Try this!
1ST SEMESTER|First Quarter
Directions: Read the Questions carefully. Encircle the letter of the correct answer.
1. This is considered as the highest criterion of social responsibility because it goes beyond societal expectation to
contribute to the community’s welfare
a. Economic responsibilities
b. Legal responsibilities
c. Ethical responsibilities
d. Discretionary responsibilities
2. This concept includes behaviour that is not necessarily codified into law and may not serve the organizations direct
economic interest.
a. Economic responsibilities
b. Legal responsibilities
c. Ethical responsibilities
d. Discretionary responsibilities
3. This concept emphasizes the business expectations to fulfill their economic goal within the legal framework.
a. Economic responsibilities
b. Legal responsibilities
c. Ethical responsibilities
d. Discretionary responsibilities
4. This view argued that a company should be operated on a profit-orientation basis where its mission is to increase its
profit as long as it stays within the rules of ethics.
a. Economic responsibilities
b. Legal responsibilities
c. Ethical responsibilities
d. Discretionary responsibilities
5. This is a business practice of the organization that accounts for the social and environmental impacts that the business
operation creates.
a. Corporate Social responsibility
b. Legal responsibilities
c. Ethical responsibilities
d. Discretionary responsibilities
6. In developing the framework of business social responsibility, one of the key considerations of every business
organization is to guarantee the safety of their services or products offered. This reflects to what particular social
responsibility
a. Corporate Social responsibility
b. Legal responsibilities
c. Duty not to cause harm
d. Discretionary responsibilities
7. This means to ensure the receipt of a favorable price based on a scope of work and adhering to a code of conduct to
avoid violating public laws
a. Corporate Social responsibility
b. Legal responsibilities
c. Duty not to cause harm
d. Discretionary responsibilities
8. This refers to the effort of the business organization to balance between maintaining the needs of the present and the
ability of future generations to meet their needs through the preservations to meet of the environment.
a. Sustainable development
b. Legal responsibilities
c. Philanthropic social responsibility
d. Discretionary responsibilities
9. Which is not a characteristic of corporate social responsibility?
a. Product safety
b. Consumer rights
c. Environmental policies
d. Price-fixing
10. Which statement best describes ethics in business?
a. Business is outside the realm of ethical enquiry and morally neutral or immortal
b. Ethics in business do exist but differ from ethics in other spheres and may appear immortal in spheres.
c. Business, politics and private life share the same ethics as part of moral community
d. None of the above
11. Which of the following best describes social responsibility?
a. A corporation’s rights, such as due process in a court of law, freedom of speech, and privacy
b. Adoption by a business of a strategic focus for fulfilling the economic, legal, ethical and philanthropic
responsibilities expected of it by its stakeholders.
c. A company attempt to maximize its profits in order to benefit stockholders
d. All the policies of a company that promote ethical business practices
12. The framework to understand how businesses meet their economic, legal, ethical, and philanthropic responsibilities is
developed around the assumption that social responsibility is a
a. Process
b. Specific set of rules and guidelines
c. Result that does not need further attention
d. Theory, with little relevance to business practice
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This section aims to:
G
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Formulate a “code of ethics” that reflect core principles derived from analyses
Infer how Filipino value system influence business practices
Explain how
the belief systems influence business practices
.
Generate ways to improve business practices guided by the philosophies, belief system or
Filipino values
Illustrate how fairness, accountability, transparency and stewardship is observed in
business and non-profit organizations
Illustrate how these philosophies are reflected into business practices
Engage yourself
Activity 1: Picture Analysis | The pictures below are related to responsibility, explain why it is related to
Business Ethics and Social Responsibility
Let’s dig deeper
The Nature and Form of Business Organizations
Business is a part of society. It works together with every human being and act like a distinct entity. It is
complex and dynamic interaction among the people and the institutions. Its activities must be observed and
viewed to see their points as a major factor in our society. That is why business must be observed by their
ethics because these 2 cannot be separated from each other. A business without good ethics can destroy the
interactions and relationships of people to institution and vice versa. Studying Business Ethics can give us
better understanding the concepts of right and wrong actions and how they practice this conducts to the
business and its effect to other people or institutions.
BUSINESS: ITS HISTORY AND NATURE
Business may be defined in many ways. Business may be the undertaking of a person or a group of person
investing money, property, or skills with a primary goal of gaining profit and rendering service to our society. It
may be also as an important activity in our society. Without business, there is no transaction nor trading today.
Business creates a good interaction between men to institution and institution to men. The business is always
referred or connected with anything that is something to do with the economy because of the cycle of money
through the industries and enterprises to consumers to government continuously going back again.
