Bus. Ethics Q2 4th Module
Bus. Ethics Q2 4th Module
Bus. Ethics Q2 4th Module
As a senior high school student, you are already being prepared for life outside of
school. Because soon, you will be facing the world of adults-working for corporations, putting
up your own business, or providing services on your own. When you face bigger roles in your
life later on, you will need to make ethical business decisions and hopefully, your ethical values
will guide you in the right direction.
This set of modules introduces you to business ethics and corporate social responsibility.
The first unit focuses on the understanding of business ethics, and how it should be integrated
in business practices. You will encounter cases and situations where you will be asked to weigh
things in order to make a business decision. You will be given an overview of how a corporate
culture works, and some of the most common ethical issues that businesses face today. You will
also learn the philosophical roots of some of the ethical frameworks being practiced today, as
well as the prevalence of different Filipino traits and practices that affect the corporate culture.
Business organizations are an important component of the modern society. They help
economies grow, offer desired products for consumption, and create jobs for the population. In
return, they make profits when people patronize their products.
In a capitalist world, business organizations are seen only as profit generators that have
no regard for ethics. However, most organizations do have ethics. Ethics, in the business
context, is about ethical decision-making that is, decisions must be based on promoting the
greater good and doing what is morally right.
This unit focuses on philosophical ethics. It compares and contrast different ethical
frameworks of utilitarianism, ethics of principles and rights, and virtue ethics. It also looks at
the impact of the different belief systems on ethics, as well as the different Filipino traits and
practices.
Page | 1
Lesson Coverage
STUDY GUIDE:
FOLLOW the
GUIDELINES
IN ANSWERING THE ACTIVITIES IN THIS MODULE
Read the direction/instruction in each activity carefully.
Expected Skills:
1. Explain the importance of establishing and sustaining business enterprises as a source of job
opportunities and financial freedom
2. Prepare and implement a proposed personal action plan to assist existing small business
enterprises to practice ethics and social responsibility in their business operation.
Module Map
Page | 2
Pre- Assessment
I. Determine if the statement is correct. If it is correct, write True on the space provided. If it is
wrong, write the correct answer to replace the underlined word. (10 points)
___________1. The customer theory recognizes that every business decision has an impact on
a wide variety of people, that is, benefits to some and imposes costs on others.
___________2. The economic model suggests that companies should be managed based on
the sole benefit of the shareholders alone.
___________6. The Natural Step uses backdrafting, a process in which it examines what! the
future will be when people emerge through the funnel.
___________8. Economic growth uses a backflow model, which shows the flow of resources
from businesses to households and back again.
___________9. The sustainable model recognizes that the economy exists within biosphere
with finite resources.
___________10. Waste management seeks to integrate what is presently waste back into
production.
Explore
In this module, you will be able to explain the importance of establishing and sustaining
business enterprises as source of job opportunities and financial freedom;
encourage employees to play active roles as decision-makers in the business enterprise;
and
suggest innovative ways of developing new products.
Page | 3
A little bit of good can turn into a whole lot of good when fueled by the commitment of a social
entrepreneur.
-Jeff Skoll
Do you believe that you can change the world? Most social entrepreneurs do, and they are
indeed making a difference in the society. Social enterprises are a breath of fresh air in the
society. They embody the enterprising spirit of the private sectors and use the power of
economic markets to provide solutions to social problems.
The time is ripe for social entrepreneurship. The dissatisfaction by the people to the relative
inability of the public and private sectors in dealing with society's problems gives rise to the
increasing initiative of individuals to take the lead in addressing social issues.
According to David Bornstein, a journalist and author who focuses on social innovation, there
are several key changes that have made the social entrepreneurship phenomenon possible.
First, the global increase in prosperity and the increase in wealth of the middle class provided
financial capacity to invest in social ventures. Second, the increase in the number of democratic
and semi-democratic societies has given the citizens the freedom to pursue social
entrepreneurship to provide solutions to social problems outside of the government and
business sectors. Third, the proliferation of new communications technology, access to the
Internet, and the popularity of social media have increased people's level of awareness of social
problems and their impact on societies.
Firm Up
The word social comes from the Latin word socialis, which means "an associate, ally, or
companion." It suggests the organization of people who belong in interdependent groups that
live and work together cooperatively in a community or society.
According to Clay Clark, CEO of a business consulting firm, an entrepreneur is "someone who
seeks to profitably solve a problem that the world has, in exchange for enough monetary
compensation to achieve his or her dreams."
