Topic: The Responsibilities and Accountabilities of Entrepreneur

Objectives: At the end of the lesson, the students should be able to:
1. Identify responsibilities to the business organization he/she belongs to.
2. Explain the different models and frameworks of social responsibility
3. Differentiate responsibility from accountability.
4. Appreciate more fully the concept of CSR
5. Debate (for or against) the statement, “The only social responsibility
of business is to earn profits.”
The entrepreneur job description

1. entails planning and directing the operations of a company/ brand

of business assigned to them.
2. It also involves providing leadership and direction for the
organization.
3. Formulating policies, managing daily operations, and planning the
use of materials and human resources, but are too diverse and
general in nature to be classified in any one functional area
of management or administration, such as personnel, purchasing,
or administrative services.
• Responsible entrepreneurs are

1. special breed, seeking to transform industries and even society itself.

2. They challenge and refine cultural assumptions, laws, regulations, and
event processes of governance.
3. This requires them to do and think far beyond what is usually required
of business leaders.
4. It is the entrepreneur who undertakes the risk of the enterprise in
search of profit and who seeks opportunities to profit by satisfying as
yet unsatisfied needs.

• 5. The entrepreneur then brings together the factors of production

necessary to produce, offer and sell desired products and services.
• Ten skills you need to have as an entrepreneur:

∙ Curiosity -Great entrepreneurs are tasked to discover new problems,

reveal potential niche opportunities, refactor their original business
process, and innovate
∙ Time management
∙ Strategic thinking
∙ Efficiency
∙ Resilience
∙ Communication
∙ Networking
∙ Finance
• The two main functions of entrepreneurs are first,
1. taking the risk of developing new products or services and
2. successfully bring new products and services into the marketplace.

• A socially responsible entrepreneur makes donations for

significant society causes – social, cultural or ecological.

• We are responsible for activities like recycling, volunteering and

mentoring, where time is a valuable resource that should be shared with
those who need it most.
• Responsibility of Entrepreneur Towards Local Community

1. Encouragement to Healthy Competition

• The entrepreneur should encourage healthy competition among the local

community and make good quality commodities available to the public at
fair prices.

2.To Save Local Environment from Pollution

• Risks of pollution of the environment at the factory sites, due to the smoke of
the coal, polluted water and manufacturing process cannot be ruled out.

3.To Help in Activities of Public Utility

• The entrepreneur should encourage healthy competition among the local

community and make good quality commodities available to the public at
fair prices.
4.To Provide Employment to Local Community

• The entrepreneur should provide more and more

employment to the local people of the place, where
he is establishing his business unit or is performing
the business activities.
5.To Improve Standards of Living
6.To Promote Public Relations
• The entrepreneur should provide information to the public
about the policies and activities of his business or
business organization and should try to understand the
feelings of the common man..
Social Responsibility of Entrepreneurs towards Employees

1. Reasonable and Attractive Remuneration

2. Assignment of Right Jobs/ Qualities of Effective Leadership in an Entr

epreneur

3. To Give Security of Employment

4. To Give Best Working Conditions

5. Providing Opportunities for Individual Development

6. Development of Mutual Understanding and Trust

7. Adoption of Welfare Schemes

8. Human Behaviour
 9. Establishment of Small Industrial Relations

10. Participation in Profits and Management

11. Well Defined Service Conditions

12. To Adopt Incentives Wages Scheme

13. To Corporate in Execution of Labour Laws

• Social Responsibility of Entrepreneurs towards Government

∙ Compliance of Government Rules
∙ Payment of Taxes
∙ Not to Correct the Government Machinery
∙ Not to Seek Political Patronage by Unfair Means
∙ To Cooperate with Government for Economic Development
Social Responsibility of Entrepreneurs towards
Government
• The government regulates and controls the business, with the
objectives of the systematic economic development of the
country and safeguarding the interests of the common people.

• Compliance of Government Rules

1. The rules framed by the government for business should be

fully complied with.

2. The entrepreneur should follow the laws regarding obtaining

licenses for a specified business, the operation of the business,
price determination and production, 
3. Payment of Taxes

• The government imposes various types of taxes, like, Income Taxes,

sales tax, exercise duties, tariff duties and wealth tax on the entrepreneur
and business, for raising financial resources. The entrepreneur should
honestly pay these taxes.

