ETHICAL CONDUCT &

SOCIAL © 2018 WAIRINDI

RESPONSIBILITY OF DANIEL

ENTREPRENEURS
 ETHICS
‘Ethics’ originates from the Greek word ‘ethos’
meaning character, conduct and activities of the
people based on moral principles.
Concerned with what is right and what is wrong
in human behaviour on the basis of standard
behaviour or conduct accepted by the society.
Honesty, truthfulness, compassion, sympathy,
feeling of brotherhood etc. are considered ethical.
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 BUSINESS ETHICS
Ethics from business point of view or
business ethics are the moral principles,
which guide the behaviour of businessmen or
business activities in relation to the society.
It provides certain code of conduct to carry
on the business in a morally justified manner.

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 BUSINESS ETHICS CONT’D
…
The fundamental moral values and behavioral
standards that form the foundation for the people
of an organization as they make decisions and
interact with stakeholders
It is important for an entrepreneur to have
clear ethics policies governing ethical
behaviour, because not everyone has the same
standards.
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Key Stakeholders External Stakeholders

Customers
Customers
Special
SpecialInterest
Interest
Workers’
Workers’Unions
Unions Groups
Groups
Internal Stakeholders
Employees
Employees Investors
Investors

Board
Boardofof Management
Management
Directors
Directors
Creditors
Creditors Suppliers
Suppliers

Government
Government General
GeneralPublic
Public
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 THREE LEVELS OF ETHICAL STANDARDS

The law
Organizational policies and
procedures
The moral stance employees take
when faced with decisions not governed
by formal rules
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 THREE STYLES OF MANAGEMENT
Immoral management - driving force
is greed
Amoral management - does not
consider ethical impact on others
Moral management - sees the law as a
minimum standard of behavior
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 AN ETHICAL FRAMEWORK
Step 1. Recognize the ethical dimensions involved
in the dilemma or decision
Step 2. Identify the key stakeholders involved and
determine how the decision will affect them
Step 3. Generate alternative choices and
distinguish between ethical and unethical
responses
Step 4. Choose the “best” ethical response and
implement it
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 ETHICAL CONDUCT IN
BUSINESS
Running the business without adopting unfair
practices,
Being honest and truthful about quality of goods,
Charging fair prices,
Abiding to laws,
Paying taxes, duties and fees to the government
honestly are some of the ethical behaviour of business.

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 THE BENEFITS OF MORAL
MANAGEMENT
Earning a profit does not conflict with maintaining high
ethical standards
1. Avoid the damage to a company’s reputation that results
from unethical behaviour
2. Dealing with diverse stakeholders is easier with a solid
ethical foundation
3. Attracting and retaining quality workers is easier
4. A company’s ethical philosophy determines its ability to
provide value for its customers
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 THE BENEFITS OF MORAL
MANAGEMENT
Earning a profit does not conflict with
maintaining high ethical standards
1. You make better decisions because you base them
on your values.
2. You are able to persuade others to agree with you
when you are confident about your values.
3. You usually do not regret decisions you make based
on your values.
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 WHY ETHICAL LAPSES OCCUR
An unethical employee
An unethical organizational culture
Moral blindness
Competitive pressures
Opportunity pressures
Globalization of business
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 ESTABLISHING ETHICAL STANDARDS

The utilitarian principle

Kant's categorical imperative
The professional ethic
The Golden Rule
The television test
The family test
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 MAINTAINING ETHICAL STANDARDS
Create a company credo
Develop a code of ethics
Enforce the code fairly and consistently
Conduct ethics training
Hire the right people
A business owner without good business ethics
can not expect his or her employees to act ethically.
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MAINTAINING ETHICAL STANDARDS CONT’D…
Perform periodic ethical audits
Establish high standards of behavior...not just rules
Set an impeccable ethical example
Create a culture that emphasizes two-way
communication
Involve employees in establishing ethical
standards
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DEVELOPING A CODE OF ETHICS
Many entrepreneurs develop an explicit code of
ethics that spells out appropriate business conduct.
Codes of ethics can be written or unwritten. Follow
these steps to create guidelines:
1.Brainstorm ethical dilemmas
2.Discuss potential solutions
3.Write a set of general guidelines
4.Improve your code
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HOW ETHICAL BEHAVIOR IS ENCOURAGED
Adoption of a code of ethics
Institution of rewards and punishments
concerning ethical behavior
Adoption of internal programs for resolving
conflicts
Creation of ethics review committees
Provision of training in ethics for employees
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HOW ETHICAL BEHAVIOR IS ENCOURAGED
Top management support; Ethics must begin at
the top of an organization
Code of Ethics; It is a formal document indicating
the entrepreneurship’s adapted principles of
appropriate behaviour
Rewards and Punishments Concerning Ethical
Behavior; Punishments could take the form of
dismissal, demotion, suspension, or reprimand.
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SPECIAL PROBLEMS FOR ENTREPRENEURS
Conflicts of interest: If an entrepreneur faces a conflict of
interest, he or she should not put aside ethics to meet a
short-term goal.
Bribes: In some parts of the world, bribes are an accepted
part of doing business. Bribes are illegal in Uganda
Desperate measures
Cultural differences
Patent or copyright infringement

