UNIVERSITY OF CAGAYAN VALLEY

Tuguegarao City

SCHOOL OF BUSINESS ADMINISTRATION & GOVERNANCE

MODULE IN ENREPRENERIAL MIND

Course Title: ENTREPRENEURIAL MIND

Credit Units: 3 units
Course Description:

This course aims to provide students with an understanding of the nature of enterprise and
entrepreneurship and orientate students towards an entrepreneurial mindset. It introduces the
role of the entrepreneur, innovation, and technology in the entrepreneurial process. Being
entrepreneurial is not necessarily about starting a new venture but is about seeking opportunities
and taking action to bring those opportunities into reality. It involves "building something from
nothing" and successful entrepreneurs know how to manage and mitigate uncertainty and risk.
The course content is relevant to those individuals thinking about starting a business or who are
already in business - large or small, for profit or social enterprise; those who are interested in
commercializing their own innovations or of other; entrepreneurial employees interested in
"corporate entrepreneurship" and those who advise entrepreneurs or engage in policy making in
the entrepreneurship area. Developing an entrepreneurial mindset and enterprising skill set
critical for constantly changing markets or workplaces.

MODULE 4 SOCIAL RESPONSIBILITEIS OF ENTREPRENEURS

Learning Outcomes:
At the end of this module, students are expected to:
Knowledge
1. Have a better understanding on how socially responsible entrepreneur is proactive with
eliminating corrupt, irresponsible, or unethical behavior that might bring harm to the
community, its people, or the environment before the behavior happens.
2. Gain in-depth insights into economic and social value creation.
3. Learn to think strategically and act opportunistically with a socially conscious business
mindset.
4. Demonstrate with a working knowledge of the concepts, opportunities, and challenges
of social entrepreneurship.
5. Understand a business's responsibility to know and abide by workplace laws, trade
regulations, and ethical behavior that affect business operations
Skills
1. Be aware of ethics and social Responsibility in business and should follow them to
maintain the ecological balance in the society.
2. To engage in a collaborative learning process to develop a better understanding of the
context and domain of social entrepreneurship.
Values
1. Learn that individuals have a duty to act in the best interests of their environment and
society as a whole.
2. Become socially responsible in everything that they do.
3. Be an influencer in our communities, that it the duty of every individual to make the
commitment to embrace and embed social responsibility into our personal values and
belief system.

1
 UNIVERSITY OF CAGAYAN VALLEY
Tuguegarao City

SCHOOL OF BUSINESS ADMINISTRATION & GOVERNANCE

LESSON 4. SOCIAL RESPONSIBILITEIS OF ENTREPRENEURS

Intended Learning Outcomes
1. Know the definitions of social responsibility of entrepreneurs.
2. Gain knowledge on the importance of social responsibility of entrepreneur.
3. Identify and discuss the arguments of entrepreneurs for social responsibility.
4. Discuss profit motives and social responsibility.
5. Discuss social responsibility of entrepreneur towards different sections of society
6. Explain ethics and social responsibility of entrepreneurs.
7. Enumerate and explain the social responsibility to consumers.
8. Discuss the theories on social responsibility.

Learning Activities

SOCIAL RESPONSIBILITY OF ENTREPRENEUR

According to Professor Howard Bowen, social responsibility of entrepreneur is
defined as the obligations of businessmen to pursue their policies, to make those decisions or to
follow lines of actions which are desirable in terms of the objectives and values of society.

“The entrepreneur is the pivot of development.”

“The entrepreneur is the pivot of development,” this statement attracts our attention
towards the importance of entrepreneurs in economic development. Economic development of a
country takes place when output increases as a result of entrepreneurial activity. The
entrepreneur is the central figure in the process of development. The economic development of
a country to a large extent depends on human resources human resources alone cannot bring
economic development and for solving this purpose, there must be dynamic entrepreneurs. A
country maybe rich in natural resources but if it lacks in dynamic entrepreneurs then, it may not
be able to utilize the resources and it may lag in economic development. Entrepreneurs are
action oriented, highly motivated individuals who take risks to achieve goals. An entrepreneur
is one who looks for opportunities, identifies and seizes them mainly for profit. Entrepreneurs
seizing opportunities set up business undertaking and industries,
economic thereby make transformation.

