transparent in terms of career opportunities and hierarchies. This also includes the issue
of fair payment and profit sharing as well as the limitation of the term of contracts.

1. Employee Payments and Taxes

As a business owner and employer, it is your responsibility to pay your employees. You should ensure they
receive at least the minimum wage per hour for the state in which your business operates. You should pay each
employee the money you owe them or working in a given minimum pay period. That payment should include any
overtime that the employee has worked, any sick leave that they have taken, and any vacation wages that they are
entitled to. You should ensure that your employees receive their paychecks on time and should strive to never
delay those paychecks so that your employees are also able to meet their own financial obligations in a timely
manner.

2. Employer Reporting to Employees

You should not just pay your employees. You should also make sure you report to them about their earnings. This
is one of the most important responsibilities of management to its employees. Each paycheck should include a
statement that shows their gross pay, the withholdings, and deductions that have been made, and their net pay for
the pay period in particular and the year to date in general.

3. Maintaining Safety Standards

It is a requirement of the federal government that you maintain a work environment that is safe for your
employees. The level of safety should be in accordance with the specific standards set by the Occupational Safety
and Health Administration (OSHA) for the industry in which your small business operates.

4. Maintaining Proper Equipment and Tools

Make sure that each of your employees uses the correct equipment and tools that are safe for the particular
industry that your business operates in. That is another responsibility that rests on you as the business owner.
You should also regularly inspect the facilities at your business’ place of operations and also test the safety
knowledge of your employees. By doing these regularly, you ensure that your workplace is always as safe as it
possibly can be under any given circumstances.

5. Workers' Compensation Insurance

Workers’ compensation insurance is a special kind of insurance that covers the medical care expenses of restoring
the worker to health, as well as the payment of their wages during the period that they are recovering. This is
known as wage replacement.

What are the responsibilities and accountabilities of businesses to the government?

Governmental Agencies

Companies must comply with the laws of the countries they operate within. This also includes SMOOTH and
HONEST cooperation with government organizations such as, for example, health and safety departments and
health offices. In production facilities, the quality standards and regulations specified by the legislator must be
observed through regular checks and surveys.

The following are the responsibility of an entrepreneur towards government:

1. Compliance of Government Rules

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The rules framed by the government for business should be fully complied with. The entrepreneur should follow
the laws regarding obtaining licenses for a specified business, the operation of the business, price determination
and production, etc.

2. Payment of Taxes

The government imposes various types of taxes, like, Income Taxes, sales tax, exercise duties, tariff duties and
wealth tax on the entrepreneur and business, for raising financial resources. The entrepreneur should honestly pay
these taxes.

3. To Cooperate with Government for Economic Development

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

4. Not to Correct the Government Machinery

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

5. Not to Seek Political Patronage by Unfair Means

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

What are the responsibilities and accountabilities of entrepreneur to suppliers and creditors?

The social responsibilities of an entrepreneur or organization institution may be spelled out, as follows, to
facilitate the study. So, the social responsibility of entrepreneur towards suppliers, creditors, and depositors are
different and important for any business organization growth.

Responsibility of Entrepreneur towards Suppliers

1. To Pay Fair Prices of Goods

The entrepreneurs should pay reasonable prices for the materials purchased from the suppliers. Often, the farmers
provide cotton, sugarcane, and jute etc. to various industrial, for use as raw material. However, the industrialists
pay them very low prices for these commodities.

2. To Pay in Reasonable Time

The responsibility of the entrepreneurs is that payment to the suppliers may be made in time so that they may not
have to face financial difficulties and may carry out their functions smoothly.

3. To Inform about Changes in Market

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

4. To Give Guarantee of Minimum Price

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

5. To Motivate Indigenous Supplies

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If the suppliers of the raw materials, machinery, and equipment are both indigenous and foreigners, indigenous
suppliers should be encouraged. The materials of the indigenous suppliers should not be rejected in the attraction
of foreign suppliers.

