COURSE TITLE: ENTREPRENEURIAL MANAGEMENT

COURSE GENERAL OBJECTIVES: This course aims to teach the approach entrepreneur use in identifying
opportunity and creating new ventures, analytic skills that are needed to practice the approach and the
background knowledge and managerial skills that are necessary for dealing with the recurring issues
involved starting, growing and harnessing the value of new ventures.

COURSE SPECIFIC OBJECTIVES: At the end of the course, the students should be able to:

1. Apply and explain entrepreneurial management principles and practices

2. Display appreciation on the significant contribution of small businesses in the economic growth
and development.
3. Develop a business plan appropriate to learners and demonstrate presentation skills for the
business plan.

COURSE STRUCTURE: The course Entrepreneurial Management consists of three (3) structural units
divided into 26 modules

MODULE NO.7: THE ETHICAL AND SOCIAL RESPONSIBILITIES OF THE ENTREPRENEURS

MODULE OBJECTIVES

After this module, learners should be able to:

 Define the meaning of Ethics and code of ethic

 Discuss ethical standards and effect of adhering to ethical standards
 Define business ethics
 Discuss ethical principles in business
 Identify business practices
 Factors influencing business ethics
 Discuss unethical business practices
 Understand social responsibilities and its four (4) areas
 Discuss four types of social responsibility
 Understand the benefits of social responsibility towards society

INTRODUCTION

If we examine the current literature on ethics, the focus is on guidelines given by philosophers,
academics and social critics. However, leaders, managers and engineers require more practical
information about managing ethics. Managing ethics in the workplace holds tremendous benefit to all
including managers, engineers, organizations and society. This is particularly true today when it is
critical to understand and manage highly diverse groups, with different values in the workplace and
operating in globalized economic conditions.

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 The concern for society’s survival brought into the fore the need to adapt ethical standards
and socially responsible actions. The role of the entrepreneur in propagating ethics and social
responsibility in business cannot be over emphasize.

Ethics of business is ethics of responsibility so we will discuss the underlying principles of

business ethics in relation to social responsibility.

Since 1950s corporate responsibility has been the means by which the public can hold
companies accountable for their actions. Corporate responsibility is increasingly today and can take on
various forms including pro- bono work, product donations, financial contributions, employees’
community service days, eco – friendly practices, and many creative ways by businesses, small and large,
can give back to their communities. Companies are increasingly ramping up their focus on social
responsibility, whether it’s championing women’s rights, protecting the environment or attempting to
obliterate poverty, on local, national, or local levels. From an optics, respective, socially responsible
companies project more attractive images to both consumers and shareholders alike which serves to
positively affect their bottom lines.

CONTENT

ETHICS - it is a system of moral principles concerned with what is good for individuals and society also
described as moral philosophy practiced by a person or group of people An example of ethics is a code
of conduct set by business. It is also define as the study of moral obligation involving the distinction
between right and wrong which paved the way for the adaptation of the general rules of conduct in
society.

CODE OF ETHICS – is a guide of principles designed to help professionals conduct business honestly and
with integrity encompasses areas such as business ethics, a code of professional practice and an
employee’s code of conduct.

BUSINESS CODE OF ETHICS – is a body of policies based on laws and values that a company wants all
employees to adhere to, but different types of industries have different regulatory requirements that
partially govern a company’s code of ethics.

Ethical Standards and Adherence to those Standards

ETHICAL STANDARDS – are principles established by the founders of organization that when followed
promote values such as trust, good behaviour, fairness, and or kindness.

These standards are an important part of an organization’s culture. They establish the
parameters of behaviour that owners and top executives expect from employees and also from
suppliers, at least to the extent of their relationship with the organization.

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 A corporate governance system will put a lot of effort into communicating and enforcing the
principles done usually through behaviour modelling which means that top executives should set the
example of how lower – level employees should act.

