Name: _________________________________ Name of Teachers: MARILYN TORRES______

Grade/Section: _________ Date of Submission: ____________________

BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

4TH t QUARTER-Module1 (Week1)
ETHICS AND CORPORATE SOCIAL RESPONSIBILITY

Most Essential Learning Competency: Discuss the Responsibilities and Accountabilities of

Entrepreneurs to its Stakeholders.

Objectives: 1. Define Social Responsibility

2. Distinction between Ethics, Business Ethics and Social Responsibilities
3. Understand Entrepreneurs responsibilities and accountabilities to Stakeholders.

Discussion:

What Is Corporate Social Responsibility (CSR)?

Corporate social responsibility (CSR) is a self-regulating business model that helps a company be
socially accountable—to itself, its stakeholders, and the public. By practicing corporate social
responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they
are having on all aspects of society, including economic, social, and environmental.

To engage in CSR means that, in the ordinary course of business, a company is operating in ways that
enhance society and the environment, instead of contributing negatively to them.

Understanding Corporate Social Responsibility (CSR)

Corporate social responsibility is a broad concept that can take many forms depending on the
company and industry. Through CSR programs, philanthropy, and volunteer efforts, businesses can
benefit society while boosting their brands.

As important as CSR is for the community, it is equally valuable for a company. CSR activities can help
forge a stronger bond between employees and corporations, boost morale and help both employees
and employers feel more connected with the world around them.

Why should a company implement CSR?

Many companies view CSR as an integral part of their brand image, believing that customers will be
more likely to do business with brands that they perceive to be more ethical. In this sense, CSR
activities can be an important component of corporate public relations. At the same time, some
company founders are also motivated to engage in CSR due to their personal convictions.

What is the impact of CSR?

The movement toward CSR has had an impact in several domains. For example, many companies have
taken steps to improve the environmental sustainability of their operations, through measures such
as installing renewable energy sources or purchasing carbon offsets. In managing supply chains, efforts
have also been taken to eliminate reliance on unethical labor practices, such as child labor and slavery.

Page 1 of 4
Although CSR programs have generally been most common among large corporations, small
businesses also participate in CSR through smaller-scale programs such as donating to local charities
and sponsoring local events.

Social responsibility – the adoption by a business of a strategic focus for fulfilling the economic, legal,
ethical and philanthropic responsibilities expected of it by its stakeholders.
 (1) all types of business – small and large, sole proprietorships and partnerships as
well as large corporations
 (2) it involves action and measurement
 (3) 4 types of responsibility
a. Economic c. ethical
b. Legal d. philanthropic
 (4) it involves those to whom an organization is responsible – the stakeholders


Who are stakeholders?

2 Types of Stakeholders:
1. Internal – these are individual and parties that directly participate in the management of the
entities.
Example: Employees, Owners, Managers, Investors
2. External – these are individual and parties outside the management of the entities; parties or
groups that are not a part of the organization but get affected by its activities.
Example: Government, Creditors, Investors, Suppliers, Consumers, General Public, Environment and
others such as Clients, Intermediaries, Competitors, Financial Institutions, etc.

Distinction between Ethics, Business Ethics and Social Responsibilities.

Ethics- is the study of the moral behavior or conduct of man as viewed from ultimate principles insofar
as these principles are known by human reason. It is a philosophical science, dealing with the morality
of the human act. Pertains to the individual character of a person or persons.

Business Ethics- is concerned primarily with the relationship between business goals and techniques
to specifically human ends. It studies the impact of laws for the benefit of the individual, the company,
firm, the business community, and society as a whole.

Winston Churchill once said, we make a living by what we get, but we make a life by what we
give. It is understood to mean that people and organizations must behave ethically and with sensitivity
toward the social, cultural, economic and environmental issues. Social responsibility helps individuals,
organizations, and governments to have a positive impact on development, business, and society with
a positive contribution to bottom-line results. Actions done under social responsibility must touch and
improve the live of the ordinary people.

Social Responsibility is an ethical theory, in which individuals are accountable for fulfilling their
civic duty; the actions of a person must benefit the whole society. In this way, there must be a balance
between economic growth and the welfare of society and the environment. If this equilibrium is
maintained, then the social responsibility is accomplished.

Page 2 of 4
ENTREPRENEURS RESPONSIBILITIES AND ACCOUNTABILITIES TO STAKEHOLDERS

A., Employees
Identifying their concerns. Entrepreneurs are responsible for decisions that affects the self -esteem,
personal growth, morale and economic well-being of those they manage, particularly in the selection,
merit, goal setting and performance standards, evaluation and feedbacks, discipline, promotion,
communication, delegation of task/work, training and development, provision for health and safety
conditions etc.

B. Government- businesses must also abide by the laws of the countries in which they operate,
making them responsible to the respective governments in several areas by paying taxes, abiding
labor laws, contribute to political stability, follow environmental regulations, help earn foreign
exchange, avoid corruption, contribute to government treasury.

C. Creditors and Investors

The primary responsibility of a business, according to economist Milton Friedman, is to its
investors -- the people who have put up their own money in an effort to help it succeed. The
company must provide correct information for return of investment. Transparent in its financial
and operational activities. Companies’ relationships with investors also entail social responsibility.
Although a company’s economic responsibility to make a profit might seem to be its main
obligation to its shareholders, some investors increasingly are putting more emphasis on other
aspects of social responsibility.

D. Suppliers
The services of the suppliers are also important for any business because they supply raw
materials, machinery, labor, and other materials. Without suppliers, the smooth operation of the
business is quite difficult. Therefore, the following elements must be present: payment of fair prices
of goods, payment in reasonable time, to inform about changes in market, to give guarantee of
minimum price, to motivate indigenous supplies, to provide technical advice, to inform suppliers
of future developments, to promote healthy competition.

E. Customers/Consumers
To be successful in today’s business environment, entrepreneurs must satisfy its customers
and consumers. A firm must deliver what it promises, as well as be honest and forthright in
everyday interactions with customers, suppliers, and others. Recent research suggests that many
consumers, particularly millennials, prefer to do business with companies and bran ds that
communicate socially responsible messages, utilize sustainable manufacturing processes, and
practice ethical business standards.

F. Society or General Public

Entrepreneurs must also be responsible to society. A business provides a community with
jobs, goods, and services. It also pays taxes that go to support schools, hospitals, and better roads.
Some companies have taken an additional step to demonstrate their commitment to stakeholders
and society as a whole.

Page 3 of 4
Activity 1. Define the following terms:

a. Economic Responsibility b. Legal Responsibility

c. Ethical Responsibility d. Philanthropic Responsibility

Activity 2: Give at least 3 examples of the above Responsibilities found in Activity 1.

Activity 3: TRUE OR FALSE. Answer true if the statement is True, if the statement is false, answer
False and supply the correct word(s) to make the statement correct.

1. “We make a living by what we get, but we make a life by what we receive”.
2. Entrepreneurs are not responsible for decisions that affects the self -esteem, personal
growth, morale and economic well-being of those they manage.
3. Businesses must abide by the laws of the countries in which they operate.
4. The primary responsibility of a business, according to economist Milton Friedman, is to its
investors -- the people who have put up their own money in an effort to help the business
succeed.
5. The following elements are not relevant to entrepreneurs responsibilities, payment of fair
prices of goods, payment in reasonable time, to inform about changes in market, to give
guarantee of minimum price, to motivate indigenous supplies, to provide technical advice,
to inform suppliers of future developments, to promote healthy competition.

Activity 4: In no less than 500 words, answer the question below.

What is Corporate Social Responsibility?

Page 4 of 4
Page 5 of 4