Business Ethics
Assignment of Right Jobs
RESPONSIBILITIES AND ACCOUNTABILITIES OF
ENTREPRENEURS
To Employees, Government, Creditors and Suppliers
An entrepreneur is one who organizes, manages and assumes the
risk of an enterprise. An entrepreneur should be aware of the ethics and
social standard follow them.
A. Employee
Employees are the true assets of an organization. They are the ones
who contribute effectively towards the success of every business so, in
return entrepreneur has responsibilities and accountabilities to fulfill for the
safety and welfare of their employees.
The following are the responsibilities and accountabilities of an
entrepreneur to his/her employees.
1. Pay Wages/Salaries and Taxes
The company should have an attractive compensation packages to attract
more potential talents who can be a help in achieving organization's
long-term goals.
Entrepreneurs have the responsibility to pay their employees of their
business at least the minimum hourly wage in their locality. Wages/salaries
should always be on time and without delay so as the employees can meet
their individual obligations thus, motivates them to stay and do well in the
business.
2.
Taking into consideration the technical and the educational background of
the employees in assigning them to the job where they are good at or
aligned with their skills and abilities. Mismatching of jobs with employee's
qualification is discouraged.
3. Create and Maintain an Ergonomic Workplace
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. Working environment that are
properly ventilated and illuminated improve employee's performance, their
health and well-being.
4. Facilitate Employees' Compensation Insurance
When injuries occur through no fault of their employees. it's their
responsibility to file a claim with their employees' insurance provider.
Businesses must treat their injured employee 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.
5. Support Career Development
Career development is providing support and encouragement for employees
to enhance their skills and capabilities as an employee. Provide a human
resources development system that supports the careers of employees, a
self-development support program, and transfer opportunities for willing
employees.
6. Train and Educate Employees
Acquisition of new knowledge and skills through the professional and
personal development of employees is a pre-requisite and a guarantee of
business's success. Professional development also includes dialogues with
colleagues, peer mentoring and peer collaboration for achieving business.
goals.
Every individual wants to develop. So, the responsibility of the entrepreneur
is that he should make all possible efforts for the individual development of
the employees and may impartially provide them equal opportunities for
that. These opportunities include imparting education and training. give
timely promotions, transfers at the right time and their participation in the
management of the business, etc.
7. Enforce Anti-Discrimination Law
Employees cannot be disadvantaged, dismissed, or not given employment
for any reasons mentioned. Any problems or issues that arise with guests or
colleagues from overseas may require involvement of embassies,
government agencies, local cultural groups, or diplomatic services to help
resolve them.
8. Respect Human Rights
Business operations are interrelated with a wide range of people and
societies throughout the world and implements and enforces a code of
conduct that fosters respect for human rights.
9. Give rewards and Benefits
Reward employees fairly and attractively. in line with the prevailing
conditions on the local market. Gather data from the labor market on a
regular basis, ensuring that reward structures remain competitive.
Employees are more likely to strive in their work if there is anticipated
reward, they've value, such as salary increase, bonus, and promotion, rather
than if there is none.
It is also mandated in the Labor Code of the Philippines that entrepreneur
should pay fringe benefits such as Philhealth, Social Security, PAG-IBIG,
taxes out of employees' wages/salaries for each employee working in their
business.
Recognition boosts esteem and morale in which employees feel important,
satisfied, and inspired. Recognizing employees for accomplishments can be
an important reason for employees to stay.
Providing these benefits motivate many employees to stay and do well in
the business.
10. Give security of Employment
The entrepreneur should provide employment security to the employees of
his organization, which will cause the sense of satisfaction among them and
they will work with full interest, dedication, and commitment and will feel
free from the apprehensions of losing a job and will have the higher degree
of faith in the employer.
B. Government
In Business, the responsibilities of entrepreneurs towards the
government, professional institutes, and other business institutions are very
essential. The government sets the targets for the balanced and rapid
economic development of the country.
Responsibilities and accountabilities of entrepreneurs to the
government are:
1. Compliance of government rules
The rules framed by the government for business should be fully complied
with. The entrepreneur should follow the laws regarding obtaining licenses
for a specific business, the operation of the business determination and
production etc.
2. Payment of Taxes
The government imposes various types of taxes, like, income Taxes, sales
fax, excise tax, tariff duties and wealth tax on the entrepreneur and business,
for raising financial resources. Entrepreneurs should honestly pay these
taxes.
3. Not to correct the Government Machinery
The government appoints the officers to implement its policies. The social
responsibility of the entrepreneur is that he may not correct the government
officers and employees for getting wrong favors or some Anti-Social
purposes.
4. Not to Seek Political Patronage by Unfair Means
The responsibility of the entrepreneurs is that they do not seek political
patronage by providing undue economic help to any political party or
politicians during elections. By giving anti-social activities with political
patronage hits the democratic values.
5. Cooperate with Government for Economic Development
The government sets the targets for the balanced and rapid economic
development of the country. For that, the entrepreneur should provide
cooperation to the government by proper utilization of available resources
in accordance with the government targets.
C. Creditors
A creditor is an entity (person or institution) that extends credit by
giving another entity permission to borrow money intended to be repaid in
the future.
Various plans are prepared for development and expansion of the
business and for that various projects are also formulated. For their
completion, capital is the foremost requirement, which is fulfilled through
loans from the individuals, Financial Institutions and Banks.
Responsibilities and accountabilities of Entrepreneur towards
creditors are:
1. Obtain Loans on Reasonable Conditions
Some certain conditions are required to be fulfilled to obtain any type of
loan. These conditions should be reasonable, both for the creditors and the
business organization.
2. Follow Mortgage Rules
The creditors provide loans in secured and unsecured forms. If the creditor
has provided the secured loan on the mortgaged property, the entrepreneur
should follow the rules of mortgaged property.
3. Follow Business Ethics
Both the entrepreneurs and creditors should follow the business ethics in
providing loans and in repayment of loans. The loan procedures should be
honestly complied with.
4. Proper Utilization of Debt Capital
Loans are obtained for particular objectives. Hence, entrepreneurs should
utilize the loan amount only for the desired objectives. The loan amount
should not be utilized by small entrepreneurs for unproductive activities.
Not only that, but loan capital should also be invested only for objectives
and projects specified for the loans. Loan capital should be utilized with the
utmost economy.
5. Regular Payment of Installment and Interest
The entrepreneurs should pay loan installments and interest regularly,
according to repayment conditions. If installments and interests are not paid
timely, the loan burden goes on increasing and it also has an adverse effect
on the reputation of the business organization.
D. Suppliers
The services of the suppliers are also important for any business
because they supply raw materials, machinery, labor, and other materials.
Without them the smooth operation of the business is quite difficult.
Entrepreneurs' responsibilities and accountabilities towards their
suppliers are the following:
1. Pay fair prices of goods at a reasonable time
The entrepreneurs should pay reasonable prices for the materials purchased
from the suppliers. Often, the farmers provide cotton, sugarcane, and jute
etc. to various industries, for use as raw materials. However. the
Industrialists pay them very low prices for these commodities.
Entrepreneurs should pay reasonable prices for this type of raw material.
The responsibility of the entrepreneurs is that payment to the suppliers may
be made in time so that they may not have to face financial difficulties and
may carry out their operations efficiently and smoothly.
2. Inform about Changes in Market
The entrepreneurs have the responsibility to provide regular information to
the suppliers regarding changes happening in the demand of the
commodities in domestic or in foreign markets. So that the suppliers may
make necessary changes in their manufacturing projects, according to the
requirements.