6. To Provide Technical Advice

The entrepreneur has the responsibility to provide technical assistance to the suppliers for the production of anew
and substituted commodities.

7. To Inform Suppliers of Future Developments

The entrepreneur should provide information about possible future development to the suppliers, in time, so that
they mold themselves according to the changing circumstances. Besides, they should also be provided
information about likely increase in demand for their material, so that they may become capable of increasing the
resources, required to meet the increased demand.

8. To Promote Healthy Competition

The entrepreneur should not encourage unhealthily and cutthroat competitions among the suppliers, for the sake
of obtaining goods from them at the minimum price only healthy competition should be encouraged.

Responsibility of Entrepreneur towards Creditors

1. To Obtain Loans on Reasonable Conditions

Some certain conditions are required to be fulfilled to obtain any type of loan. These conditions should be
reasonable, both for the creditors and the business organization. The entrepreneur should follow these conditions.

2. To Follow Mortgage Rules

The creditors provide loans in secured and unsecured forms. If the creditor has provided the secured loan on the
mortgaged property, the entrepreneur should follow the rules of mortgaged property should be safeguarded and
should be handed over the creditor, if so, required under the rules.

3. To Follow Business Ethics

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

4. Proper Utilization of Debt Capital

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

5. Regular Payment of Installment and Interest

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

6. Repayment of Loan

Loans should always be paid in on the maturity date, which facilitates regular capital flow in the business society
and also saves the Banks and Financial Institutions from adverse effects.

Social Responsibility of Entrepreneurs towards Customers

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In business organizations, the social responsibilities of entrepreneurs towards customers and consumers are very
important. These days, the prevalent notions are ‘Customer market’ and ‘Customer, the king of the market’, in
place of the old notion of ‘Sellers Market’.

What are the responsibilities and accountabilities of entrepreneur to consumers/ customers?

The social responsibilities of entrepreneurs towards the customers are as follows:

1. Determination of Fair Prices

The entrepreneurs should determine fair prices for commodities and services. The producers should regulate the
production cost of commodities and the distribution should earn marginal profit only.

2. To Render Good and Economic Services

The business institutions for organizations, providing business services and other services, like banking,
insurance, water, electricity, transportation, communications, and publications, etc. have the responsibility of
providing good and cheaper services to the customer.

3. Standardization of Goods

The entrepreneurs should get more and more goods. The goods purchased by the customers should be perfect, or
else some mishaps may occur with the customers. It is not worth that on all standardized commodities, the sign of
country standard bureau should be marked.

4. Best and Economic Packing of Products

To save the goods from being damaged or spoiled, due to the weather or transportation, these should be packed
well. The packing should be economical. Special attention is given on the packaging of machines and food
materials. The responsibility of the entrepreneur is to arrange attractive and strong packing. But, it should not
heavily increase the cost of the product.

5. Right and True Advertising

Advertisements should not be untrue and false. Customers or consumers attract to the goods mainly through
advertisements. If that proves wrong and false the customers will not believe in the future. Rather, he will not be
able to make decisions regarding the purchase of goods. Besides, the advertising media selected for the
advertisement of good should be authentic and they should not advertise exorbitantly. The contents of the
advertisement should be in accordance with the cultural values.

6. To Avoid Adulteration, Low Weight and Measurement of Products

The entrepreneurs should avoid adulteration, low weight, and measurement. Adulteration in life-saving goods
medicines, food items, and drinks are damaging for life.

7. Redressal of Customers Complaints

On several occasions, customers make complaints regarding the quality of the products, their packing, weight
measurement, technical defects, charging of higher prices and commodities not being in accordance with the
samples, etc.

8. To Maintain Contacts with Customers Associations

In present times, customers organize “Consumer Associations” and ‘customer or consumer forums’ to safeguard
their interests. Under such conditions, the entrepreneur or businessman has the responsibility to maintain contacts
with the organization of the customers and their office bearers, to avoid movements by them, by redressal of their
complaints. As a result of such contacts, consumers will save from launching movements and the entrepreneurs
will also be able to save their reputation in the markets.

