 only responsibility is to make profit

so long as it stays within the rules of

the game, which is to say, engage in
\Business Ethics open and free competition without
deception or fraud
and
Social Peter Drucker
 enterprise is an organ of the society
Responsibility and therefore, its actions and
decisions have a great impact on
society and people
WHAT IS BUSINESS ETHICS?
Business
 activity of making, buying, or selling
Etiquette
of goods
 customer code of polite behavior in
 work that is part of a job
society or among members of a
 amount of activity that is done by a
particular profession or group
store, company, factory, etc.
 comes from the old English word
Ethics
bisignes which originally means care
 study of moral problems practical
and occupation
reasoning, right and wrong, good
 to engage in purposeful activity
and bad, virtues and vices, character,
 busy-ness is not anymore the main
moral duty, and related issues
criterion or an activity to be called a
involving the origin, nature, and
business
 discipline of ethics essentially boils
down to a search for underlying
Business vs Entrepreneurs
objective standards and reasoning
 entrepreneur: somebody who shifts
for taking a particular course of
economic resources out of an area of
action
lower and into an area of higher
productivity and greater yield
 Morality governs private and personal
interactions
BELIEF SYSTEMS AND THE
 Ethics governs professional interactions
CONDUCT OF BUSINESS
 Law governs society as a whole
Christianity
 love one’s neighbor
 Not all that is legal is moral, but all that
 value of human labor
is moral is worth legalizing
 notion of private property
Milton Friedman
Hinduism

Page 1 of 10
  goals of life concern not only  honoring business obligations
moksha (spiritual freedom), but also  fair treatment to workers
artha (material well-being)
 Hindu business person must treat he Haram
business stakeholders with honesty  all forms of interest
and fairness  prohibited items
 Hindu Society institutionalizes social  price fixing
roles and by jobs  hoarding (not selling products to
Buddhism wait for prices to increase)
 one of the most relevant aspects in
relation to the conduct of business is Commonalities among Religions in
Right of Livelihood Relation to Business Conduct
 firmly believes in the  justice
interconnectedness and  mutual respect
interdependence of all things in the  stewardship
universe  honesty
 one of the Central Tenets is the
overcoming of human suffering
BUSINESS ETHICS AND
Confucianism FILIPINO VALUES
 virtue of “ren” (humaneness) and “li”
(benevolence) Peculiar Understanding of Business Ethics
 kindness, trustworthiness, tolerance,  Geographic fragmentation
courage, prudence, and propriety  Ex: Kapampangan: mayabang
 Ex: Ilocanos: kuripot
Judaism  Plurality of Language and Ethnicities
 right of action  Ex: Negros Occidental and Oriental:
 free choice different dialects
 balance  Predominant Roman Catholic Religion
 covenant (pinagkasunduan)  without the Spaniards, our country
 dialogue would have naturally been Islamic
 Short Experience on Nationhood
Islam  longer being colonized than being
 Muslims are encouraged to engage an independent country
in business activities
 Most business minded compared to Definition of Success
all the other religions  wealth; comfortable life
 ethics is about doing what is right
Halal
 legitimate earnings Kinship Structures
 trade contract with mutual consent  blood relations
 truthfulness in business dealings  marriage
 trustworthiness  compadrazgo or compadre
 generosity (christening)

Page 2 of 10
  label for every member  consequences don’t matter, as
 very wide long as intentions are good
 two reasons why people do the
Is nepotism a violation of the ethical duty of right thing
justice and fairness? 1. act of moral duty
 nepotism: choosing someone who is  doing something because
a relative you think it is right
Kapwa 2. act of conformity
 of the same nature  doing something because
 of equal status other people think it is
 partnership right
 shared orientation
 harmonious relationship and Connotation of “Bahala na”
solidarity  lacks the initiative to move, the
creativity to innovate (leaves
Pakikisama everything to chance)
 willingness to subordinate one’s own  relies on God to solve problems (root
interest in favor of others, in the word – Bathala)
spirit of harmony, friendship,  inner strength to dare, take risks,
cooperation, and deference to initiate and move, take up a
majority decisions so that group challenge, and assume responsibility
goals can be easily achieved for an act

Damdamin Dangal
 emotion or feeling  honor, duty, reputation
 judging between right and wrong,  knowing what is morally right,
just and unjust, Filipinos always feeling what is morally good, and
check how they feel about it acting in a way that is morally
 Utilitarianism (Jeremey Bendham) desirable
 consequences and effects of  “Hindi na baleng mahirap, basta
actions are the only standard of marangal.” It is better to be poor
right or wrong than to lose your honor.
 greater good for a greater  “Hindi ko pakakainin and aking mga
number of people anak ng galling sa masama.”
 benefit > cost
 Ex: land should be Split Level Christianity – Jaime Bulatao
commercialized for the benefit of  Divided personality of Filipinos
a bigger society than the farmers 1. One that is highly religious and
 Ex: testing of medicine on a one that is highly profane.
person 2. One that is highly active in
 Ex: Ford Pinto would rather pay religious activities and one that
for casualties than to remodel is ready to subvert basic moral
 Deontoligical (Immanuel Kant) norms.

