Course Subject : ETHICS FOR BUSINESS
Module
: 01
General Instructions
1. Read and do your best to gain and learn from the lectures.
2. Deepening activities and cases are given at the end of every chapter. Carefully read
and answer them with your best ability.
CHAPTER 1 - ETHICS AND BUSINESS
“There are two educations. One snould teach us how to make a living and the other how to live." - John T Adams
Introduction
Business is part of human society. And
since it is part of the complex web of
interaction among institutions and
people, its activities must be viewed and
examined from the perspective of
morality. Business without ethics
threatens the survival of human society
Objectives :
At the end of this chapter, the students
are expected to
1. Gain understanding on the nature of
business from the moral perspective
2. Rationalize the importance of ethics in
business
3. Apply the dynamics of moral reasoning
as a framework for making ethical
decisions in business
4. Examine the morality of profit-motive
in business
5. Justify the need for ethical propriety in
business and the corporate world
Lesson 1. The Nature of Business
Business is as old as human civilization.
In the beginning of human existence, men
took care of their own needs and wants.
They hunted animals and cultivated the
land for food and clothing and people
simply provided for their own. As time
went on, some people became more
proficient in doing one type of work or in
producing one or several types of goods.
In doing so, other people sought their
products and services so that they need
not spend more time, money and effort to
acquire these goods that they need. The
and in some cases, destroys the fiduciary
relationships of people. The study of
Business Ethics paves the way for our
common understanding of the
fundamental concepts of what is right and
wrong in our human conduct and its
implications to business as an important
human activity.
"manufacturer then found out that he
could continue supplying the products or
services to people if he had enough funds
or goods to barter with. He also learned
that he could expand his trades if he was
able to acquire more capital needed to
continue his entrepreneurial activities.
The more he acquired funds, the more he
was able to supply goods and services to
his customers. The requirement therefore
is for him to earn profit in order to stay in
business and provide the goods and
services needed by the customers.
For as long as people have needs and
wants, there will always be business.
Those who have capital will continue to
produce and sell goods and services that
will satisfy the needs and wants of
customers.
Business is an activity that is part and
parcel of human society. Society will not
exist without business. Since business is
an integral part of society, its activities
must be examined from the ethical
perspective, in the same way that society
examines politics, economics,
government, culture and religion from the
moral point of view. The fundamental
reason for examining the activities of
business from the moral perspective is for
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the promotion of the common good,
protection of the individual's interests and
the preservation of the human society in
general. Without ethics, business will be a
chaotic human activity because there will
be no common understanding and
agreement about what is the right and
wrong human conduct.
Business is also a complex enterprise that
involves major activities like
purchasing.manufacturing, marketing,
advertising, selling and accounting.
Businessmen deal with suppliers,
customers, workers, employees and even
competitors. Ironically, it is within this
structure of interaction of people that a
lot of questionable practices
occur-misrepresentation, questionable
pricing policies, false advertising,
misbranding, lying, adulteration, unfair
competition, and local price-cutting,
among others. The bottom line is,
somewhere, somehow people's rights are
being violated, their values disrespected
and the interest of the common good
disregarded. Business is a good human
activity. However, it is the selfish motive
and personal interests of unscrupulous
businessmen that make business bad and
in some instances, unproductive
Lesson 2. The Importance of Ethics in
Business
The study of Business Ethics paves the
way for a common ground in our
understanding of the fundamental idea of
what is good and what is bad in our
human conduct. Without ethics, people,
especially businessmen, will set their own
moral standards, moral rules and moral
principles. This would result in a kind of
subjective morality, in which case, what is
good for one may be bad for another and
vice versa. With this subjective ethical
paradigm, business people will consider
some of their actions good but
unacceptable to others, e.g., cheating the
customers to gain profit may be
acceptable to some businessmen but bad
for others. Abortion may be correct for
one person but evil for another person.
Ethics as a science does not only evaluate
the morality of our human conduct but
also provides us with a common
understanding of the universal, objective
and irreversible moral principles that
should govern our human behavior and
guide our moral decisions.
Another important aspect in business
that needs profound examination is the
manner in which business leaders and
managers confront ethical issues and
problems affecting the flow and dynamism
of business activities. One amazing thing
that is happening to business enterprises
today is the use of quantitative techniques
to measure the viability and profitability
of business. Because of this trend,
business corporations nowadays evaluate,
measure and predict the outcome tneir
business plans and decisions in terms of
profitability and quantity of goods sold.
Thus, business firms today are capable of
predicting the supply and demand of
commodities, make annual budgets,
determine the costs and benefits of their
decisions and calculate monthly and
yearly revenues and profits. Certainly,
there is nothing wrong with this approach
of managing business organizations
except that the quantitative approach is
not applicable when managers talk about
moral issues and ethical problems of
people. The resolution of some ethical
issues like sexual harassment, bribery,
misrepresentation, theft, insider trading,
conflict of interest and job discrimination,
among others, cannot be resolved by
quantitative approach alone but also by
philosophical analysis and moral
reasoning Business Ethics opens a novel
way of resolving moral problems and
ethical dilemmas affecting business
transactions and the interactions of
people in the corporate world. The study
of Business Ethics will also enhance the
human and interpersonal skills of
managers so they can be more effective in
managing the human side of the
organization.
Lesson 2. The Businessman's Myths
about Business Ethics
Businessmen are not immoral. And it
would be disastrous to judge and
conclude that business people commit
unethical acts in doing business.
Business, certainly, is a good and
productive human activity. However, it is
the businessman's wrong perception
about the role that ethics plays in the
world of business that affects his moral
judgment and decision making. Here are
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some myths that businessmen have about
Business Ethics (De George, 1982).
Myth # 1: Ethics Is a Personal Affair and
Not a Public Debatable Matter
Some businessmen claim that ethics is a
private issue and not a public matter. In
one sense, this is true because one's
concept of morality is a result of the
environmental
Tactors like religion, culture and family
values that have had a great impact on
the development of the ethical person. On
the other hand, man is also a social
being, which means he is always a being
in relation with other men. To say,
therefore, that ethics is a very subjective
matter is a myopic view of our human
nature. If ethics is a subjective thing, then
it will make morality very personal and
relative, therefore, what is good To one
person may be bad for another. And what
is bad for one person may be good for
another person. If one believes that lying
is good, it does not necessarily mean that
it is also good for others. If morality is
subjective, people will make their own
moral laws and principles and could be
worse if they begin to impose these
personal norms on others. People are
entitled to their own values and religious
beliefs but in the exercise of these value
systems, they must also consider the
values and religious orientations of
others. Certainly, our personal rights are
always limited by the rights of others. The
individual's moral values may be very
subjective but in the exercise of this value
system, he must also consider the impact
and gravity of this actions on others.
Thus, ethics is not a personal affair but a
public debatable matter.
Myth # 2: Ethics and Business Do Not Mix
Some businessmen claim that Ethics has
no place at all in business. This view is
most likely grounded on the assumption
that business is an autonomous human
activity where ethical standards do not
exist and that businessmen are free to do
what they want. To claim that business is
an activity which is independent of
morality is again a shortsighted view of
the relationship between ethics and
business. Since business is part of
human society and its activities operate
within the structure of beliefs and value
systems of people, it must also be viewed
and examined from thee perspective of
ethics. Any business activity that is
devoid of morality will bring more harm
than good to people in particular, and the
society in general.Furthermore, the belief
that ethics does not mix with business
will only justify illegal activities and will
most likely promote questionable
practices in business activities. Certainly,
Ethics has an important place in
business.
Myth # 3: Ethics in Business Is Relative
A kin to the view that ethics is a private
and subjective matter is the claim that
morality depends on the person himself
and his environment. This is another
wrong perception on the role that ethics
plays in the world of business. Some
businessmen claim that morality is
relative, which means, the fundamental
concepts of right and wrong depend on
cultural and religious values of people.
This implies further that what may be
considered a right action in one country
may be unacceptable in another cOuntry.
Abortion may be legal in
Japan but certainly not in the Philippines.
If morality is relative then what is good in
one place may be evil in other places, and
vice versa. And if morality is Viewed this
way, then who's going to tell us which
actions are good and which actions are
bad objectively? The fruth of the matter is,
there are universal moral principles that
people share and agree upon regardless of
religious orientations, cultural
expressions and value systems. And so,
all peoples around the world believe that
murder is always wrong, that stealing is
always a bad action and bribery is always
unacceptable. The study of Ethics paves
the way for our common understanding of
the fundamental principles of right and
wrong as reflected in our nature and
conduct as human beings.
Myth # 4: Good Business Means Good
Ethics
Some businessmen claim that good
business means good ethics. This
certainly is a myth. A business may be
profitable but the means of acquiring
profits may be questionable.
Drug-trafficking is a profitable business
and so is human smuggling and the like,
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but they certainly violate some rules and
values of people. The study of Ethics in
business encourages businessmen and
managers to look closely into the end and
the means of doing business. Profit
maximization is a good end in business
but the means of getting those profits
must also be examined. The end doesn't
justify the means.
