EXPLAIN THE

IMPORTANCE OF
ESTABLISHING AND
SUSTAINING BUSINESS
ENTERPRISES
Business Ethics and Social
Responsibility

LEARNING COMPETENCY:
Explain the importance of establishing and sustaining business enterprises as
a source of job opportunities and financial freedom ABM_ESR12-Ivm-p-4.1

Nestle “Good Food, Good life”

In a recent Sustainable Agriculture Forum sponsored by the European Chamber of
Commerce themed “Towards a Sustainable and Responsible Agricultural Supply Chain,”
Nestlé Philippines Chairman and CEO Kais Marzouki underscored the value of public-private
sector partnerships (PPPs) in supporting agriculture because these harmonize public and
private resources.
 PRE-ACTIVITIES/PRE-TEST:

Direction: Read each statement below and evaluate whether it is true or false. Write your
FIRST NAME if the statement is TRUE and LAST NAME if the statement is FALSE.

____________1. Financial Freedom is having residual income to cover your living expenses.
____________2. Sustainability is increasingly important in the business world.
____________3. Establishing business does not create jobs.
____________4. Having debt-free can achieve financial freedom.
____________5. Social enterprise helps disadvantaged population to human development and
economic prosperity.

Case Study

Gawad Kalinga (GK) Enchanted Farm

The GK Enchanted Farm is Gawad Kalinga’s platform to raise social entrepreneurs, help
local farmers, and create wealth in the countryside. As we learned that the road out of poverty is a
continuing journey and therefore, providing homes is merely the beginning, we also realized that
our country is abundant with resources (land included) that we can harness for every Filipino to
continuously lead a life with dignity.
What Filipino entrepreneurs need today, especially young and rising ones, is an
 Guide Questions:
1. Do you think the GK social enterprise above are sustainable? Why or why not?
2. Do you think that GK social enterprises help in poverty alleviation or reduction?
3. Does it create financial freedom to its employees? Why or why not?
4. Why is establishing a business can help the community? Can it create jobs?
5. Why is it important for businesses to think beyond profit?
6. How about in your local community, does the local community benefit from the business
enterprises? In what way? Does these businesses create jobs to your neighbors?

DISCUSSION
Sustainability of business has been an important issue for many people, especially in the business
world. Businesses must be aware of the issue at hand and understands how important it is to
make changes. Yet sustainability can have a variety of meanings, depending on the business
context.

Environmental Sustainability
Environmental sustainability can be applied in many ways, such as creating alternative routes in a production
process to reduce waste generation and increase water and energy efficiencies. Investment in renewable
energy is also growing momentum among big organizations, with many building their own solar or wind
farms, in order to phase out the consumption of fossil fuels and reduce their carbon emissions.
Sustainability and employment
Businesses with strategies that are sustainable in the long run pay their workers’ salaries and benefits that
allow them to live a sustainable life within their community. This builds loyalty within the organization,
benefiting the company through increased productivity and creativity, as well as lower levels of fraud and
mismanagement. Besides, when organizations look to improve the health and well-being of communities, they
are able to motivate employees who are genuinely interested in contributing to the success of the business.
Sustainability in business practices

Pushed by growing demands from consumers for products and services that cause minimal effects to the
ecosystems, corporations have shown interest in bringing sustainability aspects to the core of the business.

https://www.co2australia.com.au/why-is-sustainability-important-for-business/
 Importance of establishing and sustaining businesses as a source of job opportunities:

Investors invest on your products which are the necessities of people

Upon investment on products, there is a need to manufacture more and keep up with the
demands of the investing company, thus, there is a need to hire more people for the
industry.
 Commerce and regional economic integration
When new businesses export goods and services to nearby regions, these enterprises
contribute directly to a region’s productivity and earnings. Having this type of production
and rise in services, it promotes job considering that businesses involve needs more
people for production
 New technologies are created and utilized
In the height of progress in some businesses, technology always earns it place. We need
modernization for the fast-pace production and efficiency of labor. In this thought, more
skilled and knowledgeable workers from the field are needed to sustain the demands of
technology.

https://brainly.ph/question/2637290#:~:text=New%20technologies%20are%20created
%20and%20utilized&text=Hence%2C%20building%20a%20business%20is,for
%20workers%20also%20gets%20high.

