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Business Ethics Module 1

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Michelle Doctor
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7 views

Business Ethics Module 1

Uploaded by

Michelle Doctor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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BUSINESS ETHICS

S&OCIAL
RESPONSIBILITY
ABMSPECIALIZEDSUBJECT

The course deals with the fundamental concepts, principles, and practices
of ethical standards in the business environment. It combines the
theoretical foundations of setting up business enterprises with the conduct
of entrepreneurial activities in the context of one’s accountability and
social responsibility.

Specifically, the course aims to: (1) provide students with a basic
understanding of the mechanisms whereby companies can be made to act
in the best interest of shareholders, other stakeholders, and society as a
whole; (2) provide students with knowledge of general ethical principles
as applied to the special situations of business and the ability to make
informed judgments through case analyses; and (3) equip students with
the ability to formulate basic strategies in relation to corporate ethics and
governance.
Chapter 1
The Role of Business in Social
and Economic Development

Lesson 1 The Nature and Forms


of Business Organization

At the end of the session the learners will be able to:


a. Differentiate the forms of business organizations
b. Give examples of forms of business organizations
c. Explain the roles of business in social economic
and development.
BUSINESS
Is an activity that is part and parcel of human society:
It is an entity in which economic resources or inputs,
such as materials and labor, are put together and
processed to provide goods or services or outputs to
customers.

Complex enterprises involving major activities like


purchasing, manufacturing, marketing, advertising,
selling, and accounting.

Profit Business from a Moral Perspective


Objective of most businesses. Business is organizations should help in the
promotion of the common good and in the protection
It is the difference between the amount earned and of persons’ rights and interests.
the amount spent in buying, operating, or producing
something. Thus, businesses make the goods and services you
use each day.
TYPES OF BUSINESS
ORGANIZATIONS
There are generally three types of
Service Business
business organizations operated for profit:

Provides services rather than products to customers.

Merchandising Business
Sells products from other businesses to customers.

Manufacturing Business
Change basic inputs into products that are sold to customers.
FORMS OF BUSINESS ORGANIZATIONS
The three types of businesses – service, merchandising and manufacturing – may be organized to the following, given the large size and
huge amount of resources required to operate a manufacturing business, most manufacturing businesses are corporation.

SERVICE MERCHANDISING MANUFACTURING

Sole Proprietorship Partnership Corporation


A business owned by one person An association of two or more people An entity created by law that is
as partners separate and distinct from its owners and
its continued existence is
It refers to an agreement in which the dependent upon the corporate structures
individuals share the profits and liabilities of the state in which it is incorporated.
of a business venture.
FORMS OF BUSINESS ORGANIZATIONS
cont. Sole Proprietorship Partnership Corporation
NUMBER OF 1 2 or more At least 5
POSSIBLE
OWNERS
WHO MANAGES THE Owner Partners Board of Directors and
BUSINESS (but he may hire somebody) (or they may hire managers) operating management

TERMINATION Death of the owner Death of any partner or As stated in the Articles of
OF BUSINESS withdrawal of a partner Incorporation, not to exceed
50 years.
GOVERNMENT Department of Trade and Department of Trade and Securities and Exchange
AGENCY Industry - DTI Industry - DTI Commission - SEC
ASSIGNED TO
REGULATE
TRANSFER OF Sell the business (it’s a new Sell the business or interest of a Sell Stocks
OWNERSHIP entity under a new owner) partner (consent of other
partners is necessary)
LIABILITY Unlimited ; other properties not used in Generally unlimited; There are types of Limited to the stock
OF the business may be held liable for the partnerships that limit the liability of the investment of the
OWNERS obligations of the business partners shareholder
ROLE OF BUSINESS IN THE
ECONOMY
Small Businesses
Vital and significant contributors to economic development, job creation, and the
general health and welfare of economies.

Microbusinesses
Firms that employ fewer than ten people.

Form a dynamic, integral part of the market economy, providing goods and services and a
gateway by which millions enter the economic and social mainstream of society.

Corporations
Large businesses offer better jobs than small businesses, in terms of both compensation
and stability. Also provide such benefits as:
Links with suppliers, increased consumer spending, the transfer of knowledge
from one firm to another, and the sharing of pool of workers.

Competitive Forces
Competitive forces sometimes fail to steer companies in a socially beneficial way
and instead, lead them to act in a socially harmful manner.
ETHICAL
ISSUES
The wave of large corporations has brought with it a host of new ethical issues, including:

Possibilities of exploiting the workers who labor at the new machines


Manipulating the new financial markets that finance those large
enterprises

Producing massive damage to the environment.


Class Activity:
Case Problem Analysis Guide Instruction:
Abakada Company began a small enterprise buying and selling various food products. Based on the situation above, give the owner of
After a few years of successful operations, it added apparel and footwear to its wares. Abakada Company appropriate advice regarding
During this initial stage, Abakada managed to work on the basis of its proprietor’ capital, whether or not to incorporate his business. You
borrowing from its bank from time to time when needed. might wish to categorize the pros and cons into the
following issues:
After more years of operation, Abakada found that it needed to draw larger amounts of
funds through bank borrowing, as well as to hire more personnel for the growing
marketing needs and services, apart from administrative functions like accounting,
among others. The proprietor carefully weighed his options: • BUSINESS SIZE

• Shall I incorporate my business so that I can have greater and easier access to funds, • MISSION AND OBJECTIVES
especially larger loans from banks?
• If I hire more people as my company goes bigger, will I be able to manage and • PROCEDURES FOR
control well the personnel working for me? INCORPORATION
• If I begin offering ownership shares to other people outside my family, will serious
disagreements arise among us in terms of products and services to offer in the future • PERSONNEL
as well as managerial style?
• CONTROL

• FUNDING SOURCES

• LEGAL AND TAXATION


Thank You!

Reference(s):
Racelis 2017. Business Ethics and Social Responsibility. Rex
Bookstore First Edition. Pages 2 -10

Commission on Higher Education (CHED) 2016. Fundamentals of


Accountancy Business and Management 1 (FABM1) Teaching Guide.
Page 27

For suggestions, email your message to: Presentation made by:

[email protected] GIAN PAULO M. RABANAL, LPT,


MBA©

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