LESSON 3: RESPONSIBILITIES and ACCOUNTABILITIES of ENTREPRENEURS To

Employees, Government, Creditors, Suppliers, Consumers, General Public, and other

Stakeholders

An entrepreneur is one who organizes, manages and assumes the risk of an enterprise. An
entrepreneur should be aware of the ethics and social standard follow them.

A. Employee
Employees are the true assets of an organization. They are the ones who contribute
effectively towards the success of every business so, in return entrepreneur has responsibilities
and accountabilities to fulfill for the safety and welfare of their employees.

The following are the responsibilities and accountabilities of an entrepreneur to his/her employees.

1. Pay Wages/Salaries and Taxes

The company should have an attractive compensation packages to attract more potential
talents who can be a help in achieving organization’s long-term goals.
Entrepreneurs have the responsibility to pay their employees of their business at least the
minimum hourly wage in their locality. Wages/salaries should always be on time and without delay
so as the employees can meet their individual obligations thus, motivates them to stay and do well
in the business.

2. Assignment of Right Jobs

Taking into consideration the technical and the educational background of the employees in
assigning them to the job where they are good at or aligned with their skills and abilities.
Mismatching of jobs with employee’s qualification is discouraged.

3. Create and Maintain an Ergonomic Workplace

Entrepreneurs must also make employees aware of areas in their business that have a high
risk for injury and train their employees in safety procedures to minimize the risk of injury. Working
environment that are properly ventilated and illuminated improve employee’s performance, their
health and well-being.

4. Facilitate Employees’ Compensation Insurance

When injuries occur through no fault of their employees, it’s their responsibility to file a
claim with their employees’ insurance provider.

Businesses must treat their injured employee with respect and file the claim without
attempting to cause a delay in processing or attempt to deter the worker from filing a claim at all.

5. Support Career Development

Career development is providing support and encouragement for employees to enhance
their skills and capabilities as an employee. Provide a human resources development system that
supports the careers of employees, a self-development support program, and transfer
opportunities for willing employees.

6. Train and Educate Employees

Acquisition of new knowledge and skills through the professional and personal development
of employees is a pre-requisite and a guarantee of business’s success. Professional development
also includes dialogues with colleagues, peer mentoring and peer collaboration for achieving
business goals.

7. Enforce Anti-Discrimination Law

Employees cannot be disadvantaged, dismissed, or not given employment for any reasons
mentioned. Any problems or issues that arise with guests or colleagues from overseas may
require involvement of embassies, government agencies, local cultural groups, or diplomatic
services to help resolve them.

8. Respect Human Rights

Business operations are interrelated with a wide range of people and societies throughout
the world, and implements and enforces a code of conduct that fosters respect for human rights.

9. Give rewards and Benefits

Reward employees fairly and attractively, in line with the prevailing conditions on the local
market. Gather data from the labor market on a regular basis, ensuring that reward structures
remain competitive. Employees are more likely to strive in their work if there is anticipated reward,
they’ve value, such as salary increase, bonus, and promotion, rather than if there is none.

Every individual wants to develop. So, the responsibility of the entrepreneur is that he
should make all possible efforts for the individual development of the employees and may
impartially provide them equal opportunities for that. These opportunities include imparting
education and training, give timely promotions, transfers at the right time and their participation in
the management of the business, etc.

It is also mandated in the Labor Code of the Philippines that entrepreneur should pay fringe
benefits such as PhilHealth, Social Security, PAG-IBIG, taxes out of employees’ wages/salaries
for each employee working in their business.

Recognition boosts esteem and morale in which employees feel important, satisfied, and
inspired. Recognizing employees for accomplishments can be an important reason for employees
to stay. Providing these benefits motivate many employees to stay and do well in the business.

10. Give security of Employment

Theentrepreneur should provide employment security to the employees of his organization,
which will cause the sense of satisfaction among them and they will work with full interest,
dedication, and commitment and will feel free from the apprehensions of losing a job and will have
the higher degree of faith in the employer.

B. Government
In Business, the responsibilities of entrepreneurs towards the government, professional
institutes, and other business institutions are very essential. The government sets the targets for
the balanced and rapid economic development of the country.

