SOCIAL

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

Accountability refers to the obligation of an

individual or organization to account for its
02 activities, accept responsibility for them, and
to disclose the results in a transparent
manner.
 The main difference between responsibility and
accountability is that responsibility can be
shared while accountability cannot. Being
accountable not only means being responsible
for something but also ultimately being
answerable for your actions.
In ethics and governance, accountability is
Accountability answerability, blameworthiness, liability, and
vs. expectation of account-giving, while
responsibility may refer to being in charge,
Responsibility being the owner of a task or event.
Responsibility can be before and/or after a
task. Accountability owes an explanation, while
responsibility does not necessarily owe an
explanation.
 Responsibilities
and
Accountabilities
of Entrepreneurs
A. To the Employees
 Pay employees at least the minimum hourly
wage in the locality and pay each employee
money owed from working per pay period,
including overtime, sick leave, and vacation
wages.
Pay wages Pay checks should always be on time and
and taxes. without delay so the workers can meet
individual financial obligations.
The government requires entrepreneurs to pay
PhilHealth, Social Security, taxes out of
employee wages for each employee working
their business.
 Create and maintain a safe working
environment for employees as per standards.
Make employees aware of areas in the business
that have a high risk for injury and train
employees in safety procedures to minimize the
Create and risk of injury.
maintain a safe Ensure each employee uses tools and
workplace.. equipment safe for small business’ particular
industry.
Continual inspection of facilities and employee
knowledge of safety standards is necessary to
make certain the workplace remains as safe as
possible.
 When injuries occur through no fault of
employees, entrepreneurs is responsible to file a
claim with workers’ compensation insurance
provider. The coverage provides for medical
Facilitate care and wage replacement for injured
worker’s employee.
compensation Businesses must treat their injured employee
insurance. 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.
 ‘EEO’ stands for “Equal Employment
Opportunity,’ which means that employees
cannot be disadvantaged, dismissed, or not
given employment for any reason like
culture, race, religion, country, age, gender,
Enforce anti- sexual preference, disability, way of life, and
discrimination beliefs.
law. Any problems or issues that arise with
guests or colleagues from overseas may
require the involvement of embassies,
government agencies, local cultural groups,
or diplomatic services to help resolve them.
 Provide a healthy working environment,
Create and which respects each person and their
maintain opinion is considered.
a favorable Give employees feedback and be honest
working
with them.
environment.
 Train and
Respect human
educate
rights.
employees.
Support career
development.
 Give
Manage
rewards and
performance.
benefits

“What gets measured Reward employees

gets done” fairly and attractively.
B.To the government
 1. Observe laws, rules,and regulations.
2. Pay taxes.
3. Follow environmental regulations.
4. Abide by labor laws.
5. Avoid restrictive trade practices.
6. Disclose financial statements.
7. Avoid corruption.
8. Assis in implementing socio-economic policies.
9. Help earn foreign exchange.
10. Advise the government.
11. Complete promptly government contracts.
12. Contribute to government treasury.
13. Contribute to political stability.
C.To the creditors

1. Give correct information.

2. Provide fair return on investment (ROI).
3. Strengthen share prices.
4. Honor fiduciary duties.
 1. Practice fair pricing and licensing.
D. To 2. Avoid coercion and litigation.
the 3. Maintain stability
4. Maintain confidentiality.
suppliers 5. Pay on time.
6. Select suppliers with discernment.
E. To the consumers
1. Ensure quality of products and
services.
2. Ensure coonsumer's health and
safety
3. Provide easy to use products.
4. Provide free training.
5. Be fair with prices
6. Be honest in advertising and
marketing
7. Be honest in dealings
8.Attent to complaints.
9.Service even after sales
10.Respect customers's time
11.Treat consumer well
12.Ensure regular supplu
13.Research and develop to
increase customers
satisfaction
14.Avoid monopolistic
competition
F. To the general public