4. Not to Correct the Government Machinery

The government appoints the officers to implement its policies.

• The social responsibility of the entrepreneur is that he may not

correct the government officers and employees for getting wrong
favors or some Anti-Social purposes.
5. Not to Seek Political Patronage by Unfair Means

• The responsibility of the entrepreneurs is that they do not seek political

patronage by providing undue economic help to any political party or
persons, during elections.
• By giving Anti Social activities with political patronage hits the democratic
values.

Examples of antisocial behaviour

∙ noisy neighbours.
∙ graft
∙ drinking or drug use which leads to people being rowdy and causing
trouble.
∙ large groups hanging about in the street (if they are causing, or likely
to cause, alarm and distress)
∙ litter problems.
∙ racism.
• Anti-social behaviours are actions that harm or lack consideration for
the well-being of others
 To Cooperate with Government for Economic
6.

Development
• The government sets the targets for the balanced and
rapid economic development of the country.

• For that, the entrepreneur should provide

cooperation to the government by proper utilization
of available resources in accordance with the
government targets.
• The responsibilities of the
entrepreneurs towards the suppliers are as
follows:
∙ To Pay Fair Prices of Goods
∙ To Pay in Reasonable Time
∙ To Inform about Changes in Market
∙ To Give Guarantee of Minimum Price
∙ To Motivate Indigenous Supplies
∙ To Provide Technical Advice
∙ To Inform Suppliers of Future Developments
• Corporate Social Responsibility towards Suppliers and
Creditors
• Corporate Social Responsibility
• When companies uphold corporate social responsibility
(CSR), they are accountable to various internal and external
stakeholders. Internal stakeholders may include the
shareholders, employees, and management while external
stakeholders are the consumers or the buying public,
suppliers, creditors, competitors, and the local community or
the society at large. Let us focus on how companies practice
social responsibility towards its supplier and creditors.
• Who are the Suppliers and Creditors?
• It is uncommon to consider suppliers and creditors to
be part of the company’s stakeholders. But then again,
they play a vital role in any business success so they
are also worthy of being provided with CSR values.

• In strict business structure, the suppliers are primarily

responsible for providing or delivering the raw
materials and resources that a company needs in the
production.

• Suppliers indirectly affect marketing and business

aspects such as product quality, price, and production
of goods.
• Good quality raw materials also mean quality-made final
products and fair market price. Availability of supplies
determines production workload and quantity.

• Creditors have an impact on the business transactions of

companies. Usually, a business purchases goods or raw
materials on credit from various suppliers. As an
organization that buys resources on credit, CSR can be
extended on this aspect by being mindful of the obligation
to pay religiously and timely for raw materials that have
been delivered and used.

• Considering the stiff market competition across industries,

companies are doing their best to minimize costs but not
pushing too much on sales as a way of gaining profit.
• This can be addressed by keeping good relationships with
suppliers since they can help bring down the cost by offering
reasonable prices for the resources.

• However, in the same way that companies uphold ethical

business transactions and negotiations with them, suppliers
must also practice sustainable and responsible acts.
• Dealing with Suppliers and Creditors
• It is important to know that in business, companies and
suppliers must maintain a good relationship based on
mutual respect. In dealing with suppliers, there are
certain key points that firms must take note of.

• First, companies must seek fairness and truthfulness in

all dealings with suppliers especially pricing and
licensing. Next, companies should make certain that any
business transaction with suppliers must be free from
any form of coercion and unnecessary litigation. Also,
firms must promote long-term stability in their
relationship with the suppliers to pay back the good
value, quality, and reliability they gained.
• Dealing with suppliers properly means sharing
information with them and making them part of the
planning processes. On the part of the creditors, one of
the best ways to deal with suppliers is to be responsible in
making timely payments according to the agreed terms
and conditions of the trade.

• Lastly, organizations must be ethically responsible by

choosing only suppliers with fair and just employment
practices and those that have respect for human dignity.
So, a supplier that enforces child labor in its activities is
not a good example of who to deal business with.
• Good CSR Practice from Suppliers and Creditors
• Relationship between suppliers and creditors must be
mutually beneficial so CSR practice ought to be extended
to both groups.

