Ethical and Social Responsibilities of the Entrepreneur
What is Business Ethics? Ethics is the study of moral obligation involving the distinction between right and wrong. As a consequence, the study of ethics paved the way for the adaption of the general rules of conduct in society.
What is Business Ethics? 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: The public; Interest groups (i.e. Philippine Animal Welfare Society) Business organizations; and the individual’s personal morals and values.
What is Business Ethics? Adherence to ethical standards contributes to the smooth flow of business exchanges. It establishes trust between buyers and sellers and between lenders and borrowers.
Laws and regulations requiring ethical behavior Product safety and quality Fair employment practices Fair marketing and selling practices Use of confidential information for personal gain Community involvement Bribery Illegal payments to foreign governments to obtain business
Factors Influencing Ethical Behavior Situational Context Ethics intensity or issue intensity indicates the degree to which a situation is recognized to pose ethical challenges. The Person Ethical framework is a personal rule or strategy for making ethical decisions. Family Influences Sometimes the way a person is nurtured also affects his or her state of mind towards the community. When a child is brought up in a very hostile way towards society he or she will find it very difficult to behave positively ethical in that society.
Factors Influencing Ethical Behavior Internal environment and the organization Supervisory behavior, peer group norms and behavior, and policy statements and written rules. External environment Government laws and regulations, societal norms and values, and competitive climate in an industry. The norms of the community The rules of a community usually controls how one should behave in a community in order to fit appropriately within the community. Reward system
How Ethical Behavior is Encouraged Adaption of a code of ethics Institution of rewards and punishments concerning ethical behavior Adaption of internal programs for resolving conflicts Creation of ethics review committees Provision of training in ethics for employees Top management support
Ethical Issues Facing Entrepreneurs Between the company and the customers Between the company and its personnel and employees Between the company and its business associates Between the company and the investors and the financial community