8.1 | Ethics in Entrepreneurship!

INTRODUCTION
available to them when we first got together
to discuss these issues. We also considered
how confronting ethical questions early in a
business life cycle was the most cost-
effective approach and would avoid much
bigger problems in the future. That is why
Ethics in Entrepreneurship was established
—to answer that question. (About our
organization, 2020).

Figure 1.1 The Place of ethics in Entrepreneurship

((Source:Ironkwe/researchleap)

According to Our Business Ladder

(2021), entrepreneurs have become
increasingly powerful in our modern society,
and this power always has an impact on
several facets of our society. Businesses are
therefore required to assume responsibility
for sustaining moral standards, generating
wealth, and ensuring that the tools employed
to accomplish objectives are suitable. People
value business in both economic, legal, and
ethical grounds.

Recognizing the potential and difficulties of

startups is the first step in practicing ethics
in entrepreneurship. How might we assist
entrepreneurs and start-ups in considering
and resolving some of the challenging
ethical issues that even the most prosperous
start-ups appeared to be running into? We
considered how many founders and start-ups
could not devote time and energy to ethical
questions because resources were not readily
Learning Objectives:
In this chapter, you will learn about:

 What is entrepreneurial ethics?

 How ethics applied in entrepreneurship?
 Developing ethical codes and ethical dimensions of entrepreneur.
 Ethical issues entrepreneurship may face.

“If you build that foundation, both the moral and the ethical foundation, as well as the business
foundation, and the experience foundation, then the building won’t crumble.” ~ ("Henry Kravis
quote,").

8.1.2 | What is entrepreneurial ethics?

What is ethics?
The word “ethics” is derived from the Greek word ethos (character), and from the Latin
word mores (customs). Ethics is the study of what is right or wrong in human conduct. This is a
branch of Philosophy which studies moral principles. Hence, Ethics is also known as Moral
Philosophy. For example, a person cannot tell a lie with good intent. For an act to be considered
ethical, there must be no violation of duty towards one’s self or others and one’s intentions must
be pure.

Figure 1.2 Do what is right, not what is easy advice or reminder. (Source: marekuliasz|stock photos)

Socrates a Greek philosophers believes “the unexamined life is not worth living.” One
must seek knowledge and wisdom before private interests. In this manner, knowledge is sought
as a means to ethical action.
What is entrepreneurship?
 Entrepreneurship is the process by which a person or group of people (entrepreneurs) take
advantage of a business opportunity, either by creating a new product or process or by
significantly enhancing an already existing good, service, or production method. This procedure
is typically carried out by a new firm (a start-up), but it can also happen in an existing small
business that makes a significant change to its product or strategy (What is entrepreneurship?
2019).

Figure 1.3 What is entrepreneurship? Entrepreneurship sign with a sunset background (Source: Gustavo Frazao|Shutterstock)

According to Peter F. Drucker, an entrepreneur is someone who constantly looks for

changes, reacts to them, and seizes the chance they present. He goes on to say that innovation is
the particular instrument of the entrepreneur, the way he uses change as an opening for a new
product or service. Peter Drucker asserts that successful businesspeople strive to add value and to
make a difference, regardless of their personal motivations, including money, power, curiosity,
or a desire for notoriety and recognition. Even now, prosperous businesspeople have high goals.
They don’t just want to change or adjust something; they want to make it better (Tamanna, R,
2019).
Entrepreneurial Ethics
Entrepreneurial social norms, morality, social responsibility initiatives, and conduct
standards are said to be matters of ethical behavior in a company. Any commercial enterprise is
greatly influenced by business ethics and culture. The significance of entrepreneurship ethics is
therefore far more than we might think.
Morality and entrepreneurship go hand in hand. An entrepreneur can rely on his
understanding, ambitions, ability, and diligence in a business because these factors are directly
related to the outcomes of the actions made. He is accountable for his choices and deeds, so
definitely!
Additionally, every responsibility has a moral foundation. The focus of business ethics is
primarily on an entrepreneur’s moral conduct, standards, and ideals.
Why ethics important in entrepreneurship?
 Entrepreneurship requires a strong sense of ethics because it strengthens the law by
defining permissible conduct outside of the purview of the state. Businesses construct business
ethics to encourage moral behavior among their personnel and win over important constituencies
like customers and investors. A positive reputation for your business is supported by good ethical
behavior. More people will want to do business with you if you have a reputation for constantly
acting ethically when it comes to product sourcing and construction, as well as how you handle
employees, clients, and the community.
A company that lacks solid ethics risks breaking the law, falling into financial trouble, and facing
unethical situations. Nonetheless, a company’s customers, workers, and other stakeholders are
assured by good business ethics that it upholds the law and acts morally.
Being an ethical entrepreneur
Every time you reflect on the conduct you anticipate from yourself in both your
professional and personal life, you are having a philosophical conversation with yourself about
the moral principles you have decided to defend. You may decide that you should always be
honest with your loved ones, friends, clients, and other stakeholders. If this is not possible, you
should have very good explanations for why it is not possible. Alternatively, you could decide
never to deceive or mislead your business partners. Also, you can decide that even while you
want your firm to be profitable, you don't need to receive every dollar made.

WORK IT OUT

Activity Name: Ethical Dilemma Reflection

Objective: To encourage critical thinking about ethical dilemmas that arise in entrepreneurship
and to explore how to approach them in a responsible and ethical manner.
Instructions:
1. Choose an ethical dilemma that you have faced or might face as an entrepreneur. It could
be a situation where you have to make a difficult decision that might have ethical
implications.
2. Write down the scenario in detail, including the key players, the context, and the potential
consequences of your decision.
3. Reflect on the dilemma by asking yourself the following questions:
 What are the ethical considerations at play in this situation?
 What are the values that I hold as an entrepreneur and how do they apply to this
situation? What are the potential consequences of my decision for all stakeholders
involved?
 Are there any legal or regulatory requirements that I need to consider?
 What are the options available to me, and what are the pros and cons of each
option?
4. Based on your reflection, identify a course of action that aligns with your values and
ethical principles. Write down your decision and explain the reasoning behind it.
5. Share your reflection and decision with a trusted colleague or mentor who can provide
feedback and insights.
6. Finally, reflect on what you have learned from this exercise and how you can apply these
insights to future ethical dilemmas that you might face as an entrepreneur. By engaging
in this activity, you can gain a deeper understanding of the ethical.

8.1.3 | How ethics applied in entrepreneurship?

When applying ethics into the workplace, one can exercise ethics by modeling them. For
instance, if someone notices their coworker stealing, they can exercise their honest ethical
standard and report them. One can show trustworthiness by listening to a coworker and
promising to not share their hardships with others.

Figure 1.5 ethics applied (Source: Shortlister)

An entrepreneur that respects their workers and recognizes when one of them is having
trouble with an assignment should give assistance rather than reprimanding them is an example
of a leader who practices ethics. A respectful workplace is created when ethics are practiced at
work. It also creates a secure and tranquil environment.
Brown and Trevino states that, “Ethical leadership is considered to be part of effective
leadership and can drive employees to participate in more positive organizational behaviors”.
8.1.4| Developing ethical codes and ethical dimensions of entrepreneur

Developing ethical codes and ethical dimensions for entrepreneurs is a crucial aspect of
business sustainability and success. An ethical code outlines the values and principles that guide
the behavior and decision-making of entrepreneurs in their interactions with employees,
customers, stakeholders, and the wider community. It helps entrepreneurs to ensure that their
business operations are conducted in an ethical and socially responsible manner, which not only
benefits the society but also enhances the reputation and profitability of the business.
What is a Code of Ethics?

Figure 1.5 code-of-ethics (Source: Investopedia / Joules Garcia)

A code of ethics, also known as an ethical code, is a set of rules, regulations, and values
that a business adopts and that its employees are required to abide by.
Personal code of ethics examples
Here is an example of a personal code of ethics as an entrepreneur you can use as a guide:
Lauren Smith, Personal Code of Ethics

 I will treat others as I wish to be treated.

 I will be honest and transparent in my personal and professional life.
 I will always put forth my best effort, and I will maintain a healthy work-life balance.
 I am dedicated to continually improving myself.
 I will keep my promises and honor my commitments.
 I fully embrace my core values and will hold myself responsible.

Why create code of ethics?

It is essential to establish a code of ethics for entrepreneurs because it gives everyone in
the field a similar set of guidelines or expectations to follow. It outlines the industry’s ideal
procedures. It offers a foundation for meeting the profession’s compliance standards. It offers a
legal benchmark for the occupation. It’s crucial to have a code of ethics to assist you decide what
is morally right to do. If you regularly review and update your code, it will be easier for you to
keep it in mind when you are faced with ethical dilemmas on a daily basis.
What are ethical dimensions?
With the help of the competency Ethical Dimensions, which is integrated throughout the
curriculum, students will be able to recognize the moral principles that govern both individual
and group behavior and apply them to the analysis of current social and political issues.
What are the Dimensions of Ethics?
Ethics seeks to resolve challenges of human morality by defining certain themes such as
good and evil, right and wrong, virtue and vice, justice and crime.
There are four major dimensions of ethics:

 Meta-Ethics (Ethics about Ethics) -It inquiries about our comprehension– how we
perceive whether a decision, action, or purpose is good or negative.
 Prescriptive Ethics (Normative Ethics) – which is again divided into Deontological
Ethics, Teleological Ethics, and Virtue Ethics. -It is the study of ethical beliefs that
govern how individuals should act and behave in society.
 Descriptive Ethics (Comparative Ethics) - It gathers knowledge on how people live,
observes patterns of events that arise in their surroundings, and draws broad judgments
based on these observations.
 Applied Ethics –This is the theme of ethics that is used in everyday life in a variety of
domains of work and living. It is concerned with the philosophical investigation of
specific moral dilemmas in private and public life including moral judgements. Again,
divided into Bio-ethics, Cyber Ethics, Environmental Ethics, Personal Ethics,
Professional Ethics, Public Ethics, International Ethics and so on.