According to Fr. Floriano C. Roa‟s, Business Ethics and Social Responsibility, “Business is as old as human
civilization. In the beginning of human existence, men took care of their own needs and wants.” “The primitive
people were resourceful. They invented ways and means of food gathering and hunting,” according to
Feliciano R. Fajardo‟s Economics. Before, products are limited to one place. Because of this, the Sumer, the
first city-state in the fertile crescent, firstly used the activity of trading goods like crops to another places in
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return to another goods known as the barter. And as years went by, civilizations learn to use coins as
commodity money for buying goods for an exchange coins with certain value or amount.
Business is dynamic – there is constant changes depending to the unlimited needs and wants of the society
and its development. It’s an activity that is depended by everyone in order to sustain the quality of life as a
human being. Business is classified according to its activities: Service Business is a business wherein you
render service for a certain fee; Merchandising or Trading or Commerce Business is the act of buying and
selling goods for the consumer and; Production or Manufacturing Business wherein you process or convert raw
materials into finish goods or products.
Types of Business according to Activities
Types of Business organizations
Service Business
 This type of business offers professional skills, advice and consultations.
 Examples: barber shops and beauty parlors, repair shops, banks, accounting and law firms
Merchandising Business
 This type of business buys at wholesale and later sells the products at retail.
 They make a profit by selling the merchandise or products at prices that are higher than their purchase
costs.
 This type of business is also known as "buy and sell".
 Examples are: book stores, sari-sari stores, hardware stores
Manufacturing Business
 This type of business buys raw materials and uses them in making a new product, therefore combining
raw materials, labor and expenses into a product for sale later on.
 Examples are: shoe manufacturing businesses, car manufacturing plants
Additional information:
 There are businesses that may be classified under more than one type of business. A bakery, for
example, combines raw materials in making loaves of bread (manufacturing), sells hot pan de sal
(merchandising), and caters customers’ orders in small coffee table servings of ensaymada and hot
coffee (service).
Forms of Business Organizations
Sole/Single Proprietorship
A form of business is owned by one person; the simplest, and the most common form of business organization.
Advantages of sole/single proprietorship
 The owner keeps all the profits.
 The owner makes all the decisions.
 It is easy to form and operate.
Disadvantages of sole/single proprietorship
 The life of the business is limited to the life of the owner. Once the owner dies, the business will cease
to operate under the name of the proprietor.
 The amount of capital is limited only by the wealth of the proprietor.
Partnership
A form of business owned by two or more persons. The details of the arrangement between the partners are
outlined in a written document called articles of partnership. Profits are divided among partners based on their
agreed sharing. The owner is called a partner.
Advantages
 Higher capital because two or more persons will contribute to the common fund.
 It is easy to operate like a sole/single proprietorship
Disadvantages
 The profits are divided among the partners.
 A partner can be held liable for the acts of the other partners.
 In a lawsuit, the personal properties of the partners can be held beyond their contributions and may be
used to answer for any liability of the partnership.
 Upon death of the old owner, the business legally ceases
Corporation
 A business organized as a separate legal entity (artificial person) under the corporation law with
ownership divided into transferable shares of stocks.
 The law (Corporation Code of the Philippines) creates a corporation.
 The corporation begins its existence from the date the Articles of Incorporation is approved by the
Securities and Exchange Commission (SEC).
 The SEC (Securities and Exchange Commission) is the government agency primarily tasked to
regulate private corporations in the Philippines.
 The owners are called stockholders or shareholders.
 The word ‘Corporation/Incorporation/Corp./Inc.’ appears in the name of the entity.
3|Business Ethics and Social Responsibility 12
Advantages
 Can easily raise additional funds by selling shares of stocks to the public.
 Shareholders are not personally liable for the debts of the corporation. The extent of their liability is
limited to their equity (ownership) in the corporation.
Disadvantages
 It is relatively complicated to set up.
 Subject to several legal restrictions as listed in the Corporation Code of the Philippines
Cooperative
 A cooperative is a duly registered association of persons with a common bond of interest, voluntarily
joining together to achieve their social, economic and cultural needs.
 The owners are called members who contribute equitably to the capital of the cooperative.
 The members are expected to patronize their products and services.
 The word ‘cooperative’ appears in the name of the entity.
 This form of business organization is regulated by the Cooperative Development Authority (CDA). CDA
as a government agency regulate the cooperatives.
Advantages
 Enjoys certain tax exemption privilege
 Promotes the concept of sharing resources
Disadvantages
 Limited distribution of surplus
 Requires continuous education programs for members.