Few examples of these standards would be responsibility, honesty, transparency or fairness and
even though they might be interpreted differently by each person, companies usually describe the
founder’s perspective of each value to avoid confusions.

These principles should serve also as guidelines for decision- making process to help employees
align their personal criteria with company’s perspective as different ethical issues arise within normal
business activities.

BUSINESS ETHICS - is the study of business situations, activities and decisions where issues of right and
wrong are addressed. Baumhart defines “The Ethic of Business is the ethics of Responsibility” meaning
the businessman must promise that he will not harm knowingly. Also termed as a study of proper
business policies and practices regarding potentially controversial issues, such as corporate governance,
insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities.

ETHICAL PRINCIPLES IN BUSINESS

The lists of principles below incorporate the characteristics and values that the majority of
people associate with ethical behavior:

Honesty: an ethical entrepreneur must be honest and truthful in all his or her dealings. They should
never purposefully mislead or deceive other people by overstatements, partial truths,
misrepresentations, selective omissions, etc.

Integrity: ethical entrepreneurs demonstrate the courage of their convictions and demonstrates
personal integrity by doing what they believe to be the right thing, regardless of pressures to do
otherwise. They are honorable, principled and upright, and will defend their beliefs. Principle is never
sacrificed for expediency, they are never unscrupulous or hypocritical.

Trustworthy & a Promise-Keeper: they are worthy of trust. Ethical entrepreneurs are forthcoming and
candid in explaining things with the relevant information and correcting misstatements. They try as hard
as they can to keep to the letter and spirit of their commitments and promises.

Loyalty: they are loyal to individuals and institutions by support and devotion to duty and friendship in
adversity. They do not exploit a situation by disclosing information they learned in confidence. They are
extremely careful not to be affected by conflicts of interest. They are extremely loyal to their companies
and work colleagues.

Fairness: they are just and fair in all their dealings. They never exercise power arbitrarily. They do not
use indecent means to gain an advantage or exploit other people’s mistakes for their own benefit. They
are committed to justice and the equal treatment of people. They are willing to admit they are wrong.

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 Compassion and Empathy: ethical entrepreneurs are compassionate, empathetic, benevolent, kind and
caring. They strive to achieve their business goals and targets in a manner that causes the least harm
and the greatest positive good.

Respect: they demonstrate total respect for the human rights, dignity, autonomy, interests and privacy
of everybody who is affected by their decisions. They are polite and treat everybody with equal respect
and dignity regardless of nationality, national origin, race or sex.

Law Abiding: they respect and abide by the laws, regulations and rules of the marketplace.

Committed to Excellence: they aim to perform their duties to the best of their abilities. They make sure
they are prepared and well-informed, and constantly try to improve in all areas of responsibility.

Leadership: they aim to be positive ethical role models. They are aware of the responsibilities and
opportunities of their position of leadership – they aim to create an environment in which ethical
decision-making and principled reasoning are highly prized.

Reputation & Morale: they aim to build and maintain the company’s good reputation as well as the
morale of its workforce. They avoid becoming involved in conduct that may undermine respect and will
take all actions necessary to prevent the inappropriate conduct of others.

Accountability: they accept personal accountability for the ethical quality of their decisions.

FACTORS INFLUENCING BUSINESS ETHICS

Business ethics whether by a person or a business entity, is influenced by any or a combination of the
following:
 Personal code of ethics
 Legislation
 Government rules and regulations
 Ethical code of the company
 Social pressure
 Ethical climate of the company

UNETHICAL BUSINESS PRACTICES

1. Misleading Product information – many company promote injurious products with misleading
information that can be harmful to the consumers or to the environment purely for the sake of
improving the bottom line.

2. Unfair competition - defamation of a competitor, misappropriation of their trade secrets and trade
mark infringement which give a wrong impression to the consumer about the competitor and the
products it is not wrong to use the competitors name in marketing material but it should not deplore
the company or its product.