Entrepreneurs perform vital functions in economic development. They have been

referred to as the human agents needed to mobilize capital, to exploit natural resources, to create
markets and to carry on trade. It has been well said that entrepreneurial inputs spell the
difference between prosperity and poverty among nations.

MEANING AND DEFINITIONS OF SOCIAL RESPONSIBILITY

Business ventures are a unit of society in which they operate. These enterprises depend
on society for the needed resources like men, material, capital and also for selling their
products. In fact, business depends on the society for its existence, growth, and promotion.
Hence entrepreneurs have a definite social role and responsibility towards the society. Social
responsibility denotes the responsibility of the business towards various
sections of the society.

2
 UNIVERSITY OF CAGAYAN VALLEY
Tuguegarao City

SCHOOL OF BUSINESS ADMINISTRATION & GOVERNANCE

Businessmen must consider wider public interest while taking business decisions. A few
scholars have defined ‘social responsibility’ in the following way:

According to Koontz and O’Donnell, “Social responsibility is the personal obligation

of everyone, as he acts in his own interest, to assure that the rights and legitimate
interests of all others are not infringed.”

In the words of Adolph Berle, “Social responsibility is the business’s responsiveness to

public consensus, i.e., the obligation of the business to meet those demands and aspirations of
the society about which there is public consensus.

H.R. Bowen defines as “Social responsibility is the obligation to pursue those policies,
to make those decisions or to follow those lines of action which are desirable in terms of
objectives and values of our society,”

Nicholas Sirpolis has defined social responsibility as: “The circle of care and concern
that a business has for the well-being of society.”

PROFIT MOTIVE AND SOCIAL RESPONSIBILITIES

It is a misnomer that the concept of social responsibilities is against the profit motive.
Some scholars have views that entrepreneur’s primary responsibility is to earn profit
for stockholders. Milton Friedman has observed, “There is one and only one social
responsibility of business i.e., to use its resources and engage in activities designed to increase
its profits so long as it stays within the rules of the game which is to say it engages in open and
free competition without deception or fraud.”

According to Henry Ford Il the foremost social responsibility of business lies in

carrying out its operations efficiently and economically. He observes, “Today we need the
phrase ‘business is business” to remind us that business is not first and foremost a social
institution, a charitable agency, a cultural gathering, community service, a public-spirited
citizen. It is an action organization geared to produce economic results in competition with
other business. On the other hand, some scholar’s views that enterprise are not independent
entities responsible only to stock-holders. They also have a responsibility to the larger society
that provide their creation through various laws and regulations and supports them by
purchasing their products and services.
Peter F. Drucker has observed, “Business should develop concern for society and
pursue welfare activities which should form an important area of its operation. It is a demand
that quality of life becomes the business of business. The new demand for business is to make
social values and beliefs, create freedom for individual and al-together produce good
society.” Socially responsible behavior of an entrepreneur not only helps the society but is also
self-rewarding for the venture in several ways.

ARGUMENTS FOR ENTREPRENEUR’S SOCIAL RESPONSIBILITY

The arguments supporting a major role for the social responsibility of entrepreneurs are as
follows:
(1) Moral Justification: There is a growing realization that it is the moral duty of business
houses to serve the society. They enjoy wide economic and social power. Their power should be