 The members have active and direct participation in the business of the cooperative.
Think about this
Activity 2: Read the following terms and write down on the corresponding blank spaces the first word, phrase,
or statement that comes to mind after reading each.
1. Corporation2. Cooperative3. Partnership4. Single proprietorship5. Service Business6. Merchandising Business7. Manufacturing Business8. Business is dynamic9. Advantage10. DisadvantageGuide questions:
1. What is the nature and form of the business?
2. What types of forms of business organization would you use if you had the option to start a business?
Why?
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Keep this in Mind
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Nature and Form of Business Organization- There are generally three types of business
organizations operated for profit: Service, Merchandising, and Manufacturing businesses.
Extend your understanding
Activity A. Match the words in column A with the phrases in column B.Write the letters of your answer on the
blank.
Column A
Column B
__________1. Partnership
a. The owners are called stockholders or share
__________2. Single proprietorship
holders
b. A form of business owned by two or more
__________3. Merchandising business
persons
__________4. Manufacturing business
c. buys raw materials and uses them in making a
__________5. Corporation
new product
d. Wholesale and later sells the products at retail.
e. Type of business offers professional skills,
advice and consultations
f. A form of business is owned by one person
Let’s dig deeper
The purpose of Establishing Business Enterprises
The purpose and objectives of a business
If you ask a typical businessman or a typical economist what a business is, he is likely to answer “An
organization to make a profit”. But this answer is not only false, it is irrelevant. Of course, profit and profitability
are crucial for business and even for society. But profitability is not the purpose of, but a limiting factor on
business. Profit and profitability are irrelevant for understanding how a business works, what purpose it has
and how it is managed. To know what a business is, we have to start with its purpose. The purpose of a
business is to create a customer. Markets are created by businesspeople. Sometimes the want a business
satisfies has been felt before someone offered the means of satisfying it, e.g. the want for food in a famine. But
it’s the action of businesspeople that converts this potential want into demand. In other case the want has been
unfelt by the customer, nobody wanted a computer until it was available. Or there might have been no want at
all until business action created it (e.g. by innovation or by marketing). In every case, it is business action that
creates the customer. The customer determines what a business is; it is his willingness to pay for a good or
service that converts things into goods. Because its purpose is to create a customer, a business enterprise has
two basic functions: marketing and innovation.
The second function of a business is innovation.
A business enterprise can exist only in an expanding economy. In a static economy there are no business
enterprises. It is not necessary for a business to grow bigger, but it is necessary that it constantly grows better.
Innovation may result in a lower price, a new and better product, a new convenience or the definition of a new
want. The most productive innovation is a different product or service creating a new potential of satisfaction.
Innovation may be finding new uses for old products. E.g. selling refrigerators to Eskimos to prevent food from
freezing would be innovation. Technologically there is only the same old product, but economically there is
innovation. In a business enterprise work many men of high knowledge and skill. But high knowledge and skill
also mean decision-impact on how the work is to be done.
Objectives of Business
The objectives of business is the purpose for which a business is established and carried on. Proper selection
of objectives is essential for the success of a business. The businessman always has multiple objectives. All
objective may be classified into two broad categories.
5|Business Ethics and Social Responsibility 12
1. Economic Objectives
Business is an economic activity and therefore, its purpose is to show economic results. The economic
objectives of business are follows:
 Earning Profit means excess of income over the expenditure. The foremost and prime objective of
every Businessman is to earn profit. A business cannot survive without earning profit. Not only for survival but
it is also required for growth and expansion of business.
 Market standing/creation of customer Business. can survive for a longer period only if it is able to
capture a big share in the market and has market standing. It is possible only when business provides
goods and services to satisfy the needs and wants of customers. Therefore, creation and satisfaction of
customers (market) is an important objective of business.
 Innovations. Innovation means making new products or adding new features to old products for
making it more useful, improving methods of production and distribution, exploring new markets, etc. In
these days of competition, a business can be successful only when it creates new designs, better
machines, improved techniques, new varieties, etc.
 Optimum utilization of resources It refers to the best use of men, material, money and machinery
employed in business. The resources of business are scare so these must be utilized in the best
possible manner so that the business can get maximum benefit from there resources.
2. Social Objectives Business is an integral part of society. It makes use of resources of society. It earns
profit by selling its products or services to members of society. So it becomes obligatory on the part of the
businessman to do something for the society. The important social objective of business are the followings:
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Quality goods and services at Fair Prices: The first social objective of business is to provide better
quality product at reasonable price and in proper quantity on continuous basis to consumers.
