ASSIGNMENT WORK

ON

ETHICS AND SOCOAL RESPONSIABILITY

OF
ENTREPRENEUR

In partial fulfillment of
Integrated Master of Business Administration

Submitted By-
Sandeep khlalkho
CUJ/I/2015/IMBA/29
Semester VI

Under the supervision of

Dr, S.M Vipul
Assistant Professor
Centre for Business Administration
Central University of Jharkhand, Ranchi
ETHICS AND SOCOAL RESPONSIABILITY OFENTREPRENEUR

What is 'Business Ethics'

Meaning:
The term ‘Business Ethics’ refers to the system of moral principles and rules of the conduct applied to business.
Business being a social organ shall not be conducted in a way detrimental to the interests of the society and the
business sector itself. Every profession or group frames certain do’s and do not’s for its members. The members
are given a standard in which they are supposed to operate. These standards are influenced by the prevailing
economic and social situations. The codes of conduct are periodically reviewed to suit the changing circumstances.

Definitions:

“Business Ethics is generally coming to know what is right or wrong in the work place and doing what is right.
This is in regard to effects of products/services and in relationship with the stake holders.” —Cater Mcnamara

“Business ethics in short can be defined as the systematic study of ethical matters pertaining to the business,
industry or related activities, institutions and beliefs. Business ethics is the systematic handling of values in
business and industry.” —John Donaldson

There is no unanimity of opinion as to what constitutes business ethics. There are no separate ethics of business but
every individual and organ in society should abide by certain moral orders

Ethical values, translated into active language establishing standards or rules describing the kind of behavior an
ethical person should and should not engage in, are ethical principles. The following list of principles incorporate
the characteristics and values that most people associate with ethical behavior.

1.HONESTY. Ethical executives are honest and truthful in all their dealings and they do not deliberately mislead
or deceive others by misrepresentations, overstatements, partial truths, selective omissions, or any other means.

2. INTEGRITY. Ethical executives demonstrate personal integrity and the courage of their convictions by doing
what they think is right even when there is great pressure to do otherwise; they are principled, honorable and
upright; they will fight for their beliefs. They will not sacrifice principle for expediency, be hypocritical, or
unscrupulous.

3. PROMISE-KEEPING & TRUSTWORTHINESS. Ethical executives are worthy of trust. They are candid
and forthcoming in supplying relevant information and correcting misapprehensions of fact, and they make every
reasonable effort to fulfill the letter and spirit of their promises and commitments. They do not interpret
agreements in an unreasonably technical or legalistic manner in order to rationalize non-compliance or create
justifications for escaping their commitments.

4. LOYALTY. Ethical executives are worthy of trust, demonstrate fidelity and loyalty to persons and institutions
by friendship in adversity, support and devotion to duty; they do not use or disclose information learned in
confidence for personal advantage. They safeguard the ability to make independent professional judgments by
scrupulously avoiding undue influences and conflicts of interest. They are loyal to their companies and colleagues
and if they decide to accept other employment, they provide reasonable notice, respect the proprietary information
of their former employer, and refuse to engage in any activities that take undue advantage of their previous
positions.

5. FAIRNESS. Ethical executives and fair and just in all dealings; they do not exercise power arbitrarily, and do
not use overreaching nor indecent means to gain or maintain any advantage nor take undue advantage of another’s
mistakes or difficulties. Fair persons manifest a commitment to justice, the equal treatment of individuals,
tolerance for and acceptance of diversity, the they are open-minded; they are willing to admit they are wrong and,
where appropriate, change their positions and beliefs.

6. CONCERN FOR OTHERS. Ethical executives are caring, compassionate, benevolent and kind; they like
the Golden Rule, help those in need, and seek to accomplish their business objectives in a manner that causes the
least harm and the greatest positive good.

7. RESPECT FOR OTHERS. Ethical executives demonstrate respect for the human dignity, autonomy, privacy,
rights, and interests of all those who have a stake in their decisions; they are courteous and treat all people with
equal respect and dignity regardless of sex, race or national origin.

