Business Ethics and SENIOR

HIGH
Social Responsibility SCHOOL

Purpose of Business and its Role in Module

Socio-Economic Development 3
Quarter 1

Business Ethics and Social Responsibility

Business Ethics and Social Responsibility- Grade 12
Quarter 3 – Module 3: Purpose of Business and its Role in Socio-Economic
Development
First Edition, 2020

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 Business Ethics
and Social SENIOR
HIGH
Responsibility SCHOOL

Module

2
Quarter 1

Purpose of Business and its Role

in Socio-Economic Development
Introductory Message

For the Facilitator:

Welcome to the Senior High School – Purpose of Business and its Role in
Socio-Economic Development!

This Self-Learning Module was collaboratively designed, developed, and

reviewed by educators from the Schools Division Office of Pasig City headed by its
Officer-in-Charge Schools Division Superintendent, Ma. Evalou Concepcion A.
Agustin, in partnership with the City Government of Pasig through its mayor,
Honorable Victor Ma. Regis N. Sotto. The writers utilized the standards set by the K
to 12 Curriculum using the Most Essential Learning Competencies (MELC) in
developing this instructional resource.

This learning material hopes to engage the learners in guided and independent
learning activities at their own pace and time. Further, this also aims to help learners
acquire the needed 21st-century skills especially the 5 Cs, namely: Communication,
Collaboration, Creativity, Critical Thinking, and Character while taking into
consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the
body of the module:

Notes to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.

As a facilitator, you are expected to orient the learners on how to use this
module. You also need to keep track of the learners' progress while allowing them to
manage their learning. Moreover, you are expected to encourage and assist the
learners as they do the tasks included in the module.
 For the Learner:

Welcome to the Business Ethics and Social Responsibility Self-Learning

Module on Purpose of Business and its Role in Socio-Economic Development!

This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning material while being an active
learner.

This module has the following parts and corresponding icons:

Expectations - This points to the set of knowledge and skills

that you will learn after completing the module.

Pretest - This measures your prior knowledge about the lesson

at hand.

Recap - This part of the module provides a review of concepts

and skills that you already know about a previous lesson.

Lesson - This section discusses the topic in the module.

Activities - This is a set of activities that you need to perform.

Wrap-Up - This section summarizes the concepts and

application of the lesson.

Valuing - This part integrates a desirable moral value in the

lesson.

Posttest - This measures how much you have learned from the
entire module.
 EXPECTATIONS

At the end of this module, you are expected to:

1. identify three scholars and discuss their ideas about the

main objective of the business;
2. explain the purpose of business organizations and their role
in socio-economic development; and
3. create your list of purpose and objective of a business.

PRETEST

Identify the statement if it’s true or false. Write in your answer sheet TRUE if
the statement is true, and write FALSE if the statement is false.

1. Milton Friedman states that the main purpose of putting up a

business is to increase its profit.
2. For Camenisch, he believes that the profit-motive of a business
is not essential.
3. The two main purposes of business are objective and subjective.
4. According to Duska, the purpose and motive of the business are
always the same.
5. Independence is one of the subjective reasons for putting up a
business.

RECAP

Tell important detail/s that you remember when you see the following words.

Corporation Service LLC

Merchandising Cooperative Manufacturing
 LESSON

There is always a reason behind every action and decision that we make. The
answer to the question of why do we exercise is common because we want to become
physically fit, why do we eat is to satisfy our cravings, why do we study is to become
educated, etc. And of course, there are also reasons behind putting up your own
business. Most of the time, the first thing that enters our mind of why business
persons put up a business is because of money, profit, and financial matters.
However, for some businessmen, money is not the only reason for establishing their
firms.

In this module, we will explore the different reasons why businesses do exist
and why businesses are being established by most business owners.

Some subjective Reasons for Putting up a Business

1. Desire to make income for self and family – Most often, many think putting
up a business is more financially rewarding than staying to be employed and
be happy with their careers or professions they are taking. Nowadays, it is
very difficult to provide necessities for your family especially if you belong to
low income or even average income earners. That’s why people resort to
engaging in business to solve financial problems.

2. Independence - you are tired of going to the office and seeing and hearing your
boss about his complaints regarding your job. You want to be your boss and
want to decide on your own because some do not want to be told of what they
should do on something. They want to be the mind in every decision regarding
the company and operation of the business.