Avoidance of Anti-Social and Unfair trade practices: Anti-Social practices include hoarding, black
marketing and adulteration. Making false claims in advertisements to mislead and exploit people is an
example of unfair trade practice. Business should not indulge in such practices.
Generation of Employment: Now a day employment is the biggest problem of society. Business
should provide employment to more and more people living in the country. Handicapped and disabled
people should be given extra care.
Employee Welfare: Employees are a valuable asset and they make significant contributions towards
the success of business. Another social objective of business, therefore, is to ensure welfare of
employees by providing good working conditions, fair wages and facilities such as housing, medical
and entertainment etc. such welfare facilities help to improve physical and mental health of employees.
Community service: Business should contribute something to the society where it is established and
operated library, dispensary, educational institutions etc. are certain contributions which a business can
make and help in the development of community.
Role of Profit in Business is established for the purpose of earning profit. Profit plays a very important role in
business.
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The Role of profit in business can be brought out by the following reasons. For Long Survival
Profits alone help a business to continue to exist for a long period. In the absence of profit, the
establishment of a particular business loses its justification.
For Growth & Expansion All businessmen want their business to expand and to grow. For
development of business additional capital is needed. Retained earnings is a very good source of
capital. The more the profit is in 9 XI – Business Studies AK a business, the more reinvestment
becomes possible.
For increasing efficiency. Profit is that power which motivates both the parties - owner and workers to
do their best. As they know that in case of good profits they will get good compensation for their efforts
so it finally helps in increasing the efficiencies of business.
For Building Prestige and Recognition: For gaining prestige in the society, business has to satisfy all
the parties concerned. It has to supply good quality product/service at reasonable price to customers,
adequate remuneration to employees, to pay sufficient dividend to the shareholders etc. and all these
are possible only if the business is earning good profit.
Extend your understanding
Activity B. Identify the correct answer. Write your answer in a space provided.
_____________1. Employees are a valuable asset and they make significant contributions towards the
success of business
_____________2. Making new products or adding new features to old products for making it more useful,
improving methods of production and distribution, exploring new markets
6|Business Ethics and Social Responsibility 12
_____________3. Business is an economic activity and its purpose is to show economic results
_____________4. Business should contribute something to the society where it is established and operated
library, dispensary, and educational institutions.
_____________5. Profit is that power which motivates both the parties
_____________6. Employment is the biggest problem of society. Business should provide employment to
more and more people living in the country
_____________7. For gaining prestige in the society, business has to satisfy all the parties concerned
_____________8. It refers to the best use of men, material, money and machinery employed in business
_____________9. Can survive for a longer period only if it is able to capture a big share in the market and has
market standing
_____________10. Anti-Social practices include hoarding, black marketing and adulteration.
Activity C | Check your Understanding | Answer the following questions:
1. What is the purpose of establishing a business enterprise?
Let’s dig deeper
The Core Principles of Fairness, Accountability, and Transparency
Business leadership affects the moral capability and performance of organizations. Business leaders influence
the scope and character of formal ethics programs and the integration of ethics into everyday organizational
life. However, most practicing business leaders in most countries most of the time are not held accountable for
dysfunctional moral, social, and environmental performance. Many are seldom held accountable for adverse
impacts of their decision-making, for example, deepening poverty, social disintegration, and environmental
degradation. There is a need to convince managements that they should develop their “integrity capacity”
which is the individual and/or collective capability for repeated process alignment of moral awareness,
deliberation, character, and conduct that demonstrates balanced judgment, enhances sustained moral
development, and promotes supportive systems for moral decision-making. These four key dimensions of
integrity capacity—process, judgment, development, and system—should present challenges for business
leaders so that they become more aware of moral concerns and thus respond more effectively to the problems
that arise (Petrick and Quinn, 2001). The concept of “accountability” is discussed further below.
Accountability
The record on business leadership accountability is mixed at best. In Great Britain, continental Europe, and
Australia, the practice of social and environmental accounting has gained a strong foothold and expanded the
scope of business leader accountability beyond maximizing shareholder wealth. The works of the Institute of
Social and Ethical Accountability and other empirical research groups have demonstrated the corporate social
performance-financial performance link. Unfortunately, many of today’s business people are not made to
account for their activities and outcomes, especially for the things that go wrong and for their unethical actions.
In terms of global accountability, many corporate leaders act under the myth that the public interest is
synonymous with corporate property rights. Corporate business leadership’s external accountability only
becomes an issue where a solid line is drawn between these two spheres.