8.1.4 | Ethical issues entrepreneurship may face

Entrepreneurship can pose a range of ethical issues, as entrepreneurs navigate the complex
landscape of business operations, interactions with stakeholders, and decision-making. Ethical
issues in entrepreneurship can arise in various areas such as finance, marketing, intellectual
property, employment, and environmental impact.
For example, financial ethical issues may include misreporting of financial information or
fraud, while marketing ethical issues may involve deceptive advertising or false claims about
products or services. In terms of intellectual property, entrepreneurs may face ethical issues such
as infringement of patents, trademarks, or copyrights. Employment ethical issues can include
discrimination, exploitation, or unfair labor practices, while environmental ethical issues may
arise from unsustainable practices that harm the environment or community.
 Entrepreneurs need to be aware of these ethical issues and ensure that their business
operations are conducted in an ethical and socially responsible manner. By developing a strong
ethical framework, entrepreneurs can build trust with their stakeholders, create a positive impact
on society, and contribute to the long-term success and sustainability of their business.
What are ethical issues?
When a person must choose between two possibilities that are ethically unacceptable, it is
said that they are facing an ethical problem.
Major issues in ethical entrepreneurship
1. Basic Fairness- John Stacey Adams created a useful model to illustrate the importance of
employees' views of fairness. The equity theory, often known as Adam's equity theory,
explains how a worker evaluates the fairness of management decisions. According to the
fundamental tenet of equity theory, people evaluate the fairness of their treatment
depending on how others who are similar to them are treated. Those who are in similar
positions within the company are compared socially by employees.
2. Personnel and Customer Relations Distribution Dilemmas – refers to the behavior of
business persons toward customers and suppliers that involves keeping company secrets,
meeting obligations and responsibilities, and avoiding. Undue pressure that may force
others to act unethically.
3. Fraud-Unfair Competition – Unfair competition arises when one company attempts to
acquire a competitive edge over another by engaging in dishonest, unfair, improper, or
fraudulent commercial activities.
4. Unfair Communication- Some schools of thought view unethical communication as
anything that fosters misinformation, intolerance, or slander. The Merriam-Webster
dictionary defines "unethical" as "not conforming to a high moral standard; morally
wrong; immoral. Plagiarism and other behaviors that are against the rules or standards are
examples of unethical communication behavior. Any public communication that restricts
political or civil rights, including the freedoms of speech or religion, is also considered
unethical communication.
5. Non-respect of Agreements – A non-compete agreement is a contract between an
employer and employee that forbids the employee from working against the employer
while they are employed there or later. These arrangements with the law forbid
employees from pursuing careers or marketplaces that are thought to be in direct rivalry
with their employers.

WORK IT OUT
 One individual activity that can help you explore the ethical issues that entrepreneurs
may face is to conduct a case study analysis of a real-world entrepreneurial venture.
Here's a step-by-step guide on how to approach this activity:

1. Choose an entrepreneurial venture to analyze. You can look for examples in the news, online
publications, or social media. Some examples could include Uber, Amazon, or Airbnb.
2. Research the background of the entrepreneurial venture. Look for information about the
founder(s), the industry, and the market. This will give you context for the ethical issues you will
analyze.
3. Identify the ethical issues that the entrepreneurial venture faces. Look for issues related to
privacy, data protection, fair competition, environmental sustainability, labor practices, or any
other ethical concerns that are relevant to the venture.
4. Analyze the ethical issues using ethical frameworks. You can use frameworks such as
utilitarianism, deontology, or virtue ethics to examine the ethical dilemmas faced by the venture.
Consider the different stakeholders involved and their interests.
5. Evaluate the actions taken by the entrepreneurial venture. Assess whether the actions taken by the
venture were ethical or not, and what consequences they had. Identify any gaps or areas for
improvement.
6. Draw conclusions and make recommendations. Summarize your analysis and provide
recommendations for how the entrepreneurial venture could improve its ethical practices.

8.2 | GOOD GOVERNANCE

Good governance refers to the process and manner by which public institutions conduct
themselves, manage public resources, and interact with citizens, including the provision of basic
services and protection of citizens' rights. It is a concept that emphasizes transparency,
accountability, participation, rule of law, efficiency, and responsiveness in government decision-
making and administration. Good governance aims to ensure that public institutions are effective,
efficient, and trustworthy, promoting sustainable development and equitable outcomes for all
members of society.
Figure 1.6 Business Ethics Image Source: https://rb.gy/x6inde

WHAT IS A GOOD GOVERNANCE?

According to Chen (2021), corporate governance is the set of rules, policies, and
processes that guide and control a company. Corporate governance is balancing the interests of a
company's numerous stakeholders, which include shareholders, top management executives,
consumers, suppliers, financiers, the government, and the community. According to Lutkevich
(2018), corporate governance is the set of rules, practices, and regulations that govern how firms
are run, regulated, and controlled. Internal and external elements affecting the interests of a
company's stakeholders, including shareholders, customers, suppliers, government regulators,
and management, are all included in the definition. Corporate codes of ethics are internal policies
designed to ensure that employees act fairly and honestly. The goal of company legislation to
foster information transparency is repeated in codes of ethics. The main issues with codes of
ethics are that they do not compel conformity and there are few consequences for violating their
terms. As a result, corporate actors often disregard these prohibitions in favor of self-interested
behavior. Gordon (2021).
PRINCIPLE OF GOOD GOVRNANCE

 Participation - Participation in the concept of good governance here, according to

UCLG (2021), is an opportunity for everyone to voice their opinions through institutions
or representations. Furthermore, everyone, without exception, has the right to association
and speech.
 Rule of law - Good laws, institutions, and processes must be in place for governments to
promote accountability, stability, equality, and access to justice for all. This eventually
leads to respect for human rights and environmental protection. It also aids in the
reduction of corruption and violent conflict. Koulias (2020)
 Transparency- "Business transparency is the process of being open, honest, and
straightforward about various company operations," writes Hart (2022). Companies that
are transparent offer data on performance, small company revenue, internal processes,
and sourcing, pricing, and business values.
 Responsiveness - Fontanella (2023) defines responsiveness as the speed with which your
company can respond to assistance enquiries. It measures how quickly your agents
establish interactions as well as how long it takes them to accomplish the customer's
request.
 Consensus Oriented - Mulder (2018) The Consensus oriented choice Making Model
proposed by Tim Hartnett consists of seven processes that try to gain the approval of the
entire group for the choice. This unanimity is required for Consensus-Oriented Decision-
Making to occur. It is worth noting that a participant does not have to agree with a group
decision. Unanimity will not be jeopardized as long as he can step aside and recognize
that the majority has made the choice. It is the group leader's responsibility to guide the
entire team through all of the Consensus Oriented Decision-Making procedures.
 Figure 1.5 Consensus Oriented Decision-making Model (CODM) (Source: https://rb.gy/hwvies)

 Equity and Inclusiveness- Equity, as defined by Heinz (2021), is the act of ensuring that
processes and programs are unbiased, fair, and produce the best possible outcomes for all
individuals. Inclusion is the process of making employees feel like they belong at work.
 Effectiveness and efficiency - According to Martins (2022), efficiency involves doing
things "right"—whether that means moving faster, getting more work done with less
resources, completing large projects on a reduced budget, or otherwise doing "more" with
"less." Working on the "right" things, that is, things that produce business value and
move the needle on company goals, is what it means to be effective. Few teams today are
good at connecting their current work to larger organizational goals.
 Accountability - according to Kenton (2022), is the acknowledgment of responsibility
for honest and ethical behavior toward others. A company's obligation in the business
sector extends to its shareholders, employees, and the larger community in which it
operates. Accountability involves a willingness to be judged on performance in a broader
sense.

BRING IT HOME

Title: Practicing Good Governance

Objective: To provide college students with practical guidance on how to practice good
governance principles in their personal and academic lives.
Assessment
 1. Define good governance and explain its importance in promoting transparency,
accountability, and ethical behavior in society.
2. Provide examples of good governance practices in various settings (e.g., government,
business, nonprofit organizations).
3. Discuss the role of students in promoting good governance on campus and in the wider
community.
4. Provide examples of how students can practice good governance in their academic work,
extracurricular activities, and personal interactions.
5. As a student, identify areas you can make a positive impact through practicing good
governance principles.
6. Outline the key principles of good governance, such as transparency, accountability,
participation, and rule of law.
7. Provide examples of how these principles can be applied in different contexts (e.g.,
decision-making, resource allocation, conflict resolution).
8. Provide insights about how these principles can be balanced in real-world situations.
9. Provide practical guidance on how to practice good governance principles in various
settings.
10. Provide a step-by-step guide on how to develop a code of conduct or ethical guidelines.
11. Summarize the key points covered in the book and emphasize the importance of
practicing good governance in promoting a just and equitable society.

THE 4PS OF GOOD CORPORATE GOVERNANCE

1. People - People are prioritized in the Four Ps because they exist on all sides of the
business equation. They are the founders, the board of directors, the stakeholders, the
consumers, and the impartial observer .People are the organizers who decide on a goal to
work toward, create a consistent procedure to attain it, assess their performance
outcomes, and use those outcomes to improve themselves and others as people. Yes, it is
cyclical, but it must begin with people. Process PA team (2020)
2. Process - Process refinement is essential for processes to regularly achieve their goals.
Maintaining an eye on your governance procedures is always beneficial. Can they be
made more efficient? How can I be more effective in accomplishing my goal? Olivia
holds to (2022)
3. Performance - According to Rathod (2021), one of the most important talents for any
business is performance analysis. It entails comparing the actual performance to the
standard performance in order to measure its efficiency. In Corporate Governance,
performance analysis can be used to reduce deviations as well as to eliminate non-
performing policies and initiatives.
 4. Purpose - The aim of the organization then influences the creation of the company's
principles, policies, and slogan. The company cannot survive in the long run unless it has
a clear and well-defined goal. Impoff (2023)
Corporate governance has numerous advantages. Overall, it assists businesses in
achieving their objectives in a transparent and responsible manner. The following are of the most
significant advantages of maintaining an effective corporate governance framework that clearly
specifies the roles of stakeholders, managers, and other essential people:
Mitigate risk
To mitigate risk means to take actions or measures that reduce the likelihood or impact of
a potential negative outcome or loss. It involves identifying potential risks and taking proactive
steps to minimize their potential impact. Mitigating risk is a common practice in various
industries and areas of life, such as business, finance, healthcare, and personal safety.
Improves capital flow
Strong company governance influences capital flow as well. This is because strengthening
investor, bank, and other lender confidence in the company makes it easier to get funds when the
organization requires it.
Encourage positive behavior
It is not difficult to encourage positive behavior in your staff. It only takes a little
comprehension, gratitude, and innovation.
Boosts corporate reputation
That entails developing a brand image that resonates with your target market and maintaining
that brand image by promoting a consistent image throughout all of your activities. And we're
not just talking about advertising.
Improves decision-making
When we make decisions at home or in private, they have little impact on others. However,
actions made in the workplace, industry, or any other area involving groups can have a
significant impact on others.
Builds morale, reputation, and a legacy
Implementing practices that support good governance strengthens a company's identity,
allowing stakeholders and potential investors to have greater faith in you, allowing you to
establish better, long-term partnerships.
 SELF CHECK QUESTION

1. What is corporate governance, and why is it important for businesses?

2. What are the benefits of having a well-defined system of corporate governance in place?
3. How can good corporate governance help to improve a company's reputation and build
trust with stakeholders?
4. In what ways can good corporate governance help to mitigate risks and ensure
compliance with regulatory requirements?
5. What are some examples of companies that have demonstrated strong corporate
governance practices, and how have these practices contributed to their success?
6. How does good corporate governance help to foster a culture of transparency,
accountability, and ethical behavior within an organization?
7. What are some of the challenges that companies may face when implementing good
corporate governance practices, and how can these challenges be addressed?
8. How can companies measure the effectiveness of their corporate governance practices,
and what metrics can be used to evaluate performance in this area?
9. In what ways can investors and other stakeholders benefit from a company's commitment
to good corporate governance practices?
10. How can individuals and organizations work together to promote good corporate
governance and drive positive change in the business world?

