THE ETHICAL AND SOCIAL
RESPONSIBILITIES OF
THE ENTREPRENEUR
Finding the ETHICAL
or UNETHICAL
Identify if the situation is Ethical or Unethical
Ethical behavior involves actions that
align with moral principles and values,
prioritizing fairness, honesty, and respect
for others.
Unethical behavior, on the contrary,
disregards these principles, often
involving dishonesty, unfairness, or harm
towards others.
Making false claims about
product benefits or performance
to mislead consumers.
Unethical
Taking responsibility for
mistakes and promptly
addressing customer
complaints or concerns with
sincerity and accountability.
Ethical
Respecting the privacy and
confidentiality of customer
information and adhering to
data protection laws.
Ethical
Engaging in negative gossip
about someone you work with.
Unethical
Company hires someone for
being a family member.
Unethical
Treating employees fairly and with
respect, offering competitive
wages and benefits, and providing
opportunities for professional
growth and development.
Ethical
Creating a hostile work
environment through harassment,
bullying, or discrimination.
Unethical
Providing accurate and
transparent financial reporting to
stakeholders.
Ethical
WHAT IS BUSINESS ETHICS?
Ethics is the study of moral
obligation involving the
distinction between right
and wrong.
Business Ethics are the
rules about how
entrepreneurs ought to
behave.
FACTORS THAT DETERMINE
THE ETHICAL BEHAVIOR OF
ENTREPRENEURS:
1. The Public
Example: A fast-food company
is criticized for using too much
plastic packaging that harms the
environment. Because the public
demands eco-friendly solutions,
the company switches to
biodegradable packaging to
meet expectations.
2. Interest Groups
Example: A logging company plans
to clear a forest for commercial use,
but Haribon Foundation and other
groups raise awareness about its
environmental impact. Facing the
pressure, the company adopts
sustainable forestry practices, such
as replanting trees and limiting
deforestation.
3. Business Organizations
International Organization for
Standardization (ISO) – Sets
global quality and safety standards
for businesses.
Philippine Chamber of Commerce
and Industry (PCCI) – The largest
business organization in the
country, promoting ethical
business practices and economic
growth.
4. Individual Morals
and Values
Individual morals and values are
important because they guide
entrepreneurs in making ethical
decisions, building trust, and
ensuring long-term business
success.
THE EFFECT OF ADHERENCE TO
ETHICAL STANDARDS
Adherence to Ethical Establishment of
Standards Trust
by - between buyers and sellers
Entrepreneurships - between lenders and borrowers
Smooth flow of
Business Exchange
Example: selling is faster
HOW ETHICAL
BEHAVIOR IS
ENCOURAGED?
1. Adaptation of a code of
ethics;
Code of Ethics - a formal
document indicating the
entrepreneurship’s adapted
principles of appropriate
behavior.
2. Institution of rewards and punishments.
Reward - a thing given in recognition of
one’s service, effort, or achievement.
Punishment - is a penalty given as
retribution for breaking a law or rule.
3. Adaptation of internal
programs for resolving conflicts.
Employee Grievance System –
A structured process where
employees can formally report
concerns to HR.
Mediation Programs – A
neutral third party helps
employees or departments
resolve conflicts.
4. Creation of ethics review
committee
An Ethics Review Committee
helps ensure ethical decision-
making in a business. It consists
of company employees and
external members who
provide guidance on ethical
issues.
5. Provision of training in
ethics for employees.
Companies must provide
ethics training to ensure
employees can handle
ethical dilemmas in the
workplace. This training helps
employees understand
company values, ethical
standards, and appropriate
decision-making.
6. Top management support
It is challenging for any program or
activity to succeed without strong
support from top management. For
example, if unethical conduct
occurs and no sanctions are
imposed, it is likely that further
ethical violations will follow.
Ethical issues facing
entrepreneurships
Entrepreneurships face ethical questions
on a daily basis. These spring from the
following relationships:
1. Customers.
2. Personnel and employees.
3. Business associates.
4. Investors and the financial community.
RELATIONS
WITH CUSTOMERS
CONSUMER RIGHTS
1. The right to be safe
2.The right to be informed
3.The right to choose
4.The right to be heard
Right to be safe
A toy manufacturer must ensure that
its products are free from toxic
materials and small parts that could
cause choking hazards for children.
Right to be INFORMED
A food product must include a
complete list of ingredients and
nutritional information so consumers
can make informed dietary choices.
RIGHT TO CHOOSE
A consumer looking for a mobile
phone should have different brands
and models to choose from, rather
than being limited to only one
company's products.
RIGHT TO BE HEARD
A customer who receives a defective
product should be able to contact
customer service or file a complaint
with a consumer protection agency
for resolution.
RELATIONS WITH PERSONNEL
AND EMPLOYEES
Employers’ Responsibilities to the
Employees:
1. Workplace safety
2. Quality of Life Issues
3. Avoiding Discrimination
4. Preventing Sexual
Harassment
RELATIONS WITH BUSINESS
ASSOCIATES
1. Provide accurate and relevant
information to creditors.
2.Payment of price of materials
on time.
3.Prompt payment of interest on
borrowed funds.
4.Producing original documents
for credit processing.
RELATIONS WITH INVENTORS AND
THE FINANCIAL COMMUNITY
1. A fair return on investment.
2.Safety of invested capital.
3.Regular and complete information
about the performance and progress
of the company.
