To return to the case of Martin Shkreli, lets examine it through some foundational theoretical lenses, based on ethical theories. At times, ethical conduct and legal conduct may seem intertwined; in other circumstances, they are quite different. The Protestant work ethic looks at the decision from the viewpoint of capitalism, free markets, and a sense of duty to ensure maximum return on investment. The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo Lhdesmki, M., & Suutari, T. (2012). https://doi.org/10.1007/s10551-014-2439-6, DOI: https://doi.org/10.1007/s10551-014-2439-6. Social and commercial entrepreneurship: Same, different, or both? This is something we support and have encouraged, since we think that this topic like many others suffers from somewhat of a silo mentality with research developing apace in different sub-disciplines with only limited cross-referencing and learning. (2014b). PubMedGoogle Scholar. The Hippocratic Oath, for example, is embraced by most professionals in healthcare today as an appropriate standard always owed to patients by physicians, nurses, and others in the field. Further, Weerwardena and Mort (2006) have approached an understanding of the characteristics of Social Enterprises from a small case-based study of predominant characteristics that shape actions; environmental dynamics, innovativeness; proactiveness, risk management; sustainability; opportunity-seeking/recognition and social mission. However, social enterprises . You may decide you should always tell the truth to family, friends, customers, clients, and stakeholders, and if that is not possible, you should have very good reasons why you cannot. Often, ethical thought precedes and sets the stage for changes in the law. How Ethical Behavior is Encouraged Good ethical conduct requires entrepreneurs to be aware of their responsibilities to employees. (2011) have acknowledged social value creation, defined as the primary mission of social entrepreneurship, as the most promising approach to set the boundaries around the concept. We foster diversity and inclusion, dignity and respect. However, many employers are not aware that employers can actually be liable for harm caused by an employee if that employee caused harm within the scope of their job duties. Andre & Pache draw on the ethic of care. This may be due to a variety of reasons, including what researchers term a positive effect on business culture, stakeholders, and reputation.6 In other words, being ethical beneficially influences employees, investors, and customers. If we violate these standards, we are subject to punishment as established by the law. author@Michael Laverty and Chris Littel et al. Important terms and concepts. How could he simultaneously be both an investor and an independent journalist blogging about the very companies in which he had a financial interest? Ethical start-ups make ethics a core value of the enterprise. Equifax will pay at least $650 million, with the possibility of more, to resolve most claims stemming from the data breach. Responsibility and small business: Editorial. Ethics should appear in business plans, in company mission statements, and in all other company documents. We commit to: Each of our stakeholders is essential. Journal of Business Ethics, Business Ethics: A European Review, The new social entrepreneurship: What awaits social entrepreneurial ventures. This editorial to the special issue addresses the often overlooked question of the ethical nature of social enterprises. Sandra Waddock and Erica Steckler present qualitative work on the narrative life stories of social entrepreneurs, which highlights the interactive nature of vision, linking it in different ways to action. Seanor, P., & Meaton, J. These virtues consist of trust and derivatives of trust such as truthfulness. This suggests the need to consider the social embeddedness of social and socially innovative enterprises (Jack and Anderson 2002) with ethical concerns comprising trust, cooperation and commitment relations (Bull et al. These and other actions begin to help individuals develop and internalize an ethical compass. 5, 2017 0 likes 4,261 views. They argue that ethics of social entrepreneurship is emergent, realised through social actions that struggle with power, subjectivity and freedom. (2007). (2008). Kickul et al. The emerging social entrepreneurship literature has previously been dominated by enthusiasts who fail to critique the social enterprise, focusing instead on its distinction from economic entrepreneurship and potential in solving social problems. This fundamental question raises a number of related questions about the ethics of the situation. PDF Social Entrepreneurship and Business Ethics: Does Social - Springer Ethics and Social Responsibility: Getting it Right for Entrepreneurs Office of Criminal Investigations of the US Department of Justice. The #MeToo movement has changed everything. Although Shkrelis decision to raise prices was within legal limits, his actions were critically judged in the court of public opinion. Kickul, J., Gras, D., Bacq, S., & Griffiths, M. (2013). Our stated aim in our call for contributions to this Special Issue was to garner evidence to explode what appeared to be a misapprehension about the nature of social entrepreneurs and social entrepreneurship. Three of the articles in this special issue address these