According to David Jones and Chelsea Willness, there are 3 Reasons why sustainability attracts
job seekers. Among these are as follows:
Sustainability draws job seekers because it’s a source of employee’s pride
Sustainability actions often lift a company’s reputation and status, leading many job seekers to
believe they’d feel proud to work for a prestigious organization admired for its sustainability.
Reinforce that anticipated sense of pride by creating and celebrating a distinctive reputation for
sustainability.
Sustainability draws job seekers because it implies the company cares about its employees.
To some job seekers, sustainability initiatives suggest that if a company genuinely cares about
the well-being of the greater society, it would therefore stand to reason that it likely treats its
employees well. Reinforce the belief that the company cares about society and the planet more
generally, and link this to your people practices.
Sustainability connects organizational values to job seekers' personal values.

Job seekers want an employer whose values are a good fit with their own. More than three
decades of research shows that the match a person feels with an organization is a major driver of
job choice decisions. Clearly link your sustainability initiatives to specific organizational values
and demonstrate their authenticity.

David Jones and Chelsea Willness. Publised June 7, 2013 https://www.nbs.net/articles/three-

reasons-job-seekers-prefer-sustainable-

Job Creation as Corporate Social Responsibility

Corporate Social Responsibility (CSR) refers to a corporation’s responsibility or obligations
toward society. (Racelies, 2018) CSR, as defined by the World Business Council for Sustainable
Development (WBCSD), is “a continuing commitment by business to behave ethically and
contribute to economic development while improving the quality of life of the workforce and
their families, local community, and society at large.” Hence, in order to achieve its goal,
businesses must be there in order to help the community not just to earn profit but to improve the
lives of the people living in the community. It can also be attained by recruiting more people to
do the job, generating employment or assisting them to earn and invest in order to improve their
living.
Aside from those things mentioned above, there is what we call Socially Responsible
Investment. How does this Socially Responsible Investment start? and how can it alleviate
poverty?
Socially Responsible Investment (SRI)
The social enterprise movement is growing and gathering supporters across the globe as an
innovative approach to business activity offering disadvantaged populations a path to human
development and economic prosperity. There is increasing recognition among businesses,
governments, and non-governmental organizations (NGOs) that their participation in these
initiatives can lead to substantial benefits for disadvantaged and underserved populations, while
simultaneously providing opportunities for income generation (Nielsen and Samia, 2008).
The SRI movement can be said to have taken off in 1970, when the first shareholder resolutions
were filed against companies investing or working under the apartheid regime in South Africa.
By the 1980, billions of dollars had been diverted from South Africa related companies. They
were forced to sell their operations in South Africa. The US government enacted statutes, such as
the Comprehensive Anti-Apartheid Act of 1986, banning new investments in South Africa. All
over the world similar actions were taking place. In response to the growing concern about
environmental issues, “green” unit trusts arrived in 1988 with the launch of the Merlin Ecology
Fund (now the Jupiter Ecology Fund). Other environmental funds soon followed. In the
beginning of the 1990s the first social index was created by the social research firm of Kinder,
Lydenberg, Domini & Co., Inc. (KLD): Domini 400 Social Index. In creating the Index, KLD
started by screening the companies in the Standard & Poor’s 500 Index at that time, eliminating
those companies that failed to qualify under the exclusionary and qualitative screens. The Co-
operative Insurance Society (CIS), part of the Co-operative Movement, was the first financial
service organization in the UK that adopted an ethical policy for all its funds, the so-called
Responsible Shareholding Scheme. In the United States, there are about 230 mutual funds that
follow SRI strategies in their investment process. Additionally, the rise of social indexes as
counterparts to the traditional, exclusively financial indices will give ethical investment a further
boost. In 1999, the Dow Jones Sustainability Group Indexes (one global index, three regional
indexes and one country index covering the US) were launched and in 2001, the arrival of the
FTSE4GOOD index marks a further move of SRI into mainstream investment (Broadhurst et al.,
2005).
Socially responsible investments, thus have a special role to play in alleviating poverty, creating
empowerment, and establishing entitlement at the grassroots level of socioeconomic
development. They require easily accessible, low cost, and amenable funds and technology that
can be sustained in the long-term rather than be some quick-fix solution. The end point of many
social enterprises is a participatory socioeconomic transformation in which not only the non-
competing poor and needy cooperate with each other, but also meaningful relations are created
between the resourceful and the needy to enhance community well-being (Choudhury et al.,
2008).
Financial Freedom
Job creation, good investments, sustainability will always lead to financial freedom of every
people, local community and the whole society. Financial freedom according ETMONEY Blog
is, “having enough residual income to cover your living expenses. It is not about being rich and
having tons of money but having enough to cover your expenses so that you can spend your
precious time doing what you like rather than doing things just to earn money.”
Nowadays, it is so difficult for us to achieve financial freedom although we are earning money
especially if we are burdened with growing debt, unexpected cash emergencies, wildly
extravagant spending, medical emergencies and other issues that hampers us to achieve it.
According to Matt Danielsson, there are 12 ways to help us in achieving financial freedom.
Among of these are as follows:
1. Set Life Goals
Every person must have a clear plan of his/her life and that includes checking your bank account,
what the lifestyle entails, and at what age this should be achieved. Your goals must be written
down so that you can prepare and establish a financial milepost at regular intervals.
2. Make a Budget
Most of us fail in making a budget. What you will do is to list down all your monthly dues and
make a monthly budget for all your expenses. You must stick to your budget and do not make
unnecessary purchases.
3. Pay Off Credit Cards in Full
Credit Cards are toxic to wealth – building. When you go to malls although you do not have
money, you will be tempted to swipe because of your existing credit card. See to it that those
purchases must be paid in full at the end of the month to avoid any interests and fees.
4. Create Automatic Savings
There are retirement plan, insurances, and other contribution benefits. Enroll in these benefits so
that you can have an automatic withdrawal in case of emergencies.
5. Start Investing Now
Take note that there has been no better way to grow your money than through investing. The
beauty of compounded interest can make your money grow exponentially over time, but you
need to wait to achieve meaningful growth.
6. Watch Your Credit
Do not acquire what you can not afford. Always keep track of all your credits so that you will
have no burden in paying all of them.
7. Negotiate
You must know how to negotiate things especially in buying stuff from small businesses.
Sometimes, spending huge money in big groceries is not practical compared in spending money
in markets. All you need to do is negotiate in buying bulk or repeated orders so that you can avail
discounts.
8. Continuous Education
Knowledge is always the greatest defense against fraud. If you have knowledge, they can not just
fool you. You will know how to track your transactions, you will know how to audit, and you
will also know that will help protect your rights.
9. Proper Maintenance
Taking good care of your properties can make them last long. Maintaining the properties is better
and more practical than buying a new one.
10. Live Below Your Means
Being economical while living a life to the fullest is not a hard thing to do. Live like a poor but
earn like a rich. Do not wish for something you cannot afford especially if you want it right
away. Patience is always a virtue.
11. Get a Financial Advisor
If you have lots of money yet they are not as readily available to convert to cash- get a financial
advisor to educate and help you make decisions.
12. Take Care of Your Health
Health will always be a wealth especially in this time of Pandemic. Many wealthy people,
companies go bankrupt because the owner got sick and the money that is intended for the
business is now used as buying the maintenance. Invest in good health with regular check ups to
doctors and dentists. Other companies have a limited sick days and others will even mark you
absent which will lead to loss of income. Ailments make insurance premiums skyrocket and poor
health may force earlier retirement with a lower monthly income.

