BUSINESS ETHICS

AND SOCIAL
RESPONSIBILITY
WEEK 1: The Nature and Forms of
Business Organization
What are the forms of business
Organization?
What are the advantages and
disadvantages of business
organization?
 What is BUSINESS?

A business is an organization involved in the provision

of goods, services, or both to consumers, whatever
sector they may belong to, such as industry,
government, companies, or individuals. An
organization is composed of two or more people who
work together in a structured way to achieve a specific
goal or set a goals. It is a group of people sharing a
common purpose or objective. Organizations may be
large or small.
A business organization is usually privately owned and
provides goods and services to customers in exchange
for other goods, services, or money. What
distinguishes businesses from other organizations is
that among their primary goals is obtaining profit.
Business profits when it sales or revenue is greater
than its expenditures or expenses. However, profit is
not the only goal of business since it has other
responsibilities to society, the government, the
environment, the community around it, and other
stakeholders.
 Types of Business Organizations
according to size:
According to size Total Assets Number of Example
Employees
Micro enterprises Less than Php Less than Food
3million 10 stall/grocery
stores
Small enterprises Between Php Between 10 Chain of
3million and and 99 restaurant
Php 15million
 Types of Business Organizations
according to size:
According to size Total Assets Number of Example
Employees
Medium enterprises More than Php 100-200 Food
15million until people manufacturing
Php100 corporation
millions
Large enterprises More than More than Large beverages
Php100 million 200 people and bottling
companies
Types of Business Organizations according to structure and ownership:
1. Sole Proprietorship. This is owned by a single person who
solely benefits form the profits or suffers the loses. The owner
may operate the business alone or with other people. A sole
proprietor has unlimited liability for all obligations incurred by
the business, whether from operating costs or judgements
against the business. All assets of the business belong to a
sole proprietor.
Types of Business Organizations according to structure and ownership:
2. Partnership. This is an agreement of two or more persons who bind
themselves to contribute money, property, or industry to a common
fund, with the intention of dividing profits among themselves. In most
forms of partnerships, each partner has unlimited liability for the debt
incurred by the business. Types of for-profit partnerships:
◦ General Partnership- partners divides responsibility for management
and liability.
◦ Limited Partnership-other partners are limited and contribute only
capital, take no part in control or management and are liable for debts
to specific extent only.
 Types of Business Organizations according to structure and ownership:
3. Corporation. This is an artificial being created by operation of law. It has
the right of succession and the powers, attributes, and properties expressly
authorized by law, to its existence. The owners of a corporation have limited
liability and the business has a separate legal personality from its owners.
Corporation can be either government-owned or privately owned. They can
be organized as either for profit or as not-for-profit organizations. A privately
owned, for profit corporation owned by its shareholders, who elect a board
of directors to direct the corporation and hire its management staff. A
privately owned, for-profit corporation can be either privately held by a small
group of individuals, or publicly held, with publicity traded shares listed on a
stock exchange.
 Types of Business Organizations according to structure and ownership:
4. Cooperative. A cooperative is a non-profit enterprise, owned
and democratically controlled on a mutual basis by its members
who participate in the availing of its operation. Often referred to
as “co-op”, a cooperative is a limited liability business that can
organize for-profit or not-for-profit. A cooperative differs from a
corporation in that it has members, not shareholders, and they
share decision-making authority. Cooperatives are fundamental
to the ideology of economic democracy.
 
 Role of Business Organizations in Socio-Economic
Development
Businesses are a very important part of the circular flow
of any market economy. Market economy is defined as a
economic system in which economic decisions and the
pricing of goods and services are guided solely by the
combined interactions of a country’s individual citizens
and businesses.
 Role of Business Organizations in Socio-Economic
Development
Businesses also allow the economy to work more
efficiently. When businesses compete with one another,
they improved their efficiency and help the economy
grow. They also assist the country to expand through
various innovations. Innovation is defined as the process
of translating an idea or invention into a good or service
that creates value for which customers will pay.
 Role of Business Organizations in Socio-Economic
Development
Business are the growth drivers of the economy of a
country. They employ people, provide income to the
working population, buy resources, sell products, bring
innovation, generate foreign capital, fulfill our daily
necessities, etc. Businesses can operate on a
multinational, national, regional, or domestic scale and
employ people of all skill sets. This generates
employment at all levels across the country.
 Role of Business Organizations in Socio-Economic
Development
The economic growth of a country is produced by
business, which provides services, goods, and incomes
for both, employees, and business holders.
 Role of Business Organizations in Socio-Economic
Development
The development of a country is sustained by
multinational corporations, large, medium, and small-
sized businesses. This development is usually perceived
as being supported by the multinational corporations,
but mostly the family businesses and individual
entrepreneurs are the greatest contributions to this
development.
 Role of Business Organizations in Socio-Economic
Development
While small size, local businesses are of great importance
in the development of a country, offering an income to
the majority of people. The multinational corporations
are of great importance to the global economy. May
multinational corporations rely on local, small size
business through outsourcing. Not all small businesses
remail at their level. They could grow and while growing,
the local economy is stimulated because they retain the
location of their headquarters.
 The role of MSMEs cannot be overemphasized. They
are essential in many ways. These are some of the things
that they do:

