The document discusses business ethics and social responsibility. It provides an overview of the course, which aims to (1) provide an understanding of how companies can act in the interests of shareholders and society; (2) teach general ethical principles applied to business situations through case analyses; and (3) equip students to formulate strategies around corporate ethics and governance. The course covers fundamental concepts of ethics in business and combines theoretical foundations of entrepreneurship with social accountability.

1. BUSINESS ETHICS &
SOCIAL RESPONSIBILITY
A B M S P E C I A L I Z E D S U B J E C T
The course deals with the fundamental concepts, principles, and
practices of ethical standards in the business environment. It
combines the theoretical foundations of setting up business
enterprises with the conduct of entrepreneurial activities in the
context of one’s accountability and social responsibility.
Specifically, the course aims to: (1) provide students with a basic
understanding of the mechanisms whereby companies can be
made to act in the best interest of shareholders, other
stakeholders, and society as a whole; (2) provide students with
knowledge of general ethical principles as applied to the special
situations of business and the ability to make informed judgments
through case analyses; and (3) equip students with the ability to
formulate basic strategies in relation to corporate ethics and
governance.
Presentation made by:
GIAN PAULO M. RABANAL, LPT, MBA©

2. Chapter 1
The Role of Business in Social
and Economic Development
Lesson 1 The Nature and Forms
of Business Organization
At the end of the session the learners will be able to:
a. Differentiate the forms of business organizations
b. Give examples of forms of business organizations
c. Explain the roles of business in social and economic
development.

3. BUSINESS
Is an activity that is part and parcel of human
society: It is an entity in which economic
resources or inputs, such as materials and labor,
are put together and processed to provide goods
or services or outputs to customers.
Complex enterprises involving major activities
like purchasing, manufacturing, marketing,
advertising, selling, and accounting.
Profit
Objective of most businesses.
It is the difference between the amount earned
and the amount spent in buying, operating, or
producing something.
Business from a Moral Perspective
Business is organizations should help in the
promotion of the common good and in the
protection of persons’ rights and interests.
Thus, businesses make the goods and services
you use each day.

4. TYPES OF BUSINESS ORGANIZATIONS
There are generally three types of business
organizations operated for profit:
Service Business
Provides services rather than products to customers.
Merchandising Business
Sells products from other businesses to customers.
Manufacturing Business
Change basic inputs into products that are sold to customers.

5. FORMS OF BUSINESS ORGANIZATIONS
The three types of businesses – service, merchandising and manufacturing – may be organized to the following, given the large
size and huge amount of resources required to operate a manufacturing business, most manufacturing businesses are
corporation.
Sole Proprietorship
SERVICE MERCHANDISING
Partnership
MANUFACTURING
Corporation
A business owned by one person An association of two or more people
as partners
It refers to an agreement in which the
individuals share the profits and
liabilities of a business venture.
An entity created by law that is
separate and distinct from its owners
and its continued existence is
dependent upon the corporate
structures of the state in which it is
incorporated.

6. FORMS OF BUSINESS ORGANIZATIONS cont.
Sole Proprietorship Partnership Corporation
NUMBER OF
POSSIBLE OWNERS
WHO MANAGES THE
BUSINESS
TERMINATION OF
BUSINESS
GOVERNMENT
AGENCY ASSIGNED
TO REGULATE
TRANSFER OF
OWNERSHIP
LIABILITY OF
OWNERS
1
Owner
(but he may hire somebody)
Death of the owner
Department of Trade and
Industry - DTI
Sell the business (it’s a new
entity under a new owner)
Unlimited ; other properties not used in
the business may be held liable for the
obligations of the business
2 or more
Partners
(or they may hire managers)
Death of any partner or
withdrawal of a partner
Department of Trade and
Industry - DTI
Sell the business or interest
of a partner (consent of other
partners is necessary)
Generally unlimited; There are types of
partnerships that limit the liability of
the partners
At least 5
Board of Directors and
operating management
As stated in the Articles of
Incorporation, not to exceed
50 years.
Securities and Exchange
Commission - SEC
Sell Stocks
Limited to the stock
investment of the
shareholder

7. ROLE OF BUSINESS IN THE ECONOMY
Small Businesses
Vital and significant contributors to economic development, job creation, and the
general health and welfare of economies.
Microbusinesses
Firms that employ fewer than ten people.
Form a dynamic, integral part of the market economy, providing goods and
services and a gateway by which millions enter the economic and social
mainstream of society.
Corporations
Large businesses offer better jobs than small businesses, in terms of both
compensation and stability. Also provide such benefits as:
Links with suppliers, increased consumer spending, the transfer of knowledge
from one firm to another, and the sharing of pool of workers.
Competitive Forces
Competitive forces sometimes fail to steer companies in a socially beneficial way
and instead, lead them to act in a socially harmful manner.

8. ETHICAL ISSUES
The wave of large corporations has brought with it a host of new ethical issues, including:
Possibilities of exploiting the workers who labor at the new machines
Manipulating the new financial markets that finance those large
enterprises
Producing massive damage to the environment.

9. Class Activity:
Abakada Company began a small enterprise buying and selling various food
products. After a few years of successful operations, it added apparel and
footwear to its wares. During this initial stage, Abakada managed to work on the
basis of its proprietor’ capital, borrowing from its bank from time to time when
needed.
After more years of operation, Abakada found that it needed to draw larger
amounts of funds through bank borrowing, as well as to hire more personnel for
the growing marketing needs and services, apart from administrative functions
like accounting, among others. The proprietor carefully weighed his options:
• Shall I incorporate my business so that I can have greater and easier access
to funds, especially larger loans from banks?
• If I hire more people as my company goes bigger, will I be able to manage and
control well the personnel working for me?
• If I begin offering ownership shares to other people outside my family, will
serious disagreements arise among us in terms of products and services to
offer in the future as well as managerial style?
Guide Instruction:
Based on the situation above, give the owner
of Abakada Company appropriate advice
regarding whether or not to incorporate his
business. You might wish to categorize the
pros and cons into the following issues:
• BUSINESS SIZE
• MISSION AND OBJECTIVES
• PROCEDURES FOR INCORPORATION
• PERSONNEL
• CONTROL
• FUNDING SOURCES
• LEGAL AND TAXATION
Case Problem Analysis

10. Thank You!
Reference(s):
Racelis 2017. Business Ethics and Social Responsibility. Rex
Bookstore First Edition. Pages 2 -10
Commission on Higher Education (CHED) 2016. Fundamentals
of Accountancy Business and Management 1 (FABM1) Teaching
Guide. Page 27
Presentation made by:
GIAN PAULO M. RABANAL, LPT, MBA©
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