Myth # 5: Business Is a War
Some business leaders and businessmen
believe that business is a war. For them,
the market is an arena of gladiators trying
to fight for survival and vying for the
number one position. Because of this
belief, businessmen often resort to using
predatory tactics to destroy the
competitors in order to emerge as the
market leader. Business is a good human
activity. And as an integral part of the
society, it must promote healthy
competition and not destroy the
competitors.
Lesson 4. The Relationship Between
Ethics and Business
Ethics plays an important role in
business. Without morality, business will
be a chaotic human activity. Ethics is not
a study of positive laws intended to
govern and regulate the actions of people
doing business. The concern of ethics as
philosophical science is to discover that
there are unwritten laws, written in the
hearts of men that should govern our
numan conduct where positive laws may
be absent, and in Some cases, not very
clear. The following arguments justify the
significant role that ethics plays in the
world of business.
4.1 Business is an integral part of human
society. Therefore, the actions of
individuals and institutions in business
must be subjected to moral rules and
moral evaluation.
4.2 In business, as in any other human
endeavor, what Is legal may not
necessarily be moral. People tend to
confuse legality with morality. An action
may be legal but not necessarily moral,
e.g, capital punishment (death by lethal
injection). For some, this is legal but in
truth, this is immoral. Ethics provides us
with a clear distinction between morality
and legality.
4.3 Laws are insufficient. They cannot
cover all aspects of our human behavior.
Laws are sometimes absent or unclear in
some areas of our human conduct. Ethics
is the unwritten law, written in the hearts
of men. In the absence of the law, Ethics
will help us discern the correct conduct to
follow based on the dictates of conscience
and reason.
4.4 In today's technocrat-oriented
business education, the trend is to train
managers to maximize profits by
quantifying the operations of business.
Certainly, the operations or business
must be aided by quantitative
instruments to measure and predict
expected outcomes. However, this is only
one side of managing the enterprise.
Managers and business leaders must also
be prepared to respond to complex
situations bearing ethical consequences.
4.5 Peter Drucker argues that "the
business enterprise is an organ of soCiety
and Its actions have a decisive impact on
the social scene. Drucker simply reminds
us that a business corporation is not just
created to make profits but also to
consider its moral and social obligations
to its stakeholders. Business
organizations should not just look after
their own interests but also the interest of
the common good.
Lesson 5. Moral Reasoning in Business
The essence of studying Business Ethics
is to provide the manager as a decision
maker with a framework for the resolution
of moral issues and problems affecting
business activities and the organization
itself. Moral reasoning is a process in
which ethical issues and problems are
benchmarked against a moral standard so
that a moral judgment is made possible.
Since managers are tasked to solve
problems of the organization and its
related activities, it is also the
responsibility of managers to help in the
resolution, if not the prevention, of moral
issues that may have adverse effects to
the operations of the business.
Characteristics of a Good Moral Standard
(Shaw, 1999):
1. A good moral standard is one that
looks at the issue as something that is
very serious, e.g, murde, graft and
corruption, stealing.
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2. A good standard must be grounded on
good mora argument. A good argument is
an argument that always tells the truth. A
solid moral argument leaves no room for
loopholes and counter arguments.
3. A good standard should be objective
and not subjective. It should be
universally accepted and should apply to
all. What is good for one person should be
at the same time good for everybody. A
good standard, when violated, brings
about feelings of guilt, shame and
remorse of conscience.
Requirements for a Good Moral Judgment
1. A good moral judgment must be logical.
This means that the decision maker must
arrive at an informed resolution of the
issue based on logical reasoning.
2. A good moral judgment must be based
on facts and solid evidence. The
information used in the process of moral
reasoning must not come from weak
sources like hearsay, rumors and
grapevine
3. A good moral judgment must be based
on sound and defensible moral principles.
A weak ethical principle is open to a lot of
criticisms.
Lesson 6. The Morality of Profit-Motive
People go into business for a number of
reasons. Some go into business for
personal satisfaction. Others are in
business to earn a livelihood. Still others
are in business because they want to
serve the society through the goods and
services they offer to the customers. But
the most common, if not the most
dominant reason why people go into
business, is to make a profit. Business as
an activity is unthinkable without profit
as motive.
Businessmen consider profit as a form of
anticipated reward or a compensation for
the efforts they spend, skills they apply
and returns for the capital they invested
in putting up and organizing the
business. Traditionally, businesspeople
have looked at the profit-motive as the
most important aspect of business. The
view of Milton Friedman, a noted
economist, reflects this sentiment. He
says that the "only responsibility of
business is to make profit so long as one
stays within the rules of the game and
engages in open and free competition
without reception or fraud." Peter
Drucker, an equally tamous management
guru on the other hand, disagrees with
this view and says that, "the primary
responsibility of business is to look for
customers and satisty their needs and
wants. Following this line of thinking,
Drucker is simply hinting that, albeit,
profit is an impotant aspect of business,
there are other factors that the
businessman must also consider in doing
business such as customer satisfaction,
quality products, after sales policies, fair
and reasonable pricing, among others.
Because of these differences of opinions,
the issue of profit-motive is a subject
matter that needs to be carefully
considered in the study of Business
Ethics. Is profit-motive in business good
or bad? Is it moral or immoral?
6.1 The Assumptions of Profit-Motive:
Understanding the nature and morality of
profit-motive starts with the examination
of some given factors and assumptions in
which the idea of profit-motive operates.
These factors are the following:
1. Profit-motive in business is an ethical
issue. Since business is an integral part of
society, its activities, including
profit-making, must be examined from the
perspective of morality. However, in
business, the concept of what is a
reasonable profit is still a subject of
endless debates.
2. Profit-motive as an ethical issue
operates within the two important aspects
of our human conduct freedom and the
structure of business. The element of
freedom implies that businessmen have
the right to decide on the amount of profit
they want to earn in the process of selling
goods and services to customers. The
structure of business, on the other hand,
is a tacit guideline that governs business
activities including profit-making nus,
any business activity is aimed at a
monetary gain because that is part of
the structure of Dusine5S. The ultimate
the criterion therefore of gauging the
Success or failure of business is its ability
to generate profits.
6.2 The Good and the Bad Sides of
Profit-Motive:
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Just like any other ethical issue,
profit-motive has two sides-the good and
the bad, Fr. Moga, S.J. (2004), describes
vividly the positive and negative
implications of profit-motive:
A. The Good Side of Profit-Motive:
1. Profit-motive motivates people to do
something meaningful, e.g., it gives
human life a goal to pursue and
something to live for.
2. Profit-motive promotes ingenuity and
cleverness in running a business, e.g.,
business leaders and entrepreneurs have
to struggle hard to overcome obstacles in
order to achieve success.
3. Profit-motive makes people productive.
Because of their desire for money,
businessmen have become productive and
some of their products have been useful
and have enhanced the quality of human
life.
4. Profit-motive generates potential capital
for. The business. Profit is potential
capital, something that can be invested to
establish new businesses. In this way,
profit also results in more jobs and more
goods and services for the public. The
society as a whole thus benefits from the
profits earned by a profit- oriented
capitalist.
B. The Bad Side of Profit-Motive:
1. Profit-motive promotes rivalry among
competitors. Sometimes the competition
becomes so stiff that it results into a
"dog-eat-dog'' world of business where
success is achieved by competing with
others and pushing them down in order
that one's own business might succeed.
This certainly dehumanizes business as
an important human activity.
2.Profit-motive makes people focus only
on making money, that is, to sell as many
goods as possible without considering
whether or not these products satisfy the
needs and wants of consumers and endusers.
3. Profit-motive turns the businessman
from being a refective and a questioning
person because he focuses his attention
only on the practical activity or making
money. Thus, a life centered on profit only
results into a narrow view of existence,
deficient in many important dimensions of
human life.
4. Profit-motive promotes self-interest
rather than the common good. It has, to
some extent, benefited some businessmen
but it has also created some social costs
that many people, if not the majority,
have to bear, e.g., depletion of the natural
resources, toxic wastes being thrown into
the rivers, pollution of the environment
and disregard for the next generations
to come.
6.3 Ethical Considerations of Profit-Motive
in Business:
1. Earning profit is a good and valid
activity in business. Commercial activities
will be absurd without the profit-motive.
However, in the process of generating
profit, an ethical discernment is required
for the businessman: Is my profit fair
enough for me and my customers? Did I
consider important factors and
parameters, goods sold, overhead,
mark-ups, profit margins, and the like?
2. Making profit such as the costs of
Making excessive profits is totally wrong.
It leads to greed, avarice and
manipulation of the customers.
3.Profit is not the "be-all and the end-all"
of doing business. Certainly, there are
other factors to be considered in business
such as, customers' satisfaction, respect
for the environment, enhancement of the
quality of life and the preservation of the
society.