3. Give guarantee of Minimum Price

The entrepreneurs should give the guarantee of minimum prices to the

suppliers so that they may feel assured about the certainty of the price and
may continue to maintain their will power.

4. Provide technical Advice

The entrepreneur has the responsibility to provide technical assistance to the

suppliers for the production of a new and substitute or replaces
supplies/commodities. The entrepreneurial organizations and Institutions
and suppliers together should short research projects.

5. Inform Suppliers of Future Developments

The Entrepreneur should provide information about possible future

development to the suppliers so that they will be aware of these
circumstances, thus, develop and become capable of increasing their
resources so as to meet the increasing demand in the future.

6. Promote Healthy Competition

The entrepreneur should not encourage unhealthily and hostile competitions

among the suppliers, for the sake of obtaining goods from them at the
minimum price, only healthy competition should be encouraged. Besides,
encouragement should be provided to individual suppliers and institutional
suppliers.
 providing a 'fair' return to the shareholders, 'fair' working conditions and
pay for the employees or 'fair' prices to the suppliers and customers and to
make the business, in general, an asset to the local community and the
LESSON 2 nation." The most important social obligation of an entrepreneur is to
reconcile and balance the various conflicting interests in the best possible
manner.
INTRODUCTION Obligations of the Entrepreneur to the Different Segments of
the Society Employees
This module focuses on the responsibilities and accountabilities of
entrepreneurs towards to consumers, general public, and other stakeholders.

An enterprise must earn profits for its own survival, for expansion,
for bearing the risks and finally for the prestige of its management. But
profit cannot be the sole objective of the entrepreneur. It is a means and not
an end. No enterprise can last long unless along with earning profits, it
continues to fulfill its obligations to the society. The ultimate objective of
every enterprise has to be the good of the people. Business must be run by
the people through the people and for the people.

