1. PME 6083 ENTREPRENEURSHIP DEVELOPMENT
CHAPTER 4
THE SOCIAL AND ETHICAL PRESPECTIVES OF ENTREPRENEURSHIP
HANAFIAH DIMAN (801981) – MOHD ARIF HAMZAH (801989) – MONA LISA LEE (803737)

2. INTRODUCTION THE SOCIAL ENTREPRENEURSHIP MOVEMENT
THE SOCIAL ENTREPRENEURSHIP CHALLANGE
THE ETHICAL SIDE OF ENTREPRENURSHIP
DEFINING ETHICS
ETHICS AND LAW
STABLISHING A STRATEGY FOR ETHICAL ENTERPRISE
ETHICS AND BUSINESS DECISION
ETHICAL CONSIDERATION IN CORPORATE ENTREPRENUEURSHIP
ETHICAL LEADERSHIP BY ENTREPRENEURS
SOCIAL AND ETHICAL ENTREPRENEURSHIP IN ISLAMIC VIEW

3. A. THE SOCIAL ENTREPRENEURSHIP MOVEMENT
1980 FOUNDED BY BILL DRAYTON. ASHOKA ASSOCIATON IS LEADING A PROFOUND TRANSFORMATION IN SOCIETY, WORKING COLLECTIVELY TO ENSURE THAT SOCIAL ENTREPRENEURS AND THEIR INNOVATIONS CONTINUE TO INSPIRE A NEW GENERATION AND CREATE POSITIVE SOCIAL CHANGE.
WORLD ECONOMIC FORUM, THE FORUM CONVENES SOCIAL ENTREPRENEURS AS ONE OF ITS SPECIAL INTEREST GROUP.
IN 2005 THE PUBLIC BROADCASTING SYSTEM (PBS) AND THE SKOLL FOUNDATION CREATED AND AIRED A TWO-PART MINISERIES PROFILING “THE NEW HEROS” WHO WERE 14 SOCIAL ENTREPRENEURS FROM AROUND THE GLOBE. PROMOTES LARGE SCALE PUBLIC AWARNESS OF SOCIAL ENTREPRENEURSHIP.
SOCIAL ENTREPRENEURS AND NOBEL PEACE PRIZE AWARDED TO VICTORIA HALE OF THE INSTITUTE OF ONEWORLD AND MUHAMMAD YUNUS AND HIS ORGANIZATION THE GRAMEEN BANK, FOR THEIR SOCIAL ENTREPRENURSHIP MOVEMENT.
US NEWS & WORLD REPORT’S TOP 25 LEADERS SOCIAL ENTREPRENURSHIP

4. B. THE SOCIAL ENTREPRENEURSHIP CHALLANGE
ENVIRONMENT (Pollution, protection, conservation, recycling effort)
ENERGY ( Conservation of energy in production, marketing, energy saving)
FAIR BUSINESS PRACTICES (Genders, minorities)
HUMAN RESOURCE (Health and safety)
COMMUNITY INVOLVEMENT (Donations, sponsorship)
PRODUCT ( Nutritional value of product)

5. C. THE ETHICAL SIDE OF ENTREPRENURSHIP
ETHICAL ISSUES IN BUSINESS ARE OF GREAT IMPORTANCE TODAY AND WITH GOOD REASON:-
1) SCANDALS
2) FRAUD
3) EXECUTIVE MISCONDUCT

6. D. DEFINING ETHICS
WHAT IS ETHICS?.
ETHICS PROVIDES THE BASIC RULES OR PARAMETERS FOR CONDUCTING ANY ACTIVITY IN AN ‘ACCEPTABLE’ MANNER.

7. Figure 4.1 Classifying Decisions Using a Conceptual Framework
Source: Verne E. Henderson, “The Ethical Side of Enterprise,” Sloan Management Review (spring 1982): 42.
© 2009 South-Western, a part of Cengage Learning. All rights reserved.

8. E. ETHICS AND LAW
FOR THE ENTREPRENEUR THE LEGAL VERSUS ETHICAL DILEMMA IS A VITAL ONE. THE LAW PROVIDES THE BOUNDARIES FOR WHAT IS ILLEGAL.
THE LEGAL ASPECT CAN BE THE MOST DUBIOUS BECAUSE THE BUSINESS WORLD AND SOCIETY RELIES HEAVILY ON THE LAW TO QUALIFY THE ACTIONS OF VARIOUS SITUATIONS.
THE LAW INTERPRETS THE SITUATIONS WITHIN THE PRESCRIBED FRAMEWORK. UNFORTUNATELY THIS FRAMEWORK DOES NOT ALWAYS INCLUDE ETHICAL OR MORAL BEHAVIOR.
ETHICS PROVIDES THE BASIC RULES ‘ACCEPTABLE’ MANNER.

9. F. STABLISHING A STRATEGY FOR ETHICAL ENTERPRISE
1). ETHICAL PRACTICES AND CODES OF CONDUCT
Code of conduct is a statement of ethical practices or guideline to which an enterprise adheres.
2). APPROACHES TO MANAGERIAL ETHICS
a) Ethical Norms
b) Motives
c) Goals
d) Orientation toward law
e) Strategy

10. G. ETHICS AND BUSINESS DECISION
THE ENTREPRENEUR IS FACED WITH SPECIFIC ETHICAL DILEMMAS:-
1). Conflict of interests. (Morality and economic trade-offs)
2). Social responsibility to stakeholders. (code of conduct)
3). Level of openness. (value and expectation )
4). Personal Traits. (Relationship and personal issues)
THESE DILEMMAS ARE CHALLENGED BY THE NEED TO MAKE BUSINESS DECISION EACH DAY.