Accountability – what it is:
 To be accountable is to be liable to explain or justify one’s actions and decisions.
 Accountability is the process of explanation and justification.
 Holding to account is the process of requiring explanation and justification, but it is also about testing,
forming a judgment, and if necessary, taking action.
 Accountability implies responsibility: it is reasonable only to hold people to account for those things for
which they are responsible.
7|Business Ethics and Social Responsibility 12
Accountability what it is not:
 It is not synonymous with responsibility.
 It does not imply a management relationship.
 It is not a “one off” annual event.
 It is not the same as appraisal.
 It is not about confrontation, “putting someone in his place” or “giving him a hard time.”
Fairness—in the context of a business organization—involves balancing the interests involved in all decisionmaking including any decisions related to hiring, firing (including the investigatory process), and the
compensation and rewards system. Recent research has expanded the meaning of equity or fairness.
Historically, equity theory focused on distributive justice, the employee’s perceived fairness of the amount of
rewards and who received them. However, organizational justice draws a bigger picture. Employees perceive
their organizations as just when they believe rewards and the way they are distributed are fair. In other words,
fairness or equity can be subjective; what one person sees as unfair may be perfectly appropriate for another.
In general, people see allocations or procedures favoring themselves as fair.
Transparency
Transparency has become an increasingly popular word in recent times; it is used and sometimes misused by
both scholars and practitioners. In this context, the associated academic literature has recently analyzed
several issues associated with corporate transparency such as the ethical justifications for information
disclosure, the ethical nature of corporate information transparency, or the use of transparency in
management-employee relationships.
Codes of Ethics
Understanding the foundation of the business ethics is very important to every decision makers and members
of the corporate organization. Easy resolution can be created and cautiousness for possible repetitions of
ethical issues can be observed and examined. In this chapter, we aim that you would understand and learn the
principles of business ethics as a part of our social responsibility and to embody the good corporate
governance.
ETHICS DEFINED
ETHICS is derived from the Greek word “ethikos” which means “having to do with character. The Latin word for
ethos is “mos” (or “mores”). That is why we known Ethics as the Moral Science or Moral Philosophy. It refers to
the theory of morality of right conduct.
Conscience. It refers to the practical judgment of reason upon act as good.
TYPES OF CONSCIENCE
1. Antecedent Conscience is a judgment before an action is done.
2. Consequent Conscience is a judgment after an action is done.
3. True Conscience is a conscience which judges thing truly as they are.
4. Erroneous Conscience is known as the false conscience.
5. Certain Conscience is a subjective certainty of the legality of particular actions.
6. Doubtful Conscience happens when a person is not certain about a judgment.
7. Scrupulous Conscience is one which sees wrong where there is none.
8. Lax Conscience is one where it fails to see wrong where there is wrong.
FACTOR INFLUENCING BUSINESS ETHICS
Leadership. Leaders is a person who leads the people towards achieving a common goal. Leader can be
good or bad, great or small they arise out of needs and opportunities of a particular time and place. Leaders
should be the role models and mentors to its subordinates to attain progress and not became examples of
disgrace and mentors of regress in work.
Performance and Working Environment. Good performance creates motivation to the subordinates to work
harder. The working environment must possess the energy of being productive in order for all to flow properly.
If the working environment possesses a weak or feeble performance, the workers started to be lazy and not
concentrated to the work resulting of being not productive.
Deontology. The philosophy that says people should meet their obligations and duties when analyzing an
ethical dilemma. This means that a person will follow his/her obligations because upholding one’s duty is what
is considered ethically correct.
Legal Rights. It includes freedom of religion, speech and assembly, protection from improper arrest, searches
and seizures, proper access to counsel, confrontation of witnesses, cross-examination in criminal
prosecutions, right to privacy in many matters and rights applied without regard to race, color, creed, gender,
or ability.
8|Business Ethics and Social Responsibility 12
BENEFITS OF BUSINESS ETHICS
Goodwill of the People. People like to build long term relationships with organizations that performs their
tasks on the principle of ethics. Moreover, strong public image leads to continual loyalty and attracts new
investors.
Prevention from Legal Actions. By implementing ethical practices, organizations are automatically prevented
from illegal and objectionable activities as business ethics instruct to avoid all that is wrong and evil. Such
organization have no fear of legal action and social boycott.
Business Ethics is substantially Improved the Society. Establishment of anti-trust laws, unions and other
regulatory bodies has contributed to the development of the society.
Ethical Practices Create Strong Public Image. Organization with strong ethical practices will possess a
strong image among the public. This image would lead to strong loyalty.
