Lesson 3.1
2: Major Ethical Issues in Entrepreneurship
Responsibilities and Accountabilities of Entrepreneurs
 Entrepreneurs have a responsibility toward their
internal and external stakeholders. The law and society hold
them accountable for their actions that impact their
employees' and communities' economic and social
development.
 Employers are responsible for developing a just
and healthy relationship with their employees. These
responsibilities include: giving fair salaries, wages, and
benefits, ensuring workplace safety and employee social
security, protecting workers' rights, promoting inclusion and
diversity, providing growth opportunities, and enhancing
employee engagement.
 Amid competition, entrepreneurs are expected to
uphold just and fair business policies. These policies cover
business processes related to retention, recruitment,
promotion, marketing and advertising, intellectual property,
and sources and use of funds.
1. It represents the expression of academic pursuits or ideas and is
assigned to certain property rights.
2. In this process, entrepreneurs make sure that enough cash is on
hand to continue their operations and fund their employees.
3. It is considered to be an employee’s movement to a higher-
grade level in the workplace.
4. This process refers to the commercial functions involved in
shifting goods and services from the producer to the consumer.
5. This process includes protecting the creators' rights to "original
artistic works" which include music, literature, and drama.
Lesson 3.
 Business ethics is a form of social responsibility
related to compliance with society’s moral and legal
standards. Many entrepreneurs find themselves weighing
whether to undertake unjust, unfair, and dishonest actions
in the interest of increased profits.
 Enterprises are expected to demonstrate basic
fairness towards their personnel and customers. Fairness in
business means equal and unbiased treatment. It also
requires objectivity and consistency when dealing with
similar problems and situations.
 When making decisions, businesses often find
themselves in a distribution dilemma, weighing the
tradeoffs between efficiency and equity. They are
challenged to find the right balance between profit
maximization and adherence to fairness, justice, and rights.
 More often than not, prioritizing efficiency and
profit without due consideration to equity results in
unethical business practices such as unfair communication
and competition, fraud, non-respect of agreements, and
environmental degradation.
1. It is a situation where a business organization has to
weigh the tradeoffs between efficiency and equity.
2. It is the type of unethical business practice wherein
the seller receives payment, but the buyer never
receives the goods and services ordered.
3. It is the type of unethical business practice where
rival companies fix the prices, divide the market among
themselves, and control the supply of goods.
4. It results from the neglect of the long-term
sustainability of natural resources.
It is the equal treatment of personnel and employees
and the consistent application of rules.
Lesson 3.3: Environmental Management
 Businesses use resources to develop products and
services that meet the current needs of society. Since
business activities impact the environment, companies
and enterprises are challenged to observe, monitor,
report, develop, execute, and evaluate their
environmental policies. This process is called
environmental management.
 The purpose of environmental management is to attain product responsibility, and carbon neutrality.
a desirable environmental state under the prevailing
socio-economic and technological conditions. It is Environmental Management Practices:
achieved by enhancing the beneficial links between its  Life-Cycle Analysis (LCA)
resource system and the environment. measures a product's cradle-to-grave impact on the
environment
 Some of the most critical parameters in assessing
whether industry or enterprise adheres to the
sustainable use of natural resources are air and water
quality and the impact of business on wildlife and
habitat.

 The United Nations called on governments and

businesses to work together and achieve the 17
sustainable development goals. Sustainable
development meets the needs of the present without
compromising the future generations’ quality of life. It
promotes fairness and equitable distribution of benefits
across generations.
-to draw up strategies to reduce the adverse effects,
No Poverty improve their products, and provide alternatives
Zero Hunger  Industrial Ecology- designs factories and distribution
Good health and Well-being systems in the most resource-efficient way
Quality Education =saves raw materials
Gender Equality =reuses wastes, energy, and other by-products
Clean Water and Sanitation
Affordable and Clean Energy  Extended product responsibility-promotes the idea that
Decent Work and Economic Growth companies should be responsible for the product they
Industry, Innovation, and Infrastructure produce even after selling them.-Cradle-to-cradle
Reduced Inequalities approach
Sustainable Cities and Communities Example: products can be disassembled when they are
Responsible Consumption and Production no longer useful to create another product
Climate Action  Carbon Neutrality=encourages companies to produce net-
Life Below Water zero emissions of greenhouse gases
Life on Land
Peace, Justice, and Strong Institutions
Partnerships for the Goals

 The business community responded to this challenge by

integrating environmental management strategies in
their business operations. These strategies are the Life-
Cycle Analysis (LCA), industrial ecology, extended

Lesson 3.4:

Environmental Management System

 The environmental management system (EMS) is a set of

guidelines and practices followed by business
organizations to avoid and reduce the environmental
impacts of their operations. It also aims to increase
operational efficiency.

 The International Organization for Standardization (IS0)

14001 is the international standard for certifying
environmental management systems. It defines EMS as
“part of the management system used to manage
environmental aspects, fulfill compliance obligations, and
address risks and opportunities.”
 are required by society to perform their social
responsibilities.

 Plan-Do-Check-Act Corporate social responsibility (CSR) refers to a business’s

(PDCA) Approach; more extensive obligations to society. These obligations
are economic objectives, legal responsibility, ethical
practice, and philanthropic expectations.

1.Environmental Policy=the foundation of the proposed EMS

=the commitment of an organization to society to
protect the environment
2. Planning= determines the different aspects of business
operations that negatively affect people and/or the The effectiveness of CSR programs can be assessed by
environment weighing the costs and benefits it brings to the company
=sets its objectives and targets and the society.
=designates responsibilities, creates timelines, and
outlines defined steps
3. Implementation and Operation
=allocates financial, human, and material resources
=conducts training and orientation
=designs procedures, communication channels, and
documentation
4. Checking and Corrective Action=monitors and evaluates
whether their operations have met the targets and
objectives
=If a company did not meet the target, then they
would note some necessary corrective actions.
5. Management Review=reviews the evaluation results to know
whether the EMS is effective or not
=the original plan undergoes some revision to add the
corrective actions, modifications, or alternatives

 All firms should have an EMS stating the regulations and

laws that apply to their industry and particular industry
and organization. The EMS addresses environmental
problems by enacting policies with explicit environmental
objectives and targets. It helps develop strategies It helps
develop strategies to improve environmental performance
and productivity. and improve the environmental
performance and productivity of a business.
The Environmental Management System
Benefits:
-Increasing resource efficiency and minimizing wasteful
spending
-Improved regulatory compliance
-Lighter regulation
-Sales and marketing
-Improving business reputation
-Finance
Lesson 3.5-Social Responsibility Frameworks and Practices

Businesses are expected to act in a manner that benefits

society. Aside from their natural economic functions, they
Lesson 3.6: Social Responsibility as Good Business Sense
Practicing social responsibility incurs costs to businesses.
They must allocate significant financial, human, and
material resources to fulfill their ethical, legal, economic,
and social obligations. Thus, many companies consider how
much they intend to give back to society.

Business giving can take many forms. Among these are

corporate philanthropy, corporate citizenship, and
corporate social responsibility.

Practicing social responsibility makes good business sense.

It is not always true that CSR is expenses without benefits.
An effective CSR program can shift the shareholder’s
orientation, increase employee motivation, support brand
recognition and reputation, strengthen the relationship
with the government, and create social value.