Business Ethics and Social Responsibility: Lessons 1-4

This set of vocabulary flashcards covers the fundamental definitions of business types, ownership structures, socioeconomic contributions, core operating principles like fairness and transparency, and common organizational practices from Lessons 1 through 4.

Business

An active process that is an integral part of human society, where economic resources or inputs (materials and services) are brought together and distributed to deliver consumer goods, products, or outputs.

Profit

The difference between the amount received and the amount spent on something purchased, produced, or manufactured.

Service Business

A business measured in terms of quality, appeal, and treatment received by customers due to its nature.

Manufacturing Business

Any business organization that converts basic inputs into finished goods or outputs.

Merchandising Business

A business that purchases products from other businesses and sells them to customers at a higher price.

Hybrid Business

A business organization that produces and sells products at the same time, combining characteristics of other business types.

Sole proprietorship

A one-person business owned by an entrepreneur who has full control and authority over the finances and operations.

BIR Form 2316

The specific tax form used as the owner's income tax return in a sole proprietorship.

Partnership

A business owned by two or more individuals (partners) who contribute money, property, or industry to divide profits and rewards among themselves.

Corporation

A legal body and entity that exists separately and distinctly from its owners, who are known as shareholders.

Shareholders

Individuals or institutions that legally own shares of corporate stock, giving them direct voting rights and part-ownership of the company.

Stockholders

Terms used interchangeably with shareholders to describe owners of equity in a legal and financial aspect.

Stakeholders

Anyone impacted by the business, including employees, customers, and suppliers, who hold a vested interest in its survival regardless of stock ownership.

Ronald Duska

He defined the purpose of business as providing goods and services, with the motivating force being the reward of profit for individuals.

Paul Camenisch

He stated the primary purpose of business is to provide socioeconomic development, while the secondary purpose is to gain profit.

Economy

The process or system by which goods and services are produced, sold, and bought in an area, with goals of growth, high employment, and price stability.

Fairness

In a business context, balancing the interests involved in decision-making through neutral, impartial, and unbiased actions, such as maintaining proportional price to quality.

Accountability

An entity's action of taking responsibility for their decisions, setting expectations, performing tasks, and being held to account for actions they are responsible for.

Transparency

Openness and clarity in operations and communication, involving the sharing of accurate, relevant, and timely information with stakeholders.

Stewardship

The conduct, supervision, and management of resources (people, capital, and environment) that belong to another but are entrusted to one's care.

Decorum

Business etiquette including practices such as punctuality, bowing, greeting everyone, and shaking hands.

Protocols

Instructions and step-by-step processes, such as customer service or health protocols.

Policies

Standards that guide a company on conduct, legal responsibilities, and employee relations in accordance with state laws, such as policies against sexual harassment.

Marketing Ethics

The promotion of products bound by moral constraints, valuing honesty, transparency, and truthful advertisements.

Accounting Ethics

The ethical and legal obligation in the identification, recording, and reporting of accurate financial data in compliance with laws and standards.

Reportorial Requirements

Documentation required by regulatory bodies to demonstrate compliance with laws, rules, and regulations, such as tax declarations.

Code of Ethics

Formalized rules (code of conduct) used to comply with ethical and legal obligations, serving as an accountability mechanism and for risk mitigation.