Business Ethics &

Social Responsibility
Quarter 4

Learner’s Packet
 Business Ethics
and Social
Responsibility
Grade 12
Quarter 4

Schools Division Office Management Team: : Rosemarie C. Blando, August M.

Jamora, Merle B. Lopez, Florendo S. Galang

Writer: Nathalie Rose C. Alegre

Evaluator: Van Russel A. Robles

Illustrator: Julius Burdeos

Subject Title : Business Ethics and Social Responsibility

Quarter Number 4
First Edition, 2020

Published by: Department of Education SDO—Rizal

Schools Division Superintendent: Cherrylou D. Repia
Assistant Schools Division Superintendents:
Gloria C. Roque and Babylyn M. Pambid
WEEKS
Formulating a Morally Defensible Position
10-12 on Ethical Issues in Entrepreneurship
Lesson

I
Ethics and morality are two major factors that have a major role in managing a
company. In colloquial speech, it may refer to something being 'ethical or moral' when we
mean that it is the right or wrong thing to do, so basically it is just about what's "good or
bad".

In this lesson, you will be required to formulate a morally defensible position on

ethical issues in entrepreneurship like basic fairness, personnel and customer relations
distribution dilemma, frauds, unfair competition and communication, non-respect of
agreement, environmental degradation.

D
One of the challenges that every business owner navigates is handling an ethical
issue, though there are laws that exist to hold workers and employees accountable. These
alone cannot deter employees from behaving unethically.

Ethical issues in business encompass a wide array within an organization's ethical

standards. Fundamental ethical issues in business include promoting conduct based on
integrity and trust, but more complex issues include accommodating diversity, empathic
decision-making and compliance and governance that is consistent with the organiza-
tion's core values and beliefs. Based on the Global Business Ethics Survey of 2019, 25%
of employees still feel that the top management of the organization they belong to does not
have a clear understanding of key ethics and compliance risks across the organization.
These references above are but a few of the unnumbered ethical issues that must be ad-
dressed in this era.

Can you identify any ethical issues in companies here in the Philippines? Can you
think of ways to prevent such ethical problems to create a harmonious environment with-
in and outside the organization?

Learning Task No.1

JUMBLED LETTERS

Directions: Reorganize blended words to form terminology relevant to business eth-

ics and social responsibility issues.

ALEGL - ________________________
CTAHILE RPILIPCENS - ________________________
SCOIAL IRIILBOTSPNSYE - ________________________
RNNTICOCCE - ________________________

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 HELCTNIUA REAOIBHV - ________________________
ALRPTIHHCOIPN - ________________________
OMNIEOCC - ________________________
RRCOPETAO CASIOL ITINYBRILSPESO - _______________________
SSBSIUEN ESHCIT - ________________________
LOACRR LDEOM - ________________________
ESKOARSDHETL - ________________________
NRIMDEAF EMODL - ________________________
NEAKCARM OEMDL - ________________________
BLILARE - ________________________
AOKERLTHDES - ________________________

Identifying Ethical Issues and Dilemmas

Ethical issues are tough social issues that involve a certain degree of controversy about
what is the right thing to do. Environmental protection is an example of a frequently dis-
cussed ethical issue, because there may be trade-offs between environmental and econom-
ic factors.

Ethical dilemmas are situations in which it is difficult for an individual to make decisions
either because the right course of action is unclear or carries some potential negative con-
sequences for the person or people involved.

Learning Task No.2

What’s on your mind?

Directions: In essay form, write your claim on how to prevent or handle different ethical
issues that an organization is facing, such as basic fairness, personnel and customer rela-
tions distribution dilemma, frauds, unfair competition and communication, non-respect of
agreement, environmental degradation.

_________________________________________________________________________________________
_________________________________________________________________________________________
_________________________________________________________________________________________
_________________________________________________________________________________________
______________________________________________________________.

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 Social responsibility is an ethical or ideological theory that an entity possesses.
Whether it may be a government, corporation, or individual entity, all of them have a re-
sponsibility to our society. While initially associated with making profits and governmental
practices, other stakeholders and local communities can also be associated with social re-
sponsibility.
Social responsibility is voluntary; it is about going above and beyond what the law
says (legal responsibility). It means eliminating corrupt, unethical behavior that might
bring harm to the community, its people or the environment.

Corporate Social Responsibility (CSR, also called corporate responsibility, corporate

citizenship, and responsible business) is a concept whereby organizations consider the in-
terests of society by taking responsibility for the impact of their activities on customers,
suppliers, employees, shareholders, communities, and other stakeholders, as well as the
environment. This obligation is seen to extend beyond the statutory obligation to comply
with the law and sees organizations voluntarily taking ways to improve the quality of life
for their employees, their families as well as the local community.