8.3 | Navigating the Complexities of Creating and Implementing

Effective Corporate Social Responsibility Policies in
Entrepreneurial Ventures

In this chapter, the focus would be on the importance of developing effective corporate
social responsibility (CSR) policies in entrepreneurial ventures. The chapter would explore the
complexities involved in creating and implementing these policies, such as understanding the
local regulatory environment, identifying key stakeholders, and aligning CSR goals with the
company's overall mission and values.
The chapter would also delve into the ethical considerations that arise when developing
and implementing CSR policies, such as balancing the interests of various stakeholders and
ensuring that the policies are aligned with the company's core values. Additionally, the chapter
would discuss strategies for measuring the impact of CSR policies and for communicating the
company's CSR initiatives to external stakeholders.
 Ultimately, this chapter would provide practical guidance for entrepreneurs looking to
develop effective CSR policies and integrate responsible business practices into their ventures,
while navigating the ethical and social complexities of these efforts.

8.3.1 | Introduction to Social Responsibility Policies

What is Policy?
In a business context, policy refers to a set of guidelines or rules that are established by
an organization to govern its operations and decision-making processes. Business policies are
developed to ensure consistency, uniformity, and compliance with legal and regulatory
requirements.1
What does a policy for business cover?
Business policies can cover a wide range of areas, including human resources, financial
management, marketing and advertising, customer service, and product development. These
policies may be formal or informal, written or unwritten, and they can be developed by top
management or department heads.2
Why is a policy for business important?
Business policies are essential because they provide guidelines and procedures that help
employees understand what is expected of them in terms of behavior and decision-making.
Policies promote consistency and fairness in decision-making, ensuring that employees are
treated equally and that similar situations are handled in the same way. Policies also help
organizations stay compliant with laws and regulations, reducing legal and financial liabilities.
Additionally, policies can foster a positive workplace culture by setting standards for behavior
that reflect the organization's values and goals. Overall, business policies are important tools for
creating a structured and organized business environment, promoting accountability, and
ensuring that the organization operates in compliance with legal and ethical standards. 3
Features of Business Policy
An effective business policy must have following features:4
1. Specific - A policy should be specific and well-defined to avoid any confusion in its
implementation. This means that it should clearly state what actions are required, who is
responsible, and what are the expected outcomes.
2. Clear - A policy should be unambiguous and free of any jargons or complicated
terminology. It should be easy to understand and interpreted in the same way by everyone
in the organization.
3. Reliable/Uniform - Policies must be consistent and uniform across the organization. This
helps in efficient implementation, as there is no room for interpretation or confusion.
 4. Appropriate - Policies should align with the organization's goals and objectives. They
should be relevant to the business needs and should not contradict any of the company's
values or mission.
5. Simple - Policies should be simple and easy to comprehend. This helps to ensure that
everyone in the organization understands them and can follow them without difficulty.
6. Inclusive/Comprehensive - Policies should have a wide scope and be comprehensive
enough to cover all relevant areas. This helps in avoiding any gaps or inconsistencies in
the policies.
7. Flexible - Policies should be flexible enough to allow for variations in implementation in
different scenarios. While policies should not be changed frequently, they should be
adaptable to different situations and should not be too rigid.
8. Stable - Policies should be stable and consistent over time. This helps to build trust and
confidence in the policies, and avoids any confusion or uncertainty among employees.
Challenges faced in creating and implementing effective Corporate Social Responsibility (CSR)
policies in entrepreneurial ventures. This includes;
1. Resource Constraints: Entrepreneurial ventures often face resource constraints, making
it difficult for them to allocate resources to CSR initiatives. Unlike established
companies, startups often have limited financial resources, manpower, and expertise,
making it challenging to prioritize and implement CSR initiatives.5
2. Lack of Awareness: Some entrepreneurs may not be aware of the importance of CSR, or
may not have the necessary knowledge and skills to develop and implement effective
CSR policies. This lack of awareness can lead to a lack of commitment to CSR
initiatives, which can limit the positive impact of these policies.6
3. Balancing Profit and Social Impact: Entrepreneurs are often focused on maximizing
profits and achieving business growth, which can sometimes conflict with their CSR
goals. Entrepreneurs may struggle to balance the need to generate revenue and the desire
to create a positive social impact, which can make it challenging to prioritize CSR
initiatives.7
4. Measuring Impact: Measuring the impact of CSR initiatives can be difficult for
entrepreneurial ventures, particularly if they do not have the resources to invest in
monitoring and evaluation. Without a clear understanding of the impact of their CSR
initiatives, entrepreneurs may struggle to justify the resources invested in these activities. 8
5. Aligning Values and Objectives: CSR policies must align with the values and objectives
of the entrepreneur and the business. If there is a disconnect between the values of the
entrepreneur and the CSR initiatives they are implementing, the policies may not be
sustainable in the long run.9
6. Lack of Legal Frameworks: In some cases, there may be a lack of legal frameworks and
regulatory support for CSR initiatives in certain countries or industries. This can create
challenges for entrepreneurs who want to implement effective CSR policies but face legal
barriers.10
7. Stakeholder Engagement: Effective CSR policies require stakeholder engagement and
collaboration. Entrepreneurs must engage with their employees, customers, suppliers, and
 other stakeholders to understand their expectations and incorporate their feedback into
CSR policies. However, this can be challenging for startups with limited resources.11

DON’T MISS THE

FUN

Title: "Social Responsibility Quest"

Gameplay: The player is presented with a virtual town and a list of social responsibility policies
that need to be implemented. The player must complete various quests and challenges in order to
enact these policies and make the town a more socially responsible place. Quests:
1. Recycling Challenge: The player must gather as much recyclable material as possible and
properly sort and dispose of it.
2. Community Service: The player must volunteer at a local charity or organization and
complete various tasks to help those in need.
3. Sustainable Energy: The player must find ways to reduce energy consumption and
implement renewable energy sources.
4. Diversity and Inclusion: The player must promote diversity and inclusion within the
community by organizing events and activities that celebrate different cultures and
backgrounds.
5. Ethical Business Practices: The player must encourage local businesses to adopt ethical
and sustainable practices.
3.8.2 | Factors to Consider when Developing CSR Policies

