ETHICAL ISSUES AND SOCIAL

RESPONSIBILITY OF
ENTREPRENEURS

ROSELINE LUBULELLAH
STRATHMORE UNIVERSITY
DEFINING BUSINESS ETHICS

Ethics is the determination of what is right

and proper or just and fair, by an
entrepreneur by undertaking decisions and
actions that reflect this. (Hisrich and
Peters,2002)

It is all about acting in an acceptable

manner

Ethics refers to a set of principles

 ETHICAL ISSUES
Ethical decision making is a challenge
that confronts every business person
involved in large or small enterprises.

Recent scandals :
Anglo-leasing
Goldenberg
Nyaga Stock brokers/Francis Thuo
Stockbrokers
Enron,
Citicorp, and other several large
companies

Such scandals have made consumers

ETHICAL ISSUES (contd)
Even after defining ethics as “a set of
principles of right conduct or a theory or
system of moral values” it is still difficult to
determine which businesses are better at
complying with ethical standards and
which businesses are acting unethically.
WHY?

This is because people disagree about what

is right and wrong
Common Examples Of Unethical
Actions By A Firm Or Entrepreneur
Theft
Falsification
Bribery
Embezzlement
Stealing supplies
Manipulating suppliers
Failure to withdraw a defective product
from the market place
Reasons for Unethical Behavior

Businesses seem to take part in unethical

behavior for different reasons today than in
the past.
According to Vogel (1987), corporate
misdeeds during previous generations
resulted from a lack of governmental
controls. However, time has changed and
there are government controls.
Some reasons for unethical practices include
4.A lack of foundation in ethics
5.Survival drives (bottom line thinking)
6.Reliance on other institutions to convey or
reinforce ethics
Reasons for Unethical Behavior
(contd)

1. Balancing work and family demands

2. Poor leadership

3. Work hours and work load

4. Need to meet high targets

5. No recognition given for achievements

6. Company politics
Strategy

1.The main strategy is to develop a set of

ethical practices and codes of conduct for

the employees to follow.
 A code of conducts is a statement of ethical

practices or guidelines to which an enterprise

adheres.
 These codes cover many areas ranging from

how to use corporate asset, conflict of interest,

use of inside information, equal employment
How Businesses Can Improve Ethical
Standards
There are certain actions a company can take
to help its employees maintain ethical
standards. A business can encourage
employees to adhere to a company’s code of
ethics by engaging in the following actions.
b)Review the relevant laws and regulations
pertaining to the business.
c)Review which values produce highly ethical
and successful people or products
d)Compose a code of ethics for the business.
Within the code, attempt to associate two
example behaviors with each value
e)Identify the top five to ten ethical values that
are high priorities within the organization.
How Businesses Can Improve Ethical
Standards (contd)
a) Include wording that indicates all employees
are expected to conform to the values stated
in the code of ethics.
b) Make sure there are no double standards
and that management sets a good example
by following the same code of conduct the
employees must follow.
c) Codes of conduct are an important first step
– begin today by putting business values on
paper, then begin to live by them.
Conclusion
Ethical business standards could be
strengthened if companies uphold a code
of ethics on a day-to-day basis.

Business ethics that are modeled by

CEOs, management, and employees can
help a company remain profitable and
stable and avoid corporate scandals.

Although embracing ethical behavior does

not guarantee success, good ethics
combined with business competence is
still a winning combination.
SOCIAL RESPONSIBILITY
The firm has certain obligations to society.
Some areas where the firm owes obligations
include:
2.Environment
3.Energy
4.Fair business practices
5.Human resources
6.Community Involvement
7.Products
The Future of Entrepreneurship

Entrepreneurship is about risk-taking,

creativity, independence and rewards.

These are and will continue to be the driving

force behind the notion of entrepreneurship in
the future.
The Future of Entrepreneurship
(contd)

The future of entrepreneurship appears bright;

this is because the field is being given
prominent recognition by:

Education institutions
Governments
Society
Corporations
What other factors will contribute to the
development of the field of entrepreneurship?