BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

MODULE
Module No. 5: Week 5: Fourth Quarter

IMPORTANCE OF ESTABLISHING
AND SUSTAINING BUSINESS
ENTERPRISES

Learning Competencies
1. Explain the importance of establishing and sustaining business enterprises as a source of job
opportunities and financial freedom.
Codes: ABM_ESR12-IVm-1-4.1

Objectives
After studying this module, you are expected to:
1. Identify the different business enterprises that gives job opportunities and financial freedom
to people.
2. Discuss the importance of establishing and sustaining business enterprises as a source of job
opportunities and financial freedom.
3. Appreciate the importance of establishing and sustaining business enterprises as a source of
job opportunities and financial freedom.

Let’s Recall
Direction: Read each statement below and evaluate whether it is true or false. Write your FIRST
NAME if the statement is TRUE and LAST NAME if the statement is FALSE.
____________1. Financial Freedom is having residual income to cover your living expenses.
____________2. Sustainability is increasingly important in the business world.
____________3. Establishing business does not create jobs.
____________4. Having debt-free can achieve financial freedom.
____________5. Social enterprise helps disadvantaged population to human development and
economic prosperity.

Let’s Understand
DISCUSSION
Sustainability of business has been an important issue for many people, especially in the
business world. Businesses must be aware of the issue at hand and understand how important it is
to make changes.

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 Sustainability in business practices
Pushed by growing demands from consumers for products and services that cause
minimal effects to the ecosystems, corporations have shown interest in bringing sustainability
aspects to the core of the business.
(https://www.co2australia.com.au/why-is-sustainability-important-for-business/ )
Environmental Sustainability
Environmental sustainability can be applied in many ways, such as creating alternative
routes in a production process to reduce waste generation and increase water and energy
efficiencies. Investment in renewable energy is also growing momentum among big
organizations, with many building their own solar or wind farms, in order to phase out the
consumption of fossil fuels and reduce their carbon emissions.
Sustainability and employment
Businesses with strategies that are sustainable in the long run pay their workers’ salaries
and benefits that allow them to live a sustainable life within their community. This builds loyalty
within the organization, benefiting the company through increased productivity and creativity, as
well as lower levels of fraud and mismanagement. Besides, when organizations look to improve
the health and well-being of communities, they are able to motivate employees who are genuinely
interested in contributing to the success of the business.
Importance of establishing and sustaining businesses as a source of job opportunities:
• Investors invest on your products which are the necessities of people
Upon investment on products, there is a need to manufacture more and keep up with the
demands of the investing company, thus, there is a need to hire more people for the industry.
• Commerce and regional economic integration
When new businesses export goods and services to nearby regions, these enterprises contribute
directly to a region’s productivity and earnings. Having this type of production and rise in
services, it promotes job considering that businesses involve needs more people for production
• New technologies are created and utilized
In the height of progress in some businesses, technology always earns it place. We need
modernization for the fast-pace production and efficiency of labor. In this thought, more skilled
and knowledgeable workers from the field are needed to sustain the demands of technology.
https://brainly.ph/question/2637290#:~:text=New%20technologies%20are%20created%20and%
20utilized&text=Henc
e%2C%20building%20a%20business%20is,for%20workers%20also%20gets%20high.
According to David Jones and Chelsea Willness, there are 3 Reasons why sustainability
attracts job seekers. Among these are as follows:
Sustainability draws job seekers because it’s a source of employee’s pride
Sustainability actions often lift a company’s reputation and status, leading many job
seekers to believe they’d feel proud to work for a prestigious organization admired for its
sustainability. Reinforce that anticipated sense of pride by creating and celebrating a distinctive
reputation for sustainability.
Sustainability draws job seekers because it implies the company cares about its employees.
To some job seekers, sustainability initiatives suggest that if a company genuinely cares
about the well-being of the greater society, it would therefore stand to reason that it likely treats
its employees well. Reinforce the belief that the company cares about society and the planet more
generally, and link this to your people practices.
Sustainability connects organizational values to job seekers' personal values.
Job seekers want an employer whose values are a good fit with their own. More than
three decades of research shows that the match a person feels with an organization is a major
driver of job choice decisions. Clearly link your sustainability initiatives to specific
organizational values and demonstrate their authenticity.
David Jones and Chelsea Willness. Published June 7,
2013

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https://www.nbs.net/articles/three-reasons-job-seekers-prefer-sustainable-

Socially Responsible Investment (SRI)