• There are three fundamental requirements every company

must need from their suppliers:
1. legal compliance
2. quality control
3. environmental conservation
• Companies share common requirements from
their suppliers but there are companies that would
establish their own pre-requisites and conditions
before purchasing goods from them.

• Suppliers must always be in compliance with the

national or regional laws and maintain proper
observance of social norms.

• Moreover, suppliers must be fair in its dealings

with creditors and organizations.

• They must also maintain the approved quality and

delivery standards expected from them.
• As suppliers, they have to maintain a stable
supply and availability of raw materials as
well as eco-friendly goods.
• They must keep their clients and purchasers
abreast of any new information on new
technology and latest raw materials.
• Confidentiality must be strictly practiced.
This means no unnecessary disclosure of
information shared by the company and its
activities.
• Responsibilities to the general public These
responsibilities include reducing dangers and promoting
public health, protecting the environment, and
developing the quality of the workforce.
• Many would also argue that businesses should support
charities and social causes through corporate
philanthropy.
• Responsibilities to customers

• Consumerism is the idea that businesses should

consider and safeguard certain customer rights.
Businesses are obligated to protect the consumers’ right
to be safe, to be informed, to choose, and to be heard.
• Responsibilities to employees In addition to
pay, employees today expect a safe working
environment, consideration of quality of life
issues like family leave, and equal
opportunity on the job. The workplace
should also be free of age discrimination,
sexual harassment, and sexism.
• Responsibilities to investors
• Businesses must be honest in reporting their
profits and the financial community financial
performance to avoid misleading investors.
When firms fail in meeting these
responsibilities, thousands of investors,
employees, and customers can suffer.
Therefore, government agencies exist to
ensure that businesses follow proper
accounting practices and to investigate alleged
fraud and other financial misdeeds.
• Types of Ethical Issues in Business
• If you are to run an ethical business, you first need to
know what types of issues you can expect to face and may
need to overcome, like

1. Discrimination
• One of the biggest ethical issues affecting the business
world in 2020 is discrimination. In the last year, many
corporations have come under fire for lacking a diverse
workforce, which is often down to discrimination.
However, discrimination can occur at businesses of all
sizes. It applies to any action that causes an employee to
receive unequal treatment.
• Discrimination is not just unethical; in many
cases, it is also illegal. There are statutes to protect
employees from discrimination based on age,
gender, race, religion, disability, and more.
Nonetheless, the gender and race pay gaps show
that discrimination is still rampant. Other common
instances of discrimination include firing
employees when they reach a certain age or giving
fewer promotions to people of ethnic minorities.
2. Harassment

• The second major ethical issue businesses face is harassment, which

is often related to racism or sexism. This can come in the form of
verbal abuse, sexual abuse, teasing, racial slurs, or bullying.
• Harassment can come from anyone in the company, as well as from
customers. In particular, it is unethical issue for the business if a
supervisor is aware of harassment from a client and takes no action to
prevent it.

• In addition to causing a toxic workplace, harassment can cause

employees to leave the company prematurely — a second reason
why some businesses lack diversity.

• Harassment can have a long-term impact on employees:

psychologically, in terms of earnings, and even impacting a
person’s entire career path.
• Unethical Accounting
• Publicly-traded companies may engage in unethical
accounting to appear more profitable than they
actually are. In other cases, an accountant or
bookkeeper may change records to skim off the top.
• Health and Safety
• Another type of ethical issue that is often protected
by law is health and safety. Companies may decide
to cut corners to reduce costs or perform tasks
faster. As well as injuries, failing to take workers’
safety into account can lead to psychosocial risks
(like job insecurity or lack of autonomy), which can
cause work-related stress.
• Abuse of Leadership Authority
• Abuse of power often manifests as harassment or
discrimination. However, those in a leadership role
can also use their authority to pressure employees
to skip over some aspects of proper procedure to
save time (potentially putting the employee at risk),
punish workers who are unable to meet
unreasonable goals, or ask for inappropriate favors.
• In addition, abuse of authority can extend beyond
the workforce. Managers can use their position to
change reports, give themselves credit for the work
of a subordinate, misuse expenses, and accept gifts
from suppliers or clients.
• Nepotism and Favoritism
• Nepotism is when a company hires someone for being a family
member. Favoritism occurs when a manager treats an employee
better than other workers for personal reasons.

