THE ETHICAL AND

SOCIAL RESPONSI-
BILITY
OF THE ENTREPRENEURS
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 manag-
ing ethics. Managing ethics in the workplace holds tremendous benefit to all
including managers, engineers, organizations and society. This is particu-
larly 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.
The concern for society’s survival brought into the fore the need to adapt
ethical standards and socially responsible actions. The role of the entre-
preneur in propagating ethics and social responsibility in business cannot
be over emphasize.
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, na-
tional, or local levels.

From an optics, respective, socially responsible companies project more attrac-

tive images to both consumers and shareholders alike which serves to posi-
tively affect their bottom lines.
What is Business Ethics?
ETHICS - it is a system of moral principles concerned with what
is good for individuals and society also described as moral phi-
losophy practiced by a person or group of people. It is also de-
fine as the study of moral obligation involving the distinction be-
tween right and wrong which paved the way for the adaptation
of the general rules of conduct in society.
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 re-
quirements that partially govern a company’s code of ethics.
ETHICAL STANDARDS – are principles established by the
founders of organization that when followed promote values
such as trust, good behaviour, fairness, and or kindness.
BUSINESS ETHICS - is the study of business situations, activities and decisions
where issues of right and wrong are addressed. 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.
The rules about how entrepreneurs ought to behave are referred to as business
ethics. The ethical behavior required of entrepreneurs is determined by the
following;
1. The public
2. Interest groups like the Society of Prevention of Cruelty to Annimals
3. Business organizations and
4. Individuals personal morals and values.
Factors influencing Ethical Behavior
5. The situation;
6. Reward system;
7. Individual differences; and
8. Other factors.
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
ETHICAL PRINCIPLES IN BUSINESS
Lists of principles below incorporate the characteristics
and values that the majority of people associate with ethi-
cal behavior:
• Honesty • Respect
• Integrity • Law Abiding
• Trustworthy and a • Committed to Exellence
Promise Keeper • Leadership
• Loyalty • Reputation and Morale
• Fairness • Accountability
• Compassion and
Emphathy
UNETHICAL BUSINESS PRACTICES
• Misleading Product information
• Unfair competition
• Maltreating employees
• Manipulating accounts
• Bribery

How Ethical Behavior is Encourage

The are certain ways of encouraging ethical behavior among
employees. These are the following:

1. Adaptation of Code of Ethics

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

A Code of Ethics can be made effective if the following re-

quirements are met;
1. It should refer to specific unethical practices like receiving
gifts, avoiding warranty claims, bid-rigging, making fictitious
claims, among others, and
2. It must supported by top management. Support comes in
various forms such as providing sufficient funds for its im-
plementation and assigning specific employees, anf the
likes.
2. Institution of Rewards and Punishments
Punishment could take the form of dismissal, demotion, suspension,
or reprimand. Rewards may be given in the form of cash gifts,
promotion or citation.
3. Adaptation of internal programs for resolvimg conflicts
Conflicts arise, even when ethical conduct of personnel is concerned.
For example, a subordinate may think his superior is acting unethically
regarding promotions. The subordinate may harbor ill feeling towards
his superior if the subordinate is not provided with means to ventilate
his grievance.
4. Ethics review Committee
To encourage ethical behavior, entrepreneurship may create an ethics
review committee. This committee is usually composed of employees
as well as some who are not employed ny the company. The commit-
tee provides advice to the entrepreneur and his staff concerning
sensitive ethical issues.
4. Provision of training in ethics.
Company personnel who are exposed to activities that are ethically
charged must be provided with sufficient training in ethics. Such train-
ing should make them sufficiently prepared to deal with various ethical
issues they would encounter in their respective workplace.
5. Top management support

Ethical Issues Facing Entrepreneurship

Entrepreneurships face ethical questions on a daily basis these spring
from
following relationships:
5. Between the company and the customers
6. Between the company and its personnel and employees
7. Between the company and its business associates and
8. Between the company and the investors and the financial commu-
nity.
Relations with Customers
Entrepreneurs are expected by society to treat their customer fairly
and not to act in ways that will be harmful to them. Entrepreneurs
should provide support for consumer rights which are as follows:
1. The right to be safe
2. The right to be informed
3. The right to choose and
4. The right to be heard.
Relations with Personnel and Employees
Good ethical condict requires entrepreneurs to be aware of their
responsibilities to employees. These are the following:
5. Workplace safety
6. Quality of life issues
7. Avoiding discrimination anf
8. Preventing sexual harassment
Relations with Business Associates
Entrepreneurships operate in conjunction with the efforts of
suppliers, agents and various types of middleman. In the
course of business transaction between the
players mentioned and the firm, some ethical questions may
come to fore. A supplier who badly needs a contract for in-
stance may attempt to bribe the company’s purchasing officer.

Relations with investors and Financial

Community
Corporate Social Responsibility
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

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 AREAS OF SOCIAL RESPONSIBILITY
 FOUR TYPES OF SOCIAL RESPONSIBILITY

Philanthropic Effort – 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

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