Business Ethics and
Social Responsibility
Quarter 4 – Module 2:
Ethical Issues in
Entrepreneurship
Business Ethics and Social Responsibility
Alternative Delivery Mode
Quarter 4 – Module 2: Ethical Issues in Entrepreneurship
First Edition, 2020
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Business Ethics and
Social Responsibilities
Quarter 4 – Module 2:
Ethical Issues in
Entrepreneurship
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home.
Activities, questions,
directions, exercises, and discussions are carefully stated for you to understand
each lesson.
Each SLM is composed of different parts. Each part shall guide you step-bystep as you discover and understand the lesson prepared for you.
Pre-tests are provided to measure your prior knowledge on lessons in
each SLM. This will tell you if you need to proceed on completing this module or
if you need to ask your facilitator or your teacher’s assistance for better
understanding of the lesson. At the end of each module, you need to answer the
post-test to self-check your learning. Answer keys are provided for each activity and
test. We trust that you will be honest in using these.
In addition to the material in the main text, Notes to the Teacher are
also provided to our facilitators and parents for strategies and reminders on how
they can best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any
part of this SLM. Use a separate sheet of paper in answering the exercises and
tests. And read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
This module was designed and written with you in mind. It is here to help you
master the Ethical Issues in Entrepreneurship. The scope of this module permits it
to be used in many different learning situations. The language used recognizes the
diverse vocabulary level of students. The lessons are arranged to follow the standard
sequence of the course. But the order in which you read them can be changed to
correspond with the textbook you are now using.
The module contains:
●
Lesson 3.2 - Ethical Issues in Entrepreneurship
After going through this module, you are expected to:
1. identify the ethical issues in entrepreneurship;
2. explain the ethical issues in entrepreneurship; and
3. formulate a morally defensible position on ethical issues in entrepreneurship.
ABM_ESR-IVI-3.2; ABM_ESR-IVI-3.3
What I Know
I.
Choose the letter of the best answer. Write the chosen letter on a separate
sheet of paper.
1. It is a result of the creative thinking of a person or groups to formulate
original ideas/content or products that are legally protected by law.
A. Copyright
B. Intellectual property
C. Patent
D. Trademark
1
2. It is a favor given to the immediate relatives, extended families, and
family friends in various activities such as business, politics, sports,
religion and others.
A. Humanism
B. Narcism
C. Nepotism
D. Patriotism
3. It is one of the ethical issues in entrepreneurship where companies are
reporting financial statements unethically.
A. Contract
B. Fraud
C. Harassment
D. Unethical Accounting Practices
4. It is one of the ethical issues in entrepreneurship where entrepreneurs
must tell only the truth about their products or services.
A. Conflict of Interest
B. Fraud
C. Harassment
D. Nepotism
5.
It is one of the ethical issues in entrepreneurship where a person or an
organization is involved in multiple interests in financial investments, work
obligations, and personal relationships, and these interests may have a conflict
with each other.
A. Antitrust
B. Conflict of Interest
C. Fraud
D. Unethical Accounting Practices
II. Give at least five (5) ethical issues in entrepreneurship.
2
Lesson
3.2
Ethical Issues in
Entrepreneurship
When we do a business, we must do it right. We must not practice monkey
business at all times. Additionally, as we go on with our business venture,
challenges are expected, so we must prepare for it. Entrepreneurs must always
possess integrity because it is the primary aspect of establishing goodwill.
In this module, you will learn the different ethical issues in entrepreneurship
that entrepreneurs may encounter.
Intellectual
Property
Harassment
and
NEPOTISM
Discrimination
Conflict of
Interest
ETHICAL ISSUES
IN
Unethical
Accounting
Practices
ENTREPRENEURSHIP
Fraud
Contracts
Antitrust
law
4
What’s In
Let us see if you can still remember our past lesson. Identify the following
responsibilities and accountabilities if it is towards EMPLOYEES, GOVERNMENT,
SUPPLIERS, CREDITORS, CUSTOMER, or LOCAL COMMUNITY. Write your answer
in your activity notebook.
_____________1. To pay in reasonable time
_____________2. Not to correct the government machinery
_____________3. Participation in profits and management
_____________4. Assignments of right jobs
_____________5. Encouragement to healthy competition
_____________6. To help in activities of public utility
_____________7. To render good and economic services
_____________8. Best and economic packaging of products
_____________9. To follow code conducts
_____________10. Proper utilization of debt capital
Notes to the Teacher
This module is for students to identify ethical issues in
entrepreneurship and formulate a morally defensible position on
this.
5
What’s New
Short Case Study:
ABC Merchandise is one of the small enterprises in the Philippines. Due to
the pandemic, ABC merchandise’s sales decreased. Mr. Lacruz, the owner, decided
to lay off workers. Because of the layoff, employees doubled their time and effort to
perform the role of other employees. Moreover, Mr. Lacruz asked for too much work
and overtime to his employees just to meet their quota and deadline. He also paid
them lower than the agreed salary on the contract. As it turned out, the employees
look burned out and stress. However, despite working hard of some of his employees,
he still decided to keep his relatives who are not productive to the business rather
than the deserving employees.
