BUSINESS ETHICS AND SOCIAL RESPONSIBILITY – GRADE 12

Name:_________________________ Date: ______________________

Grade:________________________ Section:____________________

Quarter: 3rd Week: 1 SSLM No. 1 MELC(s) 1.1 Differentiate the Forms of Business
Organizations in terms of their purpose and role in socio-economic development.
ABM_ESR12-IIIa-d-1.1; ABM_ESR12-IIIa-d-1.2; ABM_ESR12-IIIa-d-1.3
Objectives:
1. Identify the three basic forms of business organizations;
2. Compare and contrast the advantages and disadvantages of each form of
business organization; and,
3. Discuss the Role and functions of business organizations in socio economic
development of the society.
Title of Textbook/LM to Study:
Unit Pages Topic: Forms of Business Organizations

Hello learner! Welcome to our journey of learning in Business Ethics. Read each topic well
and be sure to store in your memory bank what you will learn from the different modules.
Let our journey begin!
Organization – a collection of people working together to achieve a common goal.

Business Organization - a collection of people working together to achieve a common

purpose in relation to their organizations mission, vision, goals.

A. Forms of Business Organization

These are the basic forms of business ownership
1. Individual
An individual who, rather than working as an employee, runs a small business and assume
all the risk and reward of a given business venture, idea, or good or service offered for sale.

2. Sole Proprietorship
A sole proprietorship is a business owned by only one person.

3. Partnership

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A partnership is a business owned by two or more persons who contribute resources into the
entity.

4. Corporation
A corporation is a business organization that has a separate legal personality from its
0wners.

Table 1: Types of Business Organization

Type of Firm Advantages Disadvantages
Individual 1. Business is simple to set up. 1. The owner has unlimited liability.
Proprietorship 2. Decision making is clear-cut. 2. The owner makes the decisions.
3. Earnings are taxed only once as 3. Business dies with the owner.
personal income
Partnership 1. Business is relatively easy to set 1. There is unlimited liability for the
up. partners.
2. More management skills are 2. Decision making can be
available, two heads are better complicated.
than one. 3. The company has a limited ability
3. Earnings are taxed only once as to raise capital.
the personal income of the 4. Partnerships can be unstable.
partners.
Corporation 1. There is limited ownership. 1. Corporate income is taxed twice;
2. A corporation has a separate once as corporate profits, then as
legal status. It is able to raise personal income (dividends).
large sums of capital through 2. There are greater possibilities for
issuing bonds and stock. management disagreements.
3. It has an eternal life or perpetual 3. There is the possibility of
existence. conflicting goals between the
4. It is able to recruit professional owners of the corporation (the
management and to change bad principals) and management (the
management due to separation agents).
of ownership from management.

B. The role of business in the economy and society.

1. The Role of business in the Economy

Business drives the economy in any market-based system. It generates most of a nation's
wealth, creates the lion's share of jobs, and provides most of the funds that go towards
government spending. Without business, there would be no capitalist economy to speak of.
Business-friendly policies have often been used to stimulate economic activity.

2. The Role of Business in Society

The role of a business is to satisfy a public need or demand. However, corporate social
responsibility (CSR) is more than just a simple business practice. CSR is a business practice
that involves participating in initiatives that benefit a society. It is not about working for profit
and working to help maintain the social order.

Corporations can enact corporate social responsibility CSR as a business practice in

multiple ways. Some corporations put part of their proceeds towards programs that feed the
hungry, others towards organizations that clean up the environment.

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Activity 1: Stir Me
Instructions: Read the question comprehensively and in the space provided below, write
down all your ideas.

What words come to your mind when you read the phrase “forms of business
organizations”? List them down inside the box.

Activity 2: True or False

Instructions: On the space provided before the number, Write TRUE if the statement is
correct and FALSE if it is incorrect.
________ 1. Partnership is a business organization where all assets are owned by one
person.
________ 2. Sole Proprietorship is a business organization where ownership of assets is
shared by two or more persons.
________ 3. Partnership is a business organized by two or more persons but not more than
15 incorporators.
_________4. The easiest business organization to form and dissolve is a corporation..
_________5. Partnership is complex and expensive to form and dissolve.
_________6. Corporation is reliant on the owner's managerial skills.
_________7. Partnership dissolves upon partner’s death.
_________8. Sole Proprietorship ceases upon the owner's death.
_________9. Corporations have unlimited life spans.
________10. Partnership requires agreement to start.