Identifying key stakeholders and their expectations

If stakeholders are not identified properly, the project and its outcomes cannot address all
the stakeholders’ expectations and concerns. Incomplete elicitation of the requirements from
stakeholders might leave some key requirements out of the equation, putting the project and its
outcomes in danger. Identifying key stakeholders and understanding their expectations is an
important aspect of effective stakeholder management. Here are some steps you can follow to
identify key stakeholders and their expectations:12
Internal stakeholders which are inside the organization, but not limited to, are:
 Project sponsor. The individual who bears the ultimate responsibility for the successful
completion of a project is known as the project sponsor. This includes selecting the
project manager and team, establishing measures for success, and guaranteeing that the
project is completed effectively.13
 Project manager. In a general sense, project managers (PMs) are accountable for
designing, coordinating, and supervising the execution of particular projects for an
organization while guaranteeing that these projects are finished within the scheduled
timeframe, budget, and scope.14
 Project team members. Project team members refer to the individuals who are directly
involved in carrying out one or more phases of a project. These team members can be
either internal staff or external consultants, and they may work on the project either full-
time or part-time. The specific responsibilities of project team members can differ
depending on the project and the team's composition.15
 PMO (Project Management Office). A project management office (PMO) is an entity
within a company that establishes and upholds the standards for project management.
This can be a group, agency, or department responsible for managing the organization's
projects. The PMO is accountable for maintaining the documentation and metrics related
to executing projects and is responsible for making sure that projects are completed on
schedule and within the budget.16
 Program manager. The programmed manager is accountable for ensuring the overall
consistency and completeness of the programme. They will establish and sustain the
programme's environment to facilitate the progress of each project within it, usually
through an efficient programme management office.17
 Project/Portfolio steering committee. A steering committee is a group of influential
stakeholders responsible for supervising and assisting a project in achieving its
objectives. These committees can be referred to by various names, such as stakeholder
boards, senior leadership teams, project working groups, or project oversight committees.
They monitor projects from the beginning to the end and provide direction and assistance
throughout the project life cycle.18
 Board of trustees. A board of trustees is a collective of individuals who are designated
or elected to oversee and govern the resources of an endowment, charitable foundation,
trust, or non-profit organization.19
 Company owners/founders. Company owners/founders are individuals who establish
and/or own a business entity. They are responsible for developing the company's vision,
mission, and strategies, as well as making critical decisions regarding the company's
operations, finances, and overall direction. Founders often invest their own money, time,
and effort into the company and are typically involved in the day-to-day management of
the business.20
 Top management. Top management refers to the highest level of executives in a
company, responsible for making strategic decisions that guide the overall direction of
the organization. This typically includes the CEO, CFO, COO, and other C-level
executives, as well as senior vice presidents and directors. Top management is
responsible for setting the company's goals and objectives, allocating resources,
managing financial performance, and ensuring that the organization operates efficiently
and effectively. They also play a key role in developing and implementing policies,
procedures, and initiatives to drive growth and success for the company.21
  Project managers of other projects in the organization. Project managers of other
projects in the organization are individuals who are responsible for planning, executing,
and delivering specific projects within a company. They oversee the project team,
manage resources, monitor progress, and ensure that the project is completed within the
established timeline and budget. They are accountable for the success of the project and
must communicate with stakeholders to keep them informed of progress and any
potential issues or risks. Project managers also ensure that the project aligns with the
company's goals and strategies and that it contributes to the overall success of the
organization.22
 Functional departments in the organization. Functional departments in an organization
refer to groups of employees who perform specialized tasks or functions that are critical
to the organization's success. These departments are typically organized based on their
specific expertise, such as finance, human resources, marketing, operations, and
information technology.23
 End users in functional departments. End users in functional departments refer to
employees who use the products, services, or technologies provided by the functional
departments to perform their job responsibilities. For example, end users in the finance
department might include accountants, financial analysts, or executives who use financial
reports or budgeting tools provided by the finance department to make decisions. In the
marketing department, end users might include sales representatives or marketing
managers who use customer data or marketing campaigns provided by the marketing
department to drive sales.24
External stakeholders which are outside the organization, but not limited to, are:
 Customers. Customers are individuals or organizations that buy products or services
from a company. They are important to a business because they provide the revenue
needed to sustain the company's operations and growth. Customers can be categorized as
B2C or B2B, depending on whether they are individuals or businesses. Understanding the
needs and preferences of customers is critical to developing successful products and
services, building brand loyalty, and growing the customer base. Companies must focus
on providing high-quality products and services, excellent customer service, and
competitive pricing to attract and retain customers.25
 End users outside the organization. An end user is a hands-on user who actually uses a
product on a regular or daily basis. End users are particularly important in product
development as they can provide feedback to developers to ensure that software products
function properly and are useful to those who need them.26
 Suppliers. Suppliers are individuals or businesses that provide goods or services to a
company. They are an essential part of a company's supply chain and are critical to the
success of the business. Suppliers can provide raw materials, components, finished
goods, or services that are necessary for the company's operations.27
 Contractors and subcontractors. The contractor bears the responsibility for the
construction work, including any part performed by the subcontractor, and is answerable
to the client. Subcontractors may engage in task-based contracts without a set end date,
 longer-term agreements that can be terminated at any point, or contracts with a fixed
duration.28
 Shareholders. A shareholder refers to an individual or entity that has invested capital in a
corporation in return for a portion of ownership, also known as a "share." The ownership
interest is represented by either common or preferred shares issued by the company and
owned by the shareholder. Essentially, shareholders are owners of the company, and the
number of shares they own determines the extent of their ownership stake. Shareholders
can participate in company decisions through voting rights and can receive dividends or
returns on their investment if the company generates profits.29
 Regulatory bodies. A regulatory body is a public organization or government agency
that is tasked with the legal oversight and control of various aspects of human activity.
The regulatory body's primary responsibility is to establish and enforce standards that
help to ensure the safety, quality, and fairness of the activities it regulates. This might
include monitoring and regulating industries such as healthcare, finance, energy,
telecommunications, and transportation.30
 Government agencies. Government agencies are organizations established by a
government to perform specific functions, such as regulation, administration, or provision
of public services. They are usually created through legislation or executive order and can
operate at the national, state, or local level.31
 Current and potential competitors. Current competitors are businesses or companies
that are already offering products or services in the same market or industry as the
company in question. These businesses are actively competing for the same customers
and market share. On the other hand, potential competitors are businesses or companies
that have the potential to enter the market and become competitors in the future. They
may not currently be operating in the same industry, but they possess the resources,
capabilities, or technology that could enable them to enter the market and pose a threat to
the existing companies.32
Conducting a materiality assessment to identify key social and environmental impacts
Materiality assessment is the process of determining which social and environmental
issues are most significant to a company and its stakeholders. This process involves gathering
information and data about the company's operations, products, services, and supply chain, as
well as engaging with stakeholders to understand their concerns and expectations. The goal of a
materiality assessment is to identify the issues that are most important to the company and its
stakeholders, and to prioritize those issues for action. Properly planned and executed, an ESG
sustainability materiality assessment:33
 Ensures that business strategy takes significant social and environmental topics into
account Identifies trends that may impact the company’s ability to create value in the
long-term
 Identifies areas of primary interest to important stakeholders
 Enables different functions of the business to seize opportunities to stay ahead of
competitors
  Prioritizes resources for sustainability issues that matter most to the business and
stakeholders
 Highlights areas to manage and monitor issues that are important but not currently
addressed Highlights areas where the company is increasing or decreasing value for
society

Key Steps in the Materiality Assessment Process

The following is a checklist to ensure that all necessary steps in a materiality assessment are
taken:34
 Identify stakeholders
 Conduct initial stakeholder outreach
 Identify and prioritize issues to be measured
 Design and launch survey
 Interview chosen stakeholders
 Ask stakeholders to rank ES topics in terms of importance
 Analyze insights gathered
 Benchmark results against peers and competitors
Aligning CSR policies with the company's values and business strategy
Corporate Social Responsibility (CSR) is a business approach that aims to create a
positive impact on society and the environment while also achieving business goals. To align
your CSR strategy to your company values means to ensure that your CSR initiatives are
consistent with your organization's core values and beliefs. This alignment can help create a
sense of purpose and a shared vision among employees, customers, and stakeholders.
When a company's CSR strategy reflects its values, it demonstrates a commitment to
responsible business practices and can enhance the company's reputation and brand image.
Moreover, aligning CSR strategy with company values can also help in attracting and retaining
employees, as well as fostering a positive relationship with stakeholders. Therefore, it is essential
to carefully evaluate your company's values and align your CSR strategy to ensure that your
organization is making a positive impact in the world while staying true to its core beliefs. Here
are some steps you can follow to align your CSR strategy to your company values:35
 Identify your company's core values: Your company's core values should be the
guiding principles that drive your business operations. You need to identify these values
and prioritize them based on their importance to your business.
 Evaluate your CSR initiatives: Evaluate your existing CSR initiatives to determine how
well they align with your company values. Identify the gaps between your CSR initiatives
and your core values.
 Realign your CSR strategy: Once you have identified the gaps, it's time to realign your
CSR strategy to better reflect your company values. You may need to make changes to
 your existing initiatives or develop new ones that better align with your core values.
 Communicate your values: Communicate your core values to your employees,
customers, and stakeholders. It's essential to ensure that everyone in your organization
understands your company's values and how they relate to your CSR strategy.
 Monitor and review your progress: Finally, monitor and review your progress regularly
to ensure that your CSR strategy continues to align with your company values. This will
help you identify any areas where you may need to make adjustments.
Ensuring compliance with relevant laws and regulations
Compliance with relevant laws and regulations is essential for any business or
organization to operate ethically and legally. Failure to comply with regulations can result in
serious consequences, such as legal fines, reputational damage, and loss of business licenses. To
ensure compliance, organizations should establish and maintain a robust compliance program.
Some steps that can be taken to ensure compliance with laws and regulations include:
1. Conducting regular audits: Regular audits can help identify potential areas of non-
compliance and ensure that the organization's policies and procedures are up to date and
effective.36
2. Establishing a compliance team: Organizations should establish a team responsible for
ensuring compliance with laws and regulations. This team should have the necessary
skills and expertise to navigate complex regulatory environments and keep the
organization informed of any changes in the regulatory landscape.37
3. Training employees: Training employees on relevant laws and regulations can help
ensure that they understand the importance of compliance and know how to identify and
report potential violations.38
4. Documenting policies and procedures: Organizations should document their policies
and procedures to ensure that they are followed consistently and effectively.39
5. Monitoring third-party relationships: Organizations should ensure that their vendors,
suppliers, and other third-party relationships are compliant with relevant laws and
regulations.40
6. Responding to violations: Organizations should have a plan in place to respond to
violations promptly and appropriately.41

2.8.3 | Strategies for Implementing CSR Policies

What is CSR Strategy?

A CSR strategy refers to a detailed plan that organizations and funders develop to
implement and assess their corporate social responsibility initiatives. The strategy involves
identifying specific areas of focus, designing programs that align with their values and goals,
determining how to promote and communicate the initiatives, and establishing evaluation
procedures to measure their success.42
Corporate social responsibility (CSR) initiatives are most effective when supported by a
well-developed strategy that outlines specific focus areas, program design, promotion and
communication approaches, and evaluation procedures. Successful companies often share their
strategies publicly, as Nestle has done with its “Creating Shared Value” approach. This strategy
includes long-term goals for serving individuals, families, communities, and the planet, as well
as measurement procedures and transparent performance and reporting.43

Ethical and responsible business practices (Source: https://www.nestle.com/sustainability/responsible-business)

