PME 6083 ENTREPRENEURSHIP

DEVELOPMENT

HANAFIAH DIMAN (801981) – MOHD ARIF HAMZAH (801989) – MONA LISA LEE (803737)

THE SOCIAL AND ETHICAL

PRESPECTIVES OF ENTREPRENEURSHIP

CHAPTER 4

INTRODUCTIONA. THE SOCIAL ENTREPRENEURSHIP MOVEMENT

B. THE SOCIAL ENTREPRENEURSHIP CHALLANGE

C. THE ETHICAL SIDE OF ENTREPRENURSHIP

D. DEFINING ETHICS

E. ETHICS AND LAW

F. STABLISHING A STRATEGY FOR ETHICAL ENTERPRISE

G. ETHICS AND BUSINESS DECISION

H. ETHICAL CONSIDERATION IN CORPORATE ENTREPRENUEURSHIP

I. ETHICAL LEADERSHIP BY ENTREPRENEURS

J. SOCIAL AND ETHICAL ENTREPRENEURSHIP IN ISLAMIC VIEW

A. THE SOCIAL ENTREPRENEURSHIP MOVEMENT

1) 1980 FOUNDED BY BILL DRAYTON. ASHOKA ASSOCIATON IS LEADING A PROFOUND TRANSFORMATION IN SOCIETY, WORKING COLLECTIVELY TO ENSURE THAT SOCIAL ENTREPRENEURS AND THEIR INNOVATIONS CONTINUE TO INSPIRE A NEW GENERATION AND CREATE POSITIVE SOCIAL CHANGE.

2) WORLD ECONOMIC FORUM, THE FORUM CONVENES SOCIAL ENTREPRENEURS AS ONE OF ITS SPECIAL INTEREST GROUP.

3) IN 2005 THE PUBLIC BROADCASTING SYSTEM (PBS) AND THE SKOLL FOUNDATION CREATED AND AIRED A TWO-PART MINISERIES PROFILING “THE NEW HEROS” WHO WERE 14 SOCIAL ENTREPRENEURS FROM AROUND THE GLOBE. PROMOTES LARGE SCALE PUBLIC AWARNESS OF SOCIAL ENTREPRENEURSHIP.

4) SOCIAL ENTREPRENEURS AND NOBEL PEACE PRIZE AWARDED TO VICTORIA HALE OF THE INSTITUTE OF ONEWORLD AND MUHAMMAD YUNUS AND HIS ORGANIZATION THE GRAMEEN BANK, FOR THEIR SOCIAL ENTREPRENURSHIP MOVEMENT.

5) US NEWS & WORLD REPORT’S TOP 25 LEADERS SOCIAL ENTREPRENURSHIP

B. THE SOCIAL ENTREPRENEURSHIP CHALLANGE1) ENVIRONMENT (Pollution, protection,

conservation, recycling effort)2) ENERGY ( Conservation of energy in production,

marketing, energy saving)3) FAIR BUSINESS PRACTICES (Genders,

minorities)4) HUMAN RESOURCE (Health and safety)5) COMMUNITY INVOLVEMENT (Donations,

sponsorship)6) PRODUCT ( Nutritional value of product)

C. THE ETHICAL SIDE OF ENTREPRENURSHIP

ETHICAL ISSUES IN BUSINESS ARE OF GREAT IMPORTANCE TODAY AND WITH GOOD REASON:-

1) SCANDALS

2) FRAUD

3) EXECUTIVE MISCONDUCT

D. DEFINING ETHICS

WHAT IS ETHICS?.

ETHICS PROVIDES THE BASIC RULES OR PARAMETERS FOR CONDUCTING ANY ACTIVITY IN AN ‘ACCEPTABLE’ MANNER.

© 2009 South-Western, a part of Cengage Learning. All rights reserved. 4–7

Figure4.1Classifying Decisions Using a Conceptual Framework

Source: Verne E. Henderson, “The Ethical Side of Enterprise,” Sloan Management Review (spring 1982): 42.

E. ETHICS AND LAWFOR THE ENTREPRENEUR THE LEGAL VERSUS ETHICAL

DILEMMA IS A VITAL ONE. THE LAW PROVIDES THE BOUNDARIES FOR WHAT IS ILLEGAL.

THE LEGAL ASPECT CAN BE THE MOST DUBIOUS BECAUSE THE BUSINESS WORLD AND SOCIETY RELIES HEAVILY ON THE LAW TO QUALIFY THE ACTIONS OF VARIOUS SITUATIONS.

THE LAW INTERPRETS THE SITUATIONS WITHIN THE PRESCRIBED FRAMEWORK. UNFORTUNATELY THIS FRAMEWORK DOES NOT ALWAYS INCLUDE ETHICAL OR MORAL BEHAVIOR.

ETHICS PROVIDES THE BASIC RULES ‘ACCEPTABLE’ MANNER.

F. STABLISHING A STRATEGY FOR ETHICAL ENTERPRISE

1). ETHICAL PRACTICES AND CODES OF CONDUCT

Code of conduct is a statement of ethical practices or guideline to which an enterprise adheres.

2). APPROACHES TO MANAGERIAL ETHICS

a) Ethical Norms

b) Motives

c) Goals

d) Orientation toward law

e) Strategy

G. ETHICS AND BUSINESS DECISION

THE ENTREPRENEUR IS FACED WITH SPECIFIC ETHICAL DILEMMAS:-1). Conflict of interests. (Morality and economic trade-offs)2). Social responsibility to stakeholders. (code of conduct)3). Level of openness. (value and expectation )4). Personal Traits. (Relationship and personal issues)

THESE DILEMMAS ARE CHALLENGED BY THE NEED TO MAKE BUSINESS DECISION EACH DAY.

