Entrepreneurship and Ethics
What this domain tests
Entrepreneurship: meaning, characteristics, functions and barriers, plus business ethics, CSR and ethical decision making.
Core rules
- An entrepreneur bears risk, organises factors, innovates and pursues opportunity; entrepreneurship is more than self-employment.
- Functions: idea generation, feasibility study, resource mobilisation, launching and managing growth.
- Business ethics are principles guiding conduct: honesty, fairness, transparency and respect for stakeholders; ethics is not identical to legality.
- CSR under the Companies Act, 2013, Section 135: companies meeting the net worth, turnover or net profit thresholds must spend at least 2% of average net profits of the three preceding years on CSR.
Worked example
A supplier offers substandard raw material at 20% below market price. Reasoning: short-term cost saving conflicts with product safety and reputation. Identify stakeholders such as customers, employees and regulators; apply honesty and non-harm; reject the offer and document the decision. Ethics is not only about what is legal.
Traps that cost marks
- Equating entrepreneurship with wage employment.
- Treating CSR as charity or public relations.
- Assuming legal conduct is always ethical.
- Quoting Section 135 thresholds loosely; learn them.