Business Ethics and Social

Responsibility

Quarter 4 – Module 8: The

Responsibilities and
Accountabilities of
Entrepreneurs to:
Employees, Government and
Creditors
 What I Need To Know

Entrepreneurship is the process of identifying opportunities in the marketplace

marshalling the resources required to pursue these opportunities and investing the
resources to exploit the opportunities of long-term gain. The successful entrepreneur
should maintain a strict discipline in their business. It is necessary for an entrepreneur to
know the values and important of business ethics. Doing business ethically means
holding right things right and wrong things wrong in business.
An entrepreneur is one who organizes, manages and assumes the risk of an
enterprise. An entrepreneur visualizes a business, takes bold steps to establish
undertaking, coordinates the various factors of production and gives it a start. An
entrepreneur should be aware of ethics and social Responsibility in business and should
follow them in order to maintain the ecological balance in the society. Business ethics
are centrally concentrated with the business conduct. A value is something that has
worth or importance to an individual, it contains a judgment elemental in that it carries
individual, ideas as to what is right, good or desirable.
This module will provide you with information and activities that will help you
understand the responsibilities or duties of entrepreneurs as well as their
accountabilities or liabilities.
After going through this module, you are expected to:
3.1 Discuss the responsibilities and accountabilities of entrepreneurs to:
a. employees
b. government
c. creditors
ABM_ESR12-IVi-l-3.1
 Lesson The Responsibilities and Accountabilities of
Entrepreneurs Employees, Government and
1 Creditors

What’s In

Read analyze the quote and perform the activity below.

“As an entrepreneur, you have a lot of passion and

responsibility. You have to kindle the same passion and
responsibility to your employees” –
Gurudev Sri Sri Shankar

Discuss what you understand about the quote.

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What Is It?
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A. Responsibilities and Accountabilities to the Employees

Responsibilities are the duties or obligations to satisfactorily perform or complete a

task that one must fulfill, and which has a consent penalty for failure.

1. Pay Wages and Taxes

Entrepreneurs have the responsibility to pay their employees of their business at

least the minimum hourly wage in their locality and to pay each employee money owed
from working per pay period, including overtime, sick leave, and vacation wages.

Paychecks should always be on time and without delay so the workers can meet
individual financial obligations. The government also require entrepreneurs to pay Phil
Health, Social Security, taxes out of employee wages for each employee working their
business.

2. Create and Maintain a Safe Workplace

The government requires businesses to create and maintain a safe working

environment for their employees as per standards. 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. Continual
inspection of their facilities and employee knowledge of safety standards is necessary
to make certain their workplace remains as safe as possible.

3. Facilitate Workers’ Compensation Insurance

Despite business owners’ best efforts to maintain a safe working environment,

accidents will happen. When injuries occur through no fault of their employees, it’s
their responsibility to file a claim with their workers’ compensation insurance provider.
This coverage provides for medical care and wage replacement for their injure
employee. Businesses must treat their injured employee with respect and file the claim
without attempting to cause a delay in processing or attempt to defer the worker from
filing a claim at all. This is illegal and can cost the business hefty fines and possible
jail time if the entrepreneur refuses to honor their commitment and requirements as a
business owner.

4. Enforce Anti-Discrimination Law

It is illegal to discriminate against anyone according to their culture. This means

not only race, religion, and country, but also age, gender, sexual preference, disability,
a way of life and beliefs. “EEO” stands for “Equal Employment Opportunity”, which
means that employees cannot be disadvantaged, dismissed, or not given employment
for any of these reasons. It is the employer’s responsibility to ensure that all staff is
trained and aware of their obligations under anti-discrimination laws.

5. Create and Maintain a Favorable Working Environment

As an entrepreneur and employer, you should try to provide a healthy working

environment, which respects each person and their opinion is considered. Listen to all
your collaborators and worry about their welfare. Remember that they are working for
your company exists and is profitable and that as better feel, the better they will do
their job.

6. Respect Human Rights

The Mitsubishi Electric Group understands that its business operations are
interrelated with a wide range of peoples and societies throughout the world, and
implements and enforces a code of conduct that fosters respect for human rights.
7. Support Career Development

Mitsubishi Electric provides a human resources development system that supports

the careers of employees, a self-development support program, and transfer
opportunities for willing employees.

8. Train and Educate Employees

Promoting knowledge is important in changing the business environment.

Acquisition of new knowledge and skills through the professional and personal
development of employees is a prerequisite and a guarantee of business success.