8. LAW ABIDING. Ethical executives abide by laws, rules and regulations relating to their business activities.

9. COMMITMENT TO EXCELLENCE. Ethical executives pursue excellence in performing their duties, are
well informed and prepared, and constantly endeavor to increase their proficiency in all areas of responsibility.

10. LEADERSHIP. Ethical executives are conscious of the responsibilities and opportunities of their position of
leadership and seek to be positive ethical role models by their own conduct and by helping to create an
environment in which principled reasoning and ethical decision making are highly prized.
11. REPUTATION AND MORALE. Ethical executives seek to protect and build the company’s good reputation
and the morale of its employees by engaging in no conduct that might undermine respect and by taking whatever
actions are necessary to correct or prevent inappropriate conduct of others.

12. ACCOUNTABILITY. Ethical executives acknowledge and accept personal accountability for the ethical
quality of their decisions and omissions to themselves, their colleagues, their companies, and their communities.

SOCIAL RESPONSIBILITY OF ENTREPRENEURS IN INDIA

ABSTRACT
An entrepreneur is a

who undertakes business activity with the help of societal resources. He is associated with different groups of the
society like consumer, employees, investors, government etc. With the help of the exchange with these groups he can
achieve organizational goal. So his responsibilities towards them should be properly understood. In this paper social
responsibility towards stakeholders is explained. It is concluded that if it is fulfilled properly by every
entrepreneur then that will result in optimum development of society and nation.
INTRODUCTION
An entrepreneur receives resources from the society, utilises in productive manner and gives some productive
output to the society and earns profit. He cannot do anything without the help of society. On the other hand society
is also getting benefits from entrepreneurs. Development of a new product, improvement in life style is only
possible thru active efforts undertaken by entrepreneur. So we can say there is give and take between entrepreneurs
and society. He is debtor as well as creditor of the society. If we study his behavior we find that he receiving from
different classes of the society so his responsibility towards society can be understood as follows.

As citizens of the country we are born from, it is our responsibility to obey the laws of our country. It is likewise
our responsibility to help our neighbors whenever they need help. As responsible citizens, it is our duty to vote
during election time. We respect human dignity whether the person is white or black whether schooled or
unschooled or whether rich or poor.

When we become entrepreneurs are we still responsible to our fellowmen, to our community and to our country?
In our desire to maximize profits, are we going to cheat our customers, exploit our employees, and dump our
wastes into the air, water and land? All of these things are the opposite of social responsibility. As a result, we
have adulterated products, aside from wrong weights and measurements. Many of our workers are underpaid. Our
environment is being destroyed or polluted.

The concept of social responsibility has various meanings to different individuals. For instance, to a banker, his
social responsibility is to lend money even to the poor producers, and not only to the rich ones. To manufacturers,
their social responsibility is to create quality products, and not to pollute the environment. For instance, if you are
manufacturing a huge number of print postcards in your digital printing plant, make sure that your trash and other
wastes are properly disposed and not just thrown to rivers and seas. More so, to the rich their social responsibility
is to share their excess wealth with less fortunate.

What exactly is the social responsibility of the entrepreneur or businessman to his customers, suppliers and
stockholders, fellow businessmen, government, to the community and to his employees? Such business
relationships are measured by fairness, honesty and justice.

The entrepreneur must sell quality products at fair price. He must also be fair with his suppliers by paying them on
time as agreed upon. He must pay the correct amount of taxes to the government. He must promote the welfare of
his employees. He must observe business ethics with his fellow businessmen. Equally important is the social
responsibility of the entrepreneur to his community in terms of job creation and environmental observation.

