BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

SENIOR HIGH SCHOOL – ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM) SPECIALIZED SUBJECT
Ethics?
- the branch of philosophy that deals with moral principles.
Ethical?
- connected with beliefs and principle about what is right and wrong
Responsibility?
-duty to deal with or take care of...
Business is a combination of war and sport.
-Andre Maurois
Do you agree with the quotation above? Why?
* yes! because .......
What is your opinion?
* My opinion is ......
What are those words comes on your mind?
* competition, challenges, fighting for..
Why Business Organization Exist?
To serve consumer’s needs and in return, they make profits when people patronize their products and services.
How important business organization in modern society?
they are important component of modern society as:
 they contribute to the economy’s growth,
 provide products for consumption,
 and offer employment to people
The Nature of Business Organization
Business Organization – is an entity that aims to earn profit by providing products to satisfy the needs of the market.
 Products can be tangible or physical objects( i.e., goods and commodities) such as cars, pens etc. They can be
also intangible or non physical things ( ie., services) such as haircut, medical consultation and legal advice.
Profit – is the amount of money a business takes in after the expenses needed to operate the business have been
deducted from the revenue.
Revenue – is the total amount of money a business earns during a given period of time by offering products to the
market.
For -Profit Organization
 Have the right to keep and use their profits as they choose – within legal limits because profit is the reward for
the risks they take in making and selling their products.
Examples: if a business organization spends 15 on bag of potato chips and then sells it for 20, it earns 5 for each bag
potato chips sold.
Non –Profit Organization (NPOs)
profit These are formed for a specific purpose
( e.g., to assists victims of domestic violence, to promote animal welfare, or to care for the elderly, to care for the
environment to avoid environmental disaster) to serve common good of the public.
According to the World Bank, NPOs are entirely or largely independent of the government; are not operated for profit;
and exist to serve humanitarian, social, or cultural interest, either of their members or society as a whole
NPO’s( Non –Profit Organization)
 Springboard Foundation (SBF) – is a non- government organization based in the Philippines that focuses on
raising funds to help the less fortunate Filipino children secure a better future thru various outreach programs.
  Ayala foundation –is a social development arm of the Ayala Corporation. It is a non-stock, non- profit
organization that envisions communities where people are productive, creative, self reliant, and proud to be
Filipino.
 AFI seeks to achieve this through programs in education, youth leadership, sustainable livelihood, and arts and
culture.
 Nutrition Foundation of the Philippines Inc. (NFC) – is a Philippine Private, non-stock, non- profit organization
dedicated to promoting good nutrition in Filipino communities this through program in education, youth
leadership, sustainable livelihood and arts and culture.
Activity:
If you were choose a non-profit organization to support, which would it be? What is its advocacy? How did you come up
with your choice? Why do you want to support your chosen non profit organization?
Forms of Business Organization
 Sole Proprietorship – the business is owned and operated by an one individual.
The owner has full authority on the business and owns all assets and profits but, at the same time, is personally liable
for all the obligations and losses.
- Is the simplest form of business organization and the easiest to register through of Bureau of Trade Regulation and
Consumer Protection of Department of Trade and Industry.
Sole Proprietorship can venture into different types of businesses:
1. Online Store
2. Food Cart Franchise
3.Freelance Work
Partnership
- Two or more person bind themselves to contribute money, property, or industry to a common fund the
intention of dividing the profits and sharing the liabilities among themselves.
- Registered with the Securities and Exchange Commision(SEC)
- The most common partnerships are professional partnership such as law firms and accounting firms
Partnership may either be general partnership or limited partnership
 General Partnership – where partners have unlimited liability for the debts and obligation of the business,
 Limited Partnership – have liability only up to the amount of their capital contributions.
 The Partnership is dissolved upon the death of a partner or when a partner chooses to leave.
Corporation
 Their 5 or 15 persons, who are called incorporators, hold at least one share and are bound by the articles of
incorporation, filed the SEC. The paid- up capital (total amount of capital received by a company from its
shareholders in exchange for shares of stocks) of a Philippine corporation must not less than 5,000.
Corporation can be stock or nonstock
 Stock Corporation – has a capital stock divided into shares and is authorize to distribute to the shareholders
dividends or allotments of the surplus profits on the basis of share held.
 Nonstock Corporation – is one where no part of its income is distributable as dividends to its member, trustees
or officers.
 Nonstock Corporations may be formed for charity, religious, educational, professional, or other similar purposes.

Among forms of business organization, corporations have the most number of advantages;
a. Unlimited Life
b. Credibility
c. Ease of transferring ownership
d. Protecting personal assets
Business Organization and the Economy
 Economics – is the study of how resources used in the production of goods and services are distributed for
consumption within social system.
 Factors of Production
a. Land (natural resources)
b. Labor ( Human resources)
c. Capital ( Capital resources)
Do research: provide your answer in a 1 whole sheet of paper.
1. What are the different forms of business organization? Explain each
2. Give examples of the forms of business organization?
3. If you were choose the forms of business organization, which would it be? why?
4. What is socioeconomic development?
5. Show how these organizations contribute to socioeconomic development?
Read the following case study and then answer the given question.

CreativiTEA is a newly established tea shop in Tagaytay City. Greg Villamin, the owner is a health and
environment advocate. With only six months in operation, the tea shop was already able to beat competition
through its unique selling proposition of offering organic fresh tea selection to customers. The business is also
serving tea using cups made by recycled materials. For every cup of tea ordered, a portion of the income goes
to the local farmers. It has been very successful because its costumer feels that aside from health benefits
they get from drinking tea, they also feel good that they are helping the local farmers.

Because of this, Starbean, the leading coffee and tea shop in the area, was drastically affected by competition (
where 50 % of its customers shifted to creativiTEA). Starbean serves traditional coffe and tea products and
does not have advocacy or loyalty programs to beat the competition. Its has been operating for 10 years
already. Starbean resorted to contracting someone to post complaints were not valid and malicious in nature.

1.What specific right(s) in the free- enterprise system was violated by Starbean? Why do you say so?
2. What specific right(s) in the free- enterprise system best explains the success story of creativiTEA? Explain
your answer.

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Read the following case study and then answer the given question.

CreativiTEA is a newly established tea shop in Tagaytay City. Greg Villamin, the owner is a health and
environment advocate. With only six months in operation, the tea shop was already able to beat competition
through its unique selling proposition of offering organic fresh tea selection to customers. The business is also
serving tea using cups made by recycled materials. For every cup of tea ordered, a portion of the income goes
to the local farmers. It has been very successful because its costumer feels that aside from health benefits
they get from drinking tea, they also feel good that they are helping the local farmers.

Because of this, Starbean, the leading coffee and tea shop in the area, was drastically affected by competition (
where 50 % of its customers shifted to creativiTEA). Starbean serves traditional coffe and tea products and
does not have advocacy or loyalty programs to beat the competition. Its has been operating for 10 years
already. Starbean resorted to contracting someone to post complaints were not valid and malicious in nature.

1.What specific right(s) in the free- enterprise system was violated by Starbean? Why do you say so?
2. What specific right(s) in the free- enterprise system best explains the success story of creativiTEA? Explain
your answer.
  Promoting Sustainability
The Roles of business organization in the society

 Primary Objective: to develop, produce and distribute goods and services to the market on order to generate
profits.
 Among these roles are:
 Providing goods and services
 Creating employment opportunities
 Advancing the Economy
 Promoting Sustainability
 Good management Practice
 Adherence to government policy
 Public opinion
 New opportunities