Ethical Practices Support Employees’ Growth. Ethics in the workplace help employee face reality, both
good and bad – in the organization.
Strong Teamwork and High Productivity. Constant change and dialogue will ensure the employee matches
to the value of the organization.
Build Trust with the Key Shareholders. Implementation of ethics helps organization to gain trust of their
shareholders.
High Profit. Reputation of the company and its share prices also increase if the company act upon Corporate
Social Responsibility (CSR).
FOUR VIEWS OF ETHICS
1. Utilitarian View. ethical decisions are made solely on the basis of their outcomes or consequences.
Greatest good is provided for the greatest number. And encourages efficiency and productivity and is
consistent with the goal of profit maximization.
2. Moral Right View. they are more in the respecting and protecting the fundamental rights of the people.
Moral decisions are those that best maintain the rights of those people affected by them. An ethical decision is
one that avoids interfering with the fundamental rights of other.
THE SIX MORAL RIGHTS OF AN INDIVIDUALS:
 The right of free consent
 The right of privacy
 The right of freedom of conscience
 The right of free speech
 The right of due process o The right of life and safety
3. Justice View: there is always fair and impartial treatments of people according to the legal rules and
standards. The decisions to be created are based to the standard of Equality, Fairness and Impartiality.
THREE TYPES OF JUSTICE APPROACHES:
Distributive Justice: the treatment of people should not be based on arbitrary characteristics. In case of
substantive differences, people should not be treated differently in proportion to the differences among them.
Procedural Justice: the rules must be or should be clearly stated; equal and just for everyone. All the rules
approved should be consistently and impartially enforced for the betterment of the workplace.
Compensatory Justice: the individuals should be compensated for the cost of their injuries by the party
responsible. Individuals should not be held responsible for matters they have no control.
4. Individualism View. the acts when they promote the individual’s long term interests, which ultimately
leads to the greater goods. Individual self-direction paramount; individuals is believed to lead to honesty
and moral integrity since the Accounts Receiver. Is the primary documents is to one’s long term is like
one’s long term self-receipt
9|Business Ethics and Social Responsibility 12
Engage yourself
Activity 1 Answer the following question.
1. How businesses should apply accountability and transparency principles?
2. What is the importance of fairness accountability and transparency in the business?
Activity 2 | Identification: Give what is being asked in the sentence and write it on the space provided
___________1. The philosophy that says people should meet their obligations and duties when analyzing an
ethical dilemma.
___________2. Become an increasingly popular word in recent times; it is used and sometimes misused by
both scholars and practitioners
___________3. It includes freedom of religion, speech and assembly, protection from improper arrest,
searches and seizures
___________4. Leaders is a person who leads the people towards achieving a common goal. Leader can be
good or bad, great or small they arise out of needs and opportunities of a particular time and place.
___________5. People like to build long term relationships with organizations that performs their tasks on the
principle of ethics.
Let’s dig deeper
CODE OF ETHICS DEFINED
Also known as ETHICAL CODE, Code of Ethics are principles adopted by an organization to assist those in
the organization called upon to make a decision. Usually most understand the difference between “right” and
“wrong” and to apply this understanding to their decision. A written set of guidelines issued by an organization
to its workers and management to help them conduct their actions in accordance with its primary values and
ethical standards.
CODE OF CONDUCT: it is a document designed to influence the behavior of employees. They set out the
procedures to be used in specific ethical situations and delineate whether a violation of the code of ethics
occurred and, if so, remedies should be imposed.
CODE OF PRACTICE: it is adopted by a profession or by a governmental or non-governmental organization to
regulate that profession. It may be styled as a code of professional responsibility, which will discuss difficult
issues, difficult decisions that will often need to be made, and provide a clear account of what behavior is
considered “ethical” or “correct” or “right” in the circumstances.
USERS OF THE CODE OF ETHICS
Code of ethics is broad. It can be used by any persons not only the professionals like accountants and doctors.
It depends to the institution you are working with.
10 | B u s i n e s s E t h i c s a n d S o c i a l R e s p o n s i b i l i t y 1 2
These are 2 examples of users of code of ethics:
FOR SCHOOL:
Administrators
Teachers
Students
Employees
FOR BUSINESS:
Employees
Customers
Suppliers
Government
Society General
ETHICAL CODE FOR STUDENTS
Integrity of Students: it is the most basic prerequisite to earning and retaining trust. Very high standards of
integrity should be upheld. There is no compromise of principles for any reason. Character is as important as
competence in profession.
