BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
MODULE
Module No. 5: Week 5: Fourth Quarter
IMPORTANCE OF ESTABLISHING AND SUSTAINING BUSINESS
ENTERPRISES
Learning Competencies
1. Explain the importance of establishing and sustaining business enterprises
as a source of job opportunities and financial freedom.
Codes: ABM_ESR12-IVm-1-4.1
Objectives
After studying this module, you are expected to:
1. Identify the different business enterprises that gives job opportunities and
financial freedom to people.
2. Discuss the importance of establishing and sustaining business enterprises
as a source of job opportunities and financial freedom.
3. Appreciate the importance of establishing and sustaining business
enterprises as a source of job opportunities and financial freedom.
Let’s Recall
Direction: Read each statement below and evaluate whether it is
true or false. Write your FIRST NAME if the statement is TRUE and
LAST NAME if the statement is FALSE.
____________1. Financial Freedom is having residual income to cover your
living expenses.
____________2. Sustainability is increasingly important in the business world.
____________3. Establishing business does not create jobs.
____________4. Having debt-free can achieve financial freedom.
____________5. Social enterprise helps disadvantaged population to human
development and economic prosperity.
Let’s Understand
DISCUSSION
Sustainability of business has been an important issue for many people,
especially in the business world. Businesses must be aware of the issue at
hand and understand how important it is to make changes.
Sustainability in business practices
Pushed by growing demands from consumers for products and
services that cause minimal effects to the ecosystems, corporations have
shown interest in bringing sustainability aspects to the core of the business.
([Link]
business/)
Environmental Sustainability
Environmental sustainability can be applied in many ways, such as
creating alternative routes in a production process to reduce waste
generation and increase water and energy efficiencies. Investment in
renewable energy is also growing momentum among big organizations,
with many building their own solar or wind farms, in order to phase
out the consumption of fossil fuels and reduce their carbon emissions.
Sustainability and employment
Businesses with strategies that are sustainable in the long run pay
their workers’ salaries and benefits that allow them to live a sustainable life
within their community. This builds loyalty within the organization, benefiting
the company through increased productivity and creativity, as well as lower
levels of fraud and mismanagement. Besides, when organizations look to
improve the health and well-being of communities, they are able to motivate
employees who are genuinely interested in contributing to the success of the
business.
Importance of establishing and sustaining businesses as a
source of job opportunities:
• Investors invest on your products which are the necessities of people
Upon investment on products, there is a need to manufacture more
and keep up with the demands of the investing company, thus, there is a
need to hire more people for the industry.
• Commerce and regional economic integration
When new businesses export goods and services to nearby regions, these
enterprises contribute directly to a region’s productivity and earnings.
Having this type of production and rise in services, it promotes job
considering that businesses involve needs more people for production
• New technologies are created and utilized
In the height of progress in some businesses, technology always earns it
place. We need
modernization for the fast-pace production and efficiency of labor. In this
thought, more skilled and knowledgeable workers from the field are needed
to sustain the demands of technology.
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%20business%20is,for%20workers%20also%20gets%20high.
According to David Jones and Chelsea Willness, there are 3 Reasons
why sustainability attracts job seekers. Among these are as follows:
Sustainability draws job seekers because it’s a source of employee’s
pride
Sustainability actions often lift a company’s reputation and status,
leading many job seekers to believe they’d feel proud to work for a
prestigious organization admired for its sustainability. Reinforce that
anticipated sense of pride by creating and celebrating a distinctive
reputation for sustainability.
Sustainability draws job seekers because it implies the company cares about
its employees.
To some job seekers, sustainability initiatives suggest that if a
company genuinely cares about the well-being of the greater society, it
would therefore stand to reason that it likely treats its employees well.
Reinforce the belief that the company cares about society and the planet
more generally, and link this to your people practices.
Sustainability connects organizational values to job seekers' personal values.
Job seekers want an employer whose values are a good fit with their
own. More than
three decades of research shows that the match a person feels with an
organization is a major driver of job choice decisions. Clearly link your
sustainability initiatives to specific organizational values and demonstrate
their authenticity.