11. H. ETHICAL CONSIDERATION IN CORPORATE ENTREPRENUEURSHIP
1). INTERNAL NETWORK ISSUES 1.1. SYSTEMS (Misdirected reward & evaluation system) 1.2. STRUCTURE (Restricted communication channels, lack of accountability) 1.3. POLICIES & PROCEDURE (Long, complex approval cycles, extensive documentation, unrealistic performance criteria)
2. LEADERSHIP ISSUES 2.1. STRATEGIC DIRECTION (No vision from the top, lack of commitment, no role models at the top) 2.2. PEOPLE (Parochial bias, Turf protection) 2.3. CULTURE (Value that conflict with manager’s)

12. I. ETHICAL LEADERSHIP BY ENTREPRENEURS
1). VALUE SYSTEM OF AN OWNER/ENTREPRENEUR IS THE KEY TO ESTABLISHING AN ETHICAL ORGANIZATION. 2). HONESTY 3). INTEGGRITY 4). CODE OF ETHICS BY THE OWNER 5). DEVELOPING BENCHMARKS OR GUIDELINES 6). REWARD AND PUNISHMENT

13. J. ISLAMIC VIEW
SOCIAL & ETHIC ENTREPRENEUR IN ISLAMIC PRESPECTIVE IS RELEVENT TO ‘AKHLAK INSAN’ OR LEADERSHI BEHAVIOUR.
SOCIAL & ETHIC ENTREPRENEUR IS RELEVENT TO HUMAN NATURE AS ‘KHALIFAH’.
IN ISLAM GOD CREATED HUMAN AS ‘KHALIFAH’
KHALIFAH OR ENTREPRENEUR HAVE RESPONSIBILITIES DEVELOP PROSPERITY AND SEES SOCIAL AND ETHIC AS PART OF ‘IBADAH’
ALLAH GIVES REWARD TO PERFORM IBADAH

14. CONTINUE…………………..
KHALIFAH OR ENTREPRENEUR SHOULD SEARCH FOR ‘ALLAH’ BLESSING ABOVE ALL OTHER FACTOR, NOT SOLELY FOR PROFIT BECAUSE ‘ALLAH’ IS THE ABSOLUTE OF POWER AND WEALTH
ALLAH CREATED KHALIFAH, ALLAH CREATED WEALTH IN ABUNDANCE AND SUFFICIENT FOR ALL.
WEALTH IS CREATED AND ENTRUSTED FOR MANKIND AS KHALIFAH OR ENTREPRENEUR.
WHY ISLAM ENCOURAGE ITS UMMAH TO VENTURE INTO ENTREPRENEURSHIP?

15. Continue………..
PROPHET MUHAMMAD EXPOUNDED THAT 9 OUT 10 SOURCES OF ‘RIZQUE’ CAN BE FOUND IN ENTREPRENEURSHIP OR BUSINESS
SOCIAL & ETHIC ENTREPRENEURS IN ISLAM SHOULD SEARCH FOR ‘ALLAH’ BLESSING ABOVE ALL OTHER FACTOR.
ALLAH WILL GIVE REWARD TO GOOD/BAD SOCIAL ETHIC ‘KHALIFAH’ OR ENTREPRENEUR
WHAT ARE GUIDELINES SOCIAL & ETHIC ENTREPRENEURS IN ISLAM?

16. CONTINUE…..
SOCIAL AND ETHIC ENTREPRENEURS GUIDELINES FOR ISLAMIC ENTREPRENEURSHIP ACTIVITIES ARE WIDE AND COMPREHENSIVE BASED ON AL-QURAN AND AL-HADITH
LAW OF TOUGHT BY SUNNI AND SIYYAH ABOUT SOCIAL AND ETHICS ENTREPRENEURS (MAHZAB MALIKI, HANAFI, HAMBALI, SAFIE, AL-GHAZALI)
BY VIRTUE OF HUMAN NATURE SOCIAL AND ETHIC THE MOSLEM ENTREPRENEURS ARE KHALIFAH AND HAVE THE RESPONSIBILITIES DEVELOP PROSPERITY AND SEES SOCIAL ETHIC AS PART OF ‘IBADAH’ OR GOOD DEED.

17. CASE STUDY 4.1 : LETTING THE FAMILY IN
1. Has Carmine been unethical in his conduct? What is your reasoning?
Yes.
1). Conflict of interests. (Morality and economic trade-offs) – Carmine is not in favour of openess in conducting his business. To him, he needs control & afraid that outsiders being taken over his company.
2). Social responsibility to stakeholders. (code of conduct). Carmine only provide information to his immediate family and selected other relatives.
3). Level of openness. (value and expectation )- Minimal
4). Personal Traits. (Relationship and personal issues)- he still want to be ‘incharge’ and afraid of competition

18. 2. Is it ethical for Carmine to tell his other relatives the good news
2. Is it ethical for Carmine to tell his other relatives the good news? Why or why not?
Yes. He is obliged to share all information regarding the company’s achievement with the shareholders. Be it good or bad news, the shareholders must be inform in order for them to understand what the company has gone through. The shareholders has the right to know either their investment is a fruitful & profitable investment.
The unethical way is when Carmine is selective in disseminating the information

19. 3. If you were advising Carmine, what would you tell him? Why?

20. Q & A
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