Business Ethics and Social Re-

sponsibility
Quarter 3 – Module 1

Learner’s Packet
 Business Ethics
and Social
Responsibility

Schools Division Office Management Team: : Rosemarie C. Blando, August Jamora,

Merle D. Lopez
Writer: Thelma D. Aldea
Evaluator: Van Russel A. Robles
Illustrator: Julius Burdeos

Business Ethics and Social Responsiblity

Quarter 3
First Edition, 2020

Published by: Department of Education SDO—Rizal

Schools Division Superintendent: Cherrylou D. Repia
Assistant Schools Division Superintendents:
Gloria C. Roque and Babylyn M. Pambid

2
WEEK

1 Forms of Business Organization

I
In this lesson you will be able to differentiate the forms of business organization in
terms of their purpose and role in the socioeconomic development. The illustration and
application of the underlying core principles in business and nonprofit organization
must be observed. And from the reflection of core principles derived from the analyses,
code of ethics must be formulated.
In starting business, one must have an environmental scanning to study the
nature of a business. Before an entrepreneur starts, one consideration is to know of
what form of business organization to venture. The economic role and the impact of
this business in the development of the country.
The ethical principles must also be studied for it is important in all business.
These ethical principles serve as a guide in the conduct of businessmen in their or-
ganization.

D
Sole Proprietorship
A form of business organization owned and operated by a single individuals
as most small business are. When one person wants independent business, sole
proprietorship is the right choice. The success and the failure of the business is the
sole responsibility of the owner.
One of its advantages is the owner has the freedom to make a quick decision
and decide without consulting others. As an individual proprietor, he pays fewer
taxes at a lower rate than any other organization. The sole proprietor is well adapted
to many kinds of small business and best suited to the temperament of many per-
sons who enjoy executing initiatives and be their own bosses.
For its disadvantages, a sole proprietor ends up to incapacity or death of the
owner. When the owner dies, the business dies with the owner.
Economic contribution of small business:
1. Starting point for developing products or services, one can try
business ideas. If the business progress, it is a great chance for developing.
The product might be bought by a larger firm.
2. One can obtain experience in which can be used in the future
business venture or into a larger scale.
3. It is an assurance to the customers that an individual who is ac-
countable will do a great job.
4. Sole proprietors provide a service where knowing one’s customers
is important.
Small businesses often grow in larger ones, adding to the economic
development of a nation. Small business advocates innovation that many
successful entrepreneurs start their business in the backyard or in the gar-
age. They become lore In the field of business.
Small business becomes the important ferment in the innovation,
creativity, and the competition that provides new strength in the
economy.
3
Partnership
When a single proprietor wants to expand a business, one way to do so is to
form a partnership. It is business organization where two or more people agreed for
profit. The rights and duties of a partnership is regulated by law and by legal agree-
ment entered by the partners. The agreement states the amount of money each part-
ner is investing and the duties each one assumes. In partnership, there is also a
“silent partner” that does not want to take part in the operation and management
but invest money instead.
One of the advantages of partnership is it is a pooling of business talents.
One partner has a talent in marketing, the other is in the production.
One can be considered as a major disadvantage of this form is that every
member is liable for all the debts of the partnership, the act of any partner is legally
binding upon others. Partnership can also suffer from another disadvantage, that
the decision-making is shared. If they have serious disagreement, the business is
likely to fail.
Partnership can contribute to the development of economy by the provision of
employment, thus, eliminating unemployment problem. It can also improve the
standard living of people since the provision of employment. With technical and
managerial skills of the partners, quality kinds of products and services are pro-
duced. Also, partnership pay taxes to the government for capital expenditure.

Corporation
From the previous disciplines in business subjects that has been discussed,
corporation is defined as legal entity that is separate and distinct from its owners. It
can be said that it is a legal person that can enter to contracts, loan and borrowed
money, sue, and be sued, hire employees, own assets. It also pays taxes due to the
government.
Since corporation is a bigger business unit, it can perform vast services in the
economy. It can supply of products and services to a greater number of people
across geographic area than the small business. It can support research, develop-
ment and produce new good because of financial strength. The scientific know-how,
innovation, and technical capability are necessary in maintaining the nation’s com-
petitiveness and productivity.
Cooperatives
This kind of business organization is formed by a group or
organization that is owned and managed by its people to meet their common eco-
nomic, social, and cultural needs. Members are the customers, employees, users, or resi-
dents. They allow their people to control of the economic future and social benefits to stay
in the communities where they are established.
Cooperatives significantly contributed to social integration, job creation
and reduction of poverty. With concept of social development, it is inclusive of economic
development as well. Another is there will be community and enterprise development, edu-
cation, and human resource.
Business matters in a country’s economy. Its success can attribute to the en-
tire country, providing products and services that the community needs. From the job crea-
tion that results in money being paid back in the form of taxes. Taxes help the government
to finance infrastructure, education, health, quality of life and purchasing power of the
consumers.