• Not only are nepotism and favoritism are unfair, they are also
disheartening to employees. Workers often find they have to
work much harder to receive a promotion or other rewards.
• Privacy
• Employers may even fire workers who post controversial
statements that go against company values.
• Another ethical issue surrounds the use of devices
belonging to the company. Employers can now monitor
all worker activity on laptops and cellphones.
• Corporate Espionage
• The opposite to the above can also happen:
workers can misuse company data. An employee
may steal intellectual property or provide a
competitor with information about a client.
Usually, this is for monetary purposes, but it can
also help an employee secure a position at
another firm.

• Corporate Espionage is the unlawful theft/acquisition of

intellectual property, such as key trade secret and patent
information as well as industrial manufacturing techniques
and processes, ideas and formulas
• How to Avoid Ethical Issues in Business
• A common method businesses use to manage
ethical issues is to simply deny the problem
exists. Companies often combine this with a
gag order to stop employees talking. If you
want to maintain a good reputation, this is the
worst thing you can do. After all, sooner or
later, the unethical behavior will come to light.
• A better strategy is to take an active role,
seeking out and correcting unethical behaviors
as early as possible. There are a few key tactics
that every business owner needs to implement:
∙ Create company policies and make sure employees read
them when they start working at your business. Include
both a privacy policy and a social media policy. The first
should tell workers what computer activity and other
information you will be able to access; the second should
lay out how you expect employees to behave publicly on
social media.
∙ Monitor only pertinent information on laptops and other
devices. It may be necessary to track employee activity to
some extent (particularly if you are concerned that
workers are spending too much work time on personal
activities — which, in itself, can be an unethical
behavior). However, you don’t want to go overboard and
create a culture of distrust.
∙ Provide ongoing training in aspects like harassment prevention.
It’s worthwhile seeking outside support for this from a
reputable agency or professional, as low-quality training can
even make the problem worse.

∙ Require employees to sign a nondisclosure agreement before

they start working with any sensitive information. To create an
effective deterrent, specify that violating agreements will result
in severe penalties.

∙ Strive to create a meritocracy where you reward employees 

according to performance. 

∙ Become as involved as you are able in the day-to-day activities

at your company. This could help you detect harassment in its
early stages and prevent theft, whether monetary or of company
materials.
∙ Double check your books on a regular basis. In the case
you do detect theft, you’ll need to decide whether firing
the employee is enough or if it’s also necessary to report
the crime to the law enforcement.
• Ethical dilemmas are situations in which there is a
difficult choice to be made between two or more options,
neither of which resolves the situation in a manner that is
consistent with accepted ethical guidelines.
• When faced with an ethical dilemma, a person is faced
with having to select an option that doesn’t align with
an established code of ethics or societal norms, such as
codes of law and religious teachings, or with their
internal moral perceptions of right and wrong. Explore
ethical dilemma examples to see how you might handle
these difficult
•CASE
•Michael had several friends including Roger and Daniel.
Roger has recently met and started dating a wonderful
lady named Phyllis. He is convinced this is a long term
relationship. Unknown to Roger, Michael observed them
at a restaurant several days ago and realized Phyllis is
the wife of his other friend Daniel.
∙
Michael is deciding whether to tell Roger that Phyllis is
married when he receives a call from Daniel.
∙ Daniel suspects his wife is having an affair. Since
Daniel and his wife share many friends and contacts
with Michael, Daniel asks if Michael has heard anything
regarding an affair.
 
