Entrepreneurial Mind - Lesson 4: The Ethical and Social Responsibilities of the Entrepreneur

Lesson 4: The Ethical and Social Responsibilities of the Entrepreneur

Ethics

the study of moral obligation involving the distinction between right and wrong

Business Ethics

it is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment

1. the public

2. Interest groups like the society for prevention of cruelty to animals

3. Business Organizations

4. The individuals morals and values

The ethical behavior required of entrepreneurs is determined by the following

-Situation
-Reward System
-Individual Differences

Factors Influencing Ethical behaviors

How Ethical Behavior is encouraged

1. Adaption of code of ethics

2. Institution of rewards and punishments concerning ethical behavior

3. Adaption of internal programs for resolving conflicts

4. Creation of Ethics review committees

5. Provision of training in ethics for employees

6. Top management support

Code of Ethics

a formal document indicating the entrepreneurship's adapted principles of appropriate behavior

A code of ethics can be made effective if the following requirements are met

1. Should refer to specific unethical practices

2. It must be supported by top management

Rewards and punishment concerning ethical behavior

• A code of ethics is sufficient for some people if ethical behavior is required

• For many people, however, this may not be enough to motivate them to act ethically

Internal programs for resolving conflicts

Conflicts arise, even when the ethical conduct of personnel is concerned

Ethics review commitee

This is usually composed of company employees as well as some who are not employed by the company. These people have undergone training in ethics

Ethical Issues facing entrepreneurships

1. Between the company and the customers

2. Between the company and its personnel and employees

3. Between the company and its business associates

4. Between the company and the investors and the financial community

The right to be safe

Consumers expect that the products and services that they buy will do them no harm. They also expect to be free from bodily harm when they are inside the entrepreneur's business premise

The right to be informed

Consumers make purchasing decision often. The quality of their decisions, however, will depend on whether or not they are properly informed.

The right to choose

Firms that intend to adhere to business ethics should strive to protect consumers' right to choose what products and services they need and intend to purchase

The right to be heard

Customers have the right to communicate their concerns to the entrepreneurship they patronize. This right they may be used to express appreciation for what the company is doing, or to provide information about defects in the products the consumer brought.

Work Place Safety

The Ethical Entrepreneur makes sure that the workplace is safe for employees. He sees to it that adequate measures are adopted to prevent accidents from happening in the factory and the office

Quality of life issues

progressive companies provide daycare facilities for the children of employees. Housing is provided at the near sites. If measures like those are not feasible, entrepreneurships can still assist in locating or facilitating arrangements with private daycare and housing facilities.

Avoiding Discrimination

Everyone has the right to work in a place where discrimination is not practiced.

Preventing sexual harassment

refers to unwelcome sexual advances, requests for sexual favors, and other verbal or physical contact of sexual nature

top management support

it is very difficult for any program or activity to succeed without sufficient support from the top management.

Relations with the customer

When ethical abuses are committed, the most probable victims are the customers. This is expected because of the high frequency of transactions between the company and the customers.

Relations with personnel employees

There is always the possibility that business firms including entrepreneurship will commit unethical act toward their employees

how to prevent sexual harassment

-Issue a policy statement prohibiting sexual harassment.

• Develop a complaint procedure

• Create a work environment that encourages sexually harassed employees to report their experiences

• Establish a committee to investigate sexual harassment claims

• take disciplinary actions against harassers

Relations with business associates

Entrepreneurship operates in conjunction with the efforts of suppliers, agents, and various types of middlemen. In the course of business transactions between the players mentioned and the firm, some ethical questions may come to fore

Relationships with investors and the financial community

The countrys financial system survives partly because investors and others plays have placed a certain degree of trust in the firms they deal with.