BUSINESS ETHICS
& SOCIAL RESPONSIBILITY
The Role of Business in Social
and Economic Development
Lesson 1 :
The Nature and
Forms of Business
Organization
Forms of Business Organization
1. Sole Proprietorship – is owned by one
person.
Advantages:
• The owner has all the
profit.
• The owner makes all the
decisions.
• It is easy to form and
operate.
Disadvantages:
• The ownership of the business is
not transferrable. Once the
owner dies the business under
the owner's name will also be
terminated.
• The capital of the business is
limited only to the financial
capability of the owner.
2. Partnership – is owned by two or more
persons..
Advantages:
• It is easier to raise capital as
there are more than one
investors
• “Two heads are better than
one”, thus planning towards
the development of the
business operation will be
efficiently implemented.
Disadvantages:
• Profits are divided among the
partners based on their capital
sharing.
• A partner can be liable for any
mistakes made by other
partners.
• Any debt or liability of one
partner is also a responsibility
of other partners.
3. Corporation – is created by law (Corporation Code of the
Philippines) and it is owned by stockholders or shareholders. .
Advantages:
• Can easily raise additional
by selling shares of stock to
the public.
• Stockholders or
shareholders are not
personally liable for the
debts or the corporation.
Disadvantages:
• A corporation company is not
easy to set up.
• The business operation is
restricted by law.
Each form of the business organization
plays a vital role in the economic
development and wealth of the
country. The businesses make goods
and services use by every individual
each day. They provide jobs and
through the wages earned people
would have a quality of life, buy
property, enjoy leisure activities, and
invest money for wealth maximization.
The Social
Function of the
Business
Social Responsibility
• This means that individuals and companies
should put their obligations for the best
interests of the environment and society.
In business, it applies through Corporate
Social Responsibility (CSR) wherein a
certain company will have CSR programs,
volunteer efforts, and charitable
contributions as the organizations give
back to society.
Responsibilities to
the General Public
• These responsibilities include avoiding
risks and promoting public health,
protecting the environment, and
developing the quality of service to the
employees. The business organization
should support charities, aid to
humanity programs, or any community
services through their Corporate Social
Responsibility.
Responsibilities to
Customers
• Industries should give
protection to the
consumers’ rights to be
safe, to be informed, to
select, and to be heard.
Responsibilities to
Employees
• In addition to pay, employees today expect
a safe working environment, greater
benefits such as bonuses, incentives,
allowances, and as much possible could
compensate all the workloads. It is also the
responsibility of businesses to ensure that
bullying, age discrimination, and sexual
harassment do not happen in the
workplace.
Responsibilities to Investors
and the Financial Community
• Businesses must be truthful in disclosing their
profits and financial standing to avoid
deceiving investors. When companies fail in
meeting these responsibilities, thousands of
investors, employees, and customers can
suffer. Therefore, government agencies exist
to ensure that businesses adhere to proper
accounting practices and to examine alleged
fraud and other monetary misdeeds.
Lesson 2 :
Core Principles of
Fairness,
Accountability, and
Transparency
Accountability
• Accountability is the obligation to
demonstrate that work has been conducted
in compliance with agreed rules and
standards. To be accountable is to be liable
to explain or justify one’s actions and
decisions. Accountability implies
responsibility: it is reasonable only to hold
people to account for those things for which
they are responsible.
Fairness
• Fairness is the quality of making
judgments that are free from
discrimination. However, in the context
of business organization, it involves
balancing the interests involved in all
decision-making including any hiring,
firing (of employees), compensation, and
reward system.
Transparency
• The management should be honest and
open to its employees about the operation
of the business for them to easily
participate in attaining the organizational
goals and suggest great ideas to solve
problems. In non-government offices,
appropriate information disclosure is
necessary to inform donors about how
their money is used by a certain
organization.
Transparency
• Transparency is the quality of being
easily seen.
• In a business context, transparency is
honesty and openness. Corporate
transparency includes the ethical
justification for information disclosure
and the management-employee
relationship (participative management).
Notions of
Competence,
Professionalism,
and Responsibility
The minimum competencies expected of professionals:
1. Technical Skills – encompass the ability to apply
specialized knowledge or expertise.
2. Human Skills – are the abilities to understand,
communicate with, motivate, and support other people,
both individually and in groups.
3. Conceptual Skills – are the mental abilities that
managers must have to understand, analyze, and
diagnose complex situations.
The moral character and technical competence are
viewed as being equally important for worker
excellence. The most basic necessary skill for a
working professional is a solid competence in the
human sphere, in the sphere of work. He/she must
have a human maturity so that he/she works with the
highest professionalism. Work is done in a spirit of
service and love for those people around us.