9. Manage Performance

"What gets measured gets done" is an expression you will often hear when talking
about performance management and the simple meaning behind this statement is the
key to our philosophy of rewarding and managing performance. We want all our
employees to have clearly defined goals, which they defined themselves with their
managers, on the basis of business goals, through three main performance areas
profit, process, and people.

10. Give Rewards and Benefits

We reward our employees fairly and attractively, in line with the prevailing
conditions on the local market. We gather data from the labor market on a regular
basis, ensuring that our reward structures remain competitive. Our reward system is
well structured and transparent in its application. It:

• Allocates appropriate people to appropriate job positions

• Set requirements and standards, outcomes and measures
• Provides effective orientation, education, and training
• Provides ongoing coaching and feedback
• Designs a foundation for effective systems that reward people for their contributions
• Provides promotional/career development opportunities for employees

B. Responsibilities and Accountabilities to the Government

In any country, the government tries to preserve the community and improve its
conditions. In that respect, the business has to extend its cooperation to the
government. If the business discharges its responsibilities the government sincerely
and effectively, the government can function more efficiently.

1. Observe Laws, Rules, and Regulations

A number of legislative are formed from time to time by the government for proper
regulation and control of the business. Businessmen should comply with all legal
requirements, execute government contracts, pay taxes honestly and in time, make
services of executives available for government, suggest measures and send proposals
to enact new laws for the business.

2. Pay Taxes

Businesses must pay taxes and fees to the government in the course of carrying
out their operations. These can include taxes on revenues, tariffs on imported
products, and a number of administrative fees necessary to register the business.
Withholding these payments, particularly taxes, is considered a crime.

3. Follow Environmental Regulations

 Many companies, particularly those in the industrial and manufacturing sectors,
face heavy regulations regarding the number and variety of pollutants that they are
allowed to emit. Some companies, feeling a "social responsibility" toward the common
good, may seek to limit their pollution more than the law requires.

4. Abide by Labor Laws

Businesses that hire employees must abide by a slew of laws relating to how they
treat their employees. These include laws related to how much an employee can be

paid, how many hours he may work, and the criteria under which he can be hired
and fired.

5. Avoid Restrictive Trade Practices

Companies are forbidden from engaging in certain kinds of restrictive trade

practices that limit competition. For example, most companies may not develop
monopolies within a particular sector or provide substantial barriers for new
companies to compete with them. Restrictive trade practices of this kind can often
reduce the quality of products available to consumers and drive-up prices.

6. Disclose Financial Statements

Companies must disclose a number of financial statements to the government in

the form of tax returns, and, if the company makes ownership of shares of stock
commonly available, to the public as well. This financial transparency helps to ensure
that the company is not violating any laws, such as withholding taxes and to aid the
public in deciding whether to invest in the company.

7. Avoid Corruption

The commercial organization should not take any type of favor from government
officials by bribing or influencing them.

8. Assist in Implementing Socio-Economic Policies

The government expects co-operation and help from the business sector to help in
implementing programs and policies relating to social and economic development.

9. Help Earn Foreign Exchange

The government also expects from a business organization that it will earn foreign
currency by exporting goods in the foreign market. The government requires this
foreign currency for importing valuable and important products.

10. Advise the Government

The business organization has to provide timely advice to the government in

respect of framing important policies such as Industrial policy, Import & Export policy,
Licensing policy, etc.

11. Contribute to Government Treasury

The commercial organization must contribute the funds to the government during
emergencies and natural calamities like floods, earthquakes, etc.

12. Contribute to Political Stability

The commercial organizations should work towards the political stability of the
 country. The stable government often brings more return and peace in a democratic
country.

C. Responsibilities and Accountabilities to the Creditors

1. Give Correct Information

Shareholders who are the owners of the business should be provided with correct
information about the company to enable them to decide about further investments.

2. Provide Fair Return on Investment

The company should provide a fair return on the investment made by

shareholders. If shareholders do not get the proper dividend, then they will hesitate to
invest additional funds. Shareholders should be kept fully informed about the working
of the company for healthy growth of the business. The Companies Act 1956 also
requires the company to give full disclosure in the published statements.

3. Strengthen Share Prices

The company should strengthen the share prices by its growth, innovation, and
diversification. At the same time, shareholders should also offer wholehearted support
and co-operation to the company to protect their own interests.

What I have Learned?

A. Direction: Answer the following in not less than 5 sentences. Discuss the
responsibilities and accountabilities of entrepreneurs to the following:
a. employees
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b. government
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c. creditors
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B. Write a reflection of these responsibilities and accountabilities of entrepreneurs by answering

the question:

“What is the importance of these responsibilities and accountabilities of the

entrepreneurs especially that the country is affected by health crisis brought about by
COVID-19?”