∙
What should Michael do in this ethical dilemma? To
whom does Michael owe greater friendship or loyalty in
this situation?
∙
No matter who he tells, he knows that it is going to end
up hurting one, if not both friends.
∙
Should Michael reveal to Roger that Phyllis is married?
∙
Should Michael tell Daniel what he knows about Roger
and Phyllis? Does that fact that Daniel asked him a
direct question have an impact on what Michael should
do?
• Should Michael speak up to both Daniel and Roger?
Does he remain silent and hope his knowledge is never
discovered
• Life or Death Impact
• Consider a situation in which a group of
people are enjoying an outdoor adventure
together. One person gets stuck in the only
way in or out of an enclosed space, such as a
cave. Water starts rising in the cave due to
high tide or heavy rainfall. Everyone will
perish if the person isn’t removed from the
entrance. There is no way of removing the
person who is stuck so that the individual
will survive.
∙
The group has to make an extremely difficult decision. Do they
take an extreme action that will cost one member of the group
her life? Or, do they do nothing, knowing that chances are
good that none of them will survive if that choice of action is
taken.
∙ Who would be responsible for making such a decision? Is it
different if the person who is stuck offers to sacrifice herself
versus members of the group suggesting that she be
eliminated?
∙
What are the consequences of facing such an extreme moral
dilemma? It is commonly accepted that killing a person is
wrong, but what about when it’s done to save others?
∙ What might the consequences be for the survivors if the group
chose to kill the person who is stuck so they might survive?
Would there be legal consequences? What about guilt?
• This is one of the most extreme moral
dilemma examples, as well as an ethical
dilemma. The choice is between actively
causing one person’s death or allowing
people (including oneself) to die. Someone
following a utilitarian approach to ethics
 would likely choose to eliminate the person
who is stuck, as this philosophy is based on
choosing actions that result in the greatest
good for the greatest number of people.
Someone who focuses primarily on the
sanctity of each individual life, however,
would not consider harming the person who
is stuck to be a viable option.
• Following the Rules
• One of the most important characteristics of an
effective leader is treating people equitably. This
involves fairness and consistency, including regards
to applying the rules to everyone equally. What
should a coach do when a few superstar players get
caught breaking rules that should lead to their
suspension from the team immediately before a big
game that is very important to the team?
∙ If the star players don’t play, there is a good
chance the team will lose. If the team has to win
this game to advance to the championship game,
should that affect the coach’s decision?
∙ If the coach doesn’t apply appropriate consequences to the
actions of the players who broke the rules, what lesson are those
players learning? Will they continue to break rules?

∙ What about the other players who do follow the rules. Will they
learn that the rules are just suggestions and feel like they don’t
need to comply in the future?

∙ What if one of the players who broke the rules will miss a chance
to be seen by professional scouts if he doesn’t play in the game?

∙ What if the team’s school will earn a large amount of money

from television coverage of the big game if the team goes to the
championship?

∙ What if the coach is set to earn a big bonus or significant pay

increase if the team advances to the championship game?
• The two ethical issues created by unfair competition that
mainly affect consumers and society are the 
1. unfair distribution of goods among people
2. the introduction of various legal consequences, which
might lead to the removal of some firms from the
market. Unfair distribution of goods occurs due to higher
prices.
• PRINCIPLES OF ETHICAL COMMUNICATION 
∙
Advocate truthfulness, accuracy, honesty, and reason as
essential to the integrity of communication
∙
Endorse freedom of expression, diversity of perspective,
and tolerance of dissent to achieve the informed and
responsible decision making fundamental to a civil
society.
∙
Strive to understand and respect other communicators
before evaluating and responding to their messages
∙
Promote access to communication resources and
opportunities as necessary to fulfill human potential
and contribute to the well-being of families,
communities and society.
∙
Promote communication climates of caring and
mutual understanding that respect the unique needs
and characteristic of individual communicators.
∙
Condemn communication that degrades individuals
and humanity through distortion, intimidation,
coercion, violence and through the expression of
intolerance and hatred.
• While business contracts are legally binding
documents, they are only effective within
an ethical framework that assumes most
parties observe and fulfill their contractual
obligations. Competing for, obtaining and
satisfying contracts ethically is the basis for
an efficiently functioning economy. If your
company engages in unethical behavior,
you may lose contracts, especially those
with governments, and waste valuable
resources in legal entanglements with
contractual partners seeking damages.

• 
• A non-compete agreement is
a contract wherein an employee promises not to
enter into competition of any kind with an
employer after the employment period is over.
Employers may require employees to sign non-
compete agreements to keep their place in the
market
• A noncompete agreement is
a contract between an employee and an
employer in which the employee agrees not to
enter into competition with the employer during
or after employment. These
legal contracts prevent employees from entering
into markets or professions considered to be in
direct competition with the employer.
• What Are the Major 5 Environmental Issues
for 2019?
∙ Biodiversity is the most complicated and crucial
aspect of our planet.
∙ Water pollution is a massive problem for us and
our environment.
∙ Deforestation. We need to have plants and trees
to survive. ...
∙ Pollution.
∙ Climate Change.
• What Are the Major 5 Environmental Issues for 2019?
∙
Biodiversity is the most complicated and crucial aspect of
our planet.
∙
Water pollution is a massive problem for us and our
environment.
∙
Deforestation. We need to have plants and trees to survive. ...
∙
Pollution.
∙
Climate Change.
• Our environment faces several problems, and many of these
seem to be worsening with time, bringing us into a time of a
true environmental crisis. It is therefore becoming increasingly
important to raise awareness of the existence of these issues,
as well as what can be done to reduce their negative impact.
Some of the key issues are:
1) Pollution