problems. (2006). Zahra, S. A., Gedajlovic, E., Neubaum, D. O., & Shulman, J. M. (2009). If you are in the midst of a startup, chances are you are moving quickly. Fairness deals with doing what is right, just, and equitable. A few examples of antitrust laws are the Sherman Act, the Clayton Act, the Federal Trade Commission Act, and the Bayh-Dole Act. Entrepreneurship has been bedevilled with mythsthe heroic male who goes it alone against the odds; the entrepreneur who happens to be in the right place at the right time; the notion that anyone can be an entrepreneurand now we can add potentially the myth concerning the ethical social entrepreneur. Whenever you think about the behavior you expect of yourself, in both your professional and personal life, you are engaging in a philosophical dialogue with yourself to establish the standards of behavior you choose to upholdthat is, your ethics. It also gives the patent holder the exclusive right to block or withhold access to others, or to sell the right to use the patent. Ridley-Duff, R., & Bull, M. (2011). The antitrust concept is important to the entrepreneurs ability of entrepreneurs to form new startup businesses that are able to compete with larger, more established corporations (which may try to discourage competition). Entrepreneurship is a similarly fruitful pool from which to draw. remaining entrepreneurs viewed that ethics and social responsibility could be possibly practiced despite the strong external factors provided that entrepreneurs have strong belief. This book uses the What are the steps we need to take to get protection? But it is more than just consistency of character. However, Edison preferred DC technology and was not supportive of Teslas ideas. Being a professional of integrity means consistently striving to be the best person and professional that you can be in all your interactions with others. Core values reinforce the company mission and show how the company intends to uphold its social standards. The pressure to create a new venture, within constraints and limitations, inspires entrepreneurs to find innovative ways to meet potential market demands. However, critical reflection suggests that this may be gained at a price. In our final section of papers, the person of the entrepreneur herself is more directly focused upon especially in terms of the social entrepreneurs position in relation to social entrepreneurial outcome. His coverage of Silicon Valley-based startup companies could help ensure the successful launch of a new business or product. These acts were created to encourage competition and provide options for consumers. An economic approach opens the question of a blurring of the difference between profit and not-for-profit social enterprises (Chell 2007); the motivations of social entrepreneurs; the impact of the market mechanism on business decision-making, weakening an ethical approach and raising concerns about the inadequacy of the neo-classical economic approach to business. A legal patent gives an exclusive right to its patent holder or proprietor to use the invention in any shape or form they deem necessary. Chapter 4 Ethics and Social Responsibility - Virginia Tech Emphasizing corporate social responsibility is crucial. Still, we need not subscribe to any particular faith to hold that ethical behavior in business is necessary. consent of Rice University. In that event, you should at least follow-up with all parties via traditional mail or email to document the key terms of your agreement. Some areas of the business world involve a combination of tort law and contract law, such as litigation involving the wrongful termination of an employee. In 2017, from mid-May to July, hackers gained unauthorized access to servers used by Equifax, a major credit reporting agency, and accessed the personal information of nearly one-half of the US population.7 Equifax executives sold off nearly $2 million of company stock they owned after finding out about the hack in late July, weeks before it was publicly announced on September 7, 2017, in potential violation of insider trading rules. Indeed, according to Choi and Majumdar (2014), it is complex, contested and may be conceived as a cluster of related constructs. The creation of social value per se is not in dispute but the approach, means, method and outcomes are. Eric Solymossy & John Master, "Ethics Through an Entrepreneurial Lens: Theory and Observation," Journal of Business Ethics 38: 227-241 (2002). Spence, L. J., & Rutherford, R. (2003). Journal of Business Ethics, integrating social, environmental, ethical, consumer, and human rights concerns into their business strategy and operations. Article You may decide, as well, that while you are pursuing profit in your business, you will not require that all the money earned comes your way. In this special issue, we go beyond these somewhat polarised approaches and lay the basis, through the papers, for a more stable foundation which integrates social enterprise and ethics. Perrini, F. (2006). Social Enterprise Journal., The story of Nikola Teslaa Serbian-American inventor, engineer, and physicistoffers a cautionary tale for why entrepreneurs need to be attuned to both the technical aspects of a ventures IP and its culture of creativity. 