3. Having an entrepreneurial mind-

some people think out of the box and
is being very creative. These people
think a lot of things that can be very
helpful to society and are challenged
about their thoughts to exist in
reality. They are the ones who do not
just create products but create new
markets out of that product. The
novelty or creativity of their mind
leads them to pursue having a https://www.pexels.com/photo/black-and-white-blackboard-
business. business-chalkboard-356043/

4. The desire for competition- some people are not challenged by the career they
are taking because it is so monotonous and lacks substance. They see that
being in business ignites their spirit of desire for competition because it is
more challenging and more rewarding on their part.
5. Desire to help others-having a big heart for the community that surrounds
you makes you engage in enterprise. By putting up a firm, you believe that
you can offer better products and/or services to customers, provide jobs to
the unemployed, and help your community. Profit is just a secondary aspect
for you because it is more rewarding on your part to help others.

6. Enjoying being a businessman- you

just love dealing with people like
satisfying your customers by the goods
or services you are offering, giving
smiles on the faces of your employees
and alike. You are not really into profit.
You just really like and love what you
do. https://pixabay.com/illustrations/meeting-business-brainstorming-1453895/

7. To self-actualize – one of the reasons why people put up a business is because

they feel accomplished once all their plans go into proper places. They enjoy
seeing their plans fulfilled.

8. Makes your dream come true- many people tend to fantasize about having a
business because they see themselves sitting on their chair with a big table
and having employees that will help them in operating their business. But
only a few are brave to enter into business and these few are the ones who
realize these dreams.

9. The Desire for Extra Income – some enter into business without leaving the
status of being an employee that earns a regular income. They see that
business will just add extra income to fulfill their wants and needs. It is
necessary to have good time management when you have a sideline because
the business will eat up most of your time.

10. Challenge for multi-tasking job- you want to be a businessman because you
are up to a kind of variety of tasks, and want to leave a monotonous job. You
are a “jack-of-all-trades” when you become a businessman. It is important to
note that you are not just creating or selling products, however, you also need
to know bookkeeping, marketing, designing, researching, managing, etc.

11. Want to Innovate- people entering into a business usually have

entrepreneurial skills who like innovating things. They want to recreate,
rearrange things, and discover the easiest ways, alternative solutions,
substitute products, or better products that help consumers to live a better
life.

12. To become efficient- You need to meet

deadlines on time but you want to do
it in your way without anyone telling
you what to do. You manage self-
discipline to accomplish things on
time. You need to manage your time
https://pixabay.com/photos/skills-can-startup-start-up-3371153/
 well to get done on the target date to make good progress.

13. To avoid commuting- for some, it is better to become self-employed rather than
bearing the long traffic going to the office and experience the same commuting
back at home. At least, you can lessen the cost coming from transportation.
Some people enjoyed staying at home while busy with their business.

14. Creating Customer- others enter into enterprising

because of the feel of creating customers. For them,
they must fulfill the need of the people around
them.

The above mention is subjective reasons for putting

up a business but it does not answer the question of why
there is business. The objective purpose will tell us the
reason for the existence of businesses. https://pixabay.com/illustrations/customer-buyer-
competition-ball-2207737/

The objective purpose of a business was attempted to explore by three scholars.

Later, we will be enlightened by their ideas of why businesses do exist.

Milton Friedman: The Social Responsibility of a Business is to

Increase its Profit
According to Friedman, only people have
responsibilities because a corporation is an
artificial person and has an artificial
responsibility. The corporate executives of a
company have the responsibility to make the
firm more profitable because that is the goal or
main intention of the owners and
shareholders. It is not your responsibility to
give the needs of people outside the company
https://pixabay.com/illustrations/chart-businessman-money-statistic-
4065756/
because that is the role of the government. The
very reason why businessmen put up a firm is
to increase its profit, and you as an executive has the responsibility to attain their
intentions. We must not get wronged for what he wants to imply because as he
declared “There is one and only one social responsibility of business--- to use its
resources and engage in activities designed to increase its profits so long as to it
stays within the rules of the game, which is to say, engages in open and free
competition without deception or fraud.”

Paul F. Camenisch: Life-sustenance and Life-enhancement

Contradicting to Friedman’s statement that emphasizes profit-motive as a social
responsibility, Camenisch thought that Friedman forgot one of the essential elements
of the business and that is to respond to the needs of the society for life-sustenance
and life-enhancement.