4. The teachings of the Catholic Church
do not totally condemn profit as part of
business activity. Pope Pius XI, in
Quadragesimo Anno (1931). does not
prohibit the producer from enriching
himself provided "one respects the laws of
God, does not prejudice the rights of
others, and works according to faith and
right reason." (QA #136)
Lesson 7 The Concept of Moral
Responsibility
In the story of creation, as recounted in
the third chapter of the book of Genesis
(Gen. 3: 1-13), the first man and woman
committed an infraction against God's
commandments. As told in this particular
story, Adam and Eve violated God's
commandment by eating the fruit of the
Tree of Knowledge. As a result of this
infraction, both Adam and Eve tried to
run away and hide themselves from God.
When confronted about their
disobedience, they tried to blame one
another and eventually also blamed the
serpent. This short metaphorical story
reflects man's propensity to avoid
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accountability and responsibility for his
bad or evil actions.
However, man is by nature a being and a
creature who is Supposed to be
responsible and accountable for his
actions. The reason for thiş is twofold:
1) Man is a rational being. This means he
is capable of moral judgment. Further,
this also means that man is a thinking
being, thus, he is aware of his intentions
as well as the consequences of his
actions. Man therefore, knows what he is
doing because he is a rational and a
thinking creature.
2) Man is a free being. This means that he
has the capacity to exercise his choices.
This assumes that man is capable of
choosing what is a good and a bad action
for him.
These two assumptions provide the bases
or giving praise, blame, reward and
punishment for his actions. These
assumptions likewise provide the reasons
why we are held responsible for our
actions. These assumptions, e.g., that we
are a thinking and a free being, imply that
we are capable of assuming responsibility
for our actions.
3. Moral Responsibility likewise refers to
one's capacity for making moral or
rational decisions on his own.
According to Shaw, if a person is not
morally responsible in this third sense, he
or she cannot be considered morally
responsible in either of the other senses.
Lesson 8. Business Ethics Defined
8.1 Business Ethics is the study of what
is the right and wrong human behavior
and conduct in business.
8.2 Business Ethics is a study of the
perceptions of people about morality,
moral norms, moral rules and ethical
principles as they apply to people and
institutions in Business.
8.3 Business Ethics is the study,
evaluation, analysis and questioning of
ethical standards, policies, moral norms
and ethical theories that managers and
decision makers use in resolving moral
issues and ethical dilemmas affecting
business.
The author WilliamH. Shaw, in his book
Business Ethics (1999, pp.163-165),
came up with three meanings of moral
responsibility:
1. Moral Responsibility refers to holding
to people morally accountable for some
past acton or actions. This simply means
assigning to people blame or praise for
particular actions that they have
performed.
2. Moral Responsibility also means care,
welfare or treatment of others as derived
from the specific social role that one plays
in the society. Thus, parents are
responsible for taking care of their
children in the family, teachers are
responsible for what occurs in their
classrooms and doctors are responsible
for the treatments of their hospital
patients. In this second sense, moral
responsibility implies a duty to be
performed by a person depending on his
role in the society.
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ACTIVITY
1.Discuss why ethics is important in
business.
2. Refute the businessman's myth that
"ethics has no place at all in business."
3. Explain the phrase: "Not all that is legal
is moral, but what is moral is worth
legalizing.
4. Define Business Ethics. What is your
own personal definition of Business
Ethics?
5.Explain the phrase: "Ethics is the
unwritten law written in the hearts of
men.
6 What is your personal view on
profit-motive?
7.Do you agree with Milton Friedman that
the only responsibility of business is to
maximize profits? Why or why not?
Discussyour answer.
8. What is the Catholic Church's stand on
profit-motive?
9 What is your concept of reasonable
profit?
Cases for Analysis
Case 1: Ethies vs. Profit
A large American company participates in
highly competitive industry. To meet the
competition and achieve profit goals
ompany has chosen the decentralized
form of organization. Each manager of a
decentralized center is measured on the
basis or contribution, market penetration,
and return on investment. Fan to meet
the objectives established by corporate
management to these measures is not
accepted and usually results in demotion
or dismissal of a center manager.
An anonymous survey of managers in the
company revenue that they felt pressured
to compromise their personal etnica
standards to achieve the corporate
objectives. For example, certain plant
locations felt the pressure to reduce
quality control to a level that could not
ensure that all unsafe products would be
rejected. Also, sales personnel were
encouraged to use questionable sales
tactics to obtain orders, including offering
gifts and other incentives to purchasing
agents.
The chief executive officer is disturbed by
the survey findings. In his opinion, the
company cannot condone such behavior.
He concludes that the company should do
something about this problem.
Questions:
1. What are the ethical problems
mentioned in this particular case and
what are the probable causes of these
problems?
2. Is it all right to do something illegal or
unethical to maintain the company's
image and profitability?
3. If you are the CEO of the company,
what would you do and why?
Case 2: Friendship in Business
Asia Pacific Sugar and Sweets
Manufacturing Company ordered
molasses from Philippine-Hawalian
International Sugarcane incorporated on
November 5, 2000. When the time for
payment came, Asia Pacific Sugar and
Sweets Manufacturing Company was not
ready to pay due to tight financial crisis it
was experiencing. Mr. Rolando Gutierrez,
the manager of the said company is a
friend of Mr. Frederick Dy, the owner of
Philippine Hawaiian International
Sugarcane Incorporated. He talked with
Mr. Dy and asked him if it was all right for
the payment to be delayed. For
friendship's sake, Mr. Dy agreed. It was
only 20 days afterwards that the buyer
offered to pay. The seller accepted the
overdue account and started delivering
the molasses. Upon receiving the second
shipment, the production manager of Asia
Pacific Sugar and Sweets Manufacturing
Company reported to Mr. Gutierrez that
the molasses did not meet the indicated
quality in the invoice. Mr. Gutierrez
ordered the molasses to be returned.
Enclosed in the invoice was a
memorandum citing the reasons why it
was returned. This action enraged Mr. Dy.
Immediately, he canceled the contract and
argued that the delay of payment was a
form of "breach of contract.
Questions:
1. Was the action of Mr. Dy to cancel the
contract legally correct and morally
justified?
2. Is it appropriate to extend friendship in
business transactions? Why or why not?
Discuss your answer.
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CHAPTER 2 - THE PHILOSOPHICAL BACKGROUND OF BUSINESS ETHICS
Without moral perception, man is only an animal Without morality man as a rational being is a failure. Ramon B. Agapay
INTRODUCTION
Business Ethics as an applied branch of
General Ethics must be studied from the
perspective of philosophy. This is because
ethics is part of philosophy, and it is
unthinkable to discuss ethical concepts
and moral principles without being
philosophical. Secondly, the process of
moral reasoning involves the use of
metaphysical terminologies and concepts
that is best understood only in the light of
philosophical abstractions.
OBJECTIVES:
At the end of this chapter, the students
are expected to:
1. Compare and contrast ethics and
philosophy
2. Evaluate the nature of the human act
from the ethical perspective
3. Analyze critically the various
approaches of evaluating the morality of
the human conduct
4. Understand man's nature as a moral
being
5. Differentiate ethics from morality
Lesson 1. Ethics and Philosophy
What Is Philosophy
Philosophy, etymologically, came from two
Greek words philos, which means love,
and "sophia," which means wisdom.
Philosophy means "Tove of wisdom.
"Ancient tradition tells us that the early
Greek thinkers called themselves wise
men," and that out of humility,
Pythagoras (570-490 B.C.E.) wanted to
call himself simply a "lover of wisdom or
"philosopher." Hence, a philosopher is one
who literally loves wisdom.
As a science, philosophy is interested with
the meaning of reality including our
human experiences. It is a science that
seeks to explain the ultimate cause of
everything by the use of human reason
alone. To philosophize means to wonder
about life, to question reality and to find
sense in what we do as human beings.
Philosophy as a science therefore gives
theone philosophizing an opportunity not
just to reflect and think but also to
analyze the contents of his thoughts. In
this case,philosophy is not actually an
abstract or speculative science,as some
people think, but a subject that is
directed towards meaningful activity as a
result of profound reflection and analysis.
Other definitions of philosophy
1. Philosophy, according to Plato, is the
highest form of inquiry.
2. For William James, philosophy is a
collective name for questions that have
not been answered to the satisfaction of
the one asking the question. (Questions
like: Who am 1? How do I live? Where am
I going? are queries that have no concrete
answers.)
3.For some, philosophy is the worldview of
the person (weltanschauung, in German)
or the person's philosophic view of the
universe or reality in relation to the
purpose of actions and events. (Peter
Parker, a.k.a. Spiderman has his own
personal philosophy-with great power
comes great responsibility.")
4. For others, philosophy is a conceptual
analysis or thinking about thinking or
simply reflecting on the contents of our
thoughts.
5. Still for others, philosophy is primarily
concerned with finding the meaning and
worth of reality including our human
experiences.
6. Philosophy is also defined as the
science that studies the ultimate causes
or explanation of things attained by the
use of human reason alone.
These different definitions of philosophy
only affim that it is a metaphysical
science which basically deals with
abstractions. It is from this perspective
that Business Ethics, as an applied
branch of philosophy, must be discussed
since it involves investigating the human
values which are basically metaphysical
in nature and which are operative in
fiduciary relationships both in business
transactions and in the interactions of
9
people in business organizations and in
the corporate world.