Developing a corporate social responsibility (CSR) strategy for your company can have a
huge impact on society. But there’s also pay-back for the organization too in enhancing public
reputation, employee engagement and developing the skills of your workforce. It can also help
attract talented new employees to your organization who want to work for a company whose
values they believe in. It can enhance business performance because consumers often buy from
suppliers whose vision and values resonate with their own. Here are some steps to consider for
developing a CSR strategy. 44
1. Know your Business
A CSR (Corporate Social Responsibility) strategy is most effective when it is
closely aligned with the nature of the business being conducted. It should complement
and reinforce the company's existing activities, while also being consistent with the
values and causes that are important to its customers. For instance, if a company is in the
pet food business, it would be appropriate to support an animal charity such as the
RSPCA, Dog's Trust or a local animal shelter. Similarly, if a company sells women's
clothing or beauty products, it would be fitting to support female-friendly causes such as
a breast cancer charity or a women's refuge. By linking CSR initiatives with the
company's core business and values, it becomes more meaningful and resonant with
customers, increasing the likelihood of their support.
2. Make sure you’ve already for the basics right
Before investing time, financial and staff resources into social responsibility
initiatives, it is important to ensure that a company has taken care of its own affairs. This
means implementing measures to reduce environmental waste, increase recycling, source
products sustainably, reduce the carbon footprint, promote local employment and pay a
 living wage. Without addressing these internal concerns, any efforts to support good
causes may not be effective, and may even be perceived as insincere or hypocritical. By
taking care of its own affairs first, a company can establish a solid foundation for its
social responsibility initiatives, and ensure that it is making a meaningful and positive
impact.
3. Involve your colleagues
Collaborating with colleagues at all levels is crucial when developing a CSR
(Corporate Social Responsibility) strategy. The strategy should be reflective of the
company's values and goals, and should also inspire passion in all members of the
organization. By engaging in discussions with colleagues on how to give back to the
community or support a particular charity or cause, a company can discover creative
ways to develop its CSR program. This collaborative approach not only helps to build
consensus and commitment towards the program, but can also generate new ideas and
approaches that are aligned with the company's objectives and values. By involving
everyone in the process, a company can create a more meaningful and effective CSR
program that reflects the shared vision and aspirations of its members.
4. Think about what you can offer
To develop a CSR strategy, it's important to assess the key skills within your
organization and determine what sets you apart from other organizations. This unique
skill-set should be combined with your passions to identify ways in which your company
can make a positive difference. For instance, Greggs, a bakery firm in the UK, has
incorporated charity work into its CSR strategy through the Greggs Foundation, which
raises funds to support the Greggs Breakfast Club. This initiative provides food to school
breakfast clubs across the country, showcasing the company's commitment to addressing
social issues and making a meaningful impact in the community.
5. Look for opportunities.
To effectively implement your CSR strategy, it's important to stay informed about
local, regional, and industry sector news to identify potential opportunities to make a
difference. For instance, if your company has committed to supporting a local children's
charity, staying up-to-date with their news and events through regular meetings with the
fundraising manager or subscribing to their newsletters can enable your company to
sponsor events, fundraise for new equipment, or participate in charitable events as soon
as they become available. By keeping a pulse on relevant news and events, your company
can stay proactive and make a meaningful impact in the community.
6. Partner with experts.
A CSR program that produces positive results should allow your company to
highlight the effect of its time, resources, or financial investment. By collaborating with
experts on a local or national level, you can make a greater impact. For instance, if your
CSR strategy focuses on reducing your product's packaging impact on the environment,
why not collaborate with local recycling facilities, government agencies, or even
university students studying product design?
7. Manage your resources.
 After deciding the focus of your CSR program, it's crucial to manage the available
resources for the project. You should assess how much time your employees can spare
for CSR-related activities and the budget that can be allocated for funding these projects.
8. Think about the impact on profits.
While a CSR strategy primarily aims to create a positive impact on society or the
environment, it can also enhance the reputation of your business and attract new
customers or clients. Effective marketing of your CSR activities can create a positive
perception of your company and differentiate it from competitors. For instance, if you are
a law firm offering pro bono legal services to underprivileged individuals, you’re paying
clients may view your firm more positively and choose to do business with you.
9. Lead by example.
Effective leadership is crucial for the success of a CSR programme. It is important
to approach CSR initiatives as an integral part of the company's core values and mission,
rather than just an occasional project. To ensure this, companies can establish a CSR
Steering Group, or appoint CSR Champions or ambassadors throughout the organization
who are passionate and committed to the cause. These leaders can help to drive the CSR
strategy forward and inspire others to get involved.
10. Tell people about your good work.
Assisting charities, organizations, and other good causes to attain their objectives
through providing support, financial assistance, or fundraising efforts can result in
positive news coverage. In addition, a good CSR program can enhance a company's
reputation. Collaborating with stakeholders to inform the media and the wider community
about the progress and impact of your CSR investment should not be overlooked.

Combining Corporate Social Responsibility with Business Goals and

Objectives
The concept of corporate social responsibility (CSR) has been gaining momentum for
more than ten years, and it is not a new movement. CSR is concerned with how businesses
manage their processes in a way that positively impacts society as a whole. With the growth of
CSR, questions have arisen about how to define the concept and how to integrate it into an
organization's larger goals and objectives. The Dow Jones Sustainability Index has established a
widely accepted definition of CSR as "a business approach that generates long-term shareholder
value by embracing opportunities and managing risks arising from economic, environmental, and
social developments." The Dow Jones Sustainability Index evaluates expertise in five areas
specifically.45
 Strategy: This refers to how companies incorporate economic, environmental, and social
aspects into their long-term business strategies while maintaining their competitiveness
and reputation. It's about finding opportunities to create value while managing risks.
 Financial: This area focuses on meeting the financial expectations of shareholders while
maintaining long-term economic growth, transparent accounting, and open
communication. It involves creating sound financial returns while also considering the
economic impact of business practices.
  Customer and Product: This pertains to investing in customer relationship
management, product innovation, and service innovation while using financial, natural,
and social resources in an efficient, effective, and economic manner over the long term.
This approach aims to foster customer loyalty by developing products and services that
address social and environmental concerns.
 Governance and Stakeholder: This area emphasizes the importance of setting high
standards for corporate governance and stakeholder engagement. It involves having
corporate codes of conduct, public reporting, and engaging stakeholders in decision-
making processes.
 Human: This focuses on managing human resources to maintain workforce capabilities
and employee satisfaction through organizational learning and knowledge management
practices, remuneration, and benefit programs. This approach aims to attract and retain
talented employees while fostering a positive work environment.

2.8.4 | Measuring the Impact of CSR Policies and Communicating CSR

Initiatives

Measuring the impact of Corporate Social Responsibility (CSR) policies is an essential

step to determine whether the policies are effective in achieving the desired social,
environmental, and economic outcomes. It is also important to communicate CSR initiatives to
stakeholders to showcase the business's commitment to social responsibility and sustainability.
What is a CSR Policy?
Corporate Social Responsibility (CSR) policies refer to the guidelines, commitments, and
actions taken by a company to integrate social, environmental, and ethical concerns into its
business operations and decision-making. These policies are designed to ensure that the company
operates in a sustainable and responsible manner, creating value not only for shareholders but
also for other stakeholders, including employees, customers, suppliers, and the wider
community.46
CSR policies typically cover a broad range of issues, including labor standards,
environmental impact, human rights, community engagement, supply chain management, and
ethical business practices. The policies are often developed in consultation with stakeholders and
are regularly reviewed and updated to reflect changes in the company's operations or external
environment.47
Examples of CSR policies may include commitments to reduce greenhouse gas
emissions, eliminate child labor in the supply chain, promote diversity and inclusion, support
local community development initiatives, and ensure that business operations are conducted in
an ethical and transparent manner. By implementing CSR policies, companies can demonstrate
their commitment to social responsibility, enhance their reputation, and contribute to sustainable
development.
Why Measure CSR?
Due to the increasing significance of ethical consumerism, measuring the effectiveness of
Corporate Social Responsibility (CSR) is not a straightforward process. To ensure that the CSR
return on investment (ROI) is adequate, a CSR assessment is necessary. A comprehensive CSR
assessment must consider the following: how well the company has integrated social
responsibility movements into its daily operations, the CSR theme being addressed
(environment, labor and human rights, ethics, or sustainable procurement) and how it is being
tackled, the company's adherence to legal requirements, the definition of CSR within the
company, and the involvement of stakeholders. In summary, to measure CSR effectiveness and
achieve an adequate ROI, a thorough CSR assessment is required that considers these critical
factors. A proper CSR assessment must consider the following:48
 How well the social responsibility movements have been integrated into the daily routine
of the company
 Which theme your CSR campaign is tackling (environment, labor & human rights, ethics,
or sustainable procurement)- and how it is doing so.
 If it’s all of them, how you are committing to each.
 Legal requirements where applicable. A definition of what CSR is to your company. The
engagement of stakeholders.
Communicating CSR Initiatives
Communicating Corporate Social Responsibility (CSR) initiatives is an important aspect
of demonstrating a company's commitment to social responsibility and sustainability. Effective
communication can help build trust, increase engagement, and promote the company's CSR
initiatives to stakeholders.
A key challenge in communicating an organizations’ corporate social responsibility
initiatives is making those initiatives sound like they matter – to the organization. That requires
an understanding that they do in fact matter, that they are more than just a ‘nice to have’.
So, what makes a good corporate social responsibility communicator? A good corporate
social responsibility or sustainability communicator has these attributes: 49
 Understands the key social and environmental issues which concern your stakeholders
and shares those concerns
 Accepts the importance of communicating without embellishment or bragging
 Understands how your social responsibility work adds value to your organization and fits
with its strategy
 Has good relationships with those collecting and analyzing social and environmental data
and the rest of the communications team
 Knows when and how to use social media
Five essentials to communicating corporate social responsibility
  And, when it comes to the communications themselves these communicators
know to:
 Leave out the self-congratulatory PR fluff (keep it factual and accurate)
Demonstrate alignment with your strategy and vision (ensure messages are
consistent)
 Use data to demonstrate what you’ve achieved (but only if it’s accurate)
 Explain how corporate actions add value to the organization
 Make it readable and interesting with innovative visuals portraying outcomes

DEBATE TIME

Activity: CSR Debate

Objective: To explore different perspectives on creating and implementing effective corporate social
responsibility policies in entrepreneurial ventures through a debate.
Instructions:
1. Divide participants into two teams - Team A and Team B.
2. Assign each team with a side to debate - Team A will argue in favor of implementing CSR
policies in entrepreneurial ventures, and Team B will argue against it.
3. Provide each team with 20-30 minutes to prepare their arguments.
4. Set up the debate by asking each team to present their arguments and counter-arguments.
5. Encourage the teams to use data and examples to support their arguments.
6. After the debate, facilitate a discussion to explore the strengths and weaknesses of both
perspectives.
7. Sample Debate Topics:
 Should CSR policies be mandatory for entrepreneurial ventures?
 Do CSR policies help or hinder the financial performance of entrepreneurial ventures?
 Should CSR policies focus more on environmental sustainability or social justice issues?
 Can CSR policies be effectively implemented in small entrepreneurial ventures?
 Is it ethical for entrepreneurial ventures to prioritize CSR over profitability?