4
 E
Learning Task 1
Give a brief explanation on the different forms of business organization on how it contrib-
utes to the socioeconomic development.
1. Sole Proprietorship

2. Partnership

3. Corporation

4. Cooperatives

Learning Task 2
If you were to choose a business to start with, what form of business organization would you
choose? Briefly state your answer.

My choice is____________________________________________________________
______________________________________________________________________

Learning Task 3
Survey at least five business establishment in your area. Ask them about the contribution they
shared in the development of the economy of in our country.

5
 WEEK
Core Principles of Fairness, Accountability,
Transparency,
2
I

D
1. Fairness
When fairness is being defined, it said to be actions, processes, consequences, to what
is morally right and equal. In an organization that everybody is treated fair, everything falls
into order. They are motivated to work together, care for each other, solve problems easily.
They feel safe and happy within the organization. People tend to respect when they are treated
fair.
How fairness can be achieved in an organization? Simply do the following:
1 Decision must be according to criteria without practicing favoritism.
2. Immediately correct mistakes and improprieties.
3. Do not take advantage to one’s ignorance and mistake.
4. Be open-minded and carefully evaluate information.
5. Treat people equally according to abilities.

2. Accountability
Accountability means that every person in an organization is responsible for actions,
behaviors, performance and even in decision-making. Responsibility is an on-going task that
needs to be done. These two words are somewhat synonymous to each other. Being accounta-
ble means a person is liable to face the consequence once a task is not done. For that reason,
you are accountable to the result of action.
How to improve accountability in workplace:
1. Set one’s goal.
2. Give feedbacks. Address the poor performance as soon as possible.
3. Have a follow-through and follow up.
4. Assume that sometimes people do not understand the impact of their behavior.

3. Transparency
When someone communicate honestly and openly with co-workers in an organi-
zation, in a culture where information flow freely to team, this is transparency. Under-
stand the concept that transparency build trust, expand relationship, promote productiv-
ity and strong leadership.
Here are the ways to create transparency:
1. Be honest. Remember that transparency builds trust.
2. Win or lose, share the results.
3. Work with people who care about transparency.
4. Aim for meaningful work.
5. Avoid silos.
4. Stewardship
Business organization understands that business is not all about profit. Taking into
consideration the environmental impact of business activities that must be managed in any
way. Any activity has environmental consequence in all business. Good reputation or goodwill
will be earned, and sustainability will be achieved.
To achieve stewardship, companies may engage in materials that are renewable, using
mobile phones or internet to avoid paper consumption, shipping in large quantities to avoid
high payment. Some companies are also using solar power like factories. The benefits that can
be obtained from stewardship are the protection of our natural resources, reduction of the use
of energy, and improve the people health. It can serve also as an effective marketing function
since the company who is engaged will earn goodwill.
Even in small acts like putting off lights when not in use, switching the office aircon into
acceptable level, switching off electrical equipment when it is not needed. These also contribute
to the savings of the company’s expenses and reducing the environmental impact as well.
In compliance with the regulatory and law, companies now engaged in green marketing
because consumers’ awareness to the environmental issues. Joining in the bandwagon on go-
ing-green in the operation of the business, having the people, planet, and profit in the account.
Non-profit Organization
Non-profit organizations are those who are tax-exempt primarily engaged for so-
cial cause and public benefit. Donations and benefits derived from the fundraising activities
are the money from people. These are in the form of charitable institutions like church, school,
hospitals, universities, national charities, and foundations. Most workers here are in voluntary
basis.
Most nonprofit organizations rely on public trust that is why they must act in the man-
ner that earn public interests. They must commit to ethical principles, accountability, and
transparency. If one donor losses confidence because of unethical behavior, it will lose the
credibility of stakeholders. They must showcase ways that express and demonstrate the core
values underlying transparency and accountability.

E Learning Task 1
You are always the kind of person who fear failure, avoid conflicting situations, and
afraid of being fired from your job, that put your ethical values on the line. Given below are the
situations that would test your ethical standards. How would you respond to the situations?
Remember that honesty and excellent explanation are needed from you.
Case 1- Protecting a friend whose drinking is causing problems in the company.

Case 2 - Take credit to the work done by the others..

Case 3 - Company engaging in false marketing.

7
 Learning Task 2
Answer the following questions.
1. What guides you when you do not know what to do in a difficult situation?
_______________________________________________________________
2. Why is it important to have ethical values on the job?
_______________________________________________________________

A
Learning Task 3
Covid-19 has taken people, government, and the whole world by surprise. Nobody
is prepared by the coming of this virus in the lives of mankind, as if the world suddenly
stopped. Philippines is one of the countries that really affected by the virus. Can you say
that the humankind has really come to the point that it abused the environment? In
your own little way, how can you contribute to fight this pandemic? Draw a simple illus-
tration or make a poster showing how you will contribute to fight this. Be creative. Have
your work posted in your home. Send the picture to your teacher .