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9. To Follow Code of Conduct

Some entrepreneurs establish organizations to protect the interests of the consumers, whose membership is
voluntary. The entrepreneurs should become members of such organizations and should follow the rules and laws
of such organization.

10. After Sales Service

For several commodities, After-sales services are required. Only thereafter, these may be used properly. Hence,
entrepreneurs have the responsibility of deputing trained employees, engineers and techniques to provide after-
sale services.

11. Avoidance of Hoarding Practices

The entrepreneur should avoid the hoarding of commodities and the creation of artificial scarcities. Hoarding of
commodities for maximization of profits is business, legal, social and moral offense. It makes an adverse effect on
the reputation of entrepreneurs and businessmen.

12. To Promote Customer Research

Entrepreneurs have the responsibility to encourage market and customer research. For that, research regarding
new uses of new commodities and services is essential, so that changes occurring in desires, tastes, looking sand
designs may be known.

13. Efficient Distribution System

The commodities become costlier if the number of intermediaries for their distribution is large. Hence, an
efficient distribution system should be adopted, so that commodities do not become costly.

14. Good Behavior

There are various types of customers for the products of a business, like the male, female, children, youth, old,
educated, and educated farmers, and urban, etc. For the success of the business, affectionate civilized and
respectful behavior with all categories of customers is quite essential. Irritation towards the customer may be
damaging to the business.

Social Responsibility of Entrepreneurs towards Society and Local Community

The business or entrepreneur is a part of society. Business is performed in the society, for the society, with
resources of the society. The society also provides the opportunity for development and expansion of the business.

The following are the responsibilities of the entrepreneur towards the local community:

1. Encouragement to Healthy Competition

The entrepreneur should encourage healthy competition among the local community and make good quality
commodities available to the public at fair prices.

2. To Save Local Environment from Pollution

Risks of pollution of the environment at the factory’s sites, due to the smoke of the coal, polluted water and
manufacturing process cannot be ruled out.

So, the responsibility of the entrepreneur is that the factory may be established at a fair distance from the
residential areas may shift the factories to distant places from the residential areas.

3. To Help in Activities of Public Utility

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The entrepreneur should cooperate in providing facilities for the public utility to the local community, Like,
education, entertainment, medical, housing, and libraries, etc. For that may provide help in the establishment of
new schools, parks, hospitals, and rest houses, etc.

4. To Provide Employment to Local Community

The entrepreneur should provide more and more employment to the local people of the place, where he is
establishing his business unit or is performing the business activities should invest capital in such business which
may provide employment to a large number of people. The business has also the responsibility of providing
employment to the members of the community.

5. To Improve Standards of Living

The entrepreneur should make all possible efforts to improve the standard of living of the public. For that,
scholarships may be granted to the children of the employees and other students, employment facilities, suiting
disabled persons and orphans may be provided for.

6. To Promote Public Relations

The entrepreneur should provide information to the public about the policies and activities of his business or
business organization and should try to understand the feelings of the common man.

Social Responsibility of Entrepreneurs towards Stakeholders

Being a business owner brings more responsibilities than you might imagine. While your goal is to earn money
for you and other owners of the business, you have customers, community members, suppliers, employees and
business partners who have needs or requirements, too. Satisfying these stakeholders helps your business thrive
and avoid negative backlash.

7. Responsibilities to Customers

Customers or clients are definitely a critical stakeholder group for your business. In general, your responsibility is
to operate fairly and consistently while providing customers with a satisfactory experience. This includes
openness and transparency in marketing and follow-through on promises made. If your company offers
promotions or deals, it must honor them. Understanding customer expectations and delivering a quality, honest
and fair experience bodes well for building a loyal customer base.

