San Agustin Diocesan Academy Inc.

Jaen, Nueva Ecija

Senior High School Department

S.Y. 2020-2021
Learning Area: Business Ethics and Social Responsibility
Semester: Second
Quarter: Second
Grade Level: Twelve
Module No. 2
Week & Date: Week 2 – April 5 – 9, 2021

Module’s Objectives:

A. Content Standard: The learner will be able to understand the nature and forms of business
organizations and the purposes of establishing business enterprises.
B. Performance Standard: The learner will be able to explain the different models and frameworks
of social responsibility
C. Learning Competencies: At the end of this module, you should be able to:
1. Formulate a morally defensible position on ethical issues in entrepreneurship like basic fairness,
personnel and customer relations distribution dilemmas, fraud, unfair competition, unfair
communication, non-respect of agreements, environmental degradation, etc.

Focus: Corporate Social Responsibility

 The Nature of Social Responsibility
 Being an Ethical Entrepreneur
 Legal Issues in Entrepreneurship

List of References:
Aliza, R. (2017). Business Ethics and Social Responsibility. 1st ed. Rex Printing Company, Inc.
Caroll A.B. (2015) Business Ethics and Social Responsibility. Retrieved from:
http://www.yrdsb.ca/
schools/suttondistrict.hs/DeptPrograms/business/Documents/ethicscasestudies.pdf
Openstax™ (2021). Ethical and Legal Issues in Entrepreneurship. Retrieved from
https://openstax.org/books/entrepreneurship/pages/3-1-ethical-and-legal-issues-in-entrepreneurship
Toppr (2021). Social Responsibilities of Business. Retrieved from:
https://www.toppr.com/guides/business-studies/social-responsibilities-of-business/kinds-of-social-
responsibility/

Learning Content

Challenge Question: How does corporate social responsibility work?

Unlocking of Learning Difficulties:

Adequate - satisfactory or acceptable in quality or quantity

Codified - arrange according to a plan or system
Corollary - forming a proposition that follows from one already proved
Dogma - a principle or set of principles laid down by an authority as incontrovertibly true
Equitable - fair and impartial
Hone - refine or perfect (something) over a period of time
Interchangeably –apparently identical; very similar

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Philanthropic - (of a person or organization) seeking to promote the welfare of others, especially by
donating money to good causes; generous and benevolent
Rife - (especially of something undesirable or harmful) of common occurrence; widespread

Module’s Lecture:

Each organization now understands the importance of returning services back to society. At a minimum,
business organization have a legal responsibility to obey the laws. They also have the economic
responsibility to produce goods and services to meet the society’s demands. However, beyond legal and
economic responsibilities, most business organizations go out of their way to give back and give more to
the society – a concept called corporate social responsibility, which is the central topic for this module.

In this module, we will discuss the corporate social responsibility of an entrepreneur.

Let us start discussing the overview of Corporate Social Responsibility (CSR).

What is corporate social responsibility?

Corporate social responsibility means that businesses act in ways that balance profit and growth with the
good of society.

 Corporate social responsibility often translates into profits. This advantage for business is
sometimes described as “doing well by doing good.”

 Corporate Social Responsibility = Doing Well by Doing Good

One
type of socially-responsible corporate behavior is ethical sourcing, which means buying from
suppliers who provide safe working conditions and respect workers’ rights.

We define social responsibility as a business obligation to maximize its positive impact and
minimize its negative impact on society. Although many people use the terms social responsibility
and ethics interchangeably, they do not mean the same thing. Business ethics relates to an individual’s
or a work group’s decisions that society evaluates as right or wrong, whereas social responsibility is a
broader concept that concerns the impact of the entire business’s activities on society. From an ethical
perspective, for example, we may be concerned about a health care organization overcharging the
government for Medicare services. From a social responsibility perspective, we might be concerned
about the impact that this overcharging will have on the ability of the health care system to provide
adequate services for all citizens.

The Nature of Social Responsibility

There are four (4) dimensions of social responsibility: economic, legal, ethical, and voluntary (including
philanthropic).

1. Economic Responsibilities
What is a business? The business itself is an economic activity. Its main function is to earn
profits. To earn profits means to understand the needs and demands of consumers whether it be
regarding the quality of the product or its price.

While understanding the perspective of the consumer and meeting their needs and demand to
earn a profit is the economic responsibility of a business. When a business earns a profit, it also
means that the employees earn the profit in terms of incentives. The economic growth of a
business is not restricted to itself but affects the society as a whole.

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 2. Legal Responsibilities
Legal responsibilities are not only liable to the individuals in the society but also to the
businesses in the society. As business is an entity itself, it must also follow laws and rules.
Every business has a responsibility to operate within the boundaries set by the various
commissions and agencies at every level of the government. These rules and regulations are set
for maintaining balance and the greater good of the society.

3. Ethical Responsibilities
Ethical responsibilities include the behavior of the firm that is expected by the society but not
codified in law. The factors of ethical responsibility include that the business must be
environmentally friendly. The business should always be aware of its activities and how do
they affect the environment. It is the moral and ethical responsibility of every human and every
business.