Responsibilities and accountabilities of entrepreneurs to the government are:

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

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

3. 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.
 4. 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 politicians during elections. By giving anti-
social activities with political patronage hits the democratic values.

5. 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, pay taxes and
provide jobs.

C. Creditors
A creditor is an entity (person or institution) that extends credit by giving another entity
permission to borrow money intended to be repaid in the future.

Various plans are prepared for development and expansion of the business and for that
various projects are also formulated. For their completion, capital is the foremost requirement,
which is fulfilled through loans from the individuals, Financial Institutions and Banks.

Responsibilities and accountabilities of Entrepreneur towards creditors are:

1. 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.
Entrepreneurs should do their research on different creditors to determine the terms that best
match their financial capabilities to pay.

2. 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.

3. 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 or for personal expenses. Not only that, but loan capital
should also be invested only for objectives and projects specified for the loans.

4. 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 effecton the reputation of the business organization.

D. Suppliers
The services of the suppliers are also important for any business because they supply raw
materials, machinery, labor, and other materials. Without them, the smooth operation of the
business is quite difficult.
Entrepreneurs’ responsibilities and accountabilities towards their suppliers are the following:

1. Pay fair prices of goods at a reasonable time

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

Entrepreneurs should pay reasonable prices for this type of raw material.
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 operations efficiently
and smoothly.

2. 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 or in foreign markets.
So that the suppliers may make necessary changes in their manufacturing projects, according to
the requirements.

3. Give guarantee of Minimum Price

The entrepreneurs should give the guarantee of minimum prices to the suppliers. A
guarantee of minimum price is an initial or full sum that is paid to the supplier by the entrepreneur
regardless of how the business performs. Following of payment terms and agreed amount should
be done even when business is slow.

4. Provide technical Advice

The entrepreneur has the responsibility to provide technical assistance to the suppliers for
the production of a new and substitute or replaces supplies/commodities.

5. Inform Suppliers of Future Developments

The Entrepreneur should provide information about possible future development to the
suppliers so that they will be aware of these circumstances, thus, develop and become capable of
increasing their resources so as to meet the increasing demand in the future.

6. Promote Healthy Competition

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

E. Responsibilities and Accountabilities to the Consumers

A business cannot work without the consumer. The survival and growth of a business
depend on consumer satisfaction, service, and support. The commercial organization should win
the confidence of the customers. This is possible by sharing a positive attitude towards customers
and fulfilling social responsibilities towards them.

1. Ensure Quality of Products and Services

Your responsibility is to offer customers the highest quality in your products and services
provide the best care and never lie to get a sale. A good entrepreneur is honest and gives a good
price/benefit. Never use marketing to deceive or sell false expectations. Quality goods should be
produce and supplied. Distribution system should make goods easily available “to avoid artificial
scarcities and after-sales service should be prompt”. Buying capacity and consumer preferences
should be taken into consideration while deciding the manufacturing policies.

2. Ensures Consumer’s Health and Safety

A key consumer issue is the quality and safety of products. Customer’s need clear
instructions for safe product use, including assembly and maintenance. To avoid customer harm
and danger, anticipate potential risks of your product and services in the design stage and
throughout the product lifecycle, from R&D to manufacturing, storage, and distribution, use and
disposal, reuse and recycling. Whether or not legal safety regulations exist, products should be
safe for their intended use and and if misused in a way that can be foreseen.

3. Provide Free Training

The commercial organization should arrange to train the customers either free or for a fee
(if necessary). Such as how to operate and trouble shoot technological gadgets and machines.

4. Be Fair with Prices

The customer should not be cheated by charging high prices. It is unethical to charge
customers with a higher price than the suggested. Thus, fair price converts customer into a
permanent customer.

5. Be Honest in Advertising and Marketing

The customers want to know the facts, features, advantages, side- effects, etc., of the
product. The advertisement conveys this information. Thus, the company must see the
advertisement is not being misleading and it must be done by providing the true and actual
information.