BUSINESS ETHICS DEFINED
1. BUSINESS ETHICS is the study of what is the right and wrong human behavior and conduct in business.
2. BUSINESS ETHICS is a study of perceptions of people about morality, moral norms, moral rules, and
ethical principles as they apply to peoples and institutions in business.
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.
Examples of a Code of Ethics for Business:
Confidentiality and Privacy Policies
In recent years, many companies and agencies have fallen prey to hackers stealing client information or
proprietary data. One code of ethics section can require that employees maintain confidentiality when
handling customers' personal or private information. Also include a similar policy that relates to the company
secrets. Privacy policies are more than something you should do as a business owner, they are now
regulated and required by law when any company collects personal and private information. Train
employees on best practices to keep personal information out of the hands of the bad guys.
Professional Appearance Policies
Your company may have a dress code or dress policy. This could include a uniform shirt for service
providers, a suit and tie for account representative or business casual for Fridays. What a person wears is
part of the value-based code of ethics section. You could also state that you want employees' clothing to be
clean and pressed; a cleaning service coming into someone's home appears more professional when the
employees show up wearing company shirts that are clean and wrinkle-free.
Promoting Green Business Practices
Another value-based code of ethics topic is promoting green and environmentally sounds business
practices. This often includes limiting paper consumption but also has to do with recycling, waste disposal
and the types of products a company uses to reduce its carbon footprint. That same cleaning company could
require that all products follow specific environmental standards of safety for people, pets and the
environment.
Obeying the Law
Obeying the law is a code of ethics subject that seems as if you shouldn't need to state it. However, finding
out that employees have broken the law either during or after work can affect a company's brand. For
example, a flower shop might require that all delivery drivers maintain a clean driving record. If an employee
gets a DUI after work, this could affect his ability to do his job, even though the activity wasn't during his shif t
but this is a necessary part of the code of ethics.
Caring and Consideration Policies
Consumers often feel that businesses are just in it for the money and a quick sale. They are inundated with
sales pitches all day long. As part of its code of ethics, your company could establish, that employees
conduct business in a caring, considerate manner. Think about a home-care provider who is working with
senior citizens and their loved ones; treating the patient and family in a way that demonstrates care can
greatly increase the ability to get new clients.
Types of Codes of Ethics
A code of ethics can take a variety of forms, but the general goal is to ensure that a business and its
employees are following state and federal laws, conducting themselves with an ideal that can be exemplary,
and ensuring that the business being conducted is beneficial for all stakeholders. The following are three types
of codes of ethics found in business.
Compliance-Based Code of Ethics
For all businesses, laws regulate issues such as hiring and safety standards. Compliance-based codes of
ethics not only set guidelines for conduct but also determine penalties for violations.
Value-Based Code of Ethics
A value-based code of ethics addresses a company's core value system. It may outline standards of
responsible conduct as they relate to the larger public good and the environment. Value-based ethical codes
may require a greater degree of self-regulation than compliance-based codes.
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12 examples of ethics for the workplace
1. Transparency
Transparency involves accurately representing facts, telling a truth in its entirety and communicating clearly
and openly about everything a company does and says. It is the foundation of a strong relationship with
customers, which directly impacts the success and stability of a company.
The more candidness a company shows, the more the public is likely to trust in its service, product or mission.
This is especially true during public relations crises when full disclosure is imperative to overcoming business
issues.
2. Integrity
Sticking with a decision, especially when pressured to do otherwise, shows honor and courage. Companies
that do what they believe is morally right based on equality and fairness can demonstrate strength and
commendable character.
3. Trustworthiness
Companies that keep promises and fulfill commitments to their employees, business partners and customers
display their commitment to business ethics. Trustworthiness is a monumental component to success in
business because people typically like to work with and buy from those they believe are dependable and
principled.
4. Loyalty
Loyalty encompasses all relationships a business has including those with staff, partners, investors and
consumers. Loyalty allows a business to make decisions benefiting these relationships and overcome
influences from outside conflicting interests. This shows the business values the advancement of the company
and employees over an owner's personal gain.
5. Fairness
Companies should strive to act fairly and commit to exercising their power justly. Leaders should only use
honorable methods to gain an advantage over the competition. Also, fairness relates to equality, which means
having an open mind and treating everyone fairly. Fairness and equality can be involved in hiring practices,
marketing initiatives, business partnerships and competing within the market for new consumers or clients.
6. Compassion
Ethical companies demonstrate genuine kindness, understanding and care for the livelihood of others. In
business, this means accomplishing business goals to produce the most of good while causing the least
amount of damage. When a business decision needs to be made, careful consideration of the options and how
each one may affect a person or community helps reduce the potential negative impacts, depending on the
industry.