Lesson 2. Divisions of Philosophy
1. Theoretical or Speculative
Philosophy-studies the truth to be
known, e.g., God, immortality of
the soul, origin of the universe,
among others.
2. Practical Philosophy studies truths
to be acted upon,
e.g,ethics.axiology, semantics, and
the like.
Under Theoretical or Speculative
Philosophy Are the following:
a) Cosmology
Cosmology is a subject that studies the
origin and destiny of the universe,
evolution and the ultimate fate of the
universe. The word universe" comes from
the Greek word Kosmos. The first
philosophers were actually "cosmologists
Since they dealt with the questions
regarding the origin of the universe in a
scientific and philosophical manner.
b) Ontology
Ontology deals with the nature of
existence of things and the status of
reality. The word "onta" is a Greek word
which means being. "Ontology is also
referred as the theory of being. What does
to exist mean?" or "What is the nature of
being are some of the questions often
asked in Ontology. Ontology is actually a
branch of Metaphysics.
c) Metaphysics
Metaphysics came from the Greek
words-meta(beyond) and physikon
(nature). As a branch of philosophy,
metaphysics studies the nature of the
mind, the self and consciousness. It also
investigates the nature of religion,
existence of God, the concepts of time,
space, cause and chance. The word
metaphysics is said to originate from the
mere fact that the corresponding part of
Aristotle's work was positioned right after
the part called physics. But it is not
unlikely that the term won a ready
acceptance as denoting this part of
philosophy because it conveyed the
purpose of metaphysics, which is to reach
beyond nature (physis) as we perceive it,
and to discover the true nature" of things,
their ultmate essence and the reason for
being.
d) Psychology
Psychology for the Greeks was basically a
study about the nature of the soul of the
person and other entities. It was the
philosopher Aristotle who coined the word
Psychology which came from the Greek
words-psyche meaning soul and logos
meaning science or study. Today.
Psychology is defined as a science that
studies human and animal behavior.
e) Theodicy
Theodicy is also known as Rational
Theology. Etymologically, Theodicy came
from the Greek words-theos meaning God
and dike meaning justice. As a branch in
philosophy, Theodicy investigates the
nature, being and the attributes of God
not based on the bible and divine
revelation but by logical abstractions and
reasoning.
f)Epistemology
Epistemology comes from the word
episteme meaning knowledge. It is a
branch of philosophy that addresses the
philosophical problems surrounding the
theory of knowledge. Epistemology is
concerned with the definition of
knowledge and related concepts, the
sources and criteria of knowledge,
the kinds of knowledge possible, the
degree of its veracity and the exact
relation between the one who knows and
the object known.
Under Practical Philosophy Are the
Following:
a) Semantics
Semantics came from the Greek words
sema meaning sign or mark and
semantikos meaning significant. This
practical branch of philosophy studies the
meaning of words and its linguistic forms,
their functions and their relationship to
other words.
b) Axiology
The word Axiology is from the Greek
words axios meaning worthy, and logos,
meaning discourse or study. Axiology is
thus the discourse or study of the
philosophy or system of value Judgments
or worthiness. Axiology studies values, its
origin, types and characteristics.
c) Aesthetics
Aesthetics is the branch of philosophy
that aims to establish the general
principles of art and beauty. It is the
10
study of beauty and art. It can be divided
into the philosophy of art and the
philosophy of beauty. It is a relatively new
branch of philosophy that emerged in the
early 18th century (eariy 1700s) in
England and Germany, more than 2000
years after the emergence of the other
branches of Western philosophy (which
began earlier in Greece, around 600
B.C.E.). Aesthetics came from the Greek
word aisthetikos which means one is
perceptive of things through his
sensations, feelings and intuitions.
d) Logic
Logic deals with the nature of thinking
and reasoning using empirical support to
establish the truth. It is the study aimed
at determining the conditions under
which one is justified in passing from
given statements, called premises, to a
conclusion that is claimed to follow from
them. Logical validity is the characteristic
of an argument that guarantees that if the
premises of the argument are true then
the conclusion must necessarily be true.
☻Deductive Reasoning - reasoning from
universal truth to particular.
☻Inductive Reasoning reasoning from
particular to universal or general
principles.
e) Ethics
The term Ethics is derived from the Greek
word ethos which means "characteristic
way of acting" which is proper to man as a
rational being. The Latin word for ethos is
mos (or mores). Hence, we understand
why Ethics is sometimes called a Moral
Science or Moral Philosophy.
The goal of Ethics as a science is to
investigate the nature of the human act or
human conduct. But the formal object of
Ethics, meaning its point of view in
studying human conduct, is the right
morality or rectitude of human acts.
Ethics is a philosophical science that
studies the morality of human acts. As a
science, ethics is concerned with the
analysis of the nature of human conduct
from the point of view of morality.
Many of us hold, whether one knows it or
not, that there are two distinct and
contradictory principles that operate
within the structure of our human
behavior. First, man believes that there
are certain things that he should not do
to anyone or to others. For example,
stealing or harming our bodies. Second,
man believes that values are "subjective
and incapable of being disputed between
different individuals. These claims are
contradictory since claiming that it is
wrong to steal from you is in fact a value
judgment. But if the second claim that
value judgments are subjective is true,
then how can the first claim be true as
well? The claim that stealing is wrong is
merely man's 'subjective opinion', and
therefore man has no grounds on which
to claim that another has really been
wrong.
This problem is one (but not the only) way
to begin to look at the study of Ethics.
From the very beginning of philosophy,
philosophers have attempted to answer
the question: How should we act? They
take it as a given that there is a difference
between living rightly or well and living
wrongly or badly. Ethics provides us with
an answer to one of our basic social needs
by defining the behaviors we expect and
will accept from one another. ideally,
ethics allows us to live together,
productively and in harmony with one
another.
Lesson 3. Definitions of Ethics
[Cf. Felix Montemayor. (1994). Ethics: The
Philosophy of Life. Mandaluyong City:
National Book Store, pp. 8-9]
☻Ethics is the practical science of the
morality of human acts.
☻Ethics is the study of human conduct
from the standpoint of morality.
☻Ethics is a normative science based on
reason which studies human conduct and
provide norms for its natural integrity and
honesty.
☻Ethics is a practical science that guides
us in our actions that we may live rightly
and well.
☻Ethics is the science which lays down
the principles of right living
☻Ethics is the science of human acts
with reference to right and wrong.
☻Ethics is the scientific inquiry into the
principles of morality.
11
Lesson 4. Ethics and Morality
The terms ethics and morality are often
used interchangeably. Indeed, these
terms usually can mean the same thing,
and in casual conversation there isn't a
problem with switching between one and
the other. However, there is a distinction
between them in philosophy.
Morality refers to the quality of goodness
or badness in a human act. Good is
described as moral and bad as immoral. It
means conformity to the rules of right
conduct. It implies judgment and refers to
what we would call moral standards and
moral conduct while ethics is used to
refer to the formal study of those
standards and conduct. For this reason,
Ethics is also often called moral
philosophy. Ethics, on the other hand,
involves the study of those standards and
judgments which people create. Ethics
assumes that the standards exist and
seeks to describe them, to evaluate them,
or to evaluate the premises upon which
those standards exist. Ethics basically
investigates the nature of moral
principles, ethical systems and moral
norms that people use to justify their
moral judgments. E. Babor (2004) argues
that while ethics provides principles or
bases for right or wrong and good or bad
actions, morality actualizes the theory.
Ethics in this case outlines the theories of
right or wrong. good or bad actions.
Morality, however, translates these
theories into actions. Thus, according to
Babor, moralíity is nothing else but a
doing of ethics.
Lesson 5. Ethics as a Normative
Science
Ethics is a branch of philosophy and is
considered a ormative science because it
is concerned with the systematic study of
the norms of human conduct, as
distinguished from formal sciences such
as Mathematics, physical sciences such
as Chemistry and Physics, and empirical
sciences such as Economics and
Psychology. As a science, however, ethics
must follow the same rigors of logical
reasoning as the other Sciences.
Ethics is a normative science because it
involve systematic search for moral
principles and norms that are used to
justify our moral judgments. The
formation of a sound moral judgment
presupposes a profound analysis and
justification of n ethical principle or
theory.
There are three categories of General
Ethics:
1) Descriptive Ethics-consists of studying
and describing the morality of a people,
culture, or society. It also makes
comparisons and contrasts on the
different values, principles, code of ethics,
beliefs, and practices of people. It serves
as the foundation of Normative Ethics and
provides a standard of the morality of a
people, culture or society. This is closely
related to Anthropology, Sociology and
Psychology as these disciplines aim to
discover the moral beliefs held by a given
society, group or organization. it does not
prescribe or attempt to assess the moral
soundness of any ethical system but only
to describe objectively the values and
beliefs of people.
Examples:
Psychological Egoism - a concrete example
of Descriptive Ethics is the study of
human motivation. It says nothing about
what is good or bad or right or wrong
rather it simply declares results based on
various scientific studies. Cultural
Relativism-does not prescribe how people
should act, rather it describes how
people, when grouped and observed in
their own cultural realities, actually differ
in their behavior. What is good or bad,
moral or immoral according to this theory
is relative to the people's own culture or
sets of cultural beliefs and practices.