3
 UNIVERSITY OF CAGAYAN VALLEY
Tuguegarao City

SCHOOL OF BUSINESS ADMINISTRATION & GOVERNANCE

balanced with social responsibility. Business has the resources and capabilities to solve social
problems.
(2) Long-term Self-interest of Business: In the long run, no business enterprise can survive
and grow unless it enjoys a good image in the public. The image of the firm can be improved in
the eyes of the society by serving their (society) interests.
(3) Public Image: Socially responsible behavior creates a positive public image of an enterprise.
(4) Profitable Opportunities: That Business has little chance of success in a society which is
plagued with enormous problems and evils. Business can meet the challenges by converting the
problems into profitable opportunities. The securities of a socially responsible company enjoy a
wider market among the investors.
(5) Ensuring Law and Order: To maintain law and order in a country, business should
shoulder its responsibilities towards the society, otherwise people will resort to anti-social
activities which may ultimately harm business. The doctrine of social responsibilities is helpful
in ensuring law and order in the society. It is a preventive measure against social disorders.
(6) Balance of Responsibility and Power: Since business entrepreneurs already have a great
deal of social power, their social responsibility should be equally great.
(7) Public Expectations: There is a deep conviction that entrepreneur has a clear obligation to
the good of the greater society. The business enterprise is expected to be efficient, profitable and
at the same time socially responsible.
(8) Interdependence: Society and business affect each other. For example, goods and services
provided by the business determine the standard of living in the society. In case business does
not produce and supplies goods of good quality at moderate prices, society will react and stop
inputs in business. Therefore, it is in the interest of the business to be responsible to its social
obligations.
SOCIAL RESPONSIBILITY OF ENTREPRENEUR TOWARDS DIFFERENT
SECTIONS OF SOCIETY
Business enterprise required to discharge social responsibilities not only towards society but
also towards other social groups like employees, customers, suppliers, government,
creditors, unions and the global community. Social responsibility of entrepreneur towards
different sections. of society may be summarized as follows:
(1) Social Responsibility towards the Customers: It is truly said that “Customers are the life
blood of every business.” The major social responsibilities of entrepreneur towards customers
include the following.
(i) Producing and supplying goods at reasonable prices,
(ii) Avoiding creation of artificial scarcities.
(iii) Providing after-sale-services.
(iv) To Furnish needed information to prospective customers concerning product composition
and its quality.
(v) To ensure the health and safety of customers,
(vi) To prevent formation of monopolies with the intention of exploiting customers.
(vii) Revealing truth in advertising and levels.
(viii) To respect the integrity of the culture of the customers.
(ix) To ascertain consumer preferences and consumer satisfaction.
(x) To work within the framework of various consumer laws and legislations.
(2) Responsibility Towards the Employees: Employees produce wealth for the business and
give their best service and share in the resulting profits. Business entrepreneurs have

4
 UNIVERSITY OF CAGAYAN VALLEY
Tuguegarao City

SCHOOL OF BUSINESS ADMINISTRATION & GOVERNANCE

significant responsibilities towards employees. Entrepreneur’s basic obligations to its

employees are:
(i) To provide the opportunity for training, promotion, and advancement.
(ii) To provide better working conditions and good physical facilities.
(iii) To place an employee in a position for which he is best suited by his skills and interest.
(iv) To start welfare and profit-sharing plans for employees.
(v) To satisfy “employee dignity” by allowing him work freedom, self-realization. It is the
responsibility to treat each employee as an entity and not as in impersonal part of a group of
humans.
(vi) To recognize the workers right to a fair wage, a right to participate in decisions affecting
their working life, to membership of a trade union.
(vii) To settle employee’s grievances and disputes smoothly.
(3) Responsibility Towards Suppliers and Creditors: Business also owns responsibility
towards suppliers, dealers and creditors as follows:
(i) All dealings with suppliers should be on fair terms regarding price, quality, delivery,
payment etc.
(ii) Business must provide accurate and correct information to creditors and suppliers;
(iii) To avoid malicious propaganda, price-cutting, cut-throat competition, unhealthy
combinations, interference in production and distribution and other dishonest trade practices.
(iv) To avoid exploitation of small competitors.
(v) To create adequate, fair, and inter-business relationship.
(vi) To provide information regarding change in habits, fashion, and choices of customers,
(vii) To Promote local suppliers.
(viii) To make payment of interest at appropriate time.
(ix) To make appropriate use of debt capital.
(4) Responsibilities Towards the Community: A few responsibilities of entrepreneur towards
the community are as follows:
(i) To preserve, maintain and improve the natural wealth and resources of the society.
(ii) Economic use of natural resources so that these are not eliminated at a faster rate.
(iii) Control of pollution by providing necessary pollution-control devices in the factories, and
by facilitating pollution-control measures in the society.
(iv) Establishing of new business units in backward regions, and especially for handicapped
people and weaker sections of the society.
(v) Financial support for providing education facilities in rural areas.
(vi) Helping in health and hygiene programs in the society.
(vii) Creation of their own townships in order to provide living places and facilities to their own
workers.
(viii) To provide assistance at the time of any natural calamities like flood, drought, famine etc.
5. Responsibilities Towards the State and the Nation: Entrepreneurs owe obligation towards
the Government too. Their responsibility is:
(i) To obey the rules, regulations and the laws set forth by local, State, and federal
governments.
(ii) To pay its dues and taxes to the government fully and honestly.
(iii) To conduct business in accordance with government policies.
(iv) Not to corrupt public servants and democratic processes.
(v) To avoid buying the political favor by any means.
(vi) To help government in overall planning for nation’s well-being.

