BUSINESS ETHICS

BUSINESS ORGANIZATIONS AND THE ROLE OF BUSINESS IN SOCIAL

AND ECONOMIC DEVELOPMENT

Let’s Start
To reach the desired skill and knowledge of this course, you need to comply the following:

 Differentiate the forms of business organizations;

 give examples of the forms of business organizations; and
 show how these organizations contribute to socioeconomic development.

Let’s Recall
When we are going to talk about “business”, what comes first into your mind? Expand your answer. Write your
answer on the worksheet provided.
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VISION: Immaculate Heart of Mary Academy envisions of a life giving and innovating Educational ministry committed to
transforming community of learners into Christ-centered Augustinian Recollect Stewards.
 Let’s Explore
Hello dear grade 11 students! It’s been a while since you had your last module, and we are now bound to your second
semester. For this module, we will be learning about Business ethics. But before we proceed, let us define first these
terms.

Ethics deals primarily with the study of morality, i.e. discerning what is right or what is wrong with people’s
decisions and actions. Business ethics deals with the application of ethics in the business environment. The realm of
business does not have a moral code that is different or apart from what govern life and society. The same standards
for what is right and wrong should be upheld. Hence, Business ethics is the study of appropriate business policies and
practices regarding potentially controversial subjects including corporate governance, insider trading, bribery,
discrimination, corporate social responsibility, and fiduciary responsibilities. The law often guides business ethics,
but at other times business ethics provide a basic guideline that businesses can choose to follow to gain public
approval.

Different forms of Business organizations

Business organization is the single-most important choice you’ll make regarding your company. What form your
business adopts will affect a multitude of factors, many of which will decide your company’s future. Here are the 4
major forms of business organizations:

Sole Proprietorship

The simplest and most common form of business ownership, sole proprietorship is a business owned and run by
someone for their own benefit. The business’ existence is entirely dependent on the owner’s decisions, so when the
owner dies, so does the business.

Advantages of sole proprietorship

All profits are subject to the owner

There is very little regulation for proprietorships
Owners have total flexibility when running the business
Very few requirements for starting—often only a business license

Disadvantages

Owner is 100% liable for business debts

Equity is limited to the owner’s personal resources
Ownership of proprietorship is difficult to transfer
No distinction between personal and business income

Partnership

These come in two types: general and limited. In general partnerships, both owners invest their money, property,
labor, etc. to the business and are both 100% liable for business debts. In other words, even if you invest a little into a
general partnership, you are still potentially responsible for all it’s debt. General partnerships do not require a formal
agreement-partnerships can be verbal or even implied between the two business owners. Limited partnerships
require a formal agreement between the partners. They must also file a certificate of partnership with the state.
Limited partnerships allow partners to limit their own liability for business debts according to their portion of
ownership or investment.

Advantages

Shared resources provides more capital for the business

Each partner shares the total profits of the company
Similar flexibility and simple design of a proprietorship
Inexpensive to establish a business partnership, formal or informal

Disadvantages

Each partner is 100% responsible for debts and losses

Selling the business
VISION: Immaculate Heart ofisMary
difficult—requires finding
Academy envisions of anew
life partner
giving and innovating Educational ministry committed to
transforming community of learners into Christ-centered Augustinian Recollect Stewards.
 Let’s Engage
Activity No. 1: Filling Out.
Instructions: Research 3 local entrepreneurs or business owners on each business organization and state their
company name/business name. Include also what business are they into. In the last column, write there what is their
contribution to the socioeconomic in our country. Write your answer on the worksheet provided.

Business organization Business name Business owner Product Contribution

Sole
Proprietor-ship

Partnership

Corporation

Limited Liability
Company

Activity No. 2: Essay.

Instructions: Read and understand the questions and answer it substantially. Write your answer on the worksheet
provided.

1. What is a limited liability company? Explain the advantages and disadvantages of this type of business
ownership?
2. How to handle business by manufacturing things according to the need of consumers?

Let’s Check
Activity No. 3: Identification.
Instructions: Read the questions below and give the correct answer. Write the correct answer on the worksheet
provided.

_______________________1. Entrepreneurs generate income and revenues, and much of this income is often invested in
the local economy. If their businesses are successful, they will have funds available to invest
in other entrepreneurial ideas.
_______________________2. A business organization wherein each partner is 100% responsible for debts and losses.
_______________________3. It deals primarily with the study of morality, i.e. discerning what is right or what is wrong with
people’s decisions and actions.
_______________________4. Both owners invest their money, property, labor, etc. to the business and are both 100% liable
for business debts.
_______________________5. The simplest and most common form of business ownership.
_______________________6. This means entrepreneurs are more prepared to accept, introduce or adapt new ideas and
ways of doing things.
______________________7. The single-most important choice you’ll make regarding your company.
VISION: Immaculate Heart of Mary Academy envisions of a life giving and innovating Educational ministry committed to
transforming community of learners into Christ-centered Augustinian Recollect Stewards.
 _______________________8. A business organization wherein agreements must be comprehensive and complex.
_______________________9. A business organization wherein any income distributed to the shareholders as dividends or
profits are taxed again as the personal income of the owners.
______________________10. It is a role which states that entrepreneurs affect the economy positively by inspiring others
to achieve.

Let’s Understand
“Business opportunities are like buses, there's always another one coming.” – Richard Branson

VISION: Immaculate Heart of Mary Academy envisions of a life giving and innovating Educational ministry committed to
transforming community of learners into Christ-centered Augustinian Recollect Stewards.
 Worksheet in Business Ethics
Business Organizations and the Role of Business in Social and Economic
Development
Module 1.1-1.2

Name : __________________________________________________ Grade and Section : _________________________

Teacher : Mr. Marlindo A. Pablio

Let’s Recall
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Master The Skill

Let’s Engage
Activity No.1
Business organization Business Business Product Contribution
name owner

Sole
Proprietor-ship

Partnership

Corporation

Limited Liability
Company

Activity No. 2
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VISION: Immaculate Heart of Mary Academy envisions of a life giving and innovating Educational ministry committed to
transforming community of learners into Christ-centered Augustinian Recollect Stewards.
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Assess Yourself
Activity No. 2
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2._________________________________
3._________________________________
4._________________________________
5._________________________________
6._________________________________
7._________________________________
8._________________________________
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10.________________________________

VISION: Immaculate Heart of Mary Academy envisions of a life giving and innovating Educational ministry committed to
transforming community of learners into Christ-centered Augustinian Recollect Stewards.