H. ETHICAL CONSIDERATION IN CORPORATE ENTREPRENUEURSHIP

1). INTERNAL NETWORK ISSUES

1.1. SYSTEMS(Misdirected reward & evaluation system)

1.2. STRUCTURE(Restricted communication channels, lack of accountability)

1.3. POLICIES & PROCEDURE(Long, complex approval cycles, extensive documentation, unrealistic performance criteria)

2. LEADERSHIP ISSUES

2.1. STRATEGIC DIRECTION(No vision from the top, lack of commitment, no role models at the top)

2.2. PEOPLE(Parochial bias, Turf protection)

2.3. CULTURE(Value that conflict with manager’s)

I. ETHICAL LEADERSHIP BY ENTREPRENEURS

1). VALUE SYSTEM OF AN OWNER/ENTREPRENEUR IS THE KEY

TO ESTABLISHING AN ETHICAL ORGANIZATION.

2). HONESTY

3). INTEGGRITY

4). CODE OF ETHICS BY THE OWNER

5). DEVELOPING BENCHMARKS OR GUIDELINES

6). REWARD AND PUNISHMENT

J. ISLAMIC VIEW

SOCIAL & ETHIC ENTREPRENEUR IN ISLAMIC PRESPECTIVE IS RELEVENT TO ‘AKHLAK INSAN’ OR LEADERSHI BEHAVIOUR.

SOCIAL & ETHIC ENTREPRENEUR IS RELEVENT TO HUMAN NATURE AS ‘KHALIFAH’.

IN ISLAM GOD CREATED HUMAN AS ‘KHALIFAH’ KHALIFAH OR ENTREPRENEUR HAVE

RESPONSIBILITIES DEVELOP PROSPERITY AND SEES SOCIAL AND ETHIC AS PART OF ‘IBADAH’

ALLAH GIVES REWARD TO PERFORM IBADAH

CONTINUE…………………..

KHALIFAH OR ENTREPRENEUR SHOULD SEARCH FOR ‘ALLAH’ BLESSING ABOVE ALL OTHER FACTOR, NOT SOLELY FOR PROFIT BECAUSE ‘ALLAH’ IS THE ABSOLUTE OF POWER AND WEALTH

ALLAH CREATED KHALIFAH, ALLAH CREATED WEALTH IN ABUNDANCE AND SUFFICIENT FOR ALL.

WEALTH IS CREATED AND ENTRUSTED FOR MANKIND AS KHALIFAH OR ENTREPRENEUR.

WHY ISLAM ENCOURAGE ITS UMMAH TO VENTURE INTO ENTREPRENEURSHIP?

Continue………..

PROPHET MUHAMMAD EXPOUNDED THAT 9 OUT 10 SOURCES OF ‘RIZQUE’ CAN BE FOUND IN ENTREPRENEURSHIP OR BUSINESS

SOCIAL & ETHIC ENTREPRENEURS IN ISLAM SHOULD SEARCH FOR ‘ALLAH’ BLESSING ABOVE ALL OTHER FACTOR.

ALLAH WILL GIVE REWARD TO GOOD/BAD SOCIAL ETHIC ‘KHALIFAH’ OR ENTREPRENEUR

WHAT ARE GUIDELINES SOCIAL & ETHIC ENTREPRENEURS IN ISLAM?

CONTINUE…..SOCIAL AND ETHIC ENTREPRENEURS GUIDELINES

FOR ISLAMIC ENTREPRENEURSHIP ACTIVITIES ARE WIDE AND COMPREHENSIVE BASED ON AL-QURAN AND AL-HADITH

LAW OF TOUGHT BY SUNNI AND SIYYAH ABOUT SOCIAL AND ETHICS ENTREPRENEURS (MAHZAB MALIKI, HANAFI, HAMBALI, SAFIE, AL-GHAZALI)

BY VIRTUE OF HUMAN NATURE SOCIAL AND ETHIC THE MOSLEM ENTREPRENEURS ARE KHALIFAH AND HAVE THE RESPONSIBILITIES DEVELOP PROSPERITY AND SEES SOCIAL ETHIC AS PART OF ‘IBADAH’ OR GOOD DEED.

1. Has Carmine been unethical in his conduct? What is your reasoning?

Yes. 1). Conflict of interests. (Morality and economic

trade-offs) – Carmine is not in favour of openess in conducting his business. To him, he needs control & afraid that outsiders being taken over his company. 2). Social responsibility to stakeholders. (code of conduct). Carmine only provide information to his immediate family and selected other relatives. 3). Level of openness. (value and expectation )- Minimal4). Personal Traits. (Relationship and personal issues)- he still want to be ‘incharge’ and afraid of competition

CASE STUDY 4.1 : LETTING THE FAMILY IN

2. Is it ethical for Carmine to tell his other relatives the good news? Why or why not?

Yes. He is obliged to share all information regarding the company’s achievement with the shareholders. Be it good or bad news, the shareholders must be inform in order for them to understand what the company has gone through. The shareholders has the right to know either their investment is a fruitful & profitable investment.

The unethical way is when Carmine is selective in disseminating the information

3. If you were advising Carmine, what would you tell him? Why?

Q & A

THANK YOU