8.4 |
UNDERSTANDING THE CORPORATE SOCIAL
RESPONSIBILITIES
Figure 8.4.1 Corporate Social Responsibility (Source: https://rb.gy/qzwomg)

UNDERSTANDING THE CORPORATE SOCIAL REPONSIBILITIY

According to Fernando J. (2022) Corporate social responsibility (CSR) is a self-
regulatory business model that assists a corporation in becoming socially accountable to itself, its
stakeholders, and the general public. Companies that practice corporate social responsibility, also
known as corporate citizenship, can be aware of the impact they have on all parts of society,
including the economic, social, and environmental. CSR is critical to a company's brand
reputation, consumer, employee, and investor attractiveness, talent retention, and overall
business performance. (Reckmann 2023)
CSR is commonly defined as the process through which a firm achieves a balance of
economic, environmental, and social imperatives ("Triple-Bottom-Line-Attachment") while also
meeting the expectations of shareholders and stakeholders. In this regard, it is critical to
distinguish CSR, which can be a strategic business management idea, from charity, sponsorships,
or philanthropy, refers to tactics implemented by firms as part of corporate governance to
guarantee that the company's operations are ethical and useful to society Corporate social
responsibility, often known as corporate citizenship, is a business strategy that encourages
businesses to consider the influence they have on the environment and community.
TYPES OF CORPORATE SOCIAL RESPONSIBILITY
In general, there are four main types of corporate social responsibility. A company may
choose to engage in any of these separately, and lack of involvement in one area does not
necessarily exclude a company from being socially responsible.
Environmental Responsibility
Environmental responsibility might go beyond the company's commitment to long-term
development. If environmental protection is part of your company's goal, you may honor it by
encouraging employees to take action.
Ethical Responsibility
 The goal of ethical responsibility is to ensure that an organization operates in a fair and
ethical manner. Organizations that accept ethical responsibility strive to be ethical by treating
all stakeholders fairly, including leadership, investors, employees, suppliers, and customers
Philanthropic Responsibility
In today's world, corporations are nearly expected to give back to the areas in which they
operate and to donate to causes that correspond with their company's vision. Businesses that do
this are fulfilling their philanthropic responsibilities. This charitable commitment might be as
simple as sponsoring a local nonprofit's yearly fundraiser or as complex as donating a portion of
a company's annual earnings to a worthy cause.
Economic Responsibility
Economic responsibility is a synthesis of environmental, ethical, and charitable social
responsibilities. Companies that practice economic responsibility take steps that benefit both the
business and society.

TRUE OR FALSE?

1. Is CSR about a company's responsibility to behave ethically and contribute to economic

development while improving the quality of life of the workforce and the community?
2. Is CSR only relevant for large multinational corporations?
3. Is CSR primarily concerned with maximizing profits for shareholders?
4. Can CSR help a company enhance its reputation, attract and retain employees, and
improve relationships with stakeholders?
5. Is CSR a legal obligation that all companies must comply with?
6. Can a company's CSR initiatives include supporting social and environmental causes,
promoting diversity and inclusion, and adopting sustainable business practices?
7. Does CSR remain unchanged over time and not adapt to evolving societal needs and
expectations?
8. Is CSR a substitute for government regulation and policies?
9. Does CSR have no impact on a company's financial performance and is only a cost
center?
10. Are companies that engage in CSR likely to outperform their competitors in the long run?

IMPORTANCE OF CORPORATE SOCIAL RESPONSIBILITY

It is critical that your firm operates in a manner that exhibits social responsibility.
Although it is not a legal necessity, it is considered good practice to consider social and
environmental issues (Collier 2018). The term corporate social responsibility refers to the
opportunity for all employees of a company to contribute to society, the environment, the
country, and so on (Juneja Prachi 2022)
Corporate responsibility benefits businesses in a variety of ways. One of them is that
businesses can charge higher prices for their goods and services. According to a Nielsen Global
Survey of Corporate Social Responsibility, more than half of the customers polled are willing to
pay more if the company is devoted to corporate responsibility. CSR is particularly important in
today's society, as people want to spend their money on products and brands that adhere to
ethical principles or whose values and activities coincide with their own personal convictions.
BENEFITS OF CORPORATE SOCIAL RESPONSIBILITY
As important as CSR is for the community, it is equally valuable for a company. CSR
activities can help forge a stronger bond between employees and corporations, boost morale,
and aid both employees and employers in feeling more connected to the world around them.
Aside from the positive impacts to the planet, here are some additional reasons businesses
pursue corporate social responsibility.
Brand Recognition
It contributes to brand equity by instilling a favorable image in the minds of consumers.10
CSR has also been identified as an additional technique to promote company profitability and
development. Brand identification is the degree to which a consumer can accurately identify a
specific product or service just by looking at its logo, tag line, packaging, or advertising
campaign. An aural cue, such as a jingle or theme tune linked with a brand, can also induce
brand identification.
Investor Relations
Investor Relations (IR) is a discipline that integrates finance, communication, and marketing to
efficiently manage the flow of information between a public company, its investors, and its
stakeholders.
 Employee Engagement
However, corporate social responsibility (CSR) programs may be one of the most successful
strategies to enhance employee engagement. According to studies, CSR programs increase
employee engagement by meeting a fundamental need among employees: finding meaning in
their work.
Risk Mitigation
Risk mitigation is the process by which a company works to limit its exposure to various
hazards. Obviously, organizations confront several risks, some of which can result in significant
disruption or financial loss. Mitigation is a wise action that every business should take to avoid
such unwelcome situations.
  Starbucks. Starbucks Community Stores intends to aid local non-profit groups in their
efforts to give education and training in order to eradicate poverty among the youthful
population. By the end of 2025, the company intends to open 100 Community Stores.
 Home Depot. Home Depot Inc's Corporate Social obligation (CSR) Analysis assists in
determining the company's obligation towards the three P's, namely Profit, People, and
Planet.
 General Motors. General Motors Company (GM) has a corporate social responsibility
policy that supports the global automotive industry's business growth objectives. The
CSR strategy of General Motors is focused on stakeholders' interests in the manufacture,
sale, and usage of GM automobiles.

WORK IT OUT

Title: Exploring Corporate Social Responsibility (CSR) Initiatives

Objectives: To help students understand the importance of Corporate Social Responsibility
(CSR) and its role in promoting sustainable and ethical business practices.
Instructions:
1. Divide the students into groups of 4-5.
2. Assign each group a company (or allow them to choose one).
3. Ask each group to research the company's CSR initiatives and create a short presentation
(3-5 minutes) on what they found. They should cover:
 What CSR initiatives the company is involved in.
 How these initiatives benefit society, the environment, or both.
 Whether the company could do more in terms of CSR, and if so, what. Have each
group present their findings to the class.
Critical Thinking Questions:
1. How might a company's CSR initiatives affect its reputation and bottom line? How can a
company balance its social responsibilities with its need to generate profits?
2. In what ways can a company's CSR initiatives benefit society and the environment, and
how can these benefits also contribute to the company's success?
3. Can CSR initiatives ever truly be considered "selfless," or are they always motivated at
least in part by a desire to enhance the company's image and reputation? Does this
motivation undermine the value of the initiatives?

8.5 | SOCIAL RESPONSIBILITIES

Image Source: https://rb.gy/fjf2g5

DEFINITION OF SOCIAL RESPONSIBILITY

Social responsibility requires corporations to act in ways that benefit society rather
than just the bottom line, in addition to achieving shareholder profit. It is becoming
increasingly essential to investors and consumers looking for investments that are not only
profitable but also benefit society and the environment.50When a firm or individual contemplates
acts that may harm the environment or society, those actions are deemed socially irresponsible.
Managers, according to this theory, must make decisions that maximize profits while also
protecting the interests of the community and society as a whole51.
A type of self-regulation that displays a company's accountability and commitment to
improving the well-being of communities and society through different environmental and social
indicators. 52. Sustainability is achieved through social responsibility. Adopting essential social
responsibility principles like accountability and transparency can assist any company or
institution secure its long-term viability and success.53
UNDERSTANDING SOCIAL RESPONSIBILTY
According to Marques 2018 as the globe gets smaller, companies and people must broaden their
perspectives and work harder to ensure a sustainable future. Excellent professionals are better
equipped with the knowledge and abilities to pave the way for success for their organizations and
society. Ganti 2022 "Social responsibility" refers to the obligation for people and organizations
to act in a way that benefits both the environment and society at large. Corporate social
responsibility (CSR), which refers to social responsibility as it relates to business, is a growing
topic of concern for companies as a result of altering social norms. 54CSR serves a variety of
functions, but its primary goal is to improve your company while ensuring that it has a beneficial
influence on the community in which it operates. It enhances the long-term viability, openness,
operational effectiveness, and even financial success of your company. Futurelearn (2021) 55
THE IMPORTANCE OF SOCIAL RESPONSIBILITIES
 Social responsibility is reflected through the values that businesses contribute to the
community, and social security plays a significant role in this. As a result, businesses are
focusing on improving their image, prestige, and brand development through the development of
corporate culture and business ethics, which is an effective solution with numerous good
benefits.56 In basic terms, "social responsibility" refers to a company's commitment to pursue
attainable and beneficial long-term goals for its employees and the society at large. 57
It is critical that your firm operates in a manner that exhibits social responsibility.
Although it is not a legal necessity, it is considered good practice to consider social and
environmental issues.58
Murphy (2021) Companies are increasing their emphasis on social responsibility,
whether they are championing women's rights, protecting the environment, or attempting to
eradicate poverty on a local, national, or global scale. From an aesthetics standpoint, socially
responsible organizations portray more appealing images to both consumers and shareholders,
which benefits their bottom lines.59
MCCULLOUGH (2023) Standing out from the crowd can be difficult when the
market is already packed. Corporations that demonstrate an obligation to numerous charitable
causes, on the other hand, are often seen as more marketable than corporations with virtually
nonexistent social responsibility initiatives. Thus, social responsibility marketing is critical for
firms that wish to retain or attract customers who care about the environment, social issues, and
economic growth.60

MIND SHIFT

1. What is social responsibility?

2. Which of the following is an example of social responsibility?
3. What is the triple bottom line
4. Why is social responsibility important?
5. What is the difference between ethics and social responsibility?
6. Which of the following is an example of a social responsibility initiative?
a. A company donating money to a political campaign.
b. A company implementing a recycling program in its offices.
c. A company lobbying against government regulations that protect workers' rights.
d. What is the difference between ethics and social responsibility?
7. Which of the following is NOT a stakeholder of a business?
a. Customers
b. Shareholders
c. Competitor
There are several advantages when a company chooses to be socially responsible, such as:
 1. Gives a company a competitive edge.61
2. Attracts strong candidates and increases retention
3. Makes your business attractive to investors
4. Improves business culture
5. Increase customer loyalty and advocacy
6. Improves company reputation
7. Improves profitability and value

DISADVANTAGES:
Here are the primary disadvantages to consider:
1. Cost of money to implement
2. Impacts profitability
3. Green washing

EXAMPLES OF SOCIAL RESPONSIBILITY IN CORPORATIONS

 Charitable giving and volunteer efforts
 Changes to company policies to improve or benefit the environment
 Improving labor policies and embracing fair trade