• Pollution of the air, water and soil caused by toxins such as plastics,
heavy metals and nitrates, caused by factors such as toxins and gases
released by factories, combustion of fossil fuels, acid rain, oil spill and
industrial waste.

2) Global warming

• The emission of greenhouse gases due to human activity causes global

warming, which in turn causes an increase in temperature that then leads
to rising sea levels, melting of polar ice caps, flash floods and
desertification
3) Overpopulation

• We are facing a shortage of resources such as food, water and fuel to

sustain the rising global population, particularly in developing countries.
Intensive agriculture attempting to lessen the problem actually leads to
more damage through the use of chemical fertilizers, pesticides and
insecticides.
4) Waste disposal

• An excessive amount of waste is produced and dumped in the

oceans. Nuclear waste is particularly dangerous, as well as
plastics and electronic waste.

5) Ocean acidification

• The increase in the production of carbon dioxide by humans

causes the oceans’ acidity to rise, which has a negative impact
on marine life.

• 6) Loss of biodiversity

• Species and habitats are becoming extinct due to human

activity. This causes an imbalance in natural processes like
pollination and poses a threat to ecosystems – coral reef
destruction is particularly affected.
7) Deforestation
• Loss of trees in order to make space for
residential, industrial or commercial projects
means that less oxygen is produced, and
temperature and rainfall are affected.
8) Ozone layer depletion
• Pollution caused by chlorofluorocarbons
(CFCs) in the air creates a hole in the ozone
layer, which protects the earth from harmful
UV radiation.
9) Acid rain
• Pollutants in the atmosphere such as sulfur dioxide
and nitrogen oxides cause acid rain, which has
negative consequences for humans, wildlife and
aquatic species.

10) Public health issues

• Lack of clean water is one of the leading
environmental problems currently. Pollutants in the
air also cause issues such as respiratory disease and
cardiovascular disease.
• There are many Environmental moral
issues relevant to business.
(a) ecology
(b) traditional business attitudes towards
the environment
(c) problems involving environmental
abuse
(d) environmental protection
(e) methods to pay for environmental
protection
(f) other issues involving environmental
ethics.
Shaw briefly discusses many of the
environmental issues we face today:
• Pesticides often harm or kill fish and birds
(394), and can cause illness in children
(395). Too much pesticide is dangerous to
adults, so only safe levels are allowed
keeping adults in mind, but such levels are
still probably too dangerous for children. 
• Air pollution contaminates the air, despoils vegetation and
crops, corrodes construction materials, and threatens our lives
and health (ibid.). A 2011 study by the EPA claims that the
Clean Air Act saved over 160,000 lives in 2010, but 
many people still suffer illness and die from air pollution and
more lives can be saved by stricter standards. We generally
assume we get sick from allergies, bacteria, or viruses; but
pollution is a very common cause of illness as well.
• The ozone layer was damaged from
chloroflourocarbons (ibid.).
• Carbon dioxide (and other greenhouse
gasses) are causing global warming
(ibid.)
• Toxic chemicals in our environment
cause many health issues (ibid.).
• Nuclear power plants require minding,
processing, and transporting of nuclear
materials that causes cancer in many
people, and it’s unclear that our methods
of disposing of nuclear waste are
entirely safe (ibid.).
• There are four kinds of models of social
responsibilities that constitute total CSR:
1. economic (“make profit”)
2. legal (“obey the law”)
3. ethical (“be ethical”)
4. philanthropic (“be a good corporate citizen”).
• 

• What are the four models of CSR?