8
WEEK

3 Code of Ethics
I

D
Nowadays, a business organization must be ethical to be successful. Business ethics refers to appro-
priate policies and practices that guides the operation of business. It is usually pertaining to relation-
ship of employee to employer, environmental concerns, customers, discrimination, and social respon-
sibility.
Code of ethics are viewed by some as a set of rules and guides to establish moral standards. It
is a document that pertains to the mission and values of business organization.
In developing a code of ethics, it is important to consult the employees first since they are the
ones involve in the day-to-day operation in the business. They most likely know what the areas in the
operation that need improvement. Then the standard operating procedure of the company must be
revised to perform the job better.
Another source of information in developing code of ethics is to conduct survey to the custom-
ers. Solicit from the feedback of the customers and make this as basis. They do it by asking over the
phone or by providing comment feedback form. The success of the code of ethics is dependent on this
survey.

When the employees were empowered to function according to the job, then were able to produce the
quality kind of product and service according to the satisfaction of the customers, one can say that
the concern for the employees in the code of ethics was also addressed.
Code of ethics should be communicated from the higher ups down to the employees and at
the same time should be implemented. It can be written in the handbook of the company, discussed
during the orientation and staff meeting, or posted on the bulletin board. And for the customers, it
can be included in the promotional materials.
For the code of ethics to be successful, follow-up and feedback must be done.
The following are proposed code of ethics:
1. Obey the law of community in engaging business.
2. Excellent products and services to the utmost satisfaction of the customers.
3. No discrimination in race, color, sex etc.
4. Employees competency in the service.
5. Equality and equity in the working condition of the employees.
6. Customer service is the priority.
7. Honest advertising.
8. Preserve the environment through promoting recycle and proper waste
management.
Code of ethics should be adopted by the company so that the employees should know the dif-
ference of right and wrong and applying to understand their decisions.

9
E
Learning Task 1
Formulate a code of ethics in the following scenarios:
1. Employees using the internet and cellphone during office hours.
_____________________________________________________
2. Your co-worker is always late in coming to work, or even in attending meeting.
______________________________________________________________
3. A customer returning a product because it is defective.
______________________________________________________________
4. Interaction with your competitors.
______________________________________________________________
5. Receiving gifts and entertainment from the suppliers.

Learning Task 2

Name:________________________________ Date:_________________
Personal Code of Ethics Activity Sheets
What character words are most important to you and what behaviors show that quality?
Choose from the box.
Creativity Empathy Citizenship Truthfulness Accountability Fairness Integrity Compassion
Humor Loyalty Sincerity Tolerance Equality Forgiveness Purpose Friendship Imagination
Honesty Self-discipline Justice Sharing Wisdom Assertiveness Responsibility Kindness Coop-
eration Restraint Perseverance Confidence Consideration

QUALITIES BEHAVIOR/ACTION/RESPONSE

10
A
Learning Task 3
Write the steps you take when there is problem arise with an ethical issue.
1.
2.
3.
4.
5.

Learning Task 4
Write your code of ethics as a student by filling up the blanks.
1. My philosophy is_______________________________.
2. Character qualities I possess: ______ _____ _____ _____ _____
3. My support team is______________________________________
4. I believe everyone has the right of _____ _____ _____ _____ _____

11
 References

Fairness | Exemplary Business Ethics & Leadership. (2016, December 7). Josephson Institute of
Ethics. https://josephsononbusinessethics.com/2010/12/fairness/
Frias, S., Garalde-Orjalo, V., & Pefiangco, E. (2016). Business Ethics and Social Respon-
sibility: Principles, Policies, Programs, and Practices . Quezon City: Phoenix Publishing House.
Padilla, R. A. (2016). Business Ethics and Social Responsibility . Pasay City: JFS Publishing Ser-
vices.
Smyth, D. (2019, March 24). The Roles of Business Organizations in Economic Development .
Bizfluent. https://bizfluent.com/info-7745795-roles-business-organizations-economic-
development.html
Staff, I. (2019, July 1). How to improve accountability in the workplace in 5 steps . Insperity.
https://www.insperity.com/blog/improve-accountability-workplace-5-steps/
The Sole Proprietor < From Small Business To The Corporation-The American Free Enterprise Sys-
tem < Economy 1991 < American History From Revolution To Reconstruction and beyond .
(n.d.). American History: From Revolution to Construction and Beyond. Retrieved January
28, 2021, from https://www.let.rug.nl/usa/outlines/economy-1991/from-small-business-
to-the-corporation/the-sole-proprietor.php
Thillainayagam, K. (2021, January 11). 5 simple ways to create transparency at... Work Life by At-
lassian. https://www.atlassian.com/blog/confluence/5-ways-create-transparency-at-
work#:%7E:text=Transparency%20at%20work%2C%20or%20transparency,terms%2C%
20its%20benefits%20are%20tangible

12
Para sa mga katanungan o puna, sumulat o tumawag sa:

Department of Education Division Rizal Office

Address: DepEd Bldg.,Cabrera Rd.,Bgy. Dolores,Taytay,Rizal 1920

Telephone number: 09274562115/09615294771

13