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 3. Maltreating employees –a familiar scenario in small as in big companies who make employees work
for long hours and underpay them. Many employees are made to work under stressful condition and are
subject to mental and even sexual harassment.

4. Manipulating accounts – most companies are involved in the cooking of their books to hoodwink
investors, lenders and consumers, then tweak their financial reports to show inflated profits and
lowered depreciation that make investors think that the company is faring well and they end up buying
more stocks from the share market.

5. Bribery – inducement to influence a business decision is not uncommon in the business world.
Offering something of value in money or return of a favorable dealing is usually witnessed between
vendors and marketers.

SOCIAL RESPONSIBILITY –Social Responsibility in business also known as Corporate Social responsibility
pertains to people and organizations behaving and conducting business ethically and with sensitivity
towards social, cultural, economic and environmental issues. Social responsibility means that individual
and company have a duty to act in the best interest of their environment and society as a whole.

FOUR AREAS OF SOCIAL RESPONSIBILITY

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 Economic Aspect – Companies need to maintain strong economic interests so they can stay in business.
Being profitable and providing value to shareholders is part of a company being socially responsible.

Legal aspect – A company must follow the low and have a legal obligation to do so. For example, car
companies are required to meet a certain level of emissions standards in car production.

Ethical aspect- Acting ethically means going above and beyond the legal requirements and meeting the
expectations of society.

Philanthropic aspect-This is the expectation that companies should give back to society in the form of
charitable donations of time, money and goods.

FOUR TYPES OF SOCIAL RESPONSIBILITY

Philanthropic Effort - the company understands that its success requires not just continued innovation,
but building a next generation capable of understanding, using and improving technology. Even small
companies benefit from aligning with philanthropic causes because supporting these causes happens to
also be good marketing, because the community is invited into the business, has a good experience and
sees the company in a positive light.
Environmental conservation – environmental concerns regularly make the headline, whether a long –
term problem like global climate change or a local issue such as toxic chemical spill. Companies that
align themselves in these efforts help minimize environmental problems by taking steps such as
reducing their overall carbon footprint.

Company Diversity and Labor Practices – business leaders realize that diversity in the workplace is
beneficial when everyone is getting along and working as a team. However, labor protocols
must apply to all employees, even those at the highest levels of the company.

Supporting Volunteer Efforts – smart business leaders know that being involved in the community in a
productive way is good for the company too. Business leaders have the opportunity to choose here to
spend volunteer efforts to best help the local along with the company.

BENEFITS OF SOCIAL RESPONSIBILITY TOWARDS SOCIETY

Importance of Corporate Social Responsibility to Societies

Corporate social responsibility generates direct and indirect business benefits and advantages to the
corporation that adopt it (Bueble, 2009). In synthesis, the benefits and advantages that corporations
adopting Corporate social responsibility initiatives may obtain the following (Campbell, 2007):

1. Increased employee loyalty and retention.

2. Gaining legitimacy and access to markets.
3. Less litigation.
4. Increased quality of products and services.
5. Bolstering public image and reputation and enhanced brand value.

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 6. Less volatile stock value.
7. Avoiding state regulation.
8. Increased customer loyalty.

Corporate social responsibility activities amongst various corporations and its stakeholders could
contribute to the macroeconomic development of a developing country through sustainable benefit to
all. At the same time, optimum national impact, cooperation, and communication would be encouraged
and socialized. The following are the various benefits of corporate social responsibility to the society.

Local Community and Society

 Improved quality of life and changed habits.

 Capacity building creates wealth and employment.

Better World and Environment from Corporate Social Responsibility

 Balanced ecosystems.
 Waste management.
 Clean and Green environment.

Corporations

 Goodwill and Community acceptance.

 Profit, Growth, competitive edge and image.
 Genuine dialog with stakeholders.
 Spiritual and Pride values to their families and employees.

Thus it can be understood that, corporate social responsibility helps in building a reputation as a
responsible business and as a good citizen.