TYPES OF SOCIAL REPONSIBILITY

 Legal responsibility, according to Khosrow (2020), is the duty or obligation of a firm or a
corporate leader to comply with criminal and civil laws as well as public policy. 62
 Economic responsibility, according to Stobierski (2021), is the practice of a corporation
basing all of its financial decisions in its resolve to do well in the areas stated above. The
ultimate goal is not merely to maximize profits, but to ensure that corporate operations
have a positive influence on the environment, people, and society. 63
 According to Pacific Oak College (2021) Ethical Responsibility, being ethically
responsible implies ensuring a company engages in fair business practices across the
board, which includes treating all employees, stakeholders, and consumers ethically and
with respect.64
 The core tenet of environmental ethics, according to Blackman (2021), is that nature has
intrinsic value. This suggests that nature and its components are not only means to an
end, but are ends in and of themselves.65

MAIN BENEFITS OF SOCIAL RESPONSIBILITY

Lin (2019) claims that it fosters public trust. 88% of consumers indicated they were more
likely to spend money on a company that supports and participates in socially beneficial
activities. The corporation increases consumer trust through aiding society, whether through
monetary donations or volunteering. In the long run, the company will grow in popularity. And,
one day, it may receive press coverage, which would be a significant boost to the company's
public relations efforts. CSR improves the company's reputation.66

Increased Brand Recognition for Webber (2023) Using a socially aware CSR endeavor to
tap into the zeitgeist might bring your business to the attention of people who might not have
heard of it otherwise. People are yearning for happy stories. If you identify your brand with
constructive social and political change, you might receive media publicity that advertisers
cannot purchase.67

Russel (2018) claims that increased employee satisfaction. How a corporation handles its
community reveals a lot about how it treats its employees. People who feel valued and supported
at work are often more productive and contented. Giving your employees the opportunity to
volunteer, especially during working hours, fosters a sense of community and a connection to the
surrounding community. 68

Consumers deliberate over the things and services they purchase. According to a Nielson
survey, 66 percent of respondents pay more for products and services from socially responsible
companies. When studying the demographic of willing to pay more participants, 56 percent
stated that "a brand being known for its social value" was a top purchasing motivation. Another
buying drive, "a brand with community commitment," attracted 53% of those willing to pay
more. Customers will be loyal to your firm if their values match yours.69

WORK IT OUT
Critical Thinking Questions
1. How can social responsibility positively impact a company's bottom line? Are there any
specific examples of companies that have experienced financial benefits from engaging in
socially responsible practices?
2. How does social responsibility contribute to employee morale and retention? Are there any
specific ways that companies can use social responsibility initiatives to attract and retain
talent?
3. In what ways can social responsibility help companies build a strong reputation and brand
image? Are there any examples of companies that have successfully leveraged social
responsibility to enhance their brand?
4. Can social responsibility help companies mitigate risk? Are there any specific examples of
companies that have avoided or mitigated reputational or legal risks through their social
responsibility initiatives?
5. How does social responsibility contribute to long-term sustainability and growth for
companies? Are there any examples of companies that have built sustainable business
models by integrating social responsibility into their operations?
8.6 | Roles and Responsibilities of the Entrepreneur

The mindset of an entrepreneur has never been more crucial than it is right now. They
constantly come up with new ideas that have the potential to change the world for the better or
worse, but more importantly, they make a significant contribution to society by guiding us
toward practical solutions for problems like finance and social well-being as well as finding
creative ways to address complex issues like climate change.

Figure 1. Present day role of entrepreneur in society (Source: Austin Distel)

Any economy needs entrepreneurship because it plays a key role in fostering

socioeconomic growth and development. From small towns with few resources throughout
history to the contemporary world, where they play a crucial role on a national and international
level, entrepreneurial businesses may be found everywhere.

8.6.1 | Who is an entrepreneur?

A person who creates an enterprise around an idea is called an entrepreneur. They oversee
operations and take up the risk of the company’s success. Any types of people that have the
desire to start a business and work for themselves are considered entrepreneurs, including small
business owners, content creators, startup founders, and everyone else.
Here are some of these entrepreneur characteristics:

 Self-motivation – Entrepreneurs are highly motivated people who have a burning

ambition to invent and produce new things. They have unwavering confidence in their
abilities and their ideas, which keeps them moving forward in the face of all the
challenges.
  Decisiveness – Entrepreneurs often have to make hasty, difficult decisions that will
influence both them and the success of their business. Their choices affect every worker,
employee, and other stakeholder. As a result, they cannot afford to be uncertain.
 Risk Tolerance – More than usual risk-taking is required in entrepreneurship, which
frequently leads to failure and financial loss. In exchange for success, an entrepreneur
takes risks.
 Creativity – Entrepreneurs have the imagination to recognize business opportunities that
others miss.

8.6.2 | Why entrepreneur important in our society?

The creation of employment possibilities is one of an entrepreneur’s most significant
contributions to society. With the creation of official and informal possibilities, it closes the job
gap. Economic growth is accelerated by entrepreneurship. They encourage new employment by
developing new goods and services, which eventually accelerates economic growth.
Entrepreneurs generate money that benefits both themselves and other members of society.
Only small and medium-sized businesses (SMEs) in the Philippines were responsible for more
than 60% of all jobs. This is a significant number, and many people were able to survive only
because of these businesses. Many Filipinos would be out of work without entrepreneurs.

WORK IT OUT

Activity: To better understand the roles and responsibilities of an entrepreneur, you can try the following
activity:

1. Research a successful entrepreneur in your industry or field of interest.

2. Identify the key roles and responsibilities that this entrepreneur has undertaken to build and grow their
business.
3. Create a visual representation of these roles and responsibilities, such as a mind map, diagram, or
infographic.
4. Share your visual representation with others and discuss what you have learned about the importance
of entrepreneurship in driving economic growth and innovation.

Critical Thinking Question:

How might the world be different today if a major historical event had gone differently? For example,
how might the world be different today if Germany had won World War II, or if the Industrial Revolution had
never occurred? Consider the political, economic, and social ramifications of such a hypothetical scenario, and
think about how it might have changed the course of history. What implications might such a scenario have for
us today, and how might it affect our understanding of the world and our place in it?
8.6.3 | The Role of Entrepreneur

Due to their ability to foresee requirements and take the initiative to bring viable new ideas to
market, entrepreneurs are crucial to the health of any economy. Entrepreneurship that is
successful in assuming the risks of starting a business is rewarded with earnings, notoriety, and
chances for future expansion. Here are some of the roles of entrepreneur:
Vision Role
The vision of an entrepreneur is essentially the dream, the aim, and the target of his or her
business. A company’s vision is essentially what sets it apart from competitors while also
serving as a goal that entrepreneurs want to accomplish.
For example, Kevin F. Adler wanted to help homeless people. He created Miracle
Messages, a volunteer-based nonprofit organization with a goal of helping homeless people
reconnect with loved ones. The vision for this organization includes building a vast network of
volunteers and partnerships to stop homelessness and bring people together.
Having a vision role is significant because your company cannot create a clear plan that
moves it in the direction of the intended outcome without vision. Long-term objectives cannot be
weighed by executives against short-term aims. According to Helen Keller, “The only thing
worse than being blind is having sight with no vision”.
Implementation Role
The process of putting plans into practice to achieve a desired result is known as
implementation. In essence, it’s the art of accomplishing things. Any organization’s ability to
carry out choices and carry out crucial procedures effectively, consistently, and efficiently
determines how successful it will be. A strong implementation plan clearly describes the roles,
responsibilities, and due dates. This makes it possible for staff members at all levels of the
organization to comprehend their tasks and the goal they should strive for. A strong
implementation strategy also makes sure that everyone is working toward the same objective. By
properly putting the business ideas into practice, the entrepreneur will be able to utilize the
talents and skills of the team members of the organization to further the mission, aims, and
objectives of the company.
Counseling Role
Counseling is a talking treatment that enables individuals to speak with qualified experts
about their issues in a calm and secure setting. You discuss your problems in detail during this
phase, either with the goal of resolving them or to thoroughly explore your ideas. An excellent
service that can benefit you in all facets of your life is counseling. Whether managing stress,
motivation, or any other issues that business owners frequently encounter.
 Similar to business owners, it’s not all about the aspirations. They are always available as
a counselor. You can approach them to discuss any problems or difficulties you may be having
in your business. A business counselor is also someone who is prepared and eager to assist you
in making the most of your startup or small business in the least amount of time while ensuring
that you are on track to remain operational for the long term.
Evaluator Role
Evaluation is a method that business owners use to gauge their own success in terms of
achieving their objectives. The entrepreneur starts the evaluation process by establishing clear
goals and objectives and then creating a strategy to attain them. The next step in the evaluation
process is to objectively gauge how far those objectives have been reached. The evaluation
report that emerges can offer insightful advice for developing or maintaining the entrepreneur’s
business plan.
A business valuation, which is the process of figuring out a company’s financial value, is
also known as a business appraisal. This procedure could entail determining the company’s
market value as well as calculating its costs and asset count.

8.6.4 | The Responsibilities of entrepreneur

Innovation
For today’s entrepreneurs, innovations are crucial. It is they who are in charge of
innovation. Innovators may take an existing product into account when making changes by
analyzing how its function has changed over time in order to improve on quality while also
making sure that this most recent version complies with all requirements needed by potential
customers; innovators may take an existing product into account when making changes by
analyzing how its function has changed over time in order to improve on quality while also
making sure that this most recent version complies with all requirements needed by potential
customers.
The capacity to transform an idea into reality is entrepreneurial innovation. It is about
improving existing processes and coming up with new ones. Entrepreneurship innovation
focuses on developing new goods or services, enhancing current ones, or discovering new
markets for them.
Assumption of Risk
Entrepreneurial risk-taking is the process of locating, assessing, minimizing, and testing
out potential possibilities and tactics that can help you establish or expand your business but
could also result in financial or other losses.
Research
A new business idea needs market research. You should never undervalue the importance
of market research. Long-term success of many new firms can be due to the owners’ ongoing
market research to identify their target market, customer difficulties, and viable competition.
In order to generate new economic development or breakthroughs, entrepreneurial
research aims to collect data from a variety of domains (companies, industries, finances,
markets/consumer behavior, and trademarks/patents). Entrepreneurship research can help
founders and investors better understand a product’s concept and the strategies that can be used
to promote it. With this knowledge, one can decide whether or not the proposal is workable and
how to succeed.
Management
In order to ensure that enterprises have a positive and lasting influence, responsible
management is the dedication to acknowledging the ethical and environmental implications of
business actions.
Management responsibilities include organizing, leading, and controlling. Monitoring and
controlling are processes to make sure that what has to be done is being done.