According to Camenisch, one of the distinctive function of a business is being life-

sustenance and life-enhancement. Because of the tremendous
growing needs of society and the limited resources that we
have, people tend to create and develop new things to sustain
the necessities of life. Moreover, the primary intention of
humans in putting up a business is to provide goods and
services and not being profit-oriented. For him, he considered
profit essential yet it should not be the fundamental motive of
the firm because businesses must respond to the needs of the
society which is life-sustenance and life-enhancement. https://pixabay.com/vectors/feel-free-
silhouette-joy-3566550/

Ronald F. Duska: The Motive is not the Purpose

Duska distinctly differentiates purpose and motive.
According to him, It does not follow that your purpose
is also your motive and vice versa. No one should be
confused about the motive of doing the action and the
purpose of the action because they are different. For
example, the purpose of the teaching profession is to
help students to gain knowledge and hone skills to be
able to act in their role in society and for personal
development. On the other hand, the motive of the
person taking teaching as a profession may not be the
https://unsplash.com/photos/j06gLuKK0GM
same as its purpose. The same is true with the medical
profession whose main concern is to attend to the
medical needs of patients, yet the motive of a nurse or a doctor is not the same as
the purpose of the medical profession. So the purpose of teaching and the medical
profession will not necessarily mean the same with the motive of the teacher or the
nurse or doctor.

Duska still believes that the main purpose of the business is not for its benefit or
wealth accumulation per se. He said: “ If doing business rewards me with a profit, I
will be inclined to get into it, BUT the purpose of the business—why society allowed
it to be set up or allowed it to exist in its profit-oriented form--- was so that it would
provide good and services.”
 ACTIVITIES

According to your understanding, explain briefly the objectives of business according

to the three scholars.

Name of Scholar The Objective of the Business

1.

2.

3.

Search at least three known companies in your community

and write their mission and vision statements. From that mission
and vision statement, generalize the purpose of their business.

WRAP-UP

1. What are some subjective reasons for putting up a business?

2. According to Milton Friedman, what is the social responsibility of a
business?
3. For Paul F. Camenisch, what is the distinctive function of a business?
4. What is the motive of the business according to Ronald F. Duska?
 VALUING

1. What business do you 2. If you are a 3. What do you think

want to put up businessman, what would be the objective
someday? could be your main of your business for its
reason (subjective existence?
reason) in establishing a
business?
4.What do you think is the importance of knowing the purpose of your
business?

POSTTEST

In your answer sheet, write the appropriate word/s that are missing or being
described in the sentence.

1. For this scholar, the main responsibility of a business is to increase

its profit.
2. ____________ said that the purpose of the business is not necessarily
the motive of the business.
3. The two main reasons for the existence of business are subjective
and __________.
4. According to Camenisch, profit is essential but the primary motive
of a business should be life sustenance and _______________.
5. Your reason is _______________, if your motive to put up a business
is because of desire of competition.
 KEY TO CORRECTION

Subjective 5. TRUE 5.
Life- Enhancement 4. FALSE 4.
Objective 3. TRUE 3.
Ronald Duska 2. FALSE 2.
Milton Friedman 1. TRUE 1.
POSTTEST PRETEST

References
Books

Jerusalem, Violeta L. Business Ethics & Social Responsibility: Concepts, Principles, &
Practices of Ethical Standards. Fastbooks Educational Supply, 2017.

Cortez, Franz Giuseppe F. Business Ethics and Social Responsibility. Vibal, 2016.
“Ethics Is Derived from the Greek Word - Examveda.com,” n.d.
https://www.examveda.com/ethics-is-derived-from-the-greek-word-30381/.

Websites

———. Photograph. March 20, 2017. https://www.pexels.com/photo/black-and-

white-blackboard-business-chalkboard-356043/.

Altmann, Gerd. Photograph. April 7, 2017.

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2207737/.

Altmann, Gerd. Photograph. May 3, 2018. https://pixabay.com/photos/skills-can-

startup-start-up-3371153/.

Boundless. “Boundless Business.” Lumen, n.d.

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GraphicMama-team. Photograph. Accessed July 14, 2020.

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1453895/.
Hassan, Mohamed. Photograph. March 19, 2019.
https://pixabay.com/illustrations/chart-businessman-money-statistic-
4065756/ .

———. Photograph. July 28, 2018. https://pixabay.com/vectors/feel-free-

silhouette-joy-3566550/.

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Mozhvilo, Elena. “Photo by Elena Mozhvilo on Unsplash.” Beautiful Free Images &
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