In other words, Descriptive Ethics is very
objective in studying human behavior but
it does not provide a clear standard of
morality. It simply describes how people
act and does not prescribe how people
should act.
2) Normative Ethics involves moral
judgment based on ethical norm or
theory. This consists both of the basic
moral principles and values and the
particular moral rules that govern
people's behavior, which is right or moral
and wrong or immoral. The three tasks of
Normative Ethics are the following:
12
a. To form into a related whole the various
norms, rules and values of a society's
morality.
b. To find the basic principle from which
the particular norm can be derived.
c. To justify an ethical norm or moral
principle.
3) Metaethics is a branch of Normative
Ethics. In some other ways, both
Normative and Descriptive Ethics involve
some metaethical activity. Metaethics is
concerned with analysis of the meaning of
words and the logic of moral reasoning,
e.g.. it analyzes moral terms like, "good,
"bad, "moral," "immoral," "moral
obligation," and the like. Metaethics does
not describe moral beliefs of people, does
not evaluate the process of moral
reasoning but simply analyzes the usage
and meaning of words.
Lesson 6. The Problem of Ethical
Relativism and Situation Ethics
Ethical Relativism
Ethical relativism claims that when any
two cultures or any people hold different
moral values of an action, both can be
right. An action may be right for one
person or society and the same action
taken in the same way may be wrong for
another reason, and yet, both persons are
equally correct. While ethical relativism
emphasizes the differences of moral
beliefs and practices from the point of
view of culture, situational ethics (or
moral subjectivism) emphasizes moral
differences based on personal beliefs and
convictions.
Approaches to Moral Differences
There are four approaches in dealing with
moral differences, which can be found in
the following diagram: [cf. Nina
Rosenstand. (2003). The Moral of the
Story. New York: McGraw-Hill, Inc. pp.
88-90]
a) There Is No Moral Truth
This philosophical perspective believes
that there is no ultimate right or wrong.
This view is called moral nihilism.
Moral Nihilism is akin to moral skepticism
which holds that we cannot know whether
or not there are moral truths. Moral
subjectivism, on the other hand, holds
that moral views differ from one person to
another. This results to a subjective
morality, in which case, what is good for
one person may be bad for another.
b) There Is No Universal Moral Truth
Each culture has its own set of rules that
are valid for that culture, and we have no
right to interfere, just as they have no
right to interfere with our rules. This view
is known as ethical relativism. This
ethical paradigm
maintains that there are moral truths
that exist but these truths are relative
and dependent on cultures and beliefs
of people
c) Deep Down, We Can Find Basic Moral
Truths
This philosophical perspective believes
that despite differences, people of
different cultures can still agree on
certain moral basics. People find some
common ground on basic moral
principles. This is called soft
universalism.
d) There Is One Universal Moral Truth
This view is also known as hard
universalism or moral absolutism. This
moral paradigm maintains that
there is only one universal moral code
that everybody must follow. Because this
moral code is universal and objective,
moral problems and moral conflicts can
be solved through proper moral
reasoning.
Lesson 7. Deontological vs. Teleological
Approaches to Ethical Evaluation of
the Human Conduct
Deontological Ethics
Deontological Ethics or
non-consequentialist approach is a body
of ethical theories that measures and
evaluates the nature of a moral act based
on the validity of the motive of an act.
This means that if the motive or intention
of the act is good, then regardless of the
consequences, the whole action is good.
Examples of Deontological Ethics:
Kantian Ethics or Kantianism this is also
known as the categorical imperative
approach, the idea that one should
always base his actions on maxims or
rules that are believed to be universal. For
Kant, the moral goodness or badness of
the act does not depend on the
13
consequences of the act but on the motive
or intention of the actor, e.g., the motive is
good if it is an expression of the person's
sense of duty.
For instance, the unconditional duty of a
nanny to enter into a burning house to
save a baby. The mental process for the
nanny would be a series of questions. Are
all paid nannies obligated to rescue
babies from danger? Is the duty
unconditional? Does the particular
situation require such action of the
nanny? If the nanny's answers to the
three questions are yes, then she has a
binding moral duty to act.
Divine Command Theory is another
example of non consequentialist ethics.
This ethical theory holds that the
standard of right and wrong is the will or
law of God. The Christian Ethics is an
example of an ethical system that uses
the deontological approach in evaluating
the morality of human conduct, e.g., the
will of God is expressed in the Bible and
in the traditions of the Roman Catholic
Church. If an act violates these sacred
sources of morality, then the act is
unethical regardless of its perceived or
actual consequences.
Teleological Ethics
The word teleology came from the Greek
word tele which means far or remote.
Teleological Ethics or the consequentialist
theory measures the morality of an action
based on its consequences and not on the
motive or intention of the actor. if the
consequence of the act is good, regardless
of the motive, then the act is always
morally good.
Examples of Teleological Ethics:
Hedonism or the view that pleasure
(regardless whether the pleasure is
mental or physical, but mostly sensual) is
the only good as an end. For instance,
drinking till the last drop, eating until you
cannot swallow are some examples of a
good action that should be pursued.
Utilitarianism is another example of a
consequentialist theory. This school of
thought maintains that "the greatest good
is the greatest happiness or pleasure of
the greatest number." This means that if
the action can provide the greatest
happiness to the greatest number of
people who are affected by the action,
then the action is considered to be
morally good. For instance, if stealing will
enable me to help many poor people, then
stealing becomes good.
Implications of Deontological and
Teleological Ethics to Decision Making
These two approaches to the ethical
evaluation of the human conduct are also
used by managers in the decision making
process. Some managers decide on the
basis of their personal principles and
convictions. In this regard, managers are
said to be biased towards deontological
perspective because of their
principle-oriented decision making
process.
On the other hand, some managers could
be result-oriented in terms of decision
making. In this regard, they favor the
perspective of Teleological Ethics because
they focus on the consequence or the
result of the action regardless of the
intention or the motive of the one
performing the action.
Lesson 8. The Moral Sense" in Us
One of the basic questions in ethics is to
determine how
people develop their fundamental
concepts of good and evil.
Traditional ethics believes that man has a
natural insight
to morality, this being a gift of the Creator
who gave man
a "moral sense." This moral sense is
native in all persons regardless of race,
religion, culture, education and creed.
Man, therefore, is a moral being. He
knows the fundamental distinction
between what is good and bad, what is
moral or immoral. This basic knowledge of
right and wrong is what differentiates
man from animals. The next three
theories, namely, that of Aquinas,
Kohlberg, and Freud attempt to explain
the fundamental question of how people
develop their concept of morality.
1. The Synderesis of Man According to St.
Thomas Aquinas
14
Thomas Aquinas (1225-1274). This
theologian andpriest is sometimes called
the Prince of Scholastics. He wrote 25
books including Summa Theologica and
Summa Contra Gentiles and developed a
systematic Christian theology in response
to the problem of the dichotomy of faith
and reason during the Medieval period.
He was invited by Pope Gregory X to
attend a General Council in Rome in 1274
but died on the way to the Vatican. He
died at the young age of 49 years old. And
49 years later, he was canonized as St.
Thomas Aquinas, the Angelic Doctor of
Italian philosopher the Church.
According to Aquinas, the moral sense in
man is manifested and expressed in three
different ways:
1) Man is able to distinguish or to know
what is good and what is bad. Of all
creatures, only man has the capacity to
know the difference between a good and a
bad action.
2) Man is always obligated to do good and
avoid evil. In any given circumstance,
man is the only creature who feels this
primary duty to do what is good and avoid
what is evil.
3) Man knows that he is accountable for
his actions good or bad. Of all creatures,
only man realizes that the performance of
an action entails rewards and
punishments. If he does a good action he
expects rewards. If he does an evil action
he expects punishment. For Thomas
Aquinas and the scholastics, this
"synderesis" IS the starting point of man's
moral reasoning which takes place when
a person reaches the "age of reason." At
this point, man acquires the basic moral
principles that teach him the fundamental
difference between right and wrong9.
2. Freud's Theory of the ld, Ego, and the
Superego
Sigismund Schlomo Freud (1856-1938).
Freud was born on May 6, 1856, at
Freiburg (now Pribor), a rural town in
Moravia, which was then part of the
Austro-Hungarian Empire (now part of
Czechoslovakia). He is the founding father
of Psychoanalysis, which is a major
school of Psychology. Freud believes that
the human mind has three important
components, that of the preconscious
conscious and unconscious. No other
psychologist except Freud has studied the
unconscious part of the human mind. His
theory about sexuality being the center of
psychopathology as well as the major
drive of all individual developments has
made him one of the most controversial
yet most influential scientists of the 20h
century.
Freud founded the Psychoanalysis Theory
(Theory of the Psyche) where the approach
is to understand human behavior which
views men and women as constantly torn
between internal unconscious forces and
external social forces. The key points of
psychoanalytic theory are the following:
1) Man must learn to control his inborn
desires.