6. Be Honest in Dealings
Never lie to your customers. It is foolish to cook false stories. You will be caught. In today’s
world, where information is just a click away, everyone does his/her through research before
purchasing something. You will lose respect in front of them. If you can’t deliver something, please
mention it clearly. They might not invest in that particular product but believe me, would definitely
come back to you in near future just because you were honest, and guided them correctly. It is
pointless to badmouth your competitors.

7. Attend to Complaints
The consumer complaints must be attended immediately. When major issues, occur,
employ a system for making decisions on steps and measures to take while placing top priority on
not convincing the customers.

8. Service Even After Sales

The company is expected to provide after sale service for maintenance of goods during the
period of warranty. Efficient and effective after sale servicehelps to establish a good relationship
between the customers and the company.

9. Respect Customer’s Time

Respect your customer’s time. Do not decide the time and venue as per your availability
and comfort. If the customer wants to meet you at 6 in the evening, make sure you are there on
time. Neither arrives too early nor too late. Do not keep your customers waiting. Do not forget that
there are several options available in the market. Your loss is someone else’s gain.

10. Treat Customers’ well

Treat your customers as kings and do not think of them only when you have a pressure to
meet your targets within the stipulated time frame. Understand that a customer buys your products
or services only when he/ she trusts your brand and most importantly believes in you. Understand
the needs and requirements of your clients. Find out as to why they need a particular product and
how your product would benefit them. You need to build a strong relationship with your customers
for them not only to remain your loyal clients but also bring more people along with them. It is the
responsibility of the organization to give correct suggestions and feedbacks to customers. Avoid
making false promises and commitments which you yourself know are difficult to fulfill.
F. Responsibilities and Accountabilities to Other Stakeholders
1. Actively protecting the Environment
a. Comply with Environmental Legislation
 Comply with the Clean Air Act of 1999
 Store waste safely and securely, make sure it is treated appropriately, ensure it is
collected.
 Manage your business waste for recycling by segregating it prior to collection.
b. Dispose waste properly- Appropriate steps should be taken in prevent environmental
pollution, and to preserve ecological balance.
c. Recycle- Business are required to separate the following forms of commercial waste for
re-cycling: paper, card, plastic, metals, and glass.
d. Conserve and Protect Biodiversity- Biodiversity refers to all species of plants and
animals, including any genetic variations within those species and the complex
ecosystem they live in.
e. Prevent and remedy damages to environment- Every year there are thousands of
cases of damage to environment covering:
• damage to species and habitat
• damage to water
• risks to human health from contamination of land
f. Use Scarce Natural Resources Sparingly- Scarce natural resources should be used
very carefully at these are depleting at a very fast rate.

2. Operating with an Ethical Supply Chain

Stakeholders are increasingly aware of life-cycle issues with business supply chains and
are insisting on ethical sourcing of materials. For a jewelry company, this can mean taking steps to
ensure that you are not purchasing “blood diamonds”, which are jewels from mines operated in
near slave-like conditions and that fund brutal warlords.

Large coffee buyers are increasingly sourcing their coffee from farms that have been
certified to operate sustainably by paying workers a living wage and avoid clear- cutting rainforests
and other forms of habitat destruction.

G. Responsibilities and Accountabilities to the General Public

To maintain a positive public image and attract new clients, a company must understand its
corporate responsibilities to the public. Ultimately, any business has responsibilities to the public.

1. Be Fiscally Responsible
Company policies should be aligned with the law; avoid fiscal fraud or illegal acts using
company funds or tax payers money.

2. Consider public Input

A company should be able to operate under its own rules and ideals, but a company should
also take into account the input of its customers to remain competitive, according to the World
Bank Institute’s reported titled “Public Policy for Corporate Social Responsibility.” A company
should reach out to its customers and benefit from the insight of what customers are looking for in
products improvements.

3. Community Oriented
A company exists because of the customers it serves and the community in which it is
located. The community provides most of the employees for the company, and the community
provides all the public services the company enjoys, such as electricity and firefighting protection.
In some cases, companies are given breaks on their utilities and taxes in order to entice them to
establish a location within the community. The company has a responsibility to give back to the
community that supports it with tax breaks and a labor force. When there is a community event,
the company should contribute volunteers, money, or something that would support the event. The
company should use local suppliers as it can help to support local businesses.

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