The social enterprise movement is growing and gathering supporters across the globe as
an innovative approach to business activity offering disadvantaged populations a path to human
development and economic prosperity. There is increasing recognition among businesses,
governments, and non-governmental organizations (NGOs) that their participation in these
initiatives can lead to substantial benefits for disadvantaged and underserved populations, while
simultaneously providing opportunities for income generation (Nielsen and Samia, 2008).
The SRI movement can be said to have taken off in 1970, when the first shareholder
resolutions were filed against companies investing or working under the apartheid regime in
South Africa. By the 1980, billions of dollars had been diverted from South Africa related
companies. They were forced to sell their operations in South Africa. The US government enacted
statutes, such as the Comprehensive Anti-Apartheid Act of 1986, banning new investments in
South Africa. All over the world similar actions were taking place. In response to the growing
concern about environmental issues, “green” unit trusts arrived in 1988 with the launch of the
Merlin Ecology Fund (now the Jupiter Ecology Fund). Other environmental funds soon followed.
In the beginning of the 1990s the first social index was created by the social research firm of
Kinder, Lydenberg, Domini & Co., Inc. (KLD): Domini 400 Social Index. In creating the Index,
KLD started by screening the companies in the Standard & Poor’s 500 Index at that time,
eliminating those companies that failed to qualify under the exclusionary and qualitative screens.
The Co-operative Insurance Society (CIS), part of the Co-operative Movement, was the first
financial service organization in the UK that adopted an ethical policy for all its funds, the so-
called Responsible Shareholding Scheme. In the United States, there are about 230 mutual funds
that follow SRI strategies in their investment process. Additionally, the rise of social indexes as
counterparts to the traditional, exclusively financial indices will give ethical investment a further
boost. In 1999, the Dow Jones Sustainability Group Indexes (one global index, three regional
indexes and one country index covering the US) were launched and in 2001, the arrival of the
FTSE4GOOD index marks a further move of SRI into mainstream investment (Broadhurst et al.,
2005).
Socially responsible investments, thus have a special role to play in alleviating poverty,
creating empowerment, and establishing entitlement at the grassroots level of socioeconomic
development. They require easily accessible, low cost, and amenable funds and technology that
can be sustained in the long-term rather than be some quick-fix solution. The end point of many
social enterprises is a participatory socioeconomic transformation in which not only the non-
competing poor and needy cooperate with each other, but also meaningful relations are created
between the resourceful and the needy to enhance community well-being (Choudhury et al.,
2008).
Financial Freedom
Job creation, good investments, sustainability will always lead to financial freedom of
every people, local community and the whole society. Financial freedom according ETMONEY
Blog is, “having enough residual income to cover your living expenses. It is not about being rich
and having tons of money but having enough to cover your expenses so that you can spend your
precious time doing what you like rather than doing things just to earn money.”
Nowadays, it is so difficult for us to achieve financial freedom although we are earning
money especially if we are burdened with growing debt, unexpected cash emergencies, wildly
extravagant spending, medical emergencies and other issues that hampers us to achieve it.
According to Matt Danielsson, there are 12 ways to help us in achieving financial
freedom. Among of these are as follows:
1. Set Life Goals
Every person must have a clear plan of his/her life and that includes checking your bank account,
what the lifestyle entails, and at what age this should be achieved. Your goals must be written
down so that you can prepare and establish a financial milepost at regular intervals.
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2. Make a Budget
Most of us fail in making a budget. What you will do is to list down all your monthly dues and
make a monthly budget for all your expenses. You must stick to your budget and do not make
unnecessary purchases.
3. Pay Off Credit Cards in Full
Credit Cards are toxic to wealth – building. When you go to malls although you do not have
money, you will be tempted to swipe because of your existing credit card. See to it that those
purchases must be paid in full at the end of the month to avoid any interests and fees.
4. Create Automatic Savings
There are retirement plan, insurances, and other contribution benefits. Enroll in these benefits
so that you can have an automatic withdrawal in case of emergencies.
5. Start Investing Now
Take note that there has been no better way to grow your money than through investing. The
beauty of compounded interest can make your money grow exponentially over time, but you
need to wait to achieve meaningful growth.
6. Watch Your Credit
Do not acquire what you cannot afford. Always keep track of all your credits so that you will
have no burden in paying all of them.
7. Negotiate
You must know how to negotiate things especially in buying stuff from small businesses.
Sometimes, spending huge money in big groceries is not practical compared in spending money
in markets. All you need to do is negotiate in buying bulk or repeated orders so that you can avail
discounts.
8. Continuous Education
Knowledge is always the greatest defense against fraud. If you have knowledge, they cannot just
fool you. You will know how to track your transactions, you will know how to audit, and you
will also know that will help protect your rights.
9. Proper Maintenance
Taking good care of your properties can make them last long. Maintaining the properties is better
and more practical than buying a new one.
10. Live Below Your Means
Being economical while living a life to the fullest is not a hard thing to do. Live like a poor but
earn like a rich. Do not wish for something you cannot afford especially if you want it right away.
Patience is always a virtue.
11. Get a Financial Advisor
If you have lots of money yet they are not as readily available to convert to cash- get a financial
advisor to educate and help you make decisions.
12. Take Care of Your Health
Health will always be a wealth especially in this time of Pandemic. Many wealthy people,
companies go bankrupt because the owner got sick and the money that is intended for the business
is now used as buying the maintenance. Invest in good health with regular check-ups to doctors
and dentists. Other companies have a limited sick days and others will even mark you absent
which will lead to loss of income. Ailments make insurance premiums skyrocket and poor health
may force earlier retirement with a lower monthly income.