5
 UNIVERSITY OF CAGAYAN VALLEY
Tuguegarao City

SCHOOL OF BUSINESS ADMINISTRATION & GOVERNANCE

6. Responsibilities Towards the Business Enterprise It-self: Entrepreneur is a trustee of the

resources of the society. He has to always maintain his business efficient and productive so that
he can fulfil his responsibilities towards other sections of the society, only a, healthy business
can perform its social obligations. Thus, entrepreneurs have to fulfill the, following obligations
towards the business enterprise:
(i) To operate business efficiently at minimum cost
(ii) To make efforts for continuous growth and expansion of business
(iii) To act as an innovator.
(iv) To maintain its wealth-producing resources intact by making adequate profits to offset the
risk of economic activity.
(v) He must always, in every decision and action, put economic performance first. Business Can
only justify its existence and its authority by the economic results it produces. (Drucker)
(vi) To encourage inventions.
(vii) To protect the interest of the enterprise.
(viii) To make optimum use of resources.
(ix) He must try to achieve the goals of the business.

ETHICS AND SOCIAL RESPONSIBILITY OF ENTREPRENEUERS

Business Ethics: A Brief Definition
Ethics is the branch of philosophy concerned with the meaning of all aspects of human
behavior. Theoretical ethics, sometimes called normative ethics, is about discovering and
delineating right from wrong. It is the consideration of how we develop the rules and principles
(norms) by which to judge and guide meaningful decision-making. Theoretical ethics is
supremely intellectual in character, and, being a branch of philosophy, is also rational in nature.
Theoretical ethics is the rational reflection on what is right, what is wrong, what is just, what is
unjust, what is good, and what is bad in terms of human behavior. How we see 'ethical behavior'
- in terms of what is right and wrong - is guided by these definitions.

Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that
examines ethical principles and moral or ethical problems that arise in a business environment.
It applies to all aspects of business conduct and is relevant to the conduct of individuals and
entire organizations.

Business ethics can be defined as written and unwritten codes of principles and values that
govern decisions and actions within a company. In the business world, the organization’s
culture sets standards for determining the difference between good and bad decision making and
behavior. In the most basic terms, a definition for business ethics boils down to knowing the
difference between right and wrong and choosing to do what is right. The phrase 'business
ethics' can be used to describe the actions of individuals within an organization, as well as the
organization as a whole.