85, 160168. In 2009, AMD filed a suit against Intel claiming that the company had used leveraging dominance to exclude AMD from effectively competing in the marketplace through exclusionary pricing, discounts, and similar practices. Social entrepreneurship as an essentially contested concept: Opening a new avenue for systematic future research. Aguilera, R. V., Rupp, D. E., Williams, C. A., & Ganapathi, J. 41, 2135. Paper presented at the ISBE Conference, 57 November. A business that makes/sells a product or service has responsibility for fully disclosing the truth about its products/services. The dark side of entrepreneurship. It is an all-too-common situation that could have serious liability consequences for an entrepreneurial business if adequate insurance is not procured. Bacq, S., & Janssen, F. (2011). Definitions of social responsibility and related topics are contested (Lockett et al. OpenStax is part of Rice University, which is a 501(c)(3) nonprofit. On September 26, 2017, the CEO resigned, days before he was to testify before Congress about the breach. Most employers understand they run a risk that their employees may commit a tort, and that they are responsible when employees cause harm to others (customers or coworkers) while on duty, working on company property, and using company equipment. Imagine that upon graduation, you have the good fortune to face two entrepreneurial opportunities. Common areas rife with potential legal issues include contracts, torts, employment, intellectual property, conflicts of interest, full disclosure/truthfulness in product or service claims and performance, and antitrust/competition law (Figure 3.2). Ethics and Social Responsibility - Fundamentals of Business: Canadian 88(3), 551563. 2008). are not subject to the Creative Commons license and may not be reproduced without the prior and express written Weerwardena, J., & Mort, G. S. (2006). volume133,pages 619625 (2016)Cite this article. Journal of Business Ethics, The argument revolves around the moral intensity of the situation; the greater the moral intensity, the greater the imperative to take action. rehabilitation of male offenders) which will further our understanding of social entrepreneurship, ethics and social change. For example, if an employer asks an employee to drop something off at FedEx or UPS after work hours, and that employee negligently causes an auto accident, even if the employee is driving their personal vehicle and not a company car, the employer could be liable for damages. International Small Business Journal, This also complements work in the ethics and small business field, which draws out the aspect of proximity in moral intensity as especially important (Lhdesmki and Suutari 2012). Can an SME become a global corporate citizen? For example, if a new startup business comes up with a unique invention, it is important to protect that intellectual property. Social responsibility is about the extent to which companies owe something to "society at large" or feel the duty to give back i.e. 1. Protagonists have offered different approaches, e.g. They propose a model for social credit score based on applicant credit history, the present situation of the company and financial and social viewpoints of the specific project. Journal of World Business, Some professions, such as medicine and the law, have traditional and established codes of ethics. This would give the social entrepreneur a persona of moral superiority: an essentialist view that is challenged. The authors put forward a five-point plan to help maintain the ethic of care in the scaled-up organization and by that token avoid mission drift. Success may lie in knowing the profit we make does not come from shortchanging others. It can be said that these individuals possess a good character, are able to earn trust, and have qualities that are deemed necessary for leadership. Organization Science, For instance, some learning can be drawn from research on ethics in small business, since social enterprises are often also smaller organizations (Spence and Rutherford 2003; Moore and Spence 2006; Morsing and Perrini 2009). "Bill Cosby, Harvey Weinstein, Charlie Rose, Kevin Spacey, Al . Disclosure describes sharing the needed facts and details about a subject in a transparent and truthful way. 2006), but in order to proceed with some clarity, broadly speaking, business ethics is under-stood as the everyday moral rules-in-use in organizations 2. The second entrepreneurial opportunity is with a nonprofit recognized for a very different culture based on its compassionate approach to employee work-life balance. It could be a personal, internal code of conduct, or an official code adopted by a business organization. Chell, E., Spence, L.J., Perrini, F. et al. Journal of Business Ethics, To develop a sustained competitive advantage, an entrepreneur is responsible to protect, provide the needed safeguards, and continually grow a firms IP. Every entrepreneur enters into contracts, usually on a regular basis, and thus should have an understanding of basic contract concepts. 