REFERENCES: Racelis, Aliza. Business Ethics and Social Responsibility. 856 Nicanor Reyes,
Sr. St. Sampaloc, Manila: Rex Printing Company, Inc., June 2017: 93,131- 132,141.
Online Sources:
https://www.google.com/search?ei=VQesX_67MLCmmAXz74SwBQ&q=job+c
reation+definition&oq=job+creation&gs_lcp=CgZwc3ktYWIQAxgAMgwIABDJ
AxBDEEYQ-

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 Let’s Apply
Direction: Choose the best answer for each of the following questions. Write your
answer in a separate sheet of paper.
1. Why do people attract more on sustainable business enterprises?
a. It is because they feel embarrassed to work for a prestigious organization.
b. It suggests that if a company genuinely cares about the wellbeing of the
greater society, it will therefore stand to reason that it likely treats its employees
well.
c. It is because no matter what the values of the work/management is, as long
as the job seeker has a work, he/she will still work.
d. No matter how tiring the work is, he/she will just say repeatedly “I love my
job”.
2. What is the importance of establishing and sustaining business enterprises?
a. It can increase poverty.
b. More jobless and unemployment.
c. There is an increase of force labor.
d. It can alleviate poverty.
3. What do you mean by socially responsible investment or SRI?
a. It will not mind whether there are lots of unemployed people.
b. It alleviates poverty but will not create empowerment.
c. They require easily accessible, low cost, and amenable funds and technology
that can be sustained in the long-term rather than be some quick-fix solution.
d. It gives advantage populations a path to human development and economic
prosperity.
4. Who will benefit more in socially responsible investment (SRI) ?
a. The disadvantage population.
b. The advantage population.
c. The elites.
d. All of the above.
5. Below are the habits that help achieve financial freedom except:
a. Set life Goals
b. Pay off Credit Cards in staggered basis
c. Create Automatic Savings.
d. Watch your credit

Let’s Analyze
Based on the ways to help us in achieving financial freedom discussed, analyze the below
statements and indicate what ways are applied. (10 points).
______1. Your goals must be written down so that you can prepare and establish a financial
milepost at regular intervals.
______2. If you have lots of money yet they are not as readily available to convert to cash- get
a financial advisor to educate and help you make decisions.
______3. Do not wish for something you cannot afford especially if you want it right away.
Patience is always a virtue.
______4. Enroll in these benefits so that you can have an automatic withdrawal in case of
emergencies.

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 ______5. When you go to malls although you do not have money, you will be tempted to swipe
because of your existing credit card.
______6. What you will do is to list down all your monthly dues and make a monthly budget
for all your expenses.
______7. Always keep track of all your credits so that you will have no burden in paying all of
them.
______8. Spending huge money in big groceries is not practical compared in spending money
in markets.
______9. Taking good care of your properties can make them last long. Maintaining the
properties is better and more practical than buying a new one.
______10. Take note that there has been no better way to grow your money than through
investing.

Let’s Try
Case Study
Gawad Kalinga (GK) Enchanted Farm
The GK Enchanted Farm is Gawad Kalinga’s platform to raise social entrepreneurs, help local
farmers, and create wealth in the countryside. As we learned that the road out of poverty is a
continuing journey and therefore, providing homes is merely the beginning, we also realized
that our country is abundant with resources (land included) that we can harness for every
Filipino to continuously lead a life with dignity.
What Filipino entrepreneurs need today, especially young and rising ones, is an environment that
will help bring their ideas to life and challenge them to aspire for the greatest social impact. This
means keeping connected to community and gaining access to good mentoring, value-added
networking, and basic facilities and resources. As a Village University, classrooms are connected
to communities, making it an ideal site for any university student. Here, students will be exposed
to how to start social enterprises and communities.
Currently the following social enterprises can be found on the GK Enchanted Farm:

a. First Harvest (Peanut Spread)

b. Golden Ducks (Golden Eggs/Duck Burger)
c. Gourmet Keso (Cheese/Gatas)
d. Herb Planting
e. Kara and Beaus (Ice Cream)
f. Mushroom Magic
g. Plush and Play (Stuff Toys)
h. Theo and Philo Artisan Chocolate
Aliza Racelis, Business Ethics and Social Responsibility First Edition, 2018

Guide Questions:
1. Do you think the GK social enterprise above are sustainable? Why or why not?
2. Do you think that GK social enterprises help in poverty alleviation or reduction?
3. Does it create financial freedom to its employees? Why or why not?
4. Why is establishing a business can help the community? Can it create jobs?
5. Why is it important for businesses to think beyond profit?
6. How about in your local community, does the local community benefit from the
business enterprises? In what way? Do these businesses create jobs to your neighbors?