Ethical and Social Responsibilities

of the Entrepreneur
 What is Business Ethics?

Ethics is the study of moral obligation involving the

distinction between right and wrong. As a
consequence, the study of ethics paved the way for
the adaption of the general rules of conduct in
society.
 What is Business Ethics?

The rules about how entrepreneurs ought to behave

are referred to as business ethics. The ethical
behavior required of entrepreneurs is determined by
the following:
The public;
Interest groups (i.e. Philippine Animal Welfare Society)
Business organizations; and the individuals personal morals
and values.
 What is Business Ethics?

Adherence to ethical standards contributes to the

smooth flow of business exchanges. It establishes
trust between buyers and sellers and between
lenders and borrowers.
 Laws and regulations requiring ethical behavior

Product safety and quality

Fair employment practices
Fair marketing and selling practices
Use of confidential information for personal gain
Community involvement
Bribery
Illegal payments to foreign governments to obtain
business
 Factors Influencing Ethical Behavior

Situational Context
Ethics intensity or issue intensity indicates the degree to which
a situation is recognized to pose ethical challenges.
The Person
Ethical framework is a personal rule or strategy for making
ethical decisions.
Family Influences
Sometimes the way a person is nurtured also affects his or her
state of mind towards the community. When a child is brought
up in a very hostile way towards society he or she will find it
very difficult to behave positively ethical in that society.
 Factors Influencing Ethical Behavior

Internal environment and the organization

Supervisory behavior, peer group norms and behavior, and
policy statements and written rules.
External environment
Government laws and regulations, societal norms and values,
and competitive climate in an industry.
The norms of the community
The rules of a community usually controls how one should
behave in a community in order to fit appropriately within the
community.
Reward system
 How Ethical Behavior is Encouraged

Adaption of a code of ethics

Institution of rewards and punishments concerning
ethical behavior
Adaption of internal programs for resolving conflicts
Creation of ethics review committees
Provision of training in ethics for employees
Top management support
 Ethical Issues Facing Entrepreneurs

Between the company and the customers

Between the company and its personnel and
employees
Between the company and its business associates
Between the company and the investors and the
financial community