• A worker is expected to work with
trustworthiness, integrity, benevolence,
and competence. Trustworthiness is
very important to managers. Once it is
broken, employees will become
dissatisfied and demoralized.
• Servant leaders go beyond their self-interest
and focus on opportunities to help followers
grow and develop. They do not use their
powers to achieve their goals.
• The characteristic behavior of servant
leaders includes listening, empathizing,
persuading, accepting stewardship, actively
developing follower’s potential.
Effect of servant leadership:
1. Resulted in higher levels of commitment to
the supervisor
2. Increase team potency (a belief that one’s
team has above-average skills and abilities.
3. Higher levels of citizenship are associated
with a focus on growth and advancement.
Lesson 3 :
Codes of Ethics
Code of Ethics
• This is referred to as an "ethical code," that may
involve areas such as business ethics, a code of
professional practice, and an employee code of
conduct. It can also be a guiding principle
designed to help professionals conduct business
honestly and with integrity.
• A code of ethics document may outline the
mission and values of the business and how
professionals are supposed to approach
difficulties. The ethical philosophies are based on
the organization’s core values and the standards
to which the professional is held.
Code of Ethics
• The purpose of a code of ethics is to
provide guidance and set common ethical
standards to promote consistency in
behavior across all levels of employment.
It is concerned with an individual's moral
judgments about right and wrong. Ethical
behavior and corporate social
responsibility can bring significant
benefits to the business.
Code of Ethics
• Ethical values guide us along a
pathway to deal more effectively
with ethical dilemmas by eliminating
those behaviors that do not conform
to our sense of right and wrong and
our best rational interests without
sacrificing others.
Common
Practices in
Business
Organizations
Decorum
• Decorum is defined as appropriate,
polite behavior in a particular society.
• Office decorum is about the Do's and
Don'ts to be practiced in the workplace.
It considers a simple list of guidelines
that help in making the office
environment a better place to work.
Protocol
• Protocol means an official set of
procedures for what actions to take in a
certain situation.
• It is the proper procedure of conduct and a
standard set of rules that allow employees
to communicate with each other. The
business protocol is an important aspect of
the formation of relationships within a
company and between companies.
Protocol
• It also helps ensure that all
employees comprehend their role in
the company, their tasks, and
challenges on how to act on it
accurately and quickly.
• The purpose of the business protocol
is to encourage employees to act
uniformly.
Policies and
Procedures
• Policies and Procedures provide
employees a clear understanding
of what is being expected of them.
• They also provide a fair,
predictable, and consistent
approach in managing a workplace
and its issues.
Policies and
Procedures
• Company policies and procedures are
being implemented to protect the rights
of the employees as well as the business
interest of the employers.
• It establishes the rules of conduct
within the organization and outlines the
responsibilities of both employees and
employers.
Policies and
Procedures
• Company policies and procedures are
being implemented to protect the rights
of the employees as well as the business
interest of the employers.
• It establishes the rules of conduct
within the organization and outlines the
responsibilities of both employees and
employers.
Marketing
• Marketing refers to the activities of a
company that undertakes to promote
the buying and selling of its product
and services.
• It includes promotion, doing research,
advertising, selling, and distribution of
the services and its goods.
Seven Elements
of Marketing:
1. Product
2. Price
3. Promotion
4. Place
5. Packaging
6. Positioning
7. People
Bookkeeping
• Bookkeeping is a system of
maintaining records and data of a
particular business with a
centralized book of records to
balance daily sales and cash
receipts as well as to reconcile
bank accounts.
Bookkeeping
• It is considered as the organization of
financial information in which you are
keeping your records organized and make
it easier to locate and provide to
appropriate parties.
• It is important because it helps with
business analysis, a tool used by
management to analyze business
performance.
Features of
Bookkeeping
a. Recording financial transactions
b. Posting debits and credits
c. Producing Invoices
d. Maintaining and balancing
subsidiaries, general ledger, and
historical accounts
e. Completing payroll
Reportorial
Requirements
• Compliance with this practice is
stringent for companies that sell
securities to the public, are listed in the
stock exchange, or are classified as
public companies.
• It is stipulated by laws such as the
Securities Regulation Code and the
Corporation Code of the Philippines.
Documentation
• Documentation refers to all books,
records, files, business records and plans,
reports, correspondence, documentation
in respect of the agreement, and other
financial and customer data.
• It helps to tell the narrative for the
decision made and how the client
responded to different situations.
THANK YOU!
PRESENTED BY:
MS. RICHELLE C. REQUINALA
Respect for others
Say something
Say “thank you.”
Participate constructively
Respond in a timely manner