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ETHICAL ISSUES FACING ENTREPRENEURSHIPS

Between the company and customers

Between the company and its personnel and
employees
Between the company and its business associates
Between buyers and sellers
Between the company and the investors and
financial community or lenders and borrowers
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RELATIONS WITH CUSTOMERS
Entrepreneurs should provide support for
consumer rights which are as follows:
1. The right to be safe
2. The right to be informed
3. The right to choose
4. The right to be heard
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RELATIONS WITH PERSONNEL AND EMPLOYEES

Good ethical conduct requires entrepreneurs

to be aware of their responsibilities to
employees. These are the following:
1. Workplace safety
2. Quality of life issues
3. Avoiding discrimination
4. Preventing sexual harassment
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SOCIAL RESPONSIBILITY OF BUSINESS
Social responsibility of business refers to the
obligation of business enterprises to adopt policies
and plans of actions that are desirable in terms of
the expectation, values and interest of the society.
Social responsibility - the awareness by a
company’s managers of the social environmental,
political, human, and financial consequences its
actions produce
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SOCIAL RESPONSIBILITY OF BUSINESS
It ensures that the interests of different
groups of the public are not adversely
affected by the decisions and policies of the
business.
Studies: Companies that incorporate
social responsibility into their competitive
strategies outperform those that fail to do so
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ENTREPRENEURS & SOCIAL RESPONSIBILITY
Businesses must do more than provide jobs and
make a profit.
They also are expected to run their business
responsibly.
Being a responsible entrepreneur involves more
than philanthropy- the act of making charitable
donations to improve the welfare of society
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ENTREPRENEURS & SOCIAL RESPONSIBILITY
Businesses must do more than provide jobs and
make a profit.
They also are expected to run their business
responsibly.
Being a responsible entrepreneur involves more
than philanthropy- the act of making charitable
donations to improve the welfare of society
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BUSINESS HAS A SOCIAL RESPONSIBILITY TO...

The environment
Shareholders/owners Or Investors
Employees
Government
Customers
The community
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RESPONSIBILITY TO THE
ENVIRONMENT
The “Three R’s”:
Reduce the amount of materials
used in your company
Reuse whatever you can
Recycle the materials that you
must dispose of
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 RESPONSIBILITY TO
SHAREHOLDERS OR INVESTORS
They should be provided with a fair return on their
investment inform of dividends.
Ensure that the rate of dividend is commensurable
with the risk involved and the earnings made.
Besides dividends, the shareholders also expect an
appreciation in the value of shares. This is governed
primarily by company’s performance.
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 RESPONSIBILITY TO
EMPLOYEES
A business enterprise must ensure a fair wage or salary
to the workers based on the nature of work involved and
the prevailing rates in the market.
The working conditions must be good in respect of
safety, medical facilities, canteen, housing, leave and
retirement benefits etc.
They should also be paid reasonable amount of bonus
based on the business earnings. Preferably, there should
also be a provision for their participation in management.
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 MANAGING DIVERSITY
Assess your company’s diversity
needs
Learn to recognize your own biases
and stereotypes
Avoid making invalid assumptions
Push for diversity in your
management team
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 MANAGING DIVERSITY
CONT’D …
Concentrate on communication
Make diversity a core value in the
organization
Continue to adjust your company
to your workers
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AN AIDS POLICY SHOULD ADDRESS …

Employment
Discrimination
Employee benefits
Confidentiality
Education
“Reasonable accommodations”
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 SEXUAL HARASSMENT
Any unwelcome sexual advance,
request for sexual favors, or other verbal
or physical sexual conduct made
explicitly or implicitly as a condition of
employment
85% of sexual harassment cases are
filed by women
Harassment can take several forms
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BEHAVIOR LEADING TO SEXUAL HARASSMENT
CHARGES

Quid Pro Quo (“something for

something”) harassment
Hostile environment
Harassment by non-employees

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 PREVENTING SEXUAL HARASSMENT
Education
Policy
Procedure
Listen without judging
Investigate complaints promptly
Interview parties involved and witnesses
Maintain confidentiality
Follow company policy
Inform both parties of actions taken
Document the investigation
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RESPONSIBILITY TO
CUSTOMERS/CONSUMERS
A business enterprise must supply quality
goods and services to the consumers at
reasonable prices.
It should avoid adulteration, poor
packaging, misleading and dishonest
advertising, and ensure proper arrangement
for attending to customer complaints and
grievances.
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RESPONSIBILITY TO
CUSTOMERS/CONSUMERS
Consumers’ Rights must be
Respected;
Right to safety
Right to know
Right to be heard
Right to education
Right to choice
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RESPONSIBILITY TO
GOVERNMENT
A business enterprise must follow the
guidelines of the government while setting
up the business.
It should conduct the business in lawful
manner, pay the taxes honestly and on time.
It should not indulge in any corrupt
practices or unlawful activities.
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 RESPONSIBILITY TO
COMMUNITY
Every business is a part and parcel of our community and
has to contribute towards the general welfare of the
community.
It should preserve and promote social and cultural values,
generate employment opportunity and contribute towards
the upliftment of weaker sections of the society.
It must take every step to protect the physical and
ecological environment of the society.
It should contribute to the community development
programmes like public healthcare, sports, education,
cultural programmes.
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