Page | 4
Deepen
1. How do you then define social entrepreneurship when you put the two words together?
_____________________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________________
The following definition combines an emphasis on discipline and accountability with the notions
of value creation (Say), innovation and change agents (Schumpeter), pursuit of opportunity
(Drucker), and resourcefulness (Stevenson). It is broken down into the following definitions:
Social entrepreneurs play the role of change agents in the social sector through various means.
Among which are discussed below.
Adopting a mission to create and sustain social value (not just private value). The
mission of social entrepreneurs is to provide solutions to challenges faced by the society
they can range from poverty to illiteracy to environmental sustainability. Making profits
and providing for what the market needs are means to a social end, not the end in itself
like how business enterprises see things. They look for long-term social return on
investment (ROI), rather than simply being concerned with business ROI
Example:
Mr. and Mrs. Mark Fernandez have observed that most of the mothers in Payatas,
Quezon City are idle all day and do nothing but gamble, gossip, and do some errands at
home. They are financially dependent on their husbands whose jobs are also unstable.
Because of these observations, the couple provided them livelihood by means of weaving
durable rugs for household use. The livelihood did not only help the mothers earn money on
their own and use their idle time productively, but it also provided quality rugs to customers.
The customers, on the other hand, felt that they are not just buying a product but are also
helping alleviate poverty in some families in Payatas.
Recognizing and relentlessly pursuing new opportunities to serve that mission. Social
entrepreneurs see the opportunities, not just the problems. Take, for example, a local
social enterprise that saw gold in scrap cloths, which you can read about in activity 2.
Example:
Traffic has been one of the worst problems in Metro Manila, and a lot of strategies have been
done to try to address it. Jake Valeroso, a social entrepreneur, recognized this problem and
came up with a mobile app where commuters can book a taxi via carpooling. This saves the
commuters money since they only need to pay a portion of the transportation cost. This also
helps decongest
BEYOND WALLSthe 9.1streets
Read since only one car will be used for several passengers. Lastly, this
and Answer!
also helps the taxi driver earn more.
Page | 5
Deepen
What wonderful things can you do with scrap cloths? Scrap cloths are normally used in making
rugs-foot rugs, bath rugs, and all-purpose rugs. But have you ever thought that this lowly by-
product of textile manufacturers can be turned into a premium product?
This local enterprise wanted to give a better life to the female rug weavers in Payatas. These
women would weave rugs all day, but receive a measly profit. Thus, this local enterprise taught
these women how to upcycle scrap cloths and turn them into something beautiful, fashionable,
and expensive, by rug standards.
Read more about this company on https:/rags2riches.ph/pages/about-us and then answer the
following questions.
1. What types of products does the company offer? How was the company able to put a
premium price to its products?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
___________________________________________________________________________
2. What are the values that the company believes in, and how do they fit into the definition of
social enterprise?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Example:
Going back to Jake Valeroso's mobile app for commuters, he also found out that one of the
main issues of the drivers is what to do during off-peak hours (i.e., when there are very few
commuters availing of the service). Based on the focus group discussion conducted by
Jake's there was also a need deliver documents and gifts from one person to another.
Therefore, he innovated the mobile app and included a delivery service for documents and
gifts for a fee.
Acting boldly without being limited by resources currently in hand. Social entrepreneurs
use resources efficiently, and they do not let limited resources keep them from pursuing their
goals. They have a clear vision of what they want to achieve; and they work hard, take risks,
Page | 6
and develop strategies in order to achieve their goals. Recall the story of the social
entrepreneur who took the risk of hiring disadvantaged young adults in order to educate and
rehabilitate them while providing environment-friendly household cleaning products to its
consumers (see next activity).
Example:
Going back to the example of Mr. and Mrs. Fernandez who helped the mothers in Payatas to
create quality rugs, it was apparent that despite the lack of resources, the couple still made
use of materials available such as overstock cloths and indigenous fabrics. They acted boldly
without being limited by resources currently in hand.
• Exhibiting heightened accountability to the constituencies served and for the outcomes
created. Social entrepreneurs take steps to ensure that they are creating social value. They
seek to provide real social improvements, and they work hard to be able to do what they set
themselves to achieve.
Example:
In the example of Mr. and Mrs. Fernandez, the couple wants to see positive change and
transformation among the mothers in Payatas. This vision fueled their passion to help these
mothers and to make sure that their standards of living become better. They did not just
want to create profit; they wanted to see a social problem solved.