Activity: Shake Me!

Instructions: Compare and contrast the three basic forms of business organizations with
regards to their advantages and disadvantages. Complete the table below with your answer.
Forms of Number of Lifespan of the Decision Extent Of Legal
Business Owners Business Making Liability Personality
Organization of Business
Sole
Proprietorship

Partnership

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 Corporation

Activity: Squeeze Me!

I. Modified True or False.

Instruction: Write the word true if the statement is correct and false if the statement is
wrong, then change the underlined word to make the statement correct.( 2pts. Each item)

_________1. Corporations are the easiest to form and dissolve business organizations.
_________2. Partnerships are complex and expensive to form and dissolve.
_________3. Corporations are reliant on owner managerial skills.
_________4. Partnership dissolves upon partner’s death.
_________5. Sole Proprietorship ceases upon the owner's death.
6. Corporations have unlimited life spans.
_________ 7. Partnership requires agreement to start.
_________ 8.Sole Proprietorship is difficult and costly to start.
_________ 9. Corporations have unlimited legal and financial responsibility.
________ 10. Partnership requires a charter filed with the government to start.
________ 11.Corporation owners are called shareholders.
________ 12.Sole proprietorship must publish annual reports.
II. Check your Understanding!
1. What are the roles and functions of the different business organizations in the socio-
economic development of our society?
________________________________________________________________
________________________________________________________________

2. Give at least three (3) examples of businesses in your community and identify its form
(sole proprietorship, Partnership, or corporation).
1.__________________________________________________________________
2.__________________________________________________________________
3.__________________________________________________________________

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Rubrics for Activity 1. Stir Me!
Excellent – 20 Ideas are very relevant to the topic. They are presented in a complete
and logical manner. Sentence structure is consistently correct.
Handwriting is very neat and readable
Very Good-15 Ideas are very relevant to the topic. They are presented in an
adequate
and logical manner. Sentence structure is generally correct.
Handwriting is neat and readable.
Good – 10 Some ideas are relevant to the topic but are not presented in logical
manners. Handwriting is neat but not really readable
Needs Very little ideas are presented that are relevant to the topic. Ideas are
Improvement-5 not presented in a logical manner and sentence structure is erroneous.
Handwriting is dirty and not readable.

Retrieved from
http://www.entrepreneurshipsecret.com/the-role-of-business-entrepreneurship-in-society/

Retrieved from http://smallbusiness.chron.com/meaning-ethical-responsibility-56224.html

Retrieved from http://www.businessnewsdaily.com/4679-corporate-social-responsibility.html

Retrieved from
http://www.forbes.com/sites/walterpavlo/2014/01/13/an-mbas-thoughts-on-being-taught-ethic
s/

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Let Us Try Test Your knowledge II. Check your 2.- A corporation is an
Activity 1. Stir Activity 4. Squeeze Me! understanding artificial business unit
Me I. Modified :True or False and its creation is
1. Sole Proprietorship Suggested through the law while
2. Corporation Answers partnership is a
Answers may 3. Sole Proprietorship 1. Businesses are the business relationship
vary according to 4.True prime engine of between 2 or more
the 5. True social development persons competent to
understanding of 6. True make contracts to
and economic
the learner. 7. True engage in a business
growth like it
Activity2. Let 8. Corporation activity.
produces and
us try 9. Partnership - a corporation
distributes goods
10. Corporation operates through
True or False and services to
11. True delegated authority
1. False 12. Corporation satisfy a public and responsibility
2. False need and demand while partnership is
3. False and it generates the run by partners who
4. False nation’s wealth they themselves
5. False through taxation for formulate the
6. False public purposes and decisions & operations
7. True use and
8. True government
9. True spending.
10. True

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