SBM: Chapter 2 - Integrity, Ethics, and Social Entrepreneurship

Integrity

A general sense of honesty and reliability expressed in a strong commitment to doing the right thing, regardless of the circumstances.

Social Entrepreneurship

Entrepreneurial activity that provides innovative solutions for
social issues.

Stakeholders

Individuals or groups that can affect or are affected by the performance of the company, including owners, customers, employees, the community, and the government.

Societal Expectation

The type of responsibility that is required for small businesses to be profitable.

Legal Responsibility

The type of responsibility that mandates small businesses to obey all laws and adhere to regulations.

Ethical Responsibility

The type of responsibility that expects small businesses to avoid questionable practices.

Discretionary Responsibility

The desired or expected responsibility for small businesses to be good corporate citizens and give back to the community.

Owners' Interests

The clear and reasonable right of a company's owners to benefit from the financial performance of the business.

Customer Care

Recognizing the importance of treating customers well to increase customer satisfaction and drive healthy sales.

Employee Value

Properly appreciating employees as valuable team members, which enhances engagement and productivity.

Social Responsibilities

A company's ethical obligations to the community, often demonstrated through job creation, tax contributions, and additional community support.

Community Commitments

Responsibilities that entrepreneurs should carefully consider as building a business on a foundation of 'doing good' may increase financial burden.

Government Regulations

Laws encompassing workplace safety, fair pay, clean air, and safe products that entrepreneurs must adhere to in order to maintain integrity and avoid legal consequences.

Unethical Behavior

Actions such as fraudulent income and expense reporting for tax purposes, including skimming income and falsely claiming personal expenses as business-related, exhibited by some small firm managements.

Legitimacy Lies

Misrepresentations or false impressions made by entrepreneurs, particularly in startups, to mislead others and gain trust, posing a threat to the business's reputation and future sales if uncovered.

PRO Factors

Products, Representatives, and the Organization features that can enhance firm performance when customers are satisfied with them, often addressed through advertising and promotional strategies.

Legitimacy Establishment

Actions such as highlighting the credibility of key employees, maintaining a high-quality website, enforcing professional behavior, and forming alliances to establish a small firm's legitimacy.

Personal Privacy

A major concern for Internet users, with businesses using cookies to collect data on consumer habits, leading to debates on privacy levels and the necessity for transparent practices and privacy policies.

Employee Monitoring

Controversial practices where employers monitor Internet activity, with debates on invasion of privacy versus workplace productivity, necessitating clear policies and employee awareness, sometimes enforced through consent forms.

Intellectual Property

Original creations protected by patents, copyrights, trademarks, and trade secrets, allowing originators to demand compensation for their use, although the Internet has facilitated widespread unauthorized copying.

Ethical imperialism

The belief that the ethical standards of one's own country can be applied universally.

Foreign Corrupt Practices Act

Legislation that makes it illegal for U.S. businesses to use bribery in their dealings anywhere in the world.

Ethical relativism

The belief that ethical standards are subject to local interpretation, implying that anything goes if the local culture accepts it.

One-time practices

Actions that may establish a pattern for future behaviors.

Integrity Edge

The benefits of ethical business practices, including improved financial performance, enhanced brand image, increased sales, and customer loyalty.

Trust in business

The greatest benefit of integrity in business is the trust it generates among customers and employees.

Building a Business with Integrity

The goal of a small business owner with integrity is to operate honorably in all areas of practice, leading to a worthy legacy.

Foundations of Integrity

Beliefs that provide a foundation for ethical behavior in an individual or a firm, influencing business practices.

Underlying values

Beliefs that form the basis for ethical behavior in individuals or firms, affecting actions towards customers and others.

Leading with Integrity

In a small organization, a leader's behavior significantly influences employees and shapes the company's ethical performance.

Ethical Organizational Culture

An organizational culture supporting integrity is crucial for appropriate employee behavior, often defined by a code of ethics.

Code of ethics

Formally established standards of employee behavior communicated by a business owner, often based on fundamental principles.

Better Business Bureaus

Organizations that many small companies join to promote ethical conduct within the business community.

Business Ethics

Encourages ethical practices by providing consumers with information, creating incentives for businesses to adhere to proper practices, and resolving disputes.

Ethical Decision-Making Process

Involves defining the problem, identifying alternative solutions, evaluating these alternatives, making a decision, implementing it, and evaluating the decision.

Golden Rule

Principle for ethical behavior that advises treating others as you would want to be treated.

Triple Bottom Line

Focuses on people, profits, and the planet, prioritized by social entrepreneurs in their ventures.

Sustainable Small Businesses

Profitable companies that respond to customer needs while showing concern for the environment through eco-friendly practices.

Environmentalism

Effort to protect and preserve the environment, often making financial sense for businesses.

L E E D-certified Buildings

Facilities built to strict standards promoting energy and water conservation, reduced CO2 emissions, and improved indoor air quality.

Small Business Administration (SBA)

Public resource helping small businesses comply with environmental regulations.

Green Opportunities for Small Businesses

Opportunities created by environmental concerns that small companies can take advantage of by creating environmentally friendly products and services.

The Small Business Administration (SBA) and the Environmental Protection Agency (EPA)

The two government agencies ready to help small businesses comply with environmental regulations.