BUSINESS

ETHICS AND
SOCIAL
RESPONSIBILIT
Y
ABM - 12
FORMS OF
BUSINESS
ORGANIZATION

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1. SOLE
PROPRIETORSHIP
A sole proprietorship is a business owned by only
one person. It is the simplest form of business
organization.

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SOLE PROPRIETORSHIP
Advantages
• Easy setup
• Full control
• You receive all of the profits
• Direct access to feedback
Disadvantages
• Unlimited liability
• Full responsibility
• High working capital demands

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2. Partnership
A partnership is a business owned by two or more persons who
contribute resources into the entity.
The partners divide the profits of the business among themselves. Its
chief characteristics are:
(a) association of individuals;
(b) (b) mutual agency; (c) limited life;
(c) (d) unlimited liability; and
(d) (e) co-ownership of property.

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PARTNERSHIP
Advantages Disadvantages
+ More partners, more capital + Unlimited liability
+ Added talent + Partners can disagree
+ Divided responsibility + Profit is shared
+ Greater business networks
+ Tax advantages

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corporation
+ A corporation is a business organization that has a separate
legal personality from its owners. Ownership in a stock
corporation is represented by shares of stock.

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 CHARACTERISTICS OF
+ The corporation has separate legal existence from its owners.
CORPORATION
+ The stockholders have limited liability.
+ Transferable ownership rights (ownership is in shares of stock).
+ Ability to obtain capital (relative ease).
+ The corporation can have a continuous life.
+ The corporation is subject to numerous government regulations.
+ The corporation must pay an income tax on its earnings, and the
stockholders are required to pay taxes on the dividends they receive: the
result is double taxation of distributed earnings.

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Advantages Disadvantages
+ Owner’s liability limited to + Increased organizational
their amount invested complexity
+ No minimum or maximum + Multiple tax
on the number of owners classifications
+ Owners can operate fully
in the company
+ Operating management
flexibility

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cooperative
+ A cooperative is a business + The persons making up
organization owned by a the group are called
group of individuals and is members.
operated for their mutual
benefit.

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The Role of Each Form of Business
Organization in the Economy

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SOLE PROPRIETORSHIP
+ a. Create Job
+ b. Help Small Producers
+ c. Provide Investment
Avenues
+ d. Help Consumers
+ e. Supply Quality Goods

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PARTNERSHIP
+ a. Provide Employment
+ b. Produce of Goods and Services
+ c. Increase Government’s Revenue

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CORPORATION
+ a. Offer Better Jobs in terms of
Compensation and Stability
+ b. Increase Tax Revenue
+ c. Improve Quality of Life

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4. Cooperative
+ a. Provide Employment
+ b. Pay Local Taxes
+ c. Respond to Production
and Consumption

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 ACCOUNTABILITY
Corporate accountability refers to the obligation
and responsibility to give an explanation or reason
for the company’s actions and conduct.

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ACCOUNTABILITY
+ To be accountable is to explain or justify one’s action and decisions.
+ Accountability is the process of explanation and justification.
+ Holding to account is the process of requiring explanation and, but it
is also about testing, forming a judgment, and if necessary, taking
action.
+ Accountability implies responsibility it is reasonable only to hold
people to account for those things for which they are responsible

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 FAIRNESS
• refers to equal treatment
• in the context of a business of
organization involves balance of the
interests involved in all decision-
making including any decisions related
to hiring, firing (including the
investigatory process), and the
compensation and rewards.

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Transparency
is the extent to which investors have ready access
to required financial information about company,
such as price levels, market depth and audited
financial reports.

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 “
TRANSPARENCY
A principle of good governance is that
stakeholders should be informed about the
company’s activities, what it plans to do in
the future and any risks involved in its
business strategies..

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This is a slide title
+ Here you have a list of items
+ And some text
+ But remember not to overload your slides with
content
Your audience will listen to you or read the content, but
won’t do both.

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WHAT IS CODE OF ETHICS OR
ETHICAL
● collection CODES?
of principles and practices that a
business believes in and aims to live by (Spiro 2010)
● adopted by organizations to assist members in
understanding the difference between 'right' and
'wrong' and in applying that understanding to their
decisions.

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WHY DEVELOP AND ADOPT A CODE
OF ETHICS?
+ developing a code sets in motion a process that
raises ethical consciousness among internal
stakeholders. A code clarifies what is ethically
acceptable or unacceptable behaviour, thus making
expectations more concrete. Also, the process of
developing a code should guide ethical decision-
making.

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WHAT TO INCLUDE IN YOUR CODE
OF ETHICS AND CODE OF CONDUCT
COMPLIANCE
+ In this code we must adhere and comply with all the
legal terms, laws and regulations given by the
government in which all organizations must fairly
comply.

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COMPETITION AND FAIR DEALING
+ This is where the principles of fairness is applied
wherein, we must avoid taking unfair advantage of
anyone through manipulations, concealment, abuse
of privileged information, misrepresentation of
material facts, or any unfair dealing practices in
doing business transactions.

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CONFIDENTIALITY OF
+ practice to be accountable in safeguarding the
INFORMATION
confidentiality of information entrusted by the company,
affiliates, customers, business partners and others parties
which the company have a relationship with, except
when disclosure is authorized or legally mandated.

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CONFLICTS OF INTEREST
+ The principle of accountability is also applied in
this code which is to avoid any actual conflicts of
interest between your private interest, or either your
family member and the interest of the company.

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DISCLOSURE
+ In this code, principles of transparency are applied
in which we publicly disclose all material
information including earning results (financial
reports), corporate strategy, related party and off-
balance sheet transactions, as may be necessary
under applicable laws, rules and regulations.

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EXAMPLES
+ EXAMPLE FOR CODE OF ETHICS FOR GOVERNMENT
EMPLOYEES IN THE PHILIPPINES Republic Act No. 6713,
otherwise known as the “Code of Conduct and Ethical Standards for
Public Officials and Employees” (Lawphil, 1989)
+  
+ Section 4. Norms of Conduct of Public Officials and Employees. -
(A) Every public official and employee shall observe the following
as standards of personal conduct in the discharge and execution of
official duties:

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