• In her work on corporate social responsibility,

published in the Roosevelt Review, Redman
contends that the discussion often involves one
of three conceptual models for CSR:
1. Conflict Model
• In the traditional conflict model for corporate
social responsibility, social values and benefits are
seen as in conflict with shareholder profits.
• Under this model, corporations opting to practice
forms of social responsibility are likely to see
added costs for doing so.
• Proponents of this conceptual model generally
argue that the nature of business is one of trade-
offs between economic and moral values, and
corporate managers will inevitably be forced to
decide between their social and fiduciary
responsibilities or their commitment to
shareholder equity value.
2. Added Value Model
• A second model for conceptualizing corporate social
responsibility is to see social and environmental
commitments as a means to increase profit.
• While proponents of this model tend to acknowledge
that conflicts persist in business decisions, they also
believe that CSR investments are also capable of
generating new revenues.
• This model tends to focus on issues like the value of
CSR in attracting socially conscious consumers,
finding socially conscious employees and managing
the risks of negative press.
Multiple Goals Model
• Finally, a third model for corporate social
responsibility posts a role for social values in
corporate decisions that are untethered to
economic values.
• Under this model, corporations have goals
beyond shareholder value, including the
enhancement of their community without respect
to monetary gain.
• According to Redman, this model is thought to be
relatively radical, though some corporate officers
have expressed their support for it. Proponents of
this model emphasize quality of life as the basis
of economic activity.
• Corporate social responsibility is the commitment a
company has to the community outside of its
shareholders and employees.
• The subject isn't without controversy, with some
claiming corporations have no role in social
responsibility and others asserting that they can't
escape it.
• Business researcher Elizabeth Redman proposed the
three models of corporate social responsibility as a
way of understanding this often contentious
conversation.
• In her work on corporate social responsibility,
published in the Roosevelt Review, Redman contends
that the discussion often involves one of three
conceptual models for CSR: a conflict model, an
added value model and a multiple goals model.
• A business must have reason to exist beyond that
of making money and maximizing shareholder
value.
•  Profit is too temporary to guide a business by.
• If a business' main purpose is to make a profit, this
will both lead to a lack of strategic
direction and reduced staff motivation.
• The primary purpose of a business is to maximize
profits for its owners or stakeholders while
maintaining corporate social responsibility.
• However, we forget this word, specially in the
business world, where we tend to think that the sole
purpose of doing business is to earn money and be
profitable.
• Earning money and being profitable is
not the purpose of business. It is one
indicator that the business is doing ok.
And it is one out of many others such
as customer satisfaction, employee
motivation, process effectiveness, etc.
Six good reasons not to use profit as our primary purpose:

▪ Profit is an output and a symptom of success, not the cause.

▪ Profit is temporary and can be wiped out in an instant.

▪ In tough times, profit can be hard to come by.

▪ You need more purpose than profit to make it through.

▪ Profit doesn’t motivate the salaried staff who make success

happen.

▪ Customers don’t appreciate being seen just for their revenue.

▪ Consumers are increasingly focusing on values and

contribution to society when choosing who to do business
with.
• Profit is an output, not a purpose
• A business must have reason to exist beyond
that of making money and maximising
shareholder value. Profit cannot be the goal,
vision, or the purpose of an organisation. An
organisation that posts great year end results
doesn’t automatically earn the title of being a
great company.
• Seeking profit as a primary business purpose is
like building a house of cards or building a
house on sand – it will eventually lead to
collapse (ably demonstrated by many financial
institutions over the previous months). Profit is
too temporary to guide a business by.
• If a business’ main purpose is to make a profit, this
will both lead to a lack of strategic direction and
reduced staff motivation. For employees, once they
have earned the company enough to cover their
salaries, they make money for the owner of the
business. That’s not a real purpose!

• Beyond profit…
• A true vision for a business rests on foundations of
both purpose and values. The people within the
business have to be passionate about what they do and
why they do it. The business’ goals must then align
with this foundation. Without a clear foundation, a
business will never be truly strategic.
• Values
• A business’ core values are defined internally
through a process of introspection and discovery,
and are based not on the outside but on what lies
within
• some examples, core values held by a variety of
well-known organizations include: imagination;
product excellence; great customer service; respect
for the individual; quality; market focus; teamwork.
• Your organization does not have to hold these values
but will need to discover its own. Core values are
the handful of values that, even when push comes to
shove, your business is not prepared to sacrifice to
get ahead.
• Purpose
• The core purpose of a business is also discovered
by introspection and discovery. A business’ core
purpose is its most fundamental reason for being.
By stripping away the layers of what a business
does and what motivates it, any company will
discover a deeper purpose that unifies and
motivates. In essence, to discover your business’
core purpose, you could ask, “Why does this
business exist?”
• Why does your business do what it does? What is
the bottom line about why you make the products
you make or deliver the services you deliver?
• 6 good reasons for your business to look beyond profit
∙ Purpose and values motivate and unify management and
staff.

