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UNIVERSITY OF PANGASINAN-PHINMA
HOSPITALITY MANAGEMENT

CHAPTER 3: THE ETHICAL AND SOCIAL RESPONSIBILITIES OF THE
ENTREPRENEUR

Every now and then, newspapers file reports on corruption, deception, and illegality
committed by various personalities including entrepreneurs
...
There are indications that the practice has a tendency to become more
intense and destructive
...
Yet, the said
practice is only one of the many that are committed in the quest for improving one’s lot,
financially or otherwise
...
The role of the entrepreneur in propagating ethics and social
responsibility in business cannot be overemphasized
...

As a consequence, the study of ethics paved the way for the adaption of the general rules of
conduct in society
...
The
ethical behavior required of entrepreneurs is determined by the following:

1
...
interest groups like the Society of Prevention of Cruelty to Animals;
3
...
the individual’s personal morals and values
...
It
establishes trust between buyers and sellers and between lenders and borrowers
...


FACTORS INFLUENCING ETHICAL BEHAVIOR
Ethical behavior, whether by a person or a business entity, is influenced by any or a
combination of the following:
1
...
reward system;
3
...
other factors
...
For instance, a
firm that behaves ethically during prosperous times may act unethically in times of financial
hardships
...
THE EFFECT OF ADHERENCE TO ETHICAL STANDARDS
The expectation of high rewards for committing unethical behavior motivates a person to
do it
...
For instance, a person who is considering adulterating his products
to increase profits will be more inclined to do it especially if the community does not strongly
condemn such acts
...

People are different from one another and that includes differences in reacting to specific
situations
...
Another person would think differently and would not want to engage in such activy
...
An example is the trader who spreads rumors to
discredit competitors
...

There are certain ways of encouraging ethical behavior among employees
...
adaption of a code of ethics;
2
...
adaption of internal programs for resolving conflicts;
4
...
provision of training in ethics for employees; and

6
...


CODE OF ETHICS
The code of ethics is a formal document indicating the entrepreneurship’s adapted
principles of appropriate behavior
...
It serves as a basic reference for employees who make big or small
decisions
...
Although this does not
happen often, few persons are equipped with sufficient skills to deal with it
...

A code of ethics can be made effective if the following requirements are met:
1
...
it must be supported by top management
...

Ethical behavior of personnel occurs only when the entrepreneur develops a code of ethics
and successfully implements it
...
For many
people, however, this may not be enough to motivate them to act ethically
...


Punishments could take the form of dismissal, demotion, suspension, or reprimand
...


INTERNAL PROGRAMS FOR RESOLVING CONFLICTS
Conflicts arise, even when ethical conduct of personnel is concerned
...
The
subordinate may harbor ill feelings toward his superior if the subordinate is not provided with
a means to ventilate his grievance
...
For instance, a
subordinate may appeal a superior’s decision without exposing him to the concerned
superior
...


ETHICS REVIEW COMMITTEES
To encourage ethical behavior, the entrepreneurship may create an ethics review
committee
...
These persons have undergone special training in ethics
...
Ethics review committees are not yet popular in Philippine entrepreneurship, but it is
slow adapted by government corporations like state colleges and universities
...


PROVISION OF TRAINING IN ETHICS FOR EMPLOYEES
Company personnel who are exposed to activities that are ethically charged must be
provided with sufficient training in ethics
...


Ethics training is more appropriate for persons occupying sensitive positions in
purchasing, waste disposal, personnel, research and development, sales, and manufacturing
...
For instance, when unethical conduct is committed
and no sanction is imposed by top management, it can be expected that more that more
violations of good ethics will be made
...
These spring from the following
relationships:
1
...
between the company and its personnel and employees;
3
...
between the company and the investors and financial community
...
Rhis
expected because of the high frequency of transactions between the company and the
customers
...
An
example is the practice of sending unsolicited message to the customers though the cell
phone
...
Entrepreneurs should provide support for consumer rights which
are as follows:
1
...
the right to be informed;
3
...
the right to be heard
...
Consumers expect that the products and services that they buy will
do them no harm
...
This concern brought about the passage of laws intended to
protect the consumer
...
The
purpose is to provide some guarantee to the public that the drugs are safe to use
...
Consumers make purchasing decisions often
...

Advertisements and information printed on labels are some of the ways of providing
information to consumers about products and services
...

The Right to Choose
...
However, some traders would violate this right to make huge profits
...

Nobody could buy that brand except from him and he was able to make huge profits by
selling at a high price
...

The Right to Be Heard
...
This right may be used to express appreciation about what
the company is doing, or to provide information about defects in the products the customer
bought
...
An example is the information printed on the products label
indicating contact numbers where complaints may, be relayed
...
Since entrepreneurs and their staff make
decisions on various business activities like hiring, promotion, transfer, compensation, and
dismissal, it is not uncommon for ethical lapses to happen every now and then
...

Good ethical conduct requires entrepreneurs to be aware of their responsibilities to
employees
...


workplace safety;

2
...
avoiding discrimination; and
4
...


WORKPLACE SAFETY
...
He sees to it that adequate measures are adapted to prevent
accidents from happening in the factory and in the office
...
Fire exits must be provided
...

QUALITY OF LIFE ISSUES
...
Caring for children and the elderly are
two of the most common responsibilities that make life difficult for any employee
...
Many years ago, such concerns are
taken for granted because most Filipinos have extended families and there is someone who
would take care of the children and the elderly
...

As a remedy to the above concern, progressive companies provide day-care facilities for
the children of employees
...
If measures like those are
jot feasible, entrepreneurships can still provide assistance in locating or facilitating
arrangements with private day-care and housing facilities
...
For example, the husband may be given an option to
work at hours different from his wife so there will be an adult in their house at any given
time
...

AVOIDING DISCRIMINATION
...
Factors like age, se, race, religion, political beliefs, and the
like must not be allowed to affect any person’s chance of getting employed or promoted
...
Sexual harassment refers to unwelcome
sexual advances, requests for sexual favors, and other verbal or physical contact of a sexual
nature
...

In preventing sexual harassment, the entrepreneur needs to do the following:
1
...
develop a complaint procedure for employees to follow;
3
...

4
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Take disciplinary actions against harassers
...
In the course of business transactions between the players mentioned
and the firms, some ethical questions may come into fore
...

The practices like those stated above are unethical and must not be allowed to happen in a
company that upholds good ethical conduct
...
The degree of trust is maintained

at a high level if the investors and the financial community feel that business firms practice
good business ethics, especially thinks that their investments are well protected
...

Trust and confidence, however, are eroded by wrongdoings of some firms
...

It is to the best interest of companies including entrepreneurships to continue to be blessed
with a stable financial system
...

Misrepresentation concerning the financial health of firms, land swindles, embezzlement and
misleading reports about non-existent assets are only some of the unethical and illegal
practices that undermine our country’s financial stability

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