Page 3 of 10
 Ex: cheating because you really have to CONSUMER RELATIONS
pass the exam
Consumer Protection

1. The Market Approach

 it is assumed that the free market
LAWRENCE KOHLBERG’S STAGES will ensure the protection of the
OF MORAL DEVELOPMENT buyers from unreasonably high
prices and low quality products
Stage 1. Pre-Conventional  Invisible Hand: consumers act upon
Level 1. Punishment Orientation their best interest
 only take what is wrong if there  Collective Intelligence: like how
is a corresponding punishment Waze works; torrent
 Ex: those who break the law  Collective Stupidity: fake news;
knowing that legal action is not copying everything on a kodigo
strict  Weaknesses: assumption that there
Level 2. Rewards Orientation is perfect competition in the market
 only take what is right if there is economy
a corresponding reward  buyers lack information
regarding the details of the
Stage 2. Conventional products
Level 3. Good-Boy-Nice-Girl Orientation  many consumer markets are
 seeking approval from other usually monopolies and
people oligopolies (2); no choice such as
Level 4. Law and Order Orientation Meralco
 not the highest form of morality
because not all that is legal is 2. Contract Approach
moral  sellers and buyers always enter into
 if you can’t provide more than a contractual agreement (equal)
what the law says  stipulations: law governing company
itself
Stage 3. Post-Conventional  Conditions in a Contractual
Level 5. Social Contract Agreement: The buyer and seller…
 sees that some laws must be  have full knowledge of the
challenged, changed, and nature of the contract
modified if by doing so leads to  do not misrepresent relevant
the welfare of the society facts
Level 6. Universal Ethics  are not forced to enter the
 propelled by the right thing to contract
do  have adequate information
regarding the product

Duties of Business
ETHICAL ISSUES IN
 duty to comply

Page 4 of 10
  product should be able to deliver  manufacturer has full responsibility
what they claim to be for all the harms that the product
 duty to disclose may cause the buyer
 Ex: second hand cars who say the  only exception are natural disasters
defects
 duty not to misrepresent Limitations to the solutions offered by the
 Ex: cars who ask for a small down Social Costs Approach
payment  form of injustice to the manufacturer
 duty not to coerce since one has a moral responsibility
 should not take advantage of only if the harmful effect is
personal circumstance of buyer foreseeable and he/she did nothing
 Ex: when you increase the price of to prevent it
someone who really needs a  will not assure that accidents will not
particular medicine happen

3. Due Care Theory The Consumer Act of the Philippines

 seller has the duty to take all the (RA 7394)
necessary precautions so that the  protection against hazards to health
buyer will not be harmed by the and safety
product  protection against deceptive, unfair,
 buyer and seller are not on equal and unconscionable sales acts and
footing practices
 provision of information and
a. Caveat emptor education to facilitate sound choice
 buyer has duty to himself/herself and the proper exercise of rights by
that whatever business transaction consumer
they enter is fair  provision of adequate rights and
 duty of buyer to take necessary means of redress
precautions in entering fair business  involvement of consumer
agreements representative in the formulation of
social and economic policies
b. Caveat vendor  Policy of the state to protect:
 product safety shifts heavily on 1. protect the interest of the
manufacturer consumer
 should make sure product is safe 2. promote general welfare
3. establish standards of conduct
“No return, no exchange” for business and industry
 there should be an issuance of
warranty Basic Rights of a Consumer
 does not comply with the due care 1. Basic Needs
theory (?) 2. Safety
3. Information
4. Social Costs View 4. Choose
5. Representation

Page 5 of 10
 6. Redress  example of dog salvation
7. Consumer Education
8. Healthy Environment 2. Edward Louis Bernays
 father of public relations
 experiment of women smoking in
Ethics of Advertising public

Advertising 3. Dependence Effect by John K. Galbrait

 techniques and practices used to  necessity is the mother of invention,
bring products, services, opinions, or but invention is also the mother of
causes to public notice for the necessity
purpose of persuading the public to
respond in a certain way 4. Subliminal Advertising by James
 to introduce a new product Vicary
 to introduce alternative products  during movies messages pop up (ex:
that the public can choose from hungry? eat popcorn)
 introduce the features, uses, and
benefits of the products
a. Political Advertising Marketing to Children
 when politicians and government
officials inform and persuade the guilt
public to respond in a certain  plays a role in spending decisions as
way time-stressed parents substitute
b. Commercial Advertising material goods for time spent with
 organized method of their kids
communicating information
about a product or service which Daniel Palmer
a company or individual wants to  children represent an important
sell to people element in the modern consumer
 without the actual face to face economy
encounter with the salesman
1. Pester Power
 advertising is both legal and ethical  children having a tantrum to get
what they want
Factors to Consider in Determining the
Ethical Implications of an Advertisement: 2. Marriage of Psychology and
 social effects Marketing
 pricing: fruits vs fries  child psychologists and --- to
 commercialism and materialism effectively market to children
(ex: Valentine’s Day)
 effects on desire 3. Building Brand Name Loyalty
 effects on beliefs  when you use a certain brand as a
child and continue to wear it as your
1. Classical Conditioning – Ivan Pavlo grow older