2) Man must achieve fulfillment in ways
that are harmonious with others.
Superego in Freud's theory is the spirited
or the will in Plato's theory. For Freud,
the Superego basically reflects social rules
and values of the society that govern our
behavior. This also includes the codes and
rules that we have been taught. The
superego has elements in common with
both reason and willpower. Freud equates
superego with conscience.
Ego is the rational self or the conscious
self. In Freud's theory it is also known as
the "reality-principle." It is part reason
(intellect) but also part willpower. The ego
is under constant pressure to fight off the
pleasure-seeking desires of the id and at
the same time, the ego is pressured by the
reality forces of the environment and the
moral dictates of one's upbringing-the
superego.
ld is the irrational part in us or the
unconscious instincts. According to
Freud, we are born with the id which is
also known as the "pleasure-principle" in
each of us. The id, being irrational does
not know the meaning of postponement.
When the id wants something, it craves
for instant satisfaction. For Freud, a
healthy personality is manifested by a
person who has an ego that does an
effective job of coping with the urges of
the id and at the same time, is not
pressured by the restrictions of the
superego.
Business Application
A businessman may be tempted to cheat
his customer in the process of selling (id).
He realizes however, that to give in to this
enticement would be a violation of the
15
Code of Ethics for Businessmen and other
positive laws, like the Consumer Act of
the Philippines (superego). He therefore
discerns well and begins to rationalize
that it is better not to fool or cheat the
customer (ego). In this case, the perceived
good action, e:g.. not fooling the customer
is a decision made by the ego as a result
of its interaction with the enticement of
the id and the pressure of the superego.
3. Kohlberg's Theory of Moral Development
Lawrence Kohlberg was born in
Bronxville, New York on October 25,
1927. After high school, he enlisted and
became an engineer on a freighter. He
taught at the University of Chicago in
1962 then moved to Harvard University as
professor of Education and Social
Psychology in 1968. He contracted a
tropical disease in 1971 that bothered
him until his death. He is rumored to
have committed suicide at the Boston
Harbor on January 19, 1987.
He is well known for his Theory of Moral
Development. Through his research which
was conducted at Harvard's Center for
Moral Education in the 1950s, Kohlberg
believed that people progressed in their
moral reasoning through a series of
stages.
His theory of moral development was
based on the earlier works of the Swiss
psychologist Jean Piaget. Kohlberg helped
to clarify the general cognitive
developmental approach of Jean Piaget,
through his analysis of the changes in
moral reasoning or extending the
approaches into a series of stages.
1) Pre-conventional. This behavior is
generally found in young children and
older children. There are two stages in
this level: 1) reaction to punishment, and
2) the desire for the right behavior that
will satisfy the person's self-interest.
Stage 1 explains the concept of being good
by following commands and authority and
avoiding being punished. Stage 2 is a
stage of lIndividual Instrumental Purpose
and Exchange. This means fair deals for
concrete exchanges. This is characterized
by a view that right behavior means
acting in one's own best interests.
Stage 2 also promotes the "Tll scratch
your back and you scratch my back'" type
of mentality.
Business and Organizational Application:
Some individuals do the right thing only to
avoid punishment or to obtain approval,
e.g., an employee who thinks that the only
reason not to steal money from the
employer Is the certainty of getting caught
and then fired. The person at this stage
has little sense of the needs of others. At
the second stage, the person becomes
aware that others
have their needs also and begins to defer
to them to get what the individual wants.
2) Conventional. This level is generally
found in an ideal civilized society, hence,
the name "conventional." The first stage of
this level (Stage 3) is the Stage of Mutual
Interpersonal Expectations, Relationships
and Conformity. This is characterized by
an attitude which seeks to do what will
gain the approval of others, commonly
referred to as "Puting oneself in the other
person's shoes." Stage 3 is also known as
the 'good boy and good girl" orientation
stage. This implies that a good or bad
behavior of the person depends on
his/her conformity or non-conformity
with the norms of his/her immediate
community or environment. Stage 4 on
the other hand, is the Stage of Social
System and Conscience Maintenance
wherein one is oriented to abiding by the
law and responding to the obligations of
duty. Individuals adopt social rules
without considering the underiying ethical
principles involved. It emphasizes only
obedience to the laws, respect to authority
and performing one's duties so that social
order is maintained. In this context, the
good or the bad behavior is dependent on
the person's conformity or non-conformity
with the laws created by the state or
government. A person is considered a law
abiding citizen when he or she follows the
laws of society but will be considered a
deviant when the same person violates
the same laws.
Business and Organizational
Applications: Stage3 of this second level
describes that right behavior is one that
conforms to conventional expectations,
e.g.,an employee considers the
importance of being a loyal folower and
avoids conflicts. Stage 4 on the other
16
hand, explains that the right behavior
consists of performance of duty, respect
for authority and maintaining social
order, e.g., an employee adheres to the
organizational rules and policies and
obeys orders from the superiors.
3) Post-Conventional. This third level of
moral thinking is one that Kohlberg felt is
not reached by the majority of adults.
Stage 5 is the Stage of Prior Rights and
Social Contract or Utility. It is the stage of
understanding of rights and values. It
gives the person a sense of democracy but
relativity of rules. This means that people
at this stage realize that there are
fundamental concepts of right and Wrong
but the application of which is confined to
their own culture and environment. Each
person's moral rights however, must be
protected. The last stage (Stage 6) is the
Stage of Universal Ethical Principles. It is
based on respect for universal principles
and the demands of individual
conscience. Action is controlled by
internalized ideals that demand pressure
to act accordingly regardless of the
reaction of others in the immediate
environment. At this stage Kohlberg
believed that people do good and avoid
evil because they are convinced that there
are universal ethical principles that
govern and justify their actions.
Business and Organizational Applications:
Stage 5 maintains that the laws may be
important and must be followed but they
are not absolute, e.g, they can be changed
if necessary. Stage 6 maintains that people
cOuld act in accordance with their cornice
and based on universal ethical principles,
e.g, when an employee discovers that
formal rules and laws are at odds with
these principles, the individual is likely to
act in accordance with these principles
rather than with the rules.
Kohlberg believed that individuals could
only progress through these stages one
stage at a time, without skipping a stage
or reversing their order and that not all
people progress through all six stages
classified into three levels. Thus,
according to Kohlberg, it is important to
present them with moral dilemmas for
discussion, which would help them to see
the reasonableness of a "higher stage"
morality and encourage their development
in that direction. Kohlberg as well as
Piaget, believed that most moral
developments occur through social
interaction. The last stage of Kohlberg's
stages of moral development is called
Transcendental Morality. At this stage,
Kohlberg believes that people can
transcend their concepts of good and evil
by integrating them with their religious
convictions. Thus, murder is evil because
it is against the divine law, e.g., The 10
Commandments.
Lesson 9. Two Ethical Systems
There are two general categories under
which ethical theories are classified: (R.
Agapay, 1991)
1) Atheistic Ethics assumes that only
matter exists and man is responsible only
to himself since there is no God who
creates and rules the universe. Atheistic
theories propose the following principles:
•Matter is the only reality. Man is matter
and does not have spiritual dimension.
•Man is free and must exercise his
freedom to promote the welfare of society.
•There is no life after death.
•Man is accountable only to the State.
2) Theistic Ethics assumes that God is the
Supreme
Lawgiver. Everything must conform to
God's eternal plan of creation. Man is
accountable for his actions and deserves
either a reward or punishment in this life
or in the next. Theistic theories postulate
the following truths:
•God is the Supreme Creator and
Lawgiver.
•Man is free and must use his freedom to
promote his personal and social interests
along with his fellowmen.
•Man has an immortal soul which cannot
die.
•Man is accountable for his actions, both
good and evil.
17
ACTIVITY
1. What is Philosophy? Do you have a
personal philosophy in life? If so, what is
your personal philosophy?
2. Differentiate ethics from morality.
3. Why is ethics called a normative
science? Differentiate philosophy, art and
science. Cite their similarities and striking
differences.
4. Is ethics a one-sized shoe that fits all or
a customized outfit? Explain your answer.
5. Explain why the Kantian ethics is
considered a "Non- Consequentialist"
Ethics.
6. What is the difference between Theistic
and Atheistic Ethics?
7. Do you believe that morality is relative,
e.g., the goodness or badness of one's
action depends on the culture, laws and
beliefs of a society or community? Why or
why not? Explain your answer.
8. Why is it difficult for people to reach
Level 3 Stages 5 and 6 according to
Kohlberg?
with IT rival, Sampo Computer, also based
in Laguna.
It might have ended there. But when
Pantaleon’s new employer began taking
away IT’s market share, its top
management started to be alarmed. After
some checking, IT learned that Pantaleon
was using its inside knowledge of its
customers list to make sales.Company
officialsalso suspected he might be relying
in IT’s customer specifications and repair
manuals.
Questions:
1. IS keeping trade secrets still an
ethical issue in the age of
globalization and advance
communications technology?
2. Is Pantaleon’s action unethical,
e.g., using the customer list of his
previous company for his new
company? Why or why not?
Discuss your answer.