SELF QUESTION

How can an entrepreneur balance their responsibility to make a profit with their ethical
responsibilities to society and the environment? In other words, what strategies can entrepreneurs
use to ensure that their business practices align with their values and contribute to a sustainable
and just society?
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Key Terms
Adaptation: The ability to adjust and change in response to new circumstances or challenges.
Business strategy: A plan of action that outlines how a business will achieve its goals and
objectives.
Decision-making: The process of choosing among alternative courses of action based on a set of
criteria or values.
Economic growth: An increase in the production of goods and services in an economy over time.
Entrepreneurship: The process of creating, launching, and managing a new business venture.
Ethics: The principles of right and wrong that guide individual and organizational behavior.
Financial management: The process of planning, organizing, controlling, and monitoring
financial resources in order to achieve organizational goals and objectives.
Innovation: The development and implementation of new ideas, products, or services that create
value for customers and society.
Leadership: The ability to inspire and guide others towards a common goal or vision.
Market analysis: The process of gathering and analyzing information about a specific market or
industry in order to make informed business decisions.
Opportunity identification: The process of recognizing and evaluating potential business
opportunities.
Philanthropy: The act of donating time, money, or resources to charitable causes or
organizations.
Resource acquisition: The process of obtaining the necessary resources (such as funding, talent,
or equipment) to start or grow a business.
Risk-taking: The willingness to take calculated risks in order to achieve a desired outcome.
Social responsibility: The obligation of businesses to act in the best interests of society and the
environment.
Sustainability: The ability of a business to operate in a way that meets the needs of the present
without compromising the ability of future generations to meet their own needs.
Team building: The process of creating and developing effective teams that can work together to
achieve common goals.
Vision and mission: The overarching goals and purpose of a business, and the strategies and
values used to achieve them.
Customer satisfaction: The degree to which a business's products or services meet or exceed the
expectations of its customers.
Summary
8.1 | Ethics in Entrepreneurship
Ethics in entrepreneurship refers to the principles and values that guide the behavior of
entrepreneurs in creating, managing, and growing their businesses. It encompasses issues such as
social responsibility, sustainability, integrity, transparency, and accountability. Entrepreneurs
must recognize that their actions have an impact not only on their businesses but also on society
as a whole. Therefore, they need to make ethical decisions that consider the interests of all
stakeholders, including employees, customers, investors, and the environment. Ethical behavior
in entrepreneurship can lead to long-term success and sustainability for businesses, as it helps to
build trust and credibility with stakeholders. On the other hand, unethical behavior can lead to
reputational damage, legal issues, and financial losses. In summary, ethics in entrepreneurship is
essential for creating and maintaining a sustainable and responsible business that benefits all
stakeholders.
8.2 | Good Governance
Good governance is a set of practices and principles that promote transparency,
accountability, fairness, and effectiveness in the management and decision-making of institutions
and organizations. It involves creating and implementing policies and procedures that ensure
resources are managed in a responsible and sustainable manner and decisions are made in the
best interests of all stakeholders. The key components of good governance include transparency,
accountability, participation, the rule of law, and efficiency and effectiveness. Good governance
is important for sustainable economic and social development as it encourages investment and
promotes the efficient use of resources.
8.3 | Strategies for Implementing CSR Policies
The chapter discusses the importance of corporate social responsibility (CSR) policies in
entrepreneurial ventures and the benefits of incorporating responsible business practices. It
outlines the factors that entrepreneurs must consider when developing CSR policies, such as
identifying stakeholders and ensuring compliance with laws and regulations. The chapter also
explores strategies for implementing CSR policies, ethical considerations, and challenges of
measuring the impact of CSR policies. It concludes by discussing the challenges and
opportunities involved in implementing CSR policies in entrepreneurial ventures and emphasizes
the importance of engaging with local communities and building social capital to create positive
social and environmental impacts.

8.4 | Understanding the Corporate Social Responsibilities

Corporate social responsibility (CSR) refers to the ethical and social responsibilities that
companies have towards their stakeholders, including employees, customers, suppliers,
communities, and the environment. CSR involves the commitment of companies to conduct their
operations in an ethical and sustainable manner, taking into account the impact of their activities
on society and the environment. The core principles of CSR include ethical behavior,
sustainability, stakeholder engagement, philanthropy, and transparency. Companies that adopt
CSR principles can benefit from improved reputation, enhanced employee morale, increased
customer loyalty, and improved financial performance. CSR also has the potential to contribute
to the sustainable development of society and the environment.

8.6 | Roles and Responsibilities of the Entrepreneur

Entrepreneurship involves the creation and management of a business

venture with the aim of generating profit and creating value for stakeholders. The
role of the entrepreneur is to identify and pursue business opportunities, take
calculated risks, and innovate in order to achieve success. The responsibilities of
the entrepreneur include developing a business plan, securing financing, managing
resources, building a team, marketing and selling products or services, and making
strategic decisions that ensure the long-term sustainability and growth of the
business. Entrepreneurs also have a social responsibility to operate their businesses
in an ethical and sustainable manner that takes into account the impact of their
activities on society and the environment. They must be aware of the needs and
expectations of their stakeholders and work towards creating value for them while
also contributing to the sustainable development of society and the environment.

Review Questions:
1. What is the role of ethics in entrepreneurship?
2. What are the core principles of good governance and how are they important
for sustainable development?
3. What are the key strategies for implementing CSR policies in a business
organization?
4. What is the meaning of corporate social responsibility and how does it
benefit companies and society at large?
5. What are the core principles of CSR and how can companies adopt them in
their operations?
6. How can entrepreneurs ensure that they operate their businesses in an ethical
and sustainable manner?
7. What are the responsibilities of an entrepreneur in managing a business
venture?
 8. What is the role of stakeholder engagement in CSR and how can it be
effectively implemented?
9. How can companies promote transparency and accountability in their
operations as part of good governance practices?
10.What are the benefits of implementing CSR policies for companies,
stakeholders, and society, and how can they be measured?

Discussion Questions
1. How can entrepreneurs balance their desire for profits with the need to
operate their businesses in an ethical and sustainable manner?
2. What are the potential risks of not adopting good governance practices in
business organizations and how can they be mitigated?
3. How can companies effectively communicate their CSR policies to their
stakeholders and ensure their understanding and support?
4. What are some examples of successful CSR policies implemented by
companies and what impact have they had on society and the environment?
5. How can entrepreneurs ensure that they are meeting the social and ethical
expectations of their stakeholders while also achieving their business goals?
6. What are the challenges that companies face in implementing CSR policies
and how can they be overcome?
7. What are the ethical dilemmas that entrepreneurs may face in managing their
businesses and how can they be resolved?
8. What role do governments and regulatory bodies play in promoting good
governance and CSR practices in business organizations?
9. How can companies measure the impact of their CSR policies and ensure
that they are contributing to sustainable development?
10.What are the ethical considerations that entrepreneurs must take into account
when making decisions that affect their stakeholders and how can they
balance competing interests?
11.In what ways can entrepreneurship and corporate social responsibility
intersect and mutually benefit each other? Can entrepreneurship be a force
for positive social and environmental change, or is it inherently driven by
profit and self-interest?
Case Questions
1. Sarah is the founder of a start-up that produces sustainable, reusable bags. She sources
materials from a factory overseas that has been accused of labor violations.
 What are the ethical considerations that Sarah should take into account when
deciding whether to continue using this factory as a supplier?
 How can Sarah ensure that her company upholds ethical standards and
communicates them to her customers?
2. Mark is the CEO of a mid-sized company that has recently received criticism for lack of
transparency and accountability in its operations.
 How can Mark implement good governance practices within the company to
restore trust and prevent future incidents?
 How can he balance the interests of various stakeholders, including employees,
customers, investors, and the community?
3. Michelle is the founder of a social enterprise that provides affordable, healthy meals to
low-income families. She wants to expand her impact by partnering with local farmers to
source ingredients.
 What strategies can Michelle adopt to ensure that her supply chain is sustainable
and socially responsible?
 How can she measure and communicate the social and environmental impact of
her business to stakeholders?
4. Jenna is the CEO of a large corporation that has committed to implementing CSR policies
to address environmental and social issues. However, some stakeholders have criticized
the company for greenwashing and not taking enough concrete action.
 How can Jenna and her team create effective CSR strategies that are aligned with
the company's values and goals, while also engaging stakeholders and
demonstrating impact?
 What are some best practices for CSR reporting and communication?
5. David is a social entrepreneur who has founded a nonprofit organization that provides
education and training to refugees. He is interested in applying for grants and
partnerships with private companies, but he is concerned about compromising the
organization's values and mission.
 How can David navigate the potential conflicts between financial sustainability
and social impact?
 What are some potential risks and benefits of partnering with private sector
actors?
 How can David ensure that his nonprofit organization maintains transparency and
accountability when seeking funding or partnerships with private companies?
Why is it important for David to establish transparent and accountable
partnerships with private sector actors?
Footnotes
1
Indeed Editorial Team. (2023, March 20). What is a business policy and why is it important? Indeed.
https://www.indeed.com/career-advice/career-development/business-policy-importance

2
PRSU Study Notes. (n.d.). Business policy: Features, scopes, importance and purpose. PRSU Study Notes.
https://www.prsunotes.in/post/business-policy-01

3
Kelly, M. (2020, September 24). Why it's important to have policies and procedures: 4 reasons. GAN Integrity.
https://ganintegrity.com/blog/why-its-important-to-have-policies-and-procedures/
4

Management Study Guide. (n.d.). Business policy - Definition and features. Management Study Guide.
https://www.managementstudyguide.com/business-policy.htm
5

Indeed Editorial Team. (2022, October 1). What Are Resource Constraints? (And How to Manage Them). Indeed.
https://ca.indeed.com/career-advice/career-development/resource-constraints
6

Ademola, A., & Yusuf, S. (2014). Corporate Social Responsibility Awareness, Firm Commitment and Organizational
Performance. Scientific Research Publishing. https://www.scirp.org/html/6-2830060_46945.htm
7
Marrocchino, L. (2022, August 10). Balancing act: Creating companies that generate profit and social impact.
VentureBeat. https://venturebeat.com/enterprise-analytics/balancing-act-creating-companies-that-generate-profit-and-social-
impact/
8

Campbell, N. (n.d.). How to Measure the Impact of Your Corporate Social Responsibility Program. Benevity. Retrieved
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