1. RESPONSIBILITY FOR CONSUMERS

In this world of consumerism it is rightly said that consumer is King. Each and every economic activity is
performed to satisfy consumer needs. Responsibility towards consumers can be better fulfilled by reasonable
Pricing. An entrepreneur should have properly studied market, income, taste of consumers and accordingly
should produce and promote the product. According to change in the preferences, taste, need etc. entrepreneur
should introduce modification in the product to satisfy their needs.
Entrepreneurs should consult consumer forum and according to their suggestions, decide the quality and price of
the product. An entrepreneur should maintain business ethics in quality, quantity, design, price of the product
and should not create artificial scarcity of the product to gain abnormal profit.
2. Responsibility for Employees
Employees are the life blood of the organisation. Without them an entrepreneur cannot achieve the
organisational goal . Satisfied employees are the assets of the business. To satisfy them as per qualification,
skill and experience healthy remuneration should be paid and avoid exploitation. Motivating incentive scheme
should be introduced. The working place should be neat and clean with proper ventilation and light. For the
refreshment, provide canteen, rest, sanitation etc.
As lot of familiers are dépendent jupon the firme, entrepreneur soul provider employées familier effare facilites
like fees of their kids, medical allowance etc. While pension, provident fund, gratuity, sick leave will create the
environment of safe future. Free medication and life time familier maintenance soul be provided if he loses any
of his organ or his life at the work place.
Employées’ creative suggestions soul be admired with the help of prize or any other motivating mode to satisfy their
self actualization need. Entrepreneur soul recognize the labour unions and be cooperative with them, try to find
amicable solution for the problem. There soul be enough room for discussions and bargaining to avoid strike and
lockout.

3 Responsibility for Investors:

When the fund is collected from variety of sources like shares or debentures, responsibility towards theinterest of
different investors also arises. The prime responsibility is to reward the handsome return on their investments.
It is duty of entrepreneur to give detail about the progress of the company periodically. Especially when company is
in trouble and not able to give the expected or projected returns, soul inform the inventors about the real
situation. Variety of forms of investments soul be introduced to attract the various types of investors variety of
preference shares, debentures. In expansion to collect fund easily and to maintain relations Right issue can be
made.

4. RESPONSIBILITY FOR RELATED PROFESSIONAL INSTITUTES

An entrepreneur is also connected with different organizations, institutes like chamber of commerce, labour
union, mercantile federation, social effare institute etc. Entrepreneur soul fulfill his responsibility towards these
organizations, accept the membership of such associations. For the development of the industry and interests of
members, such institutes organizes various activities like conferences, seminar etc. Entrepreneur soul provider
finance for such activities which are helpful for the society. Such institutes provider important information like
market trends, new productions technology, new product development, new source of raw material etc. Which
are important for the entrepreneur to develop his business. So soul be ready to help such institutes as a part of
social responsibility.
5 Responsibility for Local Public
Industrial unit is established in the society. So it becomes responsibility of the entrepreneur to take care of
residing people living nearby. The interest and lifestyle of the surrounding localité soul not bé adverse affected.
He soul put local people for employment in first priority. This will increase positivity for the industry among local
people. The local means of production soul bé used for the development of nearby industry. The natural beauty of
the surroundings soul not bé spoiled due to presence of the industry. If it is polluting, necessary steps soul bé
taken by the entrepreneur to overcome it.
Entrepreneur soul help local economically backward, widows, unemployed youth. He soul arrange special
programme for the upliftment and development of orphans and orphanage. To satisfy the basic requirements of the
local mass, an entrepreneur soul support to develop organisations like school, hospital. He soul also undertake
efforts to develop public garden, play area etc to enrich the life of local people.
Entrepreneur soul provider guidance for emerging young entrepreneurs. He can arrange special programmes in
association with any organisaiton for those who poses some entrepreneurial skill. He can give guidelines for
establishment of any small scale firme or industry. In any natural calamity like earthquake, flood, drought,
heavy rain; entrepreneur soul provider help.