Many different models and frameworks were of social responsibility was created by
different philosophers. But before taking these into account, you also have to be aware of
the different types of Social Responsibility that a company should consider.

• Responsibility towards the Society - this includes carrying on the business with
moral and ethical standards, prevention of environmental pollution, minimizing ecolog-
ical imbalance, contributing towards the development of social health and education;
making use of appropriate technology and lastly overall development of the locality.
• Responsibility towards the Government - it comprises of being a law abiding compa-
ny, regularly paying of taxes, cooperating with the government in promoting social val-
ues, economic growth and development.
• Responsibility towards Shareholders - some of the acts belongs to the social respon-
sibility in this group is to work for the survival and growth of the concern, to build rep-
utation and goodwill, and to remain transparent and accountable for their actions.
• Responsibility towards Employee - to provide a healthy working environment, to
grant regular and fair compensation, to provide welfare services, training and promo-
tion facilities, a reasonable working standards and norms, an efficient mechanism to
address worker's grievances and proper recognition of efficiency and hard work.
• Responsibility towards consumers - this includes supplying consumers with socially
harmless,quality and with high standards products, fair pricing of commodities,
providing after sale services such as warranty and guarantee cards etc.

The nature of social responsibility can be classified into two, first is the manner in
which a business carries out its own activity and the other is on the welfare activity that

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Different Models and Frameworks of Social Responsibility

1. Carroll’s Model (1991)

Among all of the various models and frameworks of Corporate Social Responsibility,
Carroll’s model is the most famous. It has proposed a three dimensional conceptual model
of corporate performance. A firm has the following four categories of obligations of corpo-
rate performance: economic, legal, ethical and discretionary.

Figure 1. The Pyramid of Social Responsibility (Carroll;s Model)

Philanthropic responsibility — Do what is desired by global stakeholders.

(ex. Dontions,gifts, goodwill and anything that deals with social welfare.)
Ethical responsibility — Do what is expected by global stakeholders (Moral &
ethical values to deal with all the stakeholders.)
Legal responsibility — Do what is requires by global stakeholders ( Maximize the
shareholders value by paying good return.)
Economic responsibility — Do what is required by global capitalism
(Abiding the laws)

2. Ackerman’s Model (1976)

This model oemphasized on the internal policy goals and their relation to the CSR.
The four stages involved the following :
1) Find the social problem;
2) Study the problem,
3) Work on the problem and
4) Evaluate the problem.

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 Figure 2. The Ackerman’s Model
Under the Ackerman Model, comes the 6 strategies in adoption of CSR. The following are:
· Rejection strategy
· Adversary strategy
· Resistance strategy
· Compliance strategy
· Accommodation strategy
· Proactive strategy

Figure 3. Six Strategies in the Adoption of CSR

3. Redman Model
The Redman Model or Environmental Integrity & Community Health Model is devel-
oped by Redman and was adopted by many corporation in the US. According to this mod-
el as businesses contribute to the integrity of the environment and human health, there
will be greater potential for expansion.

4. Corporate Citizenship Model

This CSR model states that to be a corporate citizen, a corporate firm has to satfisfy
this 4 conditions:
1.Consistently satisfactory
2. Sustainable economic performance
3. Ethical actions
4. Behavior

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 Figure 4. Corporate Citizenship Model

4. Stockholders & Shareholders Model

According to this CSR model, productivists believe that the sole mission of a business is to
maximize the profit of a business. While philanthropists entertaining shareholders domi-
nate CSR through moral obligations and not for personal gain. On the other hand, the
progressivists believes that the corporate behavior basically motivated by self-interest and
should have ability to transform the socity for good and the ethical idealism concerns with
sharing of corporate profits and humanitarian activities.

Figure 5. Stockholders & Shareholders Model

6 The Intersecting Circles Model of CSR

Unlike the pyramid model, categorically refutes the hierarchical prioritization of
CSR and illustrates the integration of three aspects : economic, legal and moral. (see Fig-
ure 6) This model was proposed by Schawrtz and Caroll (2003) to illustrate the fact that
when it comes to CSR, none of the aspects are more important than the other. In this con-
text, Davis’ Iron Law of Responsibility (1960) can be mentioned as it also rejects economic

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responsibility as the first and foremost priority. Based on this model, a business although
created for profit-making, is actually a social creation and in order for it to survive and
tjrive, the sooiety must be willing to support and endure it.