4. Voluntary Responsibilities
Corporate social responsibility (CSR) (as well as all kinds of responsibility) is per definition
voluntary. Whether you are responsible or not, it is the consequence of a choice you are taking.

Responsibilities of citizen:
 Being loyal to one’s country
 Being an active member of the community
 Being helpful and respectful to one’s neighbors
 Being well informed on current affairs or issue

Being an Ethical Entrepreneur

Whenever you think about the behavior you expect of yourself, in both your professional and personal
life, you are engaging in a philosophical dialogue with yourself to establish the standards of
behavior you choose to uphold and that is, your ethics. You may decide you should always tell the
truth to family, friends, customers, clients, and stakeholders, and if that is not possible, you should have
very good reasons why you cannot. You may also choose never to defraud or mislead your business
partners. You may decide, as well, that while you are pursuing profit in your business, you will not
require that all the money earned comes your way. Instead, there might be sufficient profits to distribute
a portion of them to other stakeholders in addition to yourself—for example, those who are important
because they have helped you or are affected one way or another by your business. This group of
stakeholders might include employees (profit sharing), shareholders (dividends), the local community
(time), and social causes or charities (donations).

Being successful as an entrepreneur may therefore consist of much more than simply making money and
growing a venture. Success may also mean treating employees, customers, and the community at large
with honesty and respect. Success may come from the sense of pride felt when engaging in honest
transactions—not just because the law demands it, but because we demand it of ourselves. Success may
lie in knowing the profit we make does not come from shortchanging others. Thus, business ethics
guides the conduct by which entrepreneurs and their companies abide by the law and respect the rights
of their stakeholders, particularly their customers, clients, employees, and the surrounding community
and environment.

Legal Issues in Entrepreneurship

Entrepreneurs often create and operate a new business venture by their own rules. The pressure to create
a new venture, within constraints and limitations, inspires entrepreneurs to find innovative ways to meet
potential market demands. At the same time, the challenge to meet these expectations can create
temptations and ethical pressures as entrepreneurs make a variety of decisions. Common areas rife with
potential legal issues include fairness, personnel and customer relations distribution dilemmas, fraud,
unfair competition, unfair communication, non-respect of agreements, environmental degradation, etc.

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Example of legal issues, Fraud: Truthfulness and Full Disclosure

Ethical entrepreneurs consistently strive to apply ethics-based concepts in practice, including

truthfulness and full disclosure. These two concepts are not only part of an ethical approach to doing
business but are also underlying requirements of several areas of law including fraud. A business that
makes/sells a product or service has responsibility for fully disclosing the truth about its
products/services.

The underlying facts, reality, and evidence behind something are the truthfulness of a matter. An
individual who is being truthful is exercising the capability of being factual about a subject matter,
dealing with reality, and aware of evidence. Truthful individuals earn a level of credibility and reliability
over time because what they say and what they do are in alignment. A corollary of truthfulness is
fairness, which means to be impartial, unbiased, and in compliance with rules and standards of right and
wrong behavior. Fairness deals with doing what is right, just, and equitable. From the standpoint of
application, the quality of being truthful forms the foundation for fairness.

Disclosure describes sharing the needed facts and details about a subject in a transparent and truthful
way. This information should be adequate, timely, and relevant to allow the recipient to understand the
purpose and intent behind a product/service and to make a good decision about the value of that
product/service. Any deliberate attempt to hide, change, or bend the truth is an unethical and
irresponsible action subject to criminal investigation.

Successful entrepreneurs and the companies they represent will take pride in their enterprise if they
engage in business with transparency, intentionality, and integrity. To treat customers, clients,
employees, and all those affected by a venture with dignity and respect is ethical. In addition, ethical
business practices serve the long-term interests of businesses because customers, clients, employees, and
society at large will be much more willing to patronize a business and work hard on the business’s
behalf if that business is perceived as caring about the community it serves. And what type of firm has
long-term customers and employees? One whose track record gives evidence of honest business
practices.

Illustrations and Examples:

Illustration of Pyramid of Social Responsibility are presented below.

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Source:http://www.yrdsb.ca/schools/suttondistrict.hs/DeptPrograms/business/Documents/
ethicscasestudies.pdf

The pyramid of corporate social responsibility is a theoretical concept that implies that corporate social
responsibility is presented by four dimensions: economic, legal, ethical, and philanthropic responsibility.
This concept has significantly influenced the acceptance of the social responsibility in the business
world because it questioned the dogma that an individual entrepreneur or enterprise must at the same
time be successful, ethical and socially and ecologically responsible.

Prepared by: Checked by: Noted by:

Mrs. May Ann S. Nuestro Mr. John Patrick G. Malang Mr. Nathaniell C. Capin
Subject Teacher Subject Area Coordinator Academic Supervisor

Joanne Mae J. Bondoc, MAEd

SHS Academic Coordinator