Social entrepreneurs are regarded as change agents as they always make a difference Change,
reform, or revolutionize-in order to create solutions in the social sector. They seek to create
systemic changes and sustainable improvements.
Deepen
Actitivity 3:
A. Think about!
1. Do you think a student like you can already make a difference? If you cannot yet have your
own social enterprise, in what ways can you help provide solutions to social problems?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________________
Page | 7
2. Enumerate and explain briefly the different means by which social entrepreneurs can play the
role of change agents in the society.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________________
Firm Up
Social entrepreneurship is about a process that involves the interaction of the individual
entrepreneur, the enterprise itself, and the context in which the entrepreneur and the social
enterprise operate (Kickul, Lyons 2012). The following discussion on some models of social
entrepreneurship will help you understand better this process.
According to the Timmons model of the entrepreneurship process, the three key components of
a successful business venture are opportunity, resources, and team.
The model shows that entrepreneurship is opportunity-driven or that the market shapes the
opportunity. The entrepreneur has to be able to create value for consumers at the right price in
Page | 8
order for the opportunity to become viable. Once the opportunity is deemed viable, the
entrepreneur forms a team. The size of the team is based on the size and nature of the
opportunity. Timmons considers a good team as a requirement for the venture to succeed. The
entrepreneur also has to be able to choose the right members of the team to contribute to the
success of the business.
Identifying the resources is also important so the company can create competitive advantage
for its products. The resources must also match the requirements of the opportunity.
All the elements must complement each other and must maintain balance. As the opportunity
grows, the team and the resources must also grow to maintain the balance. If the opportunity
is too big for the team, the seesaw might collapse and the venture could fail. While the model
shows the basic requirements for setting up an enterprise, it leaves out the context in which the
entrepreneurial activities take place, which can help identify the "social" part of a social
enterprise.
The PCDO framework represents people, context, deal, and opportunity in its elements. People
represent the human resource needed to successfully run the enterprise. The collective skills of
the people are needed to fully operate the business, similar to the "team" concept in Timmons
model of entrepreneurship process People also include investors in the enterprise.
Context includes the elements in the environment where the entrepreneurship takes place. It
includes factors that are beyond the control of the management, such as political, demographic,
cultural, and economic factors.
Deal includes transactions involved in determining how and to whom benefits of the
entrepreneurial activity are dispersed. It is the substance of the bargain that defines who gives
what, who gets what, and when those deliveries and receipts will take place.
Lastly, the opportunity creates an avenue for the enterprise to offer something of value to the
market. It is the essence of the framework.
Page | 9
While this framework and Timmons model are for commercial enterprises, elements such as
opportunities and people are also utilized by social enterprises. Opportunities definitely present
themselves even in social enterprises, so the entrepreneur can develop something valuable for
the market to patronize. People are needed to mobilize the ideas and pursue the goals.
However, deals may not clearly describe the complex processes and negotiations within a social
enterprise.
Deepen
Read the case study below and then answer the questions that follow.
Jerry Ambiga has developed his talent in emceeing ever since he was in elementary. He has
emceed in numerous school events in grade school, high school, and college. There was even a
period during his college years wherein Jerry was able to use his talent to augment his family's
income even though this was not really the primary intent.
Jerry happens to be the breadwinner of the family, and part-time hosting jobs have helped him
sustain his college education. He continued his hosting career even after college. He does not
charge his customers with a substantial rate but according only to their capacity. He believes
that it is more important to share his talent. He never complained with whatever his customers
pay him.
The opportunities keep on coming because of word-of-mouth. Every time that Jerry emcees an
event, the attendees are mesmerized and refer him to their friends and to the friends of their
friends. Jerry was able to establish a reliable number of clientele. There was even a time when
Jerry could not accommodate the number of hosting jobs anymore. Jerry able to help his family
with this and was able to save substantial amount of money. At the same time, his customers
were able to save because they only paid Jerry according to what they can.
1. In this case, determine and explain how the PCDO framework was applied.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
2. Will the PCDO framework work even though one aspect of it is not present? Why or why not?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
The CASE model is a model developed by Güclü, Dees and Anderson of the Center for the
Advancement of Social Entrepreneurship. It presents the process of creating a social
opportunity. The first stage involves generating promising ideas, while the second stage
features the development of promising ideas into attractive opportunities.