1. Be fiscally 2. Consider 3. Take care of

responsible. public input. the community.
G. To the environment
1. Comply with environment legislation
2. Dispose waste properly
3. Recycle
4. Conserve and protect biodiversity
5. Prevent and remedy damages to environment
6. report an incident
7. Use scarce natural resources sparingly
 Major
Ethical Issues in
Entrepreneurship
 Ethical Issue

01 A problem or situation that requires a person

or organization to choose between
alternatives that must be evaluated as right
(ethical) or wrong (unethical)
Ethical Dilemma
02 Arises in a situation concerning right or
wrong when values are in conflict
A.Basic Gross negligence
failing to properly investigate a matter that
fairness affects the corporation and its shareholders

B.Personnel 1. Mistreating employees

and consumer 2. Descrimination and harassment in the workplace
relations 3. Conflicts of interest in family-run businesses that may cause
distribution ethical issues
4. Unethical employee behavior
dilemmas
5. Unethical working conditions
6. Side deals and sub-standard work

financial misconduct, corporate

C. Fraud
misrepresentation.
D. Unfair Competition
1.Antitrust Law or Competition Law
-Antitrust violations constituting unfair competition occur when one
competitor attempts to force others out of the market or prevent
others from entering the market, through tactics such as predatory
pricing or exclusive purchase rights to raw materials needed to make
a competing product.
2. Trademark infringement
-The maker of a product uses a name, logo, or other identifying
characteristics to deceive consumers into thinking that they are buying
the product of a competitor
 3.Misappropriation of trade secrets
-One competitor uses espionage, bribery, or outright theft to obtain
economically advantageous information in the possession of another.

4. Trade libel
-Spreading of false information about the quality or characteristics
of a competitor’s products

5.Tortious interference
-Competitor convinces a party having a relationship with another
competitor to breach a contract with, or duty to the other competitor
 6. Anti-competitive Practices
-One Preventing or reducing competition in a market
7. Dumping
-Selling a product in a competitive market at a loss for the
hope of forcing other competitors out of the market after
which the company would be free to raise prices for a
greater profit
8. Exclusive dealing
-Obliging a retailer or wholesaler to only purchase from the
contracted supplier
 9. Price fixing
-Colluding to set prices, effectively dismantling the free market
10. Refusal to deal
-Two companies agree not to use a certain vendor
11. Dividing territories
-An agreement of two companies to stay out of each other’s way
and reduce competition in the agreed-upon territories
12. Limit pricing
-Price is set by a monopolist at a level intended to discourage entry
into a market
 13. Tying
-Products that aren’t naturally related must be purchased
together.

14. Resale price maintenance

-Resellers are not allowed to set prices independently

15. Religious/minority group doctrine

-Businesses must apply tribute to a significant part of the
community in order to engage in trade with the community
 16. Absorption of a competitor or competing
technology
-The powerful firm effectively co-opts or swallows its competitor
rather than see it either compete directly or be absorbed by
another firm
17. Subsidies from government
-Support from government which allow a firm to function without
being profitable, giving them an advantage over competition or
effectively barring competition
 18. Regulations
-Placing costly restrictions on firms that less wealthy firms
cannot afford to implement