ACTIVITY #1

In relation to given unethical business practices, give two (2) samples of each practice and explain

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 ACTIVITY #2

Give various benefits of corporate social responsibility to the society in terms of local,
global/environmental, corporation.

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ASSESSMENT :

SAQ #1 Directions. Choose your answer from the given options and write your answer on the space
provided.

(Ethical Principles in Business)

_______________________1. Do not use indecent means to gain an advantage or exploit other people’s
mistakes for their own benefit; are committed to justice and the equal treatment of people.

_______________________2. Polite and treat everybody with equal respect and dignity regardless of
nationality, national origin, race or sex.

_______________________3. Strive to achieve business goals and targets in a manner that causes the
least harm and the greatest positive good.

_______________________4. Aware of the responsibilities and opportunities of the position – aim to

create an environment in which ethical decision-making and principled reasoning are highly prized.

_______________________5. Never purposefully mislead or deceive other people by overstatements,

partial truths, misrepresentations, selective omissions, etc.

_______________________6. Try as hard as they can to keep to the letter and spirit of their
commitments and promises.

_______________________7. Avoid becoming involved in conduct that may undermine respect and will
take all actions necessary to prevent the inappropriate conduct of others.

_______________________8. Do not exploit a situation by disclosing information they learned in

confidence; are extremely careful not to be affected by conflicts of interest.

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_______________________9. Are honorable, principled and upright, and will defend their beliefs.
Principle is never sacrificed for expediency, they are never unscrupulous or hypocritical.

_______________________10. Respect and abide by the laws, regulations and rules of the marketplace.

Answers to SAQ #1

1. Fairness 6. Trustworthy

2. Respect 7. Reputation

3. Compassion 8. Loyalty

4. Leadership 9. Integrity

5. Honesty 10. Law abiding

SAQ #2 Directions. Write T if your answer is correct and write F if your answer is wrong and give the
correct answer.

1. _________________ One ethical principle is reputation and morale which is avoiding becoming
involved in conduct that may undermine respect and will take action necessary to prevent the
inappropriate conduct of others.

2. _________________ The ethics of business is also the ethics of principle meaning the businesses must
promise not to do harm knowingly to other person or company.

3. _________________ Misleading product information is like showing inflated profits and lowered
depreciation in the financial report to make investor think that the company is faring well and end up in
investing more of their shares.

4. _________________ A type of social responsibility which is environmental conservation concerns to

global climate change, or local issues such as toxic chemical spill and aligning themselves to help
minimize environmental problem by taking steps by reducing overall carbon foot print.

5. _________________ Legal aspect is an area of social responsibility which means going above and
beyond the legal requirements and meeting expectations.

6. _________________ Social responsibility in business pertains to people and organizations behavior

and conduct business ethically and with sensitivity toward social, cultural, environment, economic and
economic issues. Social responsibility mean individual and company have a duty to acct in the best
interest and their environment as a whole.

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7. _________________ Business ethics is the study of business situations, activities and decisions where
issues of right and wrong are addressed. Also termed as the study of proper business policies and
practices regarding controversial issues like corporate governance.

8. _________________ Leadership, an ethical business principle is like performing their duties to the
best of their ability making sure they are prepared and well informed and constantly try to improve in all
areas of responsibility.

9. _________________ A system of moral principles concerned with what is good for individual and
society also described as moral philosophy and practices by a person or group of people.

10. _________________ A guide or principle designed to help professionals conduct business honesty
with integrity, encompasses areas such as social responsibility.

Answers to SAQ #2

1. T 6. T

2. F ___responsibility 7. T

3. F ___manipulating accounts 8. F ___committed to excellence

4. T 9. T

5. F ___ethical aspect 10. F ____Business ethics

REFERENCES:

www.bbc.com>ethics-introduction
https://www.investopedia.com>terms
www.business dictionary.com>ethics
httss://account learning.com
https://www.projectguru.in/importance-of-corporate-social-responsibility-to-societies/

MODULE WRITER:

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