8. Responsibilities to the Community

Customers are a part of your community, but the community stakeholder group is a bit different. Your community
responsibilities include actively participating in community activities and giving back in some way. Joining local
chambers of commerce and service clubs helps you establish a community presence. Giving to local charitable
organizations and allowing employees paid time off to volunteer in service programs shows your commitment to
being an active community member. Expectations of this stakeholder group have grown in the early 21st century
as watch groups have pushed to make businesses more accountable to populations from whom they derive
income.

9. Responsibilities to Your Employees

Employees have always been integral to company operations, but your responsibilities to them have increased.
Fair labor laws have legalized your duties to offer fair, non-discriminatory hiring and employment. More
importantly, more workplace diversity means you need to promote a culture where tolerance and acceptance of
differences are coached and appreciated. Plus, employees generally expect to be valued as key assets to your
business. If you do not treat them as such, they will seek out alternative employment.

10. Responsibilities to Your Suppliers and Partners

Your suppliers are no longer just companies you buy from. To maintain loyal, trusting relationships where you
look out for each other's interests, you have to operate fairly and honestly with suppliers. Being up front with your
intentions and building trust allows you to coordinate more efficient distribution processes, which minimize
inventory costs and reduce stock outs. Business partners also expect that you meet your obligation to do business

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 legally and ethically. If you pollute the environment or cheat on your business taxes, your business cohorts may
suffer guilt by association.

Stakeholders are people who have a vested interest, or stake, in the operation of your business. For public
companies, shareholders are a key stakeholder group. However, other prominent stakeholders can influence
management decisions for all types of companies. Well-rounded awareness of the impact of each type of
stakeholder is critical.

When you know what your responsibilities are, you will prepare yourself to do things related to that
responsibilities and doing them in the better way of doing things. In such a way, you are improving the quality of
the work you have done. Better quality of work you are doing will bring better results for your business.

Brain Teaser: According to Peter Drucker (2016), leadership is not rank or privileges, titles or money.
Leadership is responsibility.

Focus Questions: Now that you have already read the module’s lecture, let us now try to check if you have really
absorbed its core concepts and ideas. Try to mentally answer the following guide questions, which will help you
assess your reading progress. If you can already answer these questions, it means that you succeeded in your
reading journey. If not, try reading again the module’s lecture so that you may soon be able to answer these
questions on your own.

1. What is the social responsibility of entrepreneur?

2. What are the ethics and socially responsible of entrepreneurs?
3. What are the obligations and responsibilities of the CSR can be in the form of:
entrepreneurs to the public?
1. Health and safety of employees
4. How entrepreneurs manage their responsibility
and obligation towards to public? 2. Free education to poor children
3. Community investment
4. Volunteer assistance program
Illustrations and Examples: 5. Infrastructure development of cities
6. Cleaning of rivers
Illustration of corporate social responsibility (CSR) are 7. Preservation of cultural heritage
presented below.
8. Free hospitals for poor people

Legal Responsibilities

Economic Ethical
Responsibilities Responsibilities

Discretionary
Responsibilities

Source: https://businessjargons.com/corporate-social-responsibility.html

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Corporate Social Responsibility, or otherwise called as CSR is an on-going commitment of the organization to act
in an ethical manner and make a contribution in the country’s economic development, while bettering the standard
of living of the employees and their families, along with the society and public at large.

Its aim is to create value by producing those products and services at reasonable prices, which is needed by
society. In this way, the organization can earn profits for its shareholders, while fulfilling the necessities of
society.

Learning Exercise: Congratulations! You are already done with the concepts that you need to learn and
understand for this week. Now, let’s try to put into practice the things that you have learned. Accomplish the
following activities and see how well you can apply your learnings.

Prepared by: Checked by: Noted by:

MRS. May Ann S. Nuestro Mr. John Patrick G. Malang Mr. Nathaniell C. Capinpin
Subject Teacher Subject Area Coordinator Academic Supervisor

Ms. Joanne Mae J. Bondoc, MAEd

SHS Academic Coordinator

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