Page | 10
In the first step, the opportunities in the community are generated based on social needs and
social assets. The opportunity needs to be viable as a business and as a strategy for creating an
impact on social transformation. The second part, which covers the social impact theory, should
include a working hypothesis on the social outputs, outcomes, and impacts that are achievable
when the opportunity is actively pursued. For example, if a social entrepreneur identifies an
opportunity in the market by offering quality designer bags made of woven cloth in order to
alleviate poverty in the families of the weavers, the enterprise will have to identify how many
weavers can be employed and how many bags items they can make (output), what kind of
products they can produce (outcome), and how this opportunity will change the lives of the
weavers' families (social impact).
The CASE model takes a promising idea to take advantage of an opportunity to create a social
impact.
Deepen
Activity 5:
1. In your understanding, how do you think commercial and social enterprises differ from one
another? What are their similarities, if any?
_____________________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________________
Page | 11
B. What Have I Learned So Far?
1. What are the key differences among Timmons model of the entrepreneurship process, the
PCDO framework, and the CASE model?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
___________________________________________________________________________
In order for you to get a picture of the local social enterprise scene, this report by the British
Council features the beginnings of a few social enterprises in the Philippines, and how the
public and the private sectors are helping cultivate a culture of social entrepreneurs
https://www.britishcouncil.org/sites/default/files/social_enterprise_activity_philippines.pdf.
ESSENTIAL LEARNING
As some people put it, a social enterprise is a business with a heart. It does t only concern
itself with bottom-line profits, but it also makes it a mission to advocate social change in the
society.
There are several key changes that have made the social entrepreneurship phenomenon
possible the global increase in prosperity and the increase in wealth of the middle class which
provided financial capacity to invest in social ventures, the increase in the number of
democratic and semi-democratic societies which has given the citizens the freedom to pursue
social entrepreneurship to provide solutions to social problems outside of the government
and business sectors; and the proliferation of new communications technology. access to the
Internet, and the popularity of social media which have increased people's level of awareness
of social problems and their impact on societies.
Social entrepreneurs are regarded as change agents as they always make a difference
change, reform, or revolutionize to create solutions in the social sector. They seek to create
systemic changes and sustainable improvements.
There are several existing models that can be used in modeling the social entrepreneurship
process. Among which are the Timmons model of the entrepreneurship process, the PCDO
framework, and the CASE model.
Page | 12
Firm Up
The social enterprise plan can help you assist in formulating and finalizing your social venture.
The outline is shown below.
I. Situation Analysis
A. Social Issue(s)
B. Social Impact
C. Market Analysis
A. Product(s)
B. Mission and Vision
C. Target Beneficiaries
D. Customers
E. Competitors
III. Operations
The situation analysis gives you an overview of the environment in which the social
enterprise will be operating. You may include analysis of current trends that are related to the
enterprise you are proposing, the social issue of issues that you hope to address, and the social
impact that your social venture may have on the society. You may consider the following in
deciding on the social issue you want to help resolve:
The second part of the paper that specifically focuses on the social enterprise requires you to
describe in detail the specific things about this venture. What are the products that you will be
making available to the marker? You may also discuss your products' competitive advantage.
The mission and vision will help you set the "guiding light" for your social venture. The target
beneficiaries and customers will give a clearer picture of who will benefit from the enterprise
and what exactly they will need, and who will be patronizing the products of the enterprise.
Competitors will make you understand how competitive the environment is and give you
insights as to what your competitors are doing.
The part on operations asks you to provide specific details about your social enterprise. Some
questions that can be answered in this section are as follows:
Page | 13
Where will your social enterprise operate?
How many people do you need to manage and run it?
Where will your raw materials come from?
How long will it take for you to produce your products and make them available to the
market?
The last part will show the viability of your paper. You may refer to the skills you have learned
in Business Finance to work on this part of the paper.
Deepen
Activity 6:
Read the case study below and then answer the questions that follow.
The Bag Be Yours is a social business enterprise established by Ana Tan, Bag Be Yours sells
custom-made bags that are produced by an indigenous tribe in Palawan. This tribe used to be
idle and wanderers but when Ana started to tap them, they felt their utmost importance to
society and in the world they live in. Ana at the same time has been in to the fashion industry
for quite a while. Fashion is defined as the prevailing style or custom, as in dress or behavior.
In this generation, accessories are a part of fashion. Most of the people, especially women,
cannot go out of their houses feeling incomplete without a single accessory, and today, bags
are also considered as an accessory by both men and women. The functionality and style of
every bag in the market are great factors that catch the eye and attention of shoppers, but
there are still details that consumers would find in a bag.