An entrepreneur must take risks with his or her own capital in

order to sell and deliver products and services while expending greater
energy than the average businessperson in order to innovate. According to Responsibilities and Accountabilities of Entrepreneurs (as cited in
H.R. Brown, an entrepreneur, today, has an obligation 'to pursue those Jerusalem, Palencia & Palencia, 2017)
policies, to make those decisions or to follow those lines of action which are
desirable, in terms of the objectives and values of the society. The A. Responsibilities and Accountabilities to the Consumers
entrepreneur, therefore, has to include his social obligations and social
A business cannot work without the consumer. The survival and growth of a
values as inputs into the decision and action process, along with
business depend on consumer satisfaction, service, and support. The
organizational, economic, technological and other relevant values and
commercial organization should win the confidence of the customers. This
variables. According to Koontz O' Donnell "Social responsibility is the
is possible by sharing a positive attitude towards customers and fulfilling
personal obligation of everyone as he acts for his own interests, to assume
social responsibilities towards them.
that the rights and legitimate interests of all others are not impugned."
1. Ensure Quality of Products and Services
DISCUSSION
Your responsibility is to offer customers the highest quality in your products
According to Earnest Dale. "The manager sees himself as an
and services provide the best care and never lie to get a sale. A good
arbiter among the many interests of 'public affected by the business, the
entrepreneur is honest and gives a good price/benefit. Never Use marketing
stockholders, the employees, the suppliers, the general public and the
to deceive or sell false expectations. Quality goods should be produce and
consumers. It is his duty to divide the returns from the business equitably by
supplied. Distribution system should make goods easily available “to avoid
artificial scarcities and after-sales service should be prompt". Buying
capacity and consumer preferences should be taken into consideration while
deciding the manufacturing policies.
2. Ensures Consumer's Health and Safety
A key consumer issue is the quality and safety of products. Customers need
clear instructions for safe product use including assembly and maintenance.
To avoid customer harm and danger, anticipate potential risks of your
product and services in the design stage and throughout the product
lifecycle, from R&D to manufacturing, storage, and distribution, use and
disposal, reuse, and recycling. Whether or not legal safety regulations exist,
products should be safe for their intended use and if misused in a way that
can be foreseen.
3. Provide Free Training
The commercial organization should arrange to train the customers either
free or for a free. It must be in the case of computers, etc.
4. Be Fair with Prices
The customer should not be cheated by charging high prices. It is unethical
to charge customers with a higher price than the suggested. Thus, fair price
converts customer into a permanent customer.
5. Be Honest in Advertising and Marketing
The customers want to know the facts, features, advantages, side-effects,
etc. of the product. The advertisement conveys this information. Thus, the
company must see the advertisement is not being misleading and it must be
done by providing the true and actual information.
6. Be Honest in Dealings
Never lie to your customers. It is foolish to cook false stories. You will be
caught. In today's world, where information is just a click away, everyone
does his/her through research before purchasing something. You will lose
respect in front of them. If you can't deliver something, please mention it
clearly. They might not invest in that particular product but believe me,
would definitely come back to you in near future just because you were
honest, and guided them correctly. It is pointless to badmouth your
competitors.
7. Attend to Complaints
The consumer complaints must be attended immediately. When major
issues, occur, employ a system for making decisions on steps and measures
to take while placing top priority on not convincing the customers.
8. Service Even After Sales
The company is expected to provide after sale service for maintenance of
goods during the period of warranty. Efficient and effective after sale
service
helps to establish a good relationship between the customers and the
company.
9. Respect Customer's Time
Respect your customer's time. Do not decide the time and venue as per your
availability and comfort. If the customer wants to meet you at 6 in the
evening. make sure you are there on time. Neither arrives too early nor too
late.
Do not keep your customers waiting. Do not forget that there are several
options available in the market. Your loss is someone else's gain.
10. Treat Customers' well
Treat your customers as kings and do not think of them only when you have
a pressure to meet your targets within the stipulated time frame.