David Jones and Chelsea Willness. Published June 7,
2013 [Link]
sustainable-
Socially Responsible Investment (SRI)
The social enterprise movement is growing and gathering supporters
across the globe as an innovative approach to business activity offering
disadvantaged populations a path to human development and economic
prosperity. There is increasing recognition among businesses,
governments, and non-governmental organizations (NGOs) that their
participation in these initiatives can lead to substantial benefits for
disadvantaged and underserved populations, while simultaneously providing
opportunities for income generation (Nielsen and Samia, 2008).
The SRI movement can be said to have taken off in 1970, when the
first shareholder
resolutions were filed against companies investing or working under the
apartheid regime in South Africa. By the 1980, billions of dollars had
been diverted from South Africa related companies. They were forced to
sell their operations in South Africa. The US government enacted statutes,
such as the Comprehensive Anti-Apartheid Act of 1986, banning new
investments in South Africa. All over the world similar actions were taking
place. In response to the growing concern about environmental issues,
“green” unit trusts arrived in 1988 with the launch of the Merlin Ecology Fund
(now the Jupiter Ecology Fund). Other environmental funds soon followed. In
the beginning of the 1990s the first social index was created by the social
research firm of Kinder, Lydenberg, Domini & Co., Inc. (KLD): Domini 400
Social Index. In creating the Index, KLD started by screening the
companies in the Standard & Poor’s 500 Index at that time, eliminating
those companies that failed to qualify under the exclusionary and qualitative
screens. The Co-operative Insurance Society (CIS), part of the Co-
operative Movement, was the first financial service organization in the UK
that adopted an ethical policy for all its funds, the so-called Responsible
Shareholding Scheme. In the United States, there are about 230 mutual
funds that follow SRI strategies in their investment process. Additionally, the
rise of social indexes as counterparts to the traditional, exclusively financial
indices will give ethical investment a further boost. In 1999, the Dow Jones
Sustainability Group Indexes (one global index, three regional indexes and
one country index covering the US) were launched and in 2001, the arrival of
the FTSE4GOOD index marks a further move of SRI into mainstream
investment (Broadhurst et al., 2005).
Socially responsible investments, thus have a special role to play in
alleviating poverty, creating empowerment, and establishing entitlement
at the grassroots level of socioeconomic development. They require easily
accessible, low cost, and amenable funds and technology that can be
sustained in the long-term rather than be some quick-fix solution. The end
point of many social enterprises is a participatory socioeconomic
transformation in which not only the non-competing poor and needy
cooperate with each other, but also meaningful relations are created
between the resourceful and the needy to enhance community well-
being (Choudhury et al., 2008).
Financial Freedom
Job creation, good investments, sustainability will always lead to
financial freedom of every people, local community and the whole society.
Financial freedom according ETMONEY Blog is, “having enough residual
income to cover your living expenses. It is not about being rich and having
tons of money but having enough to cover your expenses so that you can
spend your precious time doing what you like rather than doing things just to
earn money.”
Nowadays, it is so difficult for us to achieve financial freedom although
we are earning money especially if we are burdened with growing debt,
unexpected cash emergencies, wildly extravagant spending, medical
emergencies and other issues that hampers us to achieve it.
According to Matt Danielsson, there are 12 ways to help us in
achieving financial freedom. Among of these are as follows:
1. Set Life Goals
Every person must have a clear plan of his/her life and that includes
checking your bank account, what the lifestyle entails, and at what age this
should be achieved. Your goals must be written down so that you can
prepare and establish a financial milepost at regular intervals.
2. Make a Budget
Most of us fail in making a budget. What you will do is to list down all your
monthly dues and make a monthly budget for all your expenses. You must
stick to your budget and do not make unnecessary purchases.
3. Pay Off Credit Cards in Full
Credit Cards are toxic to wealth – building. When you go to malls although
you do not have money, you will be tempted to swipe because of your
existing credit card. See to it that those purchases must be paid in full at the
end of the month to avoid any interests and fees.
4. Create Automatic Savings
There are retirement plan, insurances, and other contribution benefits. Enroll
in these benefits so that you can have an automatic withdrawal in case of
emergencies.