Social responsibility: A Brief Note

Social responsibility is an ethical ideology or theory that an entity, be it an organization
or individual, has an obligation to act to benefit society at large. Social responsibility is a duty
every individual or organization has to perform so as to maintain a balance between the
economy and the ecosystem. A trade-off always exists between economic development, in the
material sense, and the welfare of society and the environment. Social responsibility means

6
 UNIVERSITY OF CAGAYAN VALLEY
Tuguegarao City

SCHOOL OF BUSINESS ADMINISTRATION & GOVERNANCE

sustaining the equilibrium between the two. It pertains not only to business organizations but
also to anyone whose action impacts the environment. This responsibility can be passive, by
avoiding engaging in socially harmful acts, or active, by performing activities that directly
advance social goals. This shows the various ways that companies can invest in being socially
responsible and the value those actions can bring to the company.
A report suggests that social responsibility is a way of conducting business through
balancing the long-term objectives, decision-making, and behavior of a company with the
values, norms, and expectations of society. Social responsibility can be a normative principle
and a soft law principle engaged in promoting universal ethical standards in relationship to
private and public corporations.
Companies can demonstrate social responsibility in a myriad of ways. They can donate
funds to education, arts and culture, underprivileged children, animal welfare, or they can make
commitments to reduce their environmental footprint, implement fair hiring practices, sponsor
events, and work only with suppliers with similar values.

Social responsibility in business is also known as corporate social responsibility, corporate

responsibility, corporate citizenship, responsible business, sustainable responsible business, or
corporate social performance. This term refers to a form of self-regulation that is integrated
into different disciplines, such as business, politics, economy, media, and communications
studies.

Entrepreneurship v/s Ethics and social responsibility

Ethics and social responsibility are very important values in entrepreneurship ventures. This is
particularly essential in decision making process. Ethical conscience reminds entrepreneurs to
make trustworthy and profitable entrepreneurship decisions. Likewise, the social responsibility
component sought entrepreneurs to make entrepreneurial decisions that can enhance benefits
and repelling harms to the stakeholders.
The entrepreneur must establish a balance between ethical exigencies, economic
expediency, and social responsibility. A manager’s attitudes concerning corporate responsibility
tend to be supportive of laws and professional codes of ethics. Entrepreneurs have few reference
persons, role models, and developed internal ethics codes. Entrepreneurs are sensitive to peers’
pressure and social norms in the community as well as pressures from their companies.
While ethics refers to the “study of whatever is right and good for humans,” business
ethics concerns itself with the investigation of business practices in light of human values. The
word “ethics” stems from the Greek ethos, meaning custom and usage. Development of Our
Ethical Concepts Socrates, Plato, and Aristotle provide the earliest writings dealing with ethical
conceptions; earlier writings involving moral codes can be found in both Judaism and
Hinduism.
Ethics and social responsibilities of an entrepreneur is certainly an important issue
considering the role of social responsibility in society and ethics in business. Social
responsibility is beneficial for business community and at the same time for global community.
Social responsibility is significant owing to the realism of globalization. The people of the
universe are becoming interconnected more owing to the advancement of technology,
transportation and communication. The world market economy is affecting not only services
and goods but values and ideas as well. Expansion on the global front, enhancing regulatory
omission and the factors which is responsible for creating awareness regarding the significance
of making for sectored, macro and operational hazards to both an organization’s and

7
 UNIVERSITY OF CAGAYAN VALLEY
Tuguegarao City

SCHOOL OF BUSINESS ADMINISTRATION & GOVERNANCE

entrepreneur’s competitive position and reputation. As small business owners and

entrepreneurs, activities which harm the people and the planet, will spoil the scope for your
profits. For this reason, there is great significance for “triple bottom line” which is profits,
planet, and people.
An entrepreneur is running his own business and being a businessman, he has some
obligation of a business to meet his economic and legal responsibilities. Social responsibility is
basically a business intention, beyond its legal and economic obligation to do the right things
and act in ways that are good for society.
While we are talking about the business ethics, there are three things that need
consideration:
(1) Avoid breaking criminal law in one’s work-related activity
(2) Avoid action that may result in civil lawsuits against the company
(3) Avoid actions that are bad for the company image.
For example, an entrepreneur made a chemical that looks like a pesticide, and he started selling
it like a pesticide in the market and earns the profit, this act is against the law.

Reference:
https://sdak24.com/social-responsibility-of-entrepreneur-social-responsibility-notes/

----------------------------------------------------------------------------------------------------------