BUS ETHICS

• Business


  An active process which is an integral part of human society, where economic resources or inputs are brought together and distributed to deliver or give consumers goods, products, or outputs
• Business


  • Involves significant operations such as buying, assembling, distributing, advertising, selling, and accounting
• Profit


  The difference between the amount received and the amount spent on something purchased, produced, or manufactured
• The fundamental reason for examining business activities from a moral point of view is that business organizations should, in principle, help promote the common good and protect the rights and interests of individuals
• Types of business organizations operated for profit

  • Service businesses
  • Merchandising businesses
  • Manufacturing businesses
• Service businesses


  • computer repair
  • laundry services
  • tutoring
  • delivery services
  • wellness (such as gym or spa)
• Sole Proprietorship


  A one-person business where the owner has full control over the finances and operations and decides alone
• Advantages of Sole Proprietorship

  • Tax preparation is faster
  • Lower start-up costs
  • Easier handling of money
  • Least government rules and regulations
  • Can own the business for as long as desired
  • Can pass the business down to heir
• Disadvantages of Sole Proprietorship

  • Personally liable for all debts and actions
  • Lack of financial control due to looser structure
  • Difficulty in raising capital
• Partnership


  A business relationship between two or more people where they share the business venture's profits and liabilities
• Advantages of Partnership


  • Lacks formality
  • Easy to start
  • Share the burden
  • Combine expertise, skills, experience, and connections
  • Better decision-making
  • Privacy
  • Partners own and control the business
  • More funds available for expansion
  • Easy access to profits
• Disadvantages of Partnership


  • No independent legal status
  • Partners are personally liable for debts and losses
  • Lack of prestige
  • Difficulty in raising money
  • Potential for differences and conflicts
  • Slower decision-making
  • Profits must be shared
  • May affect life-work balance
  • Profits subject to individual income tax
  • Limits on business development
• Corporation


  An entity created by law that is independent and distinct from its owners and relies on the corporate laws of the state in which it is incorporated to continue its existence
• Advantages of Corporation


  • Limited liability of shareholders
  • Can raise substantial funds by selling shares or issuing bonds
  • Easy for shareholders to sell shares
  • No limit on the corporation's life, ownership can pass through generations
• Disadvantages of Corporation


  • Income gets taxed twice (corporation pays taxes, shareholders pay dividend taxes)
  • Management team can operate the business without real oversight from owners
• Social Development


  Company activities that provide the local community with opportunities to develop, as part of the company's core business or additional activities that enhance the company's reputation and its relationship with the community
• Economic Development


  Enhancing the factors of productive capacity - land, labor, capital, and technology - of a national state or local economy to reduce risks and costs
• Factors affecting Economic Development


  • Social and cultural values
  • Governmental policies
  • Personal happiness of the individuals comprising the economic community
• Doing business that increases capital and economic development presents all sorts of moral quandaries taking into consideration thoughts and beliefs about how the world works and the social ramifications of development, particularly in the second and third worlds
• Related issues for a company to consider

  • Moral
  • Reputations
  • Abilities to compete
  • Legal exposure
• Business Enterprise


  A business started to make a profit, revolving around a single idea or mission which the owner intends to use to create a viable company
• Reasons for Business Failure

  • Inexperience
  • Funding problems
• Business Organization


  An individual or group of people that collaborate to achieve certain commercial goals, either for profit or for public purposes
• Types of Business


  • For-profit business - sells products or services to generate revenue and earnings
  • Non-profit business - must bring in enough revenue to pay employees and cover costs to administer or support program
• Organization


  • Has a specific structure and hierarchy, with people and systems creating a culture and guiding its operations, with different policies, workflows, and objectives
• System View of Business

  Business begins with a hierarchy that establishes structure and order, with business leaders working on mission, vision, values, objectives and strategies to fulfill through people, processes and policies
• Organizational Culture


  Reflects the shared values within the organization that impact employee morale, communication, and ultimately success, influenced through formal and informal processes
• Process to choose a business organization

  1. Research different types

  2. Determine liability desired

  3. Decide on number of owners

  4. Choose best tax structure

  5. Consider record keeping ability
• Purpose of Establishing Business Enterprise

  Beyond being profitable and functional, includes community involvement, fairness to employees, and managing the enterprise effectively
• Responsibilities of a Successful Business

  • Invest in the local community
  • Treat employees with respect, pay fair wages, provide benefits
  • Keep employees challenged and satisfied to encourage innovation and productivity
• Managing the Business Enterprise

  1. Lead with knowledge and confidence

  2. Delegate effectively

  3. Hire and manage employees well

  4. Motivate and train employees

  5. Meet customer needs

  6. Market the company effectively
• Business Ethics


  Companies are expected to act ethically and honestly with the community, employees and shareholders, avoiding corporate fraud, shutting down local businesses, cheating on taxes, and violating laws and regulations
• Environmental Impact


  A company should limit its environmental impact and be able to show what it is doing to proactively protect the environment
• Business Enterprise Planning


  An essential business function that requires a dedicated effort from the company's management team to set goals, determine strategies, and make the enterprise more competitive
• Business Enterprise Planning Process

  1. Research the current state of the company and the market

  2. Conduct opportunity analysis to allocate resources to the best opportunities

  3. Plan and develop a high-quality management team
• Fairness


  The standard of judging which is exempted from bias or prejudice
• Fairness


  • A boss listening to both sides of the story before judging who is right and who is wrong
  • An employer giving 13th month pay to all his/her employees
  • A person paying the right price for a product purchased or for a service received
• Accountability


  The explication and justification process, about testing, forming a judgment, and taking an action if necessary
• Accountability


  • A cashier admits he/she lost the company's collection, and it is his/her mistake
  • An engineer who is assigned on a project is the one to be blamed if the project did not meet the deadlines
  • Employee A recommended his cousin to be their company janitor, but the latter stole the cellular phone of their secretary. Therefore, Employee A may be blamed for recommending his/her cousin and should pay or replace the lost cellphone
• Transparency


  • (at the individual level) A personal quality which is necessary to develop unity between and among individuals
  • (organizationally) An important mechanism for ensuring social responsibility