What do you think will be the result of this case? Can you identify the problems in
this case? After analyzing the case, can you give possible solutions?
Write your answer in your activity notebook.
Rubrics
10 pts.
7 pts.
Quality of
Content
●
The piece was
written in
extraordinary style
and voice.
●
Wellorganized and very
informative.
Grammar and
Usage of Words
●
No incorrect
spelling, grammar,
and punctuation.
5 pts.
●
The piece
●
Piece had a
is written in an
little style.
interesting voice. ●
Gives some
●
Somewhat new information
informative and
but not wellorganized.
organized
●
Few errors
in spelling,
grammar, and
punctuation.
●
Many
incorrect spelling,
grammar, and
punctuation.
What is It
What do Ethical Issues in Entrepreneurship mean?
Ethical issues refer to a situation, problem, or dilemma that pushes a person
or a group of people like an organization to choose between choices for what is right
6
or wrong. In doing a business, always bear in mind that all actions must be legal to
avoid problems.
Here are some ethical issues in entrepreneurship:
1. Nepotism
Nepotism is a favor given to the immediate relatives,
extended families, or family friends in various activities such
as business, politics, sports, religion, and others. Similarly, in
business, nepotism takes place in hiring job applicants. Often
entrepreneurs
hire
less
qualified
than
more
qualified
applicants just because they are relatives or close friends. As an entrepreneur,
we must choose the best person for every position in our company to ensure
its success.
2.
Intellectual Property: Patents, Copyrights and
Trademarks
Intellectual property is a result of the creative
thinking of a person or groups to formulate original
ideas/content or products that are legally protected by
law.
Copyright infringement means to use a copyrighted work without asking for
the permission of the copyright owner. The patent is the granting of a property right
to an inventor or creator by the sovereign law. Likewise, trademark is a registration
that allows the owner to use a name, symbol, image, or jingle on a specific product
or services. It prevents others from using it for selling their products or services.
Therefore, if you would like to copy a certain logo, image, or content of
someone’s work, make sure that you asked permission from the rightful owner to
avoid conflicts. We cannot say that we do not know it because ignorance of the law
excuses no one. Entrepreneurs must be mindful of this all the time.
3. Harassment and Discrimination in the Workplace
Fairness in the workplace is essential for the employees to
work productively. Entrepreneurs must not ask too much from
their employees as it is considered abuse. They must treat their
employees fairly regardless of their position.
4. Unethical Accounting Practices
7
All organizations must maintain their integrity when it
always comes to the accounting process.
However, other
companies or organizations practice unethical accounting
practices which is called “cooking book”. They are reporting
inaccurate financial statements because they may be wanted
to lower their taxes, or they wanted to share a smaller percentage of income with the
stockholders.
5. Contracts
All businesses enter a contract and must have a better
understanding of the basic contract concepts. Most businesses
are likely to have some collaboration with tort law-part of the
law that protects the rights of people not to be harmed
physically, financially, or in any other way, such as a breach of
privacy. Some parts of the business world are involved in both tort law and contract
law such as litigation involving the wrongful termination of an employee. Whenever
entrepreneurs enter contracts, always choose formal contracts rather than informal
contracts. This because in formal contracts, entrepreneurs have concrete proof and
evidence that may use to testify if ever needed.
6. Antitrust law
This is also called competition law. It is created to make sure
that one competitor does not abuse his power and position in the
business world to restrict competitor’s access to the market.
Furthermore, this antitrust law is very helpful to small businesses
that recently start up their business. It gives small businesses a
chance to compete fairly with larger and more established companies.
7. Fraud: Truthfulness and Full Disclosure
A business that creates or sells products or services must
be responsible enough to fully disclose the truth about its products
and services. Entrepreneurs should consistently apply ethics in
all practices, including truthfulness and full disclosure. Truthful
entrepreneurs gain a level of reliability and credibility over time
because everything they say and do is consistent and align.
8. Conflict of Interest
8
A conflict of interest is a situation in which a person
or an organization is involved in multiple interests in
financial investments, work obligations, and personal
relationships, and these interests may have a conflict with
each other. As employees, we must give the employer what
they are due in exchange for agreed-upon compensation.
What’s More
I. Directions. Let us check your understanding about our lesson by solving the
crossword puzzle. You can use the given clues below to get the correct words. Include
also the space in counting the characters. Write your answer in your notebook.
Across:
Down:
1. It is a written agreement.
2. Also called Competition Law
3. A registration that gives the owner the
4. An interest conflict with
right to use
another interest
9
5 Cooking Book
7 Result of creative thinking
6 Truthfulness and Full Disclosure
of a person protected by law
II. Directions. Complete the diagram below by giving the different issues of
entrepreneurship. You may write your answer in any order.