5. Start Investing Now
Take note that there has been no better way to grow your money than
through investing. The beauty of compounded interest can make your
money grow exponentially over time, but you need to wait to achieve
meaningful growth.
6. Watch Your Credit
Do not acquire what you cannot afford. Always keep track of all your credits
so that you will have no burden in paying all of them.
7. Negotiate
You must know how to negotiate things especially in buying stuff from
small businesses. Sometimes, spending huge money in big groceries is not
practical compared in spending money in markets. All you need to do is
negotiate in buying bulk or repeated orders so that you can avail discounts.
8. Continuous Education
Knowledge is always the greatest defense against fraud. If you have
knowledge, they cannot just fool you. You will know how to track your
transactions, you will know how to audit, and you will also know that will help
protect your rights.
9. Proper Maintenance
Taking good care of your properties can make them last long. Maintaining the
properties is better and more practical than buying a new one.
10. Live Below Your Means
Being economical while living a life to the fullest is not a hard thing to do.
Live like a poor but earn like a rich. Do not wish for something you cannot
afford especially if you want it right away. Patience is always a virtue.
11. Get a Financial Advisor
If you have lots of money yet they are not as readily available to convert to
cash- get a financial advisor to educate and help you make decisions.
12. Take Care of Your Health
Health will always be a wealth especially in this time of Pandemic.
Many wealthy people, companies go bankrupt because the owner got sick
and the money that is intended for the business is now used as buying the
maintenance. Invest in good health with regular check-ups to doctors and
dentists. Other companies have a limited sick days and others will even mark
you absent which will lead to loss of income. Ailments make insurance
premiums skyrocket and poor health may force earlier retirement with a
lower monthly income.
Let’s Apply
Direction: Choose the best answer for each of the following
questions. Write your answer in a separate sheet of paper.
1. Why do people attracts more on sustainable business enterprises?
a. It is because they feel embarrass to work for a prestigious organization.
b. It suggests that if a company genuinely cares about the wellbeing
of the greater society, it would therefore stand to reason that it likely
treats its employees well.
c. It is because no matter what the values of the work/management is, as
long as the job seeker has a work, he/she will still work.
d. No matter how tiring the work is, he/she will just say repeatedly “I love my
job”.
2. What are the importance of establishing and sustaining business
enterprises?
a. It can increase poverty.
b. More jobless and unemployment.
c. There is an increase of force labor.
d. It can alleviate poverty.
3. What do you mean by socially responsible investment or SRI?
a. It will not mind whether there are lots of unemployed people.
b. It alleviates poverty but will not create empowerment.
c. They require easily accessible, low cost, and amenable funds and
technology that can be sustained in the long-term rather than be some
quick-fix solution.
d. It gives advantage populations a path to human development and
economic prosperity.
4. Who will benefit more in socially responsible investment (SRI) ?
a. The disadvantage population.
b. The advantage population.
c. The elites.
d. All of the above.
5. Below are the habits that help achieve financial freedom except:
a. Set life Goals
b. Pay off Credit Cards in staggered basis
c. Create Automatic Savings.
d. Watch your credit
Let’s Analyze
Based on the ways to help us in achieving financial freedom discussed,
analyze the below statements and Indicate what ways are applied. (10
points).
______1. Your goals must be written down so that you can prepare and
establish a financial milepost at regular intervals.
______2. If you have lots of money yet they are not as readily available to
convert to cash- get
a financial advisor to educate and help you make decisions.
______3. Do not wish for something you cannot afford especially if you want
it right away.
Patience is always a virtue.
______4. Enroll in these benefits so that you can have an automatic
withdrawal in case of emergencies.
______5. When you go to malls although you do not have money, you will
be tempted to swipe because of your existing credit card.
______6. What you will do is to list down all your monthly dues and make a
monthly budget
for all your expenses.
______7. Always keep track of all your credits so that you will have no
burden in paying all of them.
______8. Spending huge money in big groceries is not practical compared in
spending money in markets.
______9. Taking good care of your properties can make them last
long. Maintaining the properties is better and more practical than buying a
new one.
______10. Take note that there has been no better way to grow your money
than through
investing.