Cases for Analysis
Case 1. Mang Toot’s fast-food chain has
been known in business not just only for
its great tasting food and excellent service
but also for it cleanly prepared dishes.
One day, Emong, a service crew of Mang
Toot’s Makati branch, was preparing the
gravy. He was unaware that the starch
he used was already expired. He only
noticed it after some time and the gravy
had already been served to some
customers, he immediately told
BArtolome, the branch manager, about it.
Bartolome told Emong not to tell anyone
about it, besides, no one is complaining.
Questions:
1. What is moral in the issue?
2. If you were Bartolome, what are
you going to do?
Case 2. Shared IT Secrets. When
employee Eric Pantaleon quits job in
1995, IT systems, his company, paid little
attention. Pantaleon was one of the
several customer-service representatives
of the Laguna, Philippine-based computer
company, and the turn over of
responsibilities in the department wasn’t
smooth. Following an uneventful exit
interview with human resources officials,
Pantaleon left the company to start a job
18
CIIAPTER 3 THE RELATIONSHr OF ETHIcs WITH OTHER SCIENCES AND OTHER
PHASES OF HUMAN LIFE
The unexamined liffe is not worth living. - Socrates
Introduction
Ethics is a branch of philosophy that
studies the nature and the morality of
human conduct. To some extent, Ethics is
related to other sciences because it also
deals with the investigation of the nature
of man as a rational being and a being in
relation with other beings. But unlike
other sciences, the focus and the locus of
Ethics is to study man's nature and his
behavior from the standpoint of morality.
The material object of Ethics is the
human conduct and the formal object is
morality.
Objectives:
At the end of this chapter, the students
are expected to:
1. Gain understanding of the scope
of ethicS as a science that
investigates the nature of the
human conduct
2. Distinguish ethics from other
sciences that study man's nature
and behavior
3. Differentiate ethics from etiquette
and the professional codes of
conduct.
Lesson 1. Relationship of Ethics with
Other Sciences
(cf. Felix M. Montemayor, 1994. Ethics the
Philosophy of Life Mandaluyong City:
National Book Store, Inc., pPp. 8-12 and
Ramon B. Agapay, 1991. Ethics and the
Filipino. Mandaluyong City: National Book
Store, Inc. pp. 4-6.)
The following discussion is focused on
how Ethics, as a science which studies
the nature of man and the human
conduct, is especially related to other
sciences which likewise deal with the
study of human nature and human
conduct.
1. Ethics and Logic
Ethics is the study of correct action or
doing, while Logic studies the process of
correct and organized thinking. Doing
follows thinking. Logic therefore is aimed
at the right thinking and Ethics is aimed
at the right acting or right doing and
behavior.
Based on perceiving information, Ethics
focuses first and foremost on the
demands of the subjective human world,
or world of people and relationships.
Incommunication, ethics focuses and
studies people's feelings and emotional
states based on nonverbal information
and how things are said. Logic is focused
on the demands of the material,
nonhuman world, or world of "things" in
one's environment. In communication,
Logic focuses on and studies what is done
and said, or the content of one's speech.
On intellectual qualities, Ethics is
people-oriented while Logic is
task-oriented. Ethics is focused on
enhancing relationships, modifying
content and forms of speech to match or
contradict what others expect to hear
Logic is focused on not misleading a
person and giving him correct
information.
Lastly, on behavioral relationships, Ethics
shows people's feelings for their partners
directly through emotions; while Logic
shows their feelings for their partners by
doing things for them.
2. Ethics and Psychology
Both Ethics and Psychology deal with the
study of man and his behavior. However,
Psychology studies how man behaves,
while Ethics studies how man ought to
behave. Psychology is not interested in
the morality of human behavior, while
Ethics is concerned with man's moral
obligation or the result of his behavior.
Ethics is the study of human behavior
from the perspective of morality.
Psychology, on the other hand, is the
scientific study of mental and behavioral
19
characteristics, associated with
aparticular kind of behavior.
Lesson 2. Relationship of Ethics' with
Other Phases of Human Life
3. Ethics and Sociology
Sociology deals with the study of the
social order while Ethics deals with the
study of moral order in the society. There
is no social order if there is no moral
order. Therefore, the foundation of any
society depends on the moral values of
people and their perspective on the
concept of what is good and bad in
human relationships. Society depends on
Ethics for its underlying principles.
Sociology deals with human relations in a
society, but human relations are based on
proper order and proper order comes only
with the proper observance of moral laws
and principles which regulate the actions
of men and women in a community.
The study of Ethics crosses religious and
cultural boundaries and is directed at the
question of how critical decisions are to
be made so that an organization may
work best together, to build a community
and social relationships in a positive and
productive way. How we live ethically
becomes more important as we are
required to make complex decisions
concerning customer relations,
employer-employee relationship and other
business issues.
4. Ethics and Economics
Man supports himself by earning a living.
Earning a Living to support his expenses
makes a man an economic being.
Economics as a science deals with the
study of wages, labor, production and
distribution of wealth. The study of these
issues also involves relationships among
individuals. For example, wages: between
employer and employee production:
between seller and customer. These
fiduciary relationships must be governed
by human values that can only be
understood in the light of moral principles
and the nature of values themselves.
At the heart of these relationships are
moral norms and moral rules that should
guide people's behavior as they relate with
others. Without these moral norms and
moral values, harmonious relationships
between and among parties cannot exist.
According to Charles K. Wilber (1986),
there are three ways in which Ethics
enters economics. First, economists have
ethical values that help shape the way
they do economics. This builds into the
core of economic theory a particular view
of how the economy does work and how
it should work. Second, economic actors
(consumers, workers, business owners)
have ethical values that help shape their
behavior. Third, economic institutions and
policies impact people differentially and
thus, ethical evaluations, in addition to
economic evaluations, are important.
5. Ethics and Law
Ethics and law are closely related. Ethics
deals with morality, and when we speak of
morality, we mean primarily the moral
law. Law may be defined as crystallized
ethics. Law and morality presuppose the
concepts of right and wrong. good and
bad, even the rules of conduct.
However, there is a difference between
what is oral and what is legal. Laws are
intended to regulate the external actions
of man while ethics investigates and
probes the internal disposition of man,
such as his motivations and his thoughts.
Though law often embodies ethical
principles, law and ethics are far from
co-extensive. Many acts that would be
widely condemned as unethical are not
prohibited by law lying or betraying the
confidence of a friend, for example. A man
can also commit a thousand adulteries in
his mind, yet that same person cannot be
legally or criminally be guilty because this
exercise is innate and private to the
person himself. Though he may not be
legally or criminally liable for entertaining
adultery in his thoughts, that same
person can be morally responsible for
entertaining adulterous intents and
motives in his thoughts. Law therefore is
focused on external regulations of man's
actions while ethics is concerned with the
investigation of the internal disposition of
man from the moral perspective.
6. Ethics and Religion
Ethics is a discipline or set of moral
principles and values governing an
individual or institutional behavior.
Religion generally refers to the service and
worship of God (or some other object) and
is typically expressed as a personal or
20
institutional set of beliefs, attitudes, and
practices.
Ethics evaluates the behavior of man
against his values regardless of the source
of those values. While religion certainly
can create an impact on individuals and
may actually include mandates for ethical
behavior, it is a distinct concept from
ethics. It is however, in the practice of
religion that ethics and religion may
overlap.
Religion and ethics are two phases of
human activity which are closely related.
Both ethics and religion are based on the
same postulates, e.g, they both suggest
and assume the existence of God who
created everything, man's freewill and the
immortality of the soul. Moreover, ethics
and religion have the same end or
purpose-that is, the attainment of man's
happiness in this life and beyond. Lastly,
ethics and religion prescribe right living
as the means of attaining the goal of man
in this world.
Authentic ethics cannot be separated
from the existence of God. If there is
morality, there must be a moral law; and
if there is a moral law, there must be a
lawgiver, and this ultimate lawgiver can
only be God Himself. Ethics and religion
likewise presuppose the concept of the
immortality of man's existence, e.g., that
there is life after death. For this reason,
we believe that the soul of the person
which continues to exist even after
physical death, is a soul that is immortal.
Lastly, ethics and religion both seek the
absolute truth. Ethics seeks the absolute
truth by using human reason alone, while
religion tries to understand this same
absolute truth by virtue of one's faith and
his adherence to divine revelation. In this
case, faith is our response to God's
disclosure to us.
7. Ethics and the Professional Codes of
Conduct
The era of globalization has created a
need for specialized skills and knowledge.
This is brought about by paradigm shifts
in almost all facets of human activities
that have resulted into a more complex
society that we have today. Full
automation has almost taken over a lot of
jobs done by an unskilled labor force that
in turn, creates a demand for workers
with special skills. The need for
specialized skills and knowledge in
business has created a trend which prods
people and organizations to be identified
with a particular profession basically
because it brings with it prestige, a sense
of respect, personal esteem and status
symbol.