19. Protectionism, tariffs, and quotas

-Give firms insulation from competitive forces
20. Patent misuse and copyright misuse
-obtaining a patent, copyright or other forms of intellectual
property or using such legal devices to gain an advantage in an
unrelated market
 E.Unfair communication
-Lying; Presenting misleading file notes; Concealing large debts:
Obstruction of justice by shredding documents that could be used for
legal issues; Deliberately concealing large losses in projects; Reporting
false stories; Underreporting of profit; Provision of unsuitable financial
advice to customers
F. Nonrespect of agreements (Breach of
Contract)
-A legal cause of action in which a binding agreement or bargained
for change is not honored by one or more of the parties to the
contract by non-performance or interference with the other party’s
performance
G. Environmental degradation
1.Deterioration of environment through depletion of
resources such as air, water, and soil
2. Destruction of ecosystems
3. Extinction of wildlife
H. Contractualization
-Replacing of regular workers with temporary workers who
receive lower wages with no or less benefits; they do the
work of regular workers for a specified and limited period of
time; they never become regular employees even if they get
rehired repeatedly under new contracts
 Models and
Frameworks of
Social
Responsibility in
the Practice of
Sound Business
A. Total Corporate
Social Responsibility
Framework
- This model indicates that
total corporate social
responsibility can be
subdivided into four criteria:
economic, legal, ethical, and
discretionary responsibilities.
a.Economic b.Legal
responsibilities responsibilities
-The first criterion of social
responsibility is economic
-Defines what society deems as
responsibility.
important with respect to appropriate
-The business institution’s
corporate behavior and businesses are
responsibility is to produce goods and
expected to fulfill their economic goals
services that a society wants and to
within the legal framework.
maximize profit for its owners and
shareholders but it should not be
treated as the only social responsibility
as it could lead companies into trouble.
c.Ethical
responsibilities
-Includes behavior that is not
necessarily codified into law and may
not serve the organization’s direct
economic interests
-To be ethical, organization’s decision
makers should act with equity, fairness,
and impartiality, respect the rights of
individuals, and provide different
treatments of individual only when
differences between them are relevant
to the organization’s goals and tasks.
d.Discretionary
responsibilities
-The highest criterion of social
responsibility because it goes beyond
societal expectations to contribute to
the community’s welfare
-Purely voluntary and guided by an
organization’s desire to make social
contributions not mandated by
economics, laws, or ethics
-Include generous philanthropic
contributions that offer no payback to
the organization and are not expected.
 B. The Four-Way Test Framework
Herbert J. Taylor
(18 April 1893 – 1 May 1978)
- A business executive, civic leader, and sponsor of Christian organizations who belonged
to the United States of America
- Set out to save the Club Aluminum Products distribution company from bankruptcy
- He wrote down the following twenty-four words which he believed was a simple, easily
remembered guide to right conduct – a sort of ethical yardstick – which all of those who
are in the company could memorize and apply to what they thought, said and did:
1.Is it the truth?
2.Is it fair to all concerned?
3.Will it build goodwill and better friendships?
4.Will it be beneficial to all concerned?
 THE FOUR-WAY TEST
is the exemplary Framework of Corporate Social Responsibility
and has been used and emphasized by several public service
organizations in the US and other countries for many years. It
is short and simple but has broad application to all types of
organizational activities. In a given situation, all of these
guidelines may not be entirely satisfactory but they do provide
a set of useful criteria that are easily remembered.
C. Criteria for Decision Making
Most ethical dilemmas involve conflict between the needs
of the part and of the whole the individual versus the
organization or the organization versus society as a whole.
Managers faced with tough ethical choices often benefit
from a normative strategy to guide their decision making.
Four of these approaches that are relevant to managers are
the following:
a. Utilitarian approach
-This is the ethical concept that moral behaviors produce the
greatest good to the greatest number. Under this approach, a
decision maker is expected to consider the effect of each decision
alternative on all parties and select the one that optimizes the
satisfaction of the greatest number of people.
b. Individualism approach
-This is the ethical concept that acts are moral if they promote
the individual’s best long term interests which ultimately leads
to greater good.
c. Moral-rights
approach
- This is the ethical concepts
that moral decisions are
those that best maintains
the rights of those people
affected by them.
- Six moral rights that should be
considered during decision
making are:
1.The right of free consent.
2.The right to privacy.
3.The right of freedom of conscience.
4.The right of free speech.
5.The right of due process.
6.The right to life and safety.
d. Justice approach

-This is the ethical concept that moral

decisions must be based on standards of
equity, fairness, and impartiality.
THANK YOU!