ETHICAL ISSUES
IN
ENTREPRENEURSHIP
10
What I Have Learned
Directions. Fill in the blanks. Complete the following statements with the correct
word/group of words.
1. _______________ refer to a situation, problem or dilemma that pushes a person or
group of people like an organization to choose between choices for what is right or
wrong.
2. Patent is the granting of a _______________ to an inventor or creator by the
sovereign law.
3. Companies or organizations practice unethical accounting practices which is
called “_______________”.
4. In formal contracts, entrepreneurs have concrete _______________ that may use to
testify if ever needed.
5. A conflict of interest is a situation in which a person or an organization is involved
in _______________ interests in financial investments, work obligations, and personal
relationships and these interests may have a conflict with each other.
6. Antitrust law is created to make sure that one competitor does _______________ his
power and position in the business world to restrict competitor’s access to the
market.
7. A business that creates or sells products or services must be responsible enough
to fully disclose the _______________ about its products and services.
8. Entrepreneurs must not ask too much from their employees as it is considered
_______________.
9. _______________ is a favor given to immediate relatives, extended families, and
family friends in various activities such as business, politics, sports, religion, and
others.
10. Copyright infringement means to use a _______________ without asking for the
permission of the copyright owner.
What I Can Do
Essay:
11
If you had job experience before or your family owns a business, discuss a
brief background about it. Then, identify the ethical issues that the company or your
family business experienced, and state how these issues were being addressed.
There is no need to mention the name of the business. Write your answer in your
notebook.
Rubrics
10 pts.
7 pts.
Quality of
Content
●
The piece was
written in
extraordinary style
and voice.
●
Wellorganized and very
informative.
Grammar and
Usage of Words
●
No incorrect
spelling, grammar,
and punctuation.
5 pts.
●
The piece
●
Piece had a
is written in an
little style.
interesting voice. ●
Gives some
●
Somewhat new information
informative and
but not wellorganized.
organized
●
Few errors
in spelling,
grammar, and
punctuation.
●
Many
incorrect spelling,
grammar, and
punctuation.
Assessment
I.
Directions. Modified True or False. Write TRUE if the statement is correct
and if not, underline the word or phrase that makes the sentence incorrect,
and write the correct answer on the blank.
________________1. Ethical issues refer to a situation, problem, or dilemma
that pushes a person or group of people like an organization to choose
between choices for what is right or wrong.
________________2. As employees, we must take the employer what they are
due in exchange for agreed-upon compensation.
________________3. All organizations must maintain their integrity when it
comes to the accounting process at all times.
________________4. Trademark is the granting of a property right to an
inventor or creator by the sovereign law.
________________5. Copyright infringement means to use a copyrighted work
without asking for the permission of the copyright owner.
II.
Enumeration:
6-10. Give at least five (5) ethical issues in entrepreneurship.
III.
Position Paper:
Directions. Make a position paper where you can express your disposition about the
ethical issues in entrepreneurship. Follow this format in writing your essay:
First Paragraph: Introduction
12
Second Paragraph: Content
Last Paragraph: Conclusion and Recommendations
Rubrics
10 pts.
7 pts.
Quality of Content
●
The piece was
written in extraordinary
style and voice.
●
Well-organized
and very informative.
Grammar and
Usage of Words
No incorrect spelling,
grammar, and
punctuation.
●
The piece is
written in an
interesting voice.
●
Somewhat
informative and
organized.
Few errors in
spelling, grammar,
and punctuation.
5 pts.
●
Piece had a
little style.
●
Gives some
new information but
not well-organized
Many incorrect
spelling, grammar,
and punctuation.
Additional Activities
Slogan Making:
Directions. Create a slogan about the ethical issues in entrepreneurship that can
help business owners to realize that those issues are harmful and unacceptable in
our society.
Write your answer in your activity notebook.
20 pts.
15 pts.
10 pts.
Content and
Originality
Exceptional use of
new ideas and has
originality.
Good use of new
ideas and
originality.
Average use of new
ideas and
originality.
Craftsmanship
The slogan is
exceptionally
attractive in terms
of neatness and
well-structured.
The slogan is
attractive in terms
of neatness and
well-structured.
The slogan is
acceptably
attractive though
it may be a little
bit messy.
Creativity
Slogan is
exceptionally
creative.
Slogan is creative
and puts a small
amount of thought
into it.
The slogan doesn’t
reflect any degree
of creativity.
13
References
Sprigghr.com. 6 Ethical Issues in Business and What to do About them. From
https://sprigghr.com/blog/hr-professionals/6-ethical-issues-in-business-and-whatto-do-about-them. 2020
Blank Entreprise. 10 Ethical Dilemmas in Entrepreneurship. From
https://www.blackenterprise.com/10-common-ethical-dilemmas-entrepreneurship/.
2016
15
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