Figure 6. The Intersecting Circles Model

7. The Concentric Circles Model

This model was adopted from a statement issued in 1971 by the Committee for Eco-
nomic Devt. ( see Figure 7). The statement posited that social conreacts of business pro-
cesses are not only feasible, but also morally necessary and, thus., urged corporation to
adopt a more humane view towards their function in the society.

Figure 7. The Concentric Circle Model

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8. The 3C-SR Model
This model was proposed by John Meehan,Karon Meehan and Adam Richards of
Liverpool John Moores University (Meehan, Meehan & Richards, 2006). The components of
this model are as follows: (a) ethical and social commitments, (b) connections with partners
in the value network and (c ) consistency of behaviour to build trust (see Figure 8)

Figure 8. The 3C-SR Model

9. Ethical Model
This model was developed under the influence of Mahatma Gandhi and hence, finds
its seat in the early 20th century. The pressure on Indian industrialists to demonstrate
their commitment to social development increased during the independence movement,
when Mahatma Gandhi developed the notion of trusteeship, whereby the owners of proper-
ty would voluntarily manage their wealth on behalf of the people.

10. Friedman’s Liberal Model

This approach was encapsulated by the American economist Miltpn Friedman, who
in 1958 challenged the very notion of corporate responsibility with the idea that companies
are solely responsible to their owners (Friedman,1971). As argued in this model, it is suffi-
cient for a business to obey the law and generate wealth, which through taxation and pri-
vate charitable choices can be directed to social ends. This ultimately fulfills the social re-
sponsibility of an organization towards the community and the nation.

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 E
Learning Task No. 3
Venn Diagram
Based on the frameworks and models of social responsibility or CSR (corporate social re-
sponsibility), make your own comparison of the different models and frameworks of social
responsibility using the following :
1. Similarities
2. Differences
Choose only 3 frameworks/model of corporate social responsibility. Write in on your jour-
nal/notebook.

A
Learning Task No. 4
Now that you have sufficient knowledge of corporate ethics and social responsibility, you
can now formulate your own social responsibility model.
Directions: Use an appropriate graphic organizer in formulating your own CSR Model
based on what you have learned.
You may ask your teacher for the prescribed format or you can be creative on your own.

Good luck!

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 References
“3C-SR Model Components” retrieved Feb 02,2021 from https://
image.slideshare.cdn.com/corporate-responsibility

Faith,Dirk, 2014, Ethics,Morals and Business-A brief intro to Business Ethics retrieved
Jan 31,2021 from
http://www.imzuwi.org/intro-to-business-ethics/

Fundamentals of Business, 3rd Edition-Chapter-4- “Ethics and Social Responsibility” re-

trieved last Jan31,2021 from https:// pressbooks.lib.14.edu/
fundamentalsofbusiness3c/chapter/chapter4-ethics-and-social-responsibility

Gallo,Amy,HBR Guide to Dealing with conflict at work retrieved Jan31,2021 from http://
www.harvardbusinessreview.com

“Models of Corporate Social Responsibility: Comparison,Evolution and converge” retrieved

last Feb 03,2021 from https://user/user/ downloads/models-of-corporate-social-
responsibility/ accessed Feb 03,2021

“Social Responsibility” retrieved last Feb.01,2021 from https://www.slideshare.net/

vickybandil/social-responsibility-of-business/

“Social Responsibility and Ethics in Business” retrieved last Feb.02,2021 from https://
slideshare.net/business-waheed-iqbal/

Velasque,Manuel G. 2011, Business Ethics,Concepts & Cases. London retrieved Jan

31,2021 from www.harvardbusinessreview.com/ business-ethics/concepts-analysis/

Wiley Online Library - Business and Safety Review, Retrieved last Feb.02,2021 from
https://onlinelibrary.wiley.com/

Answers

Learning Task No.2,3,4 : Answers may vary

15. STAKEHOLDER
ERS 12. FRIEDMAN MODEL 13. ACKERMAN MODEL 14. LIBERAL
9. BUSINESS ETHICS 10. CARROL MODEL 11. STAKEHOLD-
6.. PHILANTHROPIC 7. ECONOMIC 8. CORPORATE SOCIAL RESPONSIBILTY
CAL BEHAVIOR 5. CONCENTRIC
1. LEGAL 2. ETHICAL PRINCIPLES 3. SOCIAL RESPONSIBILITY 4. UNETHI-
Learning Task No.1

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Department of Education Division Rizal Office

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