1). The Worlds Most Ethical Companies: Does the Fame Translate into Gain? Presented to the European Financial Management Association (EMFA). When Martin Shkreli decided to increase the price overnight of a lifesaving HIV drug from $13.50 to $750 per pill, the public immediately characterized his actions as unethical. then you must include on every physical page the following attribution: If you are redistributing all or part of this book in a digital format, The scholarship drawn upon in this volume tends to be Western, in particular European and North American. Social Responsibilities and Ethics: 8 Best Business Practices When Martin Shkreli decided to increase the price overnight of a lifesaving HIV drug from $13.50 to $750 per pill, the public immediately characterized his actions as unethical. Bull, M., Ridley-Duff, R., Foster, D., Seanor, P. (2008). The article by Begoa Gutirrez-Nieto, Carlos Serrano-Cinca & Juan Camn-Cala presents a further useful contribution to the debate around measurement, identifying a credit scores system of socially responsible lending. Which elements of this case might involve issues of legal compliance? How important an attribute is income, and at what point would a higher income override for you the nonmonetary benefits of the lower-compensated opportunity? The Importance of Social Responsibility for Businesses - Investopedia There is a presumption that because something is socially-oriented, the motivation is likely to be ethically sound; that it is principled, morally justified and ethically legitimate. In this regard, it begs the question posed by Waddock and Steckler of what is the vision and how did it arise. This view, known as the shareholder primacy doctrine, stems from a famous Michigan Supreme Court case involving the Ford Motor Company and two shareholders named the Dodge brothers (who would go on to form the Dodge Motor Company).3 This case established a precedent that lasted for decades, built on the premise that the only thing that should matter to a CEO and their company is shareholder profits. It also offers the chance to pursue your own professional interests or volunteerism during a portion of every workday. Kindness. At the end of each year, the company plans to donate to numerous social and environmental causes. Enterprising nonprofits. Von Weltzien Hivik, H., & Mel, D. (2009). (2009) sought to map out the ethical issues and their social implications in the field of Entrepreneurship generally. Or it could be an external code based on ones profession (e.g., CPAs, attorneys, CFPs, and others have professional codes of ethics), or a more broadly applicable external code such as that of the Business Roundtable or Business for Social Responsibility. All the Entrepreneurs should consider ethics and social responsibility as their part of life. Entrepreneurship & Regional Development, Harvard Business Review, The first draws on sociological perspectives on power, subjectivity and freedom and problematizes the context of much of the superficial assumptions around the authentic nature of the practice of social entrepreneurship. Clearly, social entrepreneurship is by no means a simple concept. 29(3), 363376. 24, 407418. The research methods in evidence in respect of social entrepreneurship tend to be conceptual, theory-building, qualitative and exploratory around single case studies. Want to cite, share, or modify this book? The individual's personal morals and values What is Business Ethics? Aside from their individual perspectives, our papers contribute to three overarching themes which we will elaborate here. Core values that support social responsibility and ethics include: Integrity. Understanding social enterprise. Any deliberate attempt to hide, change, or bend the truth is an unethical and irresponsible action subject to criminal investigation. Moreover, in assessing impact, the social entrepreneur may no longer focus on the disposition of caring in the need to establish measurable results, and what is at stake is their ethical integrity. 24, 519532. Identify ethical issues that you might face in business, such as insider trading, conflicts of interest, and bribery, and explain rationalizations for unethical behavior. From a technical aspect, there are two different types of patents: utility and design patents (Figure 3.3). Without such protection, any competitor can legally, even if not ethically, copy the invention, put their own name or company brand on it, and sell it as if it were their own. The progress made in social entrepreneurship research has not been matched by a robust analysis from the ethics perspective (Cornelius et al. On September 15, 2017, the companys chief information officer and chief of security retired. Indeed one might ask whether all social entrepreneurs enact such goodness? He also discusses the human ability to rationalize our behavior to justify it to ourselves. (2008). authorURL@https://biz.libretexts.org/Bookshelves/Business/Entrepreneurship/Book%3A_Entrepreneurship_(OpenStax)/00%3A_Front_Matter/About_the_Authors, source@https://openstax.org/details/books/entrepreneurship, source@https://openstax.org/details/books/principles-finance. These two concepts are not only part of an ethical approach to doing business but are also underlying requirements of several areas of law including fraud. To examine the concept of "social entrepreneurship" 2. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations. Business. This also means that the organization, as a total system, provides consistent, meaningful, and timely consequences for unethical behavior and irresponsible actions. Instead, there might be sufficient profits to distribute a portion of them to other stakeholders in addition to yourselffor example, those who are important because they have helped you or are affected one way or another by your business.
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