Understand that a customer buys your products or services only when he/
she trusts your brand and most importantly believes in you. Understand the
needs and requirements of your clients. Find out as to why they need a
particular product and how your product would benefit them. You need to
build a strong relationship with your customers for them not only to remain
your loyal clients but also bring more people along with them. It is the
responsibility of the organization to give correct suggestions and feedbacks
to customers. Avoid making false promises and commitments which you
yourself know are difficult to fulfill.
B. Responsibilities and Accountabilities to the General Public
To maintain a positive public image and attract new clients, a company
must understand its corporate responsibilities to the public. Ultimately, any
business has responsibilities to the public.
1. Be Fiscally Responsible
One of the actions prompted failure of companies such as Enron and
Adelphia occurred when executives gave themselves loans using company
funds, according to R Donnelley. While it can be disappointing to
consumers that companies need legislation to be fiscally responsible, it
would be naive to allow company executives to keep raiding corporate bank
accounts for their own needs. When a company is caught up in scandal
caused by executive greed, it can be fiscally fatal for that company. That is
why a company need s to enact and enforce guidelines for its own that agree
with the law but also apply specifically to the company, to avoid misuse of
company funds. There is a bond of trust between a consumer and a
company that is broken when fiscal fraud occurs. This goes for public or
private companies.
2. Consider public Input
A company should be able to operate under its own rules and ideals, but a
company should also take into account the input of its customers to remain
competitive, according to the World Bank Institute's reported filled "Public
Policy for Corporate Social Responsibility.' A company should reach out to
its customers and benefit from the insight of what customers are looking for
in products improvements.
A company that creates an advisory board of a cross-section of its target of
its target audience gathers recommendations on how to keep in touch with
the customer base and how to improve the company's public image. It is the
responsibility of the company to remain accountable to its customers:
otherwise, the company will lose its customers and cease to exist.
3. Community Oriented
A company exists because of the customers it serves and the community in
which it is located. The community provides most of the employees for the
company. and the community provides all the public services the company
enjoys, such as electricity and firefighting protection. In some cases,
companies are given breaks on their utilities and taxes in order to entice
them to establish a location within the community. The company has a
responsibility to give back to the community that supports it with tax breaks
and a labor force. When there is a community event, the company should
contribute volunteers. money, or something that would support the event.
The company should use local suppliers as it can help to support local
businesses.
C. Responsibilities and Accountabilities to Other Stakeholders
1. Actively protecting the Environment
a. Comply with Environmental Legislation
 Comply with the Clean Air Act of 1999
 Store waste safely and securely, make sure it is treated
appropriately, ensure it is collected.
 Manage your business waste for recycling by segregating it prior to
collection.
b. Dispose waste properly
 Appropriate steps should be taken in prevent environmental
pollution, and to preserve ecological balance.
c. Recycle
 Business is required to separate the following forms of commercial
waste for re-cycling: paper, card, plastic, metals, and glass
d. Conserve and Protect Biodiversity
  Biodiversity refers to all species of plants and animals, including
any genetic variations within those species and the complex
ecosystem they live in.

e. Prevent and remedy damages to environment.

Every year there are thousands of cases of damage to environment covering:

 damage to species and habitat

 damage to water
 risks to human health from contamination of land

f. Use Scarce Natural Resources Sparingly

 Scarce natural resources should be used very carefully at these are

depleting at a very fast rate.

2. Operating with an Ethical Supply Chain

Stakeholders are increasingly aware of life-cycle issues with

business supply chains and are insisting on ethical sourcing of materials.

For a jewelry company. this can mean taking steps to ensure that
you are not purchasing "blood diamonds", which are jewels from mines
operated in near slave-like conditions and that fund brutal warlords.

Large coffee buyers are increasingly sourcing their coffee from

farms that have been certified to operate sustainably by paying workers a
living wage and avoid clear- cutting rainforests and other forms of habitat
destruction.