Product
Custom-made bags' designs are based on the consumer's preference. They are simply a
product straight from the imaginative and creative minds of the customers that the artistic
indigenous tribe of Palawan will create.
The primary target markets of Bag Be Yours are women and mothers aged 30-50. They were
targeted because based on studies, women in these age group not just care about a certain
product but also on its advocacy.
1. How relevant is this social business enterprise in the context of Ana solving a social issue and
her necessary skills and knowledge to manage the business?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Page | 14
B. What Have I Learned So Far?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
2. Why should a budding social entrepreneur make a social enterprise plan first before starting
the venture?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Deepen
1. What are the social issues that you take notice of every day? What actions do you think can
be done to resolve these?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
___________________________________________________________________________
Starting a social enterprise can be a daunting task. The business planning guide to
developing a social enterprise that you can access on this link may be able to inspire and
motivate you:
http://www.forthsectordevelopment.org.uk/documents/New_BusPlanGuide .pdf.
Page | 15
ESSENTIAL LEARNING
Ideas inspire action. In this case, an idea for a social enterprise may power a social change.
Ideas are important because they represent a start of something that has a potential to get
bigger later on. They represent unrealized potential value in their original state.
Entrepreneurs are often on the look out for ideas that can be offered to the market to
answer customer needs. Ideas may come from personal experiences, passion, accidental
discovery, systematic search, or awareness through channels.
Creativity and innovation are often used as synonyms, but these words are distinctly
different. Creativity is the development of original ideas or inventions, while innovation is the
implementation of these inventions. Entrepreneurs are considered as innovators, but not all
of them are inventors. There are seven types of innovation: creation of new products, new
process for producing an existing product, delivering an existing product to a new or
underserved market, utilizing a new source of labor, implementing a new organizational
structure, implementing new ways of engaging customers or target beneficiaries, and
utilization of new funding models
Ideas are turned into opportunities when they have the following characteristics, the ability
to add value for the customer, creating value by solving a customer problem or fulfilling a
customer need, the ability to capture a market and generate profits, and compatibility with
the skill set of the entrepreneurs who pursue them.
The social opportunity assessment tool contains four major assessment categories: social
value potential, market potential, competitive advantage potential, and sustainability
potential. Each category contains five criteria that the entrepreneur can evaluate by rating
them.
The social enterprise plan can help assist you in formulating and finalizing your social
venture.
Post Assessment
I. Determine if the statement is correct. If it is correct, write True on the space provided. If it is
wrong, write the correct answer to replace the underlined word. (10 points)
___________1. The customer theory recognizes that every business decision has an impact on
a wide variety of people, that is, benefits to some and imposes costs on others.
___________2. The economic model suggests that companies should be managed based on
the sole benefit of the shareholders alone.
___________6. The Natural Step uses backdrafting, a process in which it examines what! the
future will be when people emerge through the funnel.
Page | 16
___________7. Market-based approaches to environmental protection on the idea that it is
possible to involve corporations, individuals, and premised government agencies by using prices
that force them to economize. They try to put the powerful advantages of markets to work in
service to the environment.
___________8. Economic growth uses a backflow model, which shows the flow of resources
from businesses to households and back again.
___________9. The sustainable model recognizes that the economy exists within biosphere
with finite resources.
___________10. Waste management seeks to integrate what is presently waste back into
production.
Transfer
Performance task
You planning to join a competition about social enterprise, and the organizers are inviting
budding entrepreneurs to develop a social enterprise plan. Three winners will be chosen, and
each winner will receive funding money of P100,000 as a startup capital for the social
enterprise. You are required to form a team with three members.
Your team is tasked to develop a social enterprise plan as discussed. The outline is as follows:
I. Situation Analysis
A. Social Issue(s)
B. Social Impact
C. Market Analysis
A. Product(s)
B. Mission and Vision
C. Target Beneficiaries
D. Customers
E. Competitors
III. Operations
You are to write a comprehensive paper, 15-30 pages, following the format given above. The
paper and presentation will be evaluated based on the assessment rubric on the next page.
Assessment Rubric
Page | 17
Multiply the rating with the weight of each criterion to get the weighted average. Then get the
sum of the weighted averages to get the final score.
4.1-5.0 Excellent
3.1-4.0 Very Good
2.1-3.0 Satisfactory
1.1-2.0 Needs Improvement
Page | 18