Based on the Webster's Dictionary, the
meaning of professional is relating to or
characteristic of a profession; engaged in
one of the professions; participating for
gain in an activity not engaged in by
amateurs. Professionalism on the other
hand is the conduct that characterizes a
profession or a professional person; or it
can also be the pursuit of a profession for
gain or livelihood, e.g., as a manager,
engineer or as a lawyer.
The words "profession" and "professional"
imply a public declaration with the force
of a promise. Professions are groups
which declare in a public manner that
their members will act in certain ways
according to their profession and that the
same group and in some instances, the
society may discipline those who fail to
conform to its prescribed ways. The
traditional professions include medicine,
law, education and clergy.
Carpenters, plumbers, barbers, athletes,
gardeners, beauticians and even soldiers
may be considered professionals because
they have extensive knowledge and
training of their crafts and they are also
paid forthe practice of it. These
"professionals," however, may undergo
extensive training but what they do can't
be classified as a profession. Membership
of a profession requires sophisticated
skills and extensive training as well as
advanced education so that they become
competent in their line of work. The
medical and legal professions fit the
description of the word profession
because the skills of lawyers and doctors
cannot be mechanized and require good
judgment to apply the appropriate
treatment/advice to their patients/clients.
There is also the trust or secrecy that is
shared by the doctor/lawyer with their
patients/clients that is not observed with
other professionals. What makes the job
of the medical and legal professions
important is that they are expected to
21
serve the good of the public or society.
This is also the main reason that
constitutes their being in the group of
professionals. Members of the profession
create their own set of rules; set
standards for practice of the profession,
and at the same time discipline their own
members. This set of standards of the
profession is reflected in their own
professional codes of conduct. A
professional code of ethics is a set of
behavioral guidelines that members of a
professions are required by their
association to observe in the course of
their professional practice. These
guidelines, in general terms, prescribe
responsibilities that members must
adhere to and questionable situations in
which they must not be involved.
In some cases, members must be
sanctioned for violation of the code. These
sanctions may include the following:
•Payment of a fine;
•Payment of the cost of any investigation
•Reprimand;
•Imposition of conditions on membership;
•Suspension from membership; and
•Expulsion from membership.
8. Ethics and Etiquette
The word etiquette came from a French
word which means ticket. During the
medieval times, when people visit the
palace of their king, they were required to
follow in-house instructions that were
posted (ticket) in the different areas of the
palace. Hence, the word etiquette
practically means rules and conduct of
behavior that are supposed to be followed
in special situations and circumstances,
including one's visit to the palace of
theking. Today, the word etiquette refers
to a special code of behavior or courtesy,
like saying "thank you," "you are welcome,
and saying "congratulations to the groom
and "best wishes" the bride, and the like.
Although the rules of etiquette are
generally non-moral in character, the
violation of these rules of etiquette
however may have moral implications. For
example, a boss and his secretary develop
a special friendship in the workplace and
the boss, because of this closeness to the
secretary now fondly calls the same
secretary as"sweetheart." This scenario in
the workplace may have tacit moral
implications if, for example, the wife of the
boss may drop by one day at her
husband's office and discovers that her
husband calls his secretary "sweetheart."
This definitely will create a suspicion on
the part of the wife. However, the
scrupulous observance of the rules of
etiquette will not makea person moral. In
fact, it can even hide or camouflage
important moral issues. For instance the
Civil Rights issue of racial discrimination
in the U.S. in the late 1950s and 1960s
when the white Americans claimed
superiority over the African Americans
and other minorities. During this time,
the Americans were taught, as part of
their etiquette, that when a white man
enters a bus with no available seat for
him, it was imperative for the black
person or the minority to offer his seat to
the white man because people thought it
was the proper thing to do during those
times. The black Americans and the other
minorities were made to believe it was the
proper etiquette. The real moral issue,
however, was racial discrimination.
9. Ethics and Education
Education is defined as an instruction or
training by which people learn to develop
and use their mental, moral and physical
powers and abilities. It is also one way of
gaining experience about human life.
Since man however, is primarily a rational
moral being, the purpOse of education is
to perfect the moral character in man.
A great educator once said "education is
co- extensive with life." Hence, we can say
that ethics is life because it is the one
that gives life its direction, purpose, and
meaning.
10. Ethics and Art
Art is concerned with the use of
imagination to make things of aesthetic
significance. Ethics is aimed at
conforming to an accepted standard of
good behavior. Ethics also stands for
moral goodness, art, and beauty. It may
be difficult to ascertain whether a piece of
art which is offensive to morals can be
considered beautiful. Both true art and
true ethics have the same aim: That IS, to
arouse and to inspire the noble emotions
of man, thereby creating no conflict at all.
Consequently, an art which arouses the
lower impulses of man defeats the very
purpose of art.
22
Activity
1. Differentiate ethics from law. Point
out their similarities and striking
differences.
2. How is ethics different from
religion?
3. Differentiate ethics from etiquette.
4. Explain the phrase: The rules of
etiquette are nonmoral in
5. character but the violations of
these rules on etiquette can have
moral implications." Cite a
concrete example.
6. What is the difference between
ethics and morality?
7. How is ethics related to
economics?
8. What is the difference between
Ethics and the Professional Code
of Conduct?
Cases For Analysis
Case 1: The Confused Accountant Yvonne
Pillar is a young accountant who came
from a poor family. She was recently hired
by a big company called Chameleon Co.
When it was time to audit the accounting
books of the company, Yvonne was
instructed by her boss to manipulate the
numbers in order to reduce the taxes the
company will have to pay the government.
The company official said that if she
would not heed the command, she would
be terminated.
The employment condition at that time
was really tight and the chance of finding
another job was very minimal.
Questions:
1. If you were Yvonne Pillar, will you obey
your boss? Why or why not?
2 Are you morally obligated to follow an
order that is filegal?
3.Explain the moral implications of the
military slogan:
Obey first before you complain."
Case 2: The Immoral Video Shop. Mr. Jun
Quesadilla owns a video shop in Manila.
His store has a wide variety of original
VCDs and DVDs which he gets froma
legal source and approved by the
Videogram Regulatory Board. He has all
the legal papers and permits to operate
this type of business. However, Mr. Jun
Quesadilla has a secret room in his store
which he uses to avoid the authorities.
The room contains all the latest titles of
pirated VCDs and DVDs, including rated
tapes. He also uses another selling
strategy to make more money by telling
customers that the VCDs and DVDs they
want to rent are "reserved and he would
only give this to them if they would rent
them for a higher price.
Questions
1. Is it right to sell pirated VCDs,
DVDs and X-rated tapes in the
shadow of a certified video shop?
Briefly explain why.
2. In your own opinion, would you
patronize pirated CDs and DVDs
which are cheaper than the
original ones because they are
more economical? Why or why
not?
23
Rubrics for Rating
We will be using the rubrics below fto rate your answers:
a. For essays the following shall be used:
3pts
Content - Addresses each question and all its parts thoroughly;
incorporates relevant course content into responses; uses
specificinfomration from case in response
Application - Demonstrates deep understanding of course theories
and ideas applied to analysis of situations
Original thinking - demonstrated original thinking that adds insight
to analysis of case; meaningful elaboration beyond text and notes in
strategy development
Structure- response to each question is well organized, clearly
written;
2pts
Grammar and mechanics- response is free of mechanical and
grammatical writing errors.
Content - Addresses each question and all its parts ; incorporates a
fair count of relevant course content into responses; uses few data
from cases in response
Application - Demonstrates a fair understanding of course theories
and ideas applied to analysis of situations
Original thinking - demonstrate logical thinking that may insight to
analysis of case; elaborates with fair grasps of context and few notes
in strategy development
Structure- response to each question resembles a fair organization,
clearly written;
Grammar and mechanics- response has few mechanical and
grammatical writing errors.
1pt
Content - Addresses few questions and all its part; incorporates few
relevant course content into responses; uses specific infomration from
case in response
Application - Demonstrates an understanding, but not fully, of course
theories and ideas applied to analysis of situations
Original thinking - demonstrates slightly obvious logical thinking that
may add insight to analysis of case; elaboration is on plain context
and does not go beyond notes in strategy development
Structure- response to questions show struggle in organization, and
is unfairly written;
Grammar and mechanics- response is full of mechanical and
grammatical writing errors.
b. For other types of questions such as identification, matching type,
enumeration and the like, will be rated at one point per correct answer.
24
References
Agapay, Ramon. (1991). Ethics and the Filipino. Manila: National Book Store.
Blaug, Mark. (1992). The Methodology of Economics: or How Economics Explain. Cambridge:
Cambridge University Press.
Montemayor, Felix. (1994). Ethics : The Philosophy of Life, Mandaluyong CIty: National Book
Store.
Piderit, John. (1993). The Ethical Foundations of Economics. Washington D.C.: Georgetown
University Press.
Wilber, Charles. (1986). Ethical Values and Economics Theory. Chicago: Chicago University
Press.
Online Resources
www.ergan.com/ethical_tradition.htm
http.eduserve.hscer.wasingtonn.edu/bioethics/topics/profes.html
http://www.eadkin.edu.au/scitech/a+b/courses/675topic01.pdf#search=’Professionalism
%20and%the%20Profession’
25