∙ Purpose and values give a company a solid foundation from

which to make decisions.

∙ Purpose and values provide a navigational compass to all

elements of the business.

∙ Customers will have more to buy into and engage with.

∙ Purpose and values encourage loyalty of both staff and

customers.

∙ Purpose and values encourage a strong culture and ethos

within a business.
• Business Beyond Profit Motivation
1. Profit is an output, not a purpose- A business must
have reason to exist beyond that of making money and
maximizing shareholder value. Profit cannot be the goal,
vision, or the purpose of an organization.
• Seeking profit as a primary business purpose is like
building a house of cards or building a house on sand-it
will eventually lead to collapse. Profit is too temporary to
guide a business by.

2. Companies with a purpose beyond profit tend to

make more money - One of the paradoxes of business is
that the most profitable companies are not those that are
most profit-focused. Because satisfied customers are the
only source of long-term success, measures need to be
related to purpose as defined from a customer point of view
3. .Business needs Purpose than Profit to Make It
Through- Many corporate and business strategies now include
sustainability. In addition to the traditional environmental
'green' sustainability concerns, business ethics practices
have expanded to include social sustainability. Social
sustainability focuses on issues related to human capital
in the business supply chain, such as worker's rights,
working conditions, child labor, and human trafficking
4. What is the purpose of doing business if it is not
being profitable? The starting point of great companies
is Purpose.
•  There are four main types of purposes according to
Nikos Mourkogiann is, the author of Purpose:
a.Discovery has rooted in intuition that life is a kind of
adventure. Example: Apple and their goal to always
come up with the new/ most innovative products.

b.Excellence implies standards and purports the belief

that excellent performance in our role in life represents
the supreme good. Example: Warren Buffet

c.Altruism is a purpose built in serving its customers in a

way that is beyond standard obligation. Example: Body
Shop

d.Heroism demonstrates achievement, often with a

charismatic and visionary leader. Example: Ford,
Microsoft
5. Business with a strong sense of purpose are
more successful -Stand for something beyond
simply increasing profits. A true vision for a
business rests on foundations of both purpose and
values. The people within the business have to be
passionate about what they do and why they do it.
The business goals must then align with this
foundation.
Definition of terms:
• Tax avoidance – is the use of lawful tax planning
• Tax evasion- failure to make full disclosure to
the government
• Accountability is something you hold a person to only after a task is
done not done.

- Is to be liable to explain and justify one’s actions and decisions

• Animal Welfare are species are not put-on earth for our exploitation,
they have a right to fair treatment

• Contractualization – the replacing of regular workers with temporary

workers who receive lower wages with no or less benefits.

• Contractualization is hiring workers for short term, nonregular

employment without the benefits accorded by law to regular workers

• Freeman said,” the world today is very complex and there is a great
deal of uncertainty
• Corporate Code of Conduct - a set of moral principles and
standards of conduct guiding a specific company /business
organization. 

• Social responsibility refers to a person’s obligation to

consider the effects of his decisions and actions on the
whole social system.

• Ethical culture – one that ensures the positive learning of the

organizational members and formation of their character thru
the virtues.

• Entrepreneur must promote the welfare of his employees

• Social audit is a way of measuring, understanding, reporting

and improving an organization’s social and ethical
performance.
• Stakeholder dimension emphasizes the importance of
how other stakeholders such as employees, suppliers and
customers are fairly and justly treated.
• Muhammad Yunus - According to him, Corporate Social
Responsibility (CSR) as practiced today cannot be of help
in solving society’s main problem such as poverty,
injustices and environmental degradation.
• Solid waste Management - This law was created in
response to the looming garbage problem in the country
• Corporate tax comes from the corporate income 

• Stakeholders dimension – emphasizes the importance of

how other stakeholders are fairly and justly treated