6. RESPONSIBILITY FOR THE NATION

An entrepreneur undertakes his business activities in the boundaries of any nation. So it becomes his duty to
follow the law and order of any particular region or nation. The prime duty towards the government is to follow the
law and order of that city, state or nation in which it is situated. It is the duty of entrepreneur to pay the genuine
tax intime. So that government can better use it for the development of undeveloped localité.
The development of any nation is based on the development of basic industries only. So it is social
responsibility of the entrepreneur to jump into the basic industries of the nation. Government also supports such
industrial development.
Innovation is the identity of an entrepreneur. For the development of the society and nation, new product
development is needed. Entrepreneur soul undertake the research and development and uplift the lifestyle of the
nation. According to change in time, government policy also changes. For the development of new industries as
well as new entrepreneurs such policies are framed or modified. It is the duty of the entrepreneur to come
forward and accept the changes and support the nation for the development. Entrepreneur soul try to explore
the overseas market and help the nation in form of export. He soul take the benefits of entrepreneurship
development programmes and utilize the latest information and training for the development of his business and
country.
For planned development of the country, government organises different programmes and sets the targets in five
year programmes. An entrepreneurs soul take benefits of such programmes and help the government for the
development of the nations. Some times for the development of personal organisations, entrepreneurs adopt
wrong tactics like bribe, corruption to the government employées This may result into imbalance growth of the
nation. At the cost of needy class of the entrepreneurs, developed entrepreneurs are getting benefits. Nation is the
base on which an entrepreneur is developed. So he soul always try to increase the wealth and prosperity of the
nation Without the support of national resources, the development would have not taken place. The contribution
of government and national wealth soul not bé overlooked by an entrepreneur. So he soul always try to increase
the wealth of the nation.

7. RESPONSIBILITY AT INTERNATIONAL LEVEL

In the modern time, India has also opened the doors for the foreign countries. On the other hand our
entrepreneurs have also the chances to take benefits of overseas market. It’s time for global competition. So
entrepreneur has to provider global quality standard to sustain in the market. The entrepreneur has to produce the
product keeping in mind the global standard. As competition is not limited up to domestic level. Competitors are
worldwide. So entrepreneur soul bé aware with global standards. The biggest benefit of this situation is
improvement in quality of the domestic product.
To face the competition with global companies, domestic entrepreneur has to introduce new technology. For this
either he may undertake research and development or he can have a tie up with any foreign concern having better
technological standard. So technological collaborations will bé necessity for the domestic entrepreneurs.
Due to globalisation, it is possible to invite the foreign investors to invest in our country. Because of foreign direct
investment inflow of exchange has increased. An entrepreneur can get benefit of huge investment thru FDI. It is
even beneficial for underdeveloped or undeveloped country to develop. An entrepreneur of such a country can
grab the opportunity in development of the business.
International trade increases the prosperity, wealth of the nation. China could bé developed on this basis.
Domestic resources are engaged in satisfying needs of other countries will result in increase in national income of
the country. That will result in increase in wealth of the country.
Because of globalisation better business relations can bé developed with friendly countries. Inter dependences
will bé increased due to this. Exchange of resources will bé easier in this case and benefits specialisation and
division of labour can bé achieved.
To develop the business at international level an entrepreneur soul follow the international standard of business
ethics. Code of conduct of different countries soul bé followed. Violation of this may result in collapse of global
image. So it is the duty of entrepreneur to take care of global business standard.
Being part of global business, an entrepreneur soul become a part of international union. Such multinational
union organises fairs, exhibition etc for the development of the business. So entrepreneur soul bé alert and grab
the opportunity to become member of such multinational union and thru which he can knock the doors of the
other countries as well.

CONCLUSION
From the above discussion it can bé seen that any entrepreneur alone cannot do anything. It’s a team work. And a
team can not perform well if involved parties are not fully satisfied. So its duty of entrepreneur to think about
the societal side of his economic activity. If every entrepreneur will start fulfilling his social responsibility
properly then it can result in optimum development of society as well as nation.

Fundamentals of Entrepreneurship, Jamanadas Publications, 2010