7. Respect
Having basic respect for the rights, privacy and dignity of people—including individuals within and outside the
company—is an important business ethical standard. Companies that treat all humans with respect regardless
of religion, sex, race, nationality or other signifier are often reviewed positively in the public eye.
8. Lawfulness
Business ethics also include abiding by legal regulations and obligations regarding their business activities like
taxes, worker safety and employment and labor laws. Companies that work within the boundaries of the legal
system are more credible and honorable, which can establish a strong positive reputation as an employer that
encourages high-quality candidates to apply for roles.
9. Providing excellence
Ethical organizations strive to provide excellence by always working to deliver the greatest quality of service or
products to their clients and customers. They pursue creativity and innovation, looking for the best ways to
deliver their goods and seek to constantly improve their performance, customer satisfaction and employee
morale.
10. Responsibility
Companies with high ethical standards recognize their responsibilities to their employees and customers and
understand how the conduct of their leadership affects the business. Companies have a responsibility to lead
with the values and mission of the organization to make logical decisions that benefit everyone. Company
leaders should implement ethical standards and model them to others by displaying the standards themselves.
11. Reputation upholding
An ethical company seeks to maintain and protect a positive reputation to build a motivating work culture, keep
investors engaged and provide exceptional service to customers. Upholding a good reputation means
engaging in conduct that uplifts the company. If any action is taken to undermine a company's reputation,
leaders need to handle the situation appropriately utilizing other ethical standards such as transparency,
accountability and responsibility.
12. Accountability
Ethical businesses accept responsibility for all decisions made as a company and admit their mistakes to all of
those who may be affected by a misstep including shareholders, employees and the public. In addition to
taking accountability, they also accept any consequences that result and do so transparently.
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Extend your understanding
Activity A. Match the words in column A with the phrases in column B.Write the letters of your answer on the
blank.
Column A
Column B
_____1. Code of Conduct
a. It can be used by any persons not only the
_____2. Users of the code of ethics
professionals like accountants and doctors.
_____3. Obeying the Law
b. It is a document designed to influence the
_____4. Compassion
behavior of employees
_____5. Integrity
c. Sticking with a decision, especially when
pressured to do otherwise, shows honor and
courage
d. Is a code of ethics subject that seems as if you
shouldn't need to state it
e. Ethical companies demonstrate genuine
kindness, understanding and care for the livelihood
of others.
f. ethical company seeks to maintain and protect a
positive reputation to build a motivating work
culture
Think about this
Activity 1 Classify each situation below whether it shows fairness, accountability, transparency, by check
(/) you like in the proper column.
Situation
Fairness
Accountability
Example: The manager shows the receipt to the
accountant
Transparency
/
1. The purchasing officer of the company paid the
exact amount for the supplies.
2. The book sales of victory bookstores corporation
is open for those who are interested
3. John employee discovered that his salary was
short by Php 700.00 and asked the payroll
officer who, in turn show him the records.
4. ABC Company gave all its employees 13 month
pay.
5. The accounting clerk took her/his noon break
but forgot to lock her/his locker. To her/his
dismay, all collections the whole morning were
stolen.
Activity 2. Direction Construct a short paragraph for each number.
Example: I could show transparency by trust employees to make decisions.
1. I could show fairness by
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2. I could show accountability by
3. I could show transparency by
Let’s dig deeper
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Engage yourself
Activity A: Answer the following question.
Processing Question:
1. What is the importance of understanding the foundation of the business ethics?
.
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2. Describe how the Filipino value system affects the attitudes of business constituents?
Activity B | Identification: Give what is being asked in the sentence and write it on the space provided
___________1. I the value system where one gains favor, promotion, or political appointment through family
affiliation.
___________2. Filipino are universally regarded as excellent workers who perform well whether the job
involves physical labor and task.
___________3. literally means "love of self" or self-love
___________4. Is a filipino term which means "loyal customer"
___________5. Is a virtue of respect for ones parents, elders, and ancestors.
Activity C True or false: Write T on the space provided if the statement is true and F if the statement is false.
________1. Moral education a question of high importance in any investigation of ethics is how can teach
people.
________2. Judaism- offers the golden rule command.
________3. Christianity-the prophet Muhammad emphasized that honesty and kind.
________4. Rule utilitarianism- is put in place to benefit the most people by using the fairest methods
________5. Buddhism is an ancient philosophical system that follows the teaching of the Buddha.
Activity D. Answer the following question.
1. How do you use ethics and responsibility in everyday life?
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