POSTTEST:

Direction: Choose the best answer for each of the following questions. Write your answer in a
separate sheet of paper.
1. Why do people attracts more on sustainable business enterprises?
a. It is because they feel embarrass to work for a prestigious organization.
b. It suggests that if a company genuinely cares about the well-being of the greater
society, it would therefore stand to reason that it likely treats its employees well.
c. It is because no matter what the values of the work/management is, as long as the
job seeker has a work, he/she will still work.
d. No matter how tiring the work is, he/she will just say repeatedly “I love my job”.
2. What are the importance of establishing and sustaining business enterprises?
a. It can increase poverty.
b. More jobless and unemployment.
c. There is an increase of force labor.
d. It can alleviate poverty.
3. What do you mean by socially resposible investment or SRI?
a. It will not mind whether there are lots of unemployed people.
b. It alleviates poverty but will not creat empowerment.
c. They require easily accessible, low cost, and amenable funds and technology that
can be sustained in the long-term rather than be some quick-fix solution.
d. It gives advantage populations a path to human development and economic
prosperity.
4. Who will benefit more in socially responsible investment (SRI)?
a. The disadvantage population.
b. The advantage population.
c. The elites.
d. All of the above.
5. Below are the habits that help achieve financial freedom except:
a. Set life Goals
b. Pay off Credit Cards in staggered basis
c. Create Automatic Savings.
d. Watch your credit