Address poverty through job generation, equitable

distribution of income, and dispersal of economic
activities in the countryside.
Provide broad-based sources of growth
Stimulate entrepreneurial skills among the people.
Serve as suppliers and providers of support services for
large enterprises.
Act as incubators for developing domestic enterprises
into large corporations.
Play a very important and significant role in the
economic and social development of a country.
From the economic development standpoint, the
histories of advanced and developing economies clearly
indicate the decisive roles that SMEs continue to play in
economic growth.
From another standpoint. Addressing SMEs- by their
sheer overwhelming number and unavoidable presence
alone-will certainly generate high socio-political returns.
 ITEMS Forms of Business Ownership/Structure
1. 2. 3. 4.
a. Number of        
possible owners
b. Who        
manages the
business?
c. Termination        
of the business
d. Liability of        
owners
e. Government        
agency assigned
primarily to
operate
ITEMS Types of business according to size

  1. 2. 3. 4.

a. Total of assets        

b. number of        
employees

c. Give examples        
Activity 2. Modified True or False (20pts)
Instructions: Analyze each sentence below and write whether it is True or
False. If the statement is False, underline the word/words that make it wrong
then write the correct word/s on the given space after the statement.

1. Sole Proprietor is owned by two persons. __________________

2. Micro enterprise are businesses with total assets of less than
₱5millon. ________
3. Businesses are also the engine of growth and development of a
nation. _________
4. The amount of capital is limited only by the wealth of the
proprietor. __________
______
Activity 2. Modified True or False (20pts)
Instructions: Analyze each sentence below and write whether it is True or
False. If the statement is False, underline the word/words that make it wrong
then write the correct word/s on the given space after the statement.

5. Profit is gained when its sales or revenue is lesser than its

expenditures or expenses. __________________
6. The detail of arrangement between partners are outlined in a
written document called articles of corporation. ______________
7. A business organization is usually privately owned and provides
goods and services to customers in exchange for other goods,
services, or money. _________
______8. The proof of ownership of the shareholder/stockholder is
evidenced by a stock
Activity 2. Modified True or False (20pts)
Instructions: Analyze each sentence below and write whether it is True or
False. If the statement is False, underline the word/words that make it wrong
then write the correct word/s on the given space after the statement.

8. The proof of ownership of the shareholder/stockholder is

evidenced by a stock certificate. ____________
9. Ize’s Candy Company is categorized as large enterprise because
it has a capital of ₱110 million. ______________
10. A cooperative is a duly registered association of person with
common bond of interest, voluntarily joining together to achieve
their social, economic and cultural needs. ____________
Activity 3. Picture Analysis
Instructions: Analyze the given image below.
Answer the given questions below.
Use the given space below.
.
QUESTIONS:
1. Define business using your own words.

2. Why do people engage in business? In

analyzing the picture above, explain how
business operates in the community?
 Activity 4. Caselet
Instructions: Read and analyze the situation
below. Answer the given questions below.
Muggy Mug Company is in the southern part of Isabela
Province. This is engaged in manufacturing of mugs, glasses,
artifacts and even mining activities. The company has more
than 300 personnel. Because of financial stability it had, they
grow larger and move to engage more and more businesses in
the future.
 Activity 4. Caselet
Instructions: Read and analyze the situation
below. Answer the given questions below.
The company has calculated the cost of carbon dioxide, the
water waste and other waste. They realize that profit alone is
not the only end, but other performance measure exists. They
come to realize that with the great power comes the
corresponding responsibility.
 If you are the owner, how will you answer the
given guided questions below:
1. What is the role of your business in
the society?
2. Assess the role of business
organization in the social
development?