Page 6 of 10
  humans have to do whatever to
4. Buzz or Street Marketing survive
 capturing attention of consumers  view that human beings are the
and media to the point where talking central fact on earth
about your product, brand, or Anthropocentric Extensionism
company becomes entertaining,  notion that the moral duty to care
fascinating, and newsworthy for the environment is not only on
account of the presently existing
5. Commercialization in Education human beings but also on account
 sponsor school activities of those who do not yet exist, the
 advertise things that can be used by unborn
students
Anthropocentrism vs Anthropocentrism
Code of Ethics by the AdBoard Extensionism
 advertisements for cigarettes and  contrasting since one cares for not
tobacco products will not be aimed only self but also for others
at or directed to minors as the target
audience Biocentrism
 advertisements shall not exploit the  centrality of life
youth younger than 18 years of age  ethical perspective that all life
 models and talents who are minors deserves equal moral consideration
or appear to be minors and those or has equal moral standing
who portray authority figures or  everything that has life has values
roles meant to appeal to minors will independent from the concerns of
not appear in such advertisements human beings

Ethical Dilemmas in the Nature of the Ecocentrism

Product  house centered
 less nutritional products  natural environment is a house for
 toys with unrealistic features everybody and everything; living
 toys that promote violence things and non-living alike
 Ex: things in a museum

Ethics of Pricing Environmentalism

 concern with safe guarding the
1. negotiation natural world and its various
2. enough information elements and the differing ways in
3. not under pressure to accept the price which such a concern is expressed by
people

ETHICAL ISSUES IN RELATION TO THE Social Ecology and Ecofeminism

NATURAL ENVIRONMENT  environmental issues cannot be
understood independently of
Anthropocentrism economic and political issues

Page 7 of 10
 1. Comparative Wage
Environmental Colonialism  same rate as what competitors are
 colonial powers created a global paying in the same industry
infrastructure that encouraged the  Ex: bank teller in BDO Quezon City
extraction of natural resources from and Metrobank in Manila
poor peripheral countries by rich
core countries while at the same 2. Capability of the Business
time undermining sustainable native  startup businesses have less to pay
cultures for compared to big long-running
 did this through globalization: want companies
an “equal” playing field for everyone  Ex: ABS-CBN vs Miriam College
economically
 Ex: Philippines exports bananas and 3. Nature of the Job
mangos while other countries export  risk involved with the job
phones and cars  left out compared to the other
 one of the most important factors
environmental ethical issues  Ex: life guard vs doctor: even if they
 Ex: Canada threw their trash in the both save lives, training time is
Philippines “unknowingly” significantly different

 Environmental problems rooted in an 4. A business person must be in cognizant

economic system that is deeply of the laws on minimum wage
exploitative not only of nature but also  Ex: less firms more applicants cause
of humans. settlement for low wage

 Overcoming the environmental crisis 5. A business owner must take into

involves a radical overhaul of economic consideration the relative
and social organization, and in particular proportionality and similarity of the
the overthrowing of capitalism nature of the job

 communism = equal wealth for 6. Both the employer and employee must
everyone consider the fairness of wage
 capitalism = gain as much wealth as you negotiations
can
7. Must account for the cost of living
Social Ecology within the specific locality where his or
 against capitalism and the her business operates
totalitarian tendencies of Russian
Marxism Living Wage
 amount of money a full-time
employee needs to afford the
ETHICAL ISSUES IN EMPLOYER- necessities of life, support a family,
WORKER RELATIONS and live above poverty line

Page 8 of 10
Right to Form a Union and to Strike  educating the workers, the
 sign of a healthy democracy employers and the society as a
whole with regard to the value of
Labor Union human labor and the dignity of the
 usually the most effective workers
mechanism that gives power and  there is a need to validate if what
leverage to the workers you are doing is right
 association of employees that
advances the member interests Fiduciary Duty of the Employee
though collective bargaining with an 
employer  candor
 Ex: class asking teacher to move a  agent’s moral duty to be always
deadline truthful and honest to his or her
principal
United Nations Declaration of Human Rights  care
(UDHR, Article 20)  loyalty
 everyone has the right to freedom of
assembly and association
CORPORATE SOCIAL RESPONSIBILITY
1987 Constitution, Bill of Rights (Article 3)
 the right of the people, including Social Responsibility
those employed in the public and  a person’s obligation to consider the
private sectors, to form unions, effects of his decisions and actions on
associations, or societies for the whole social system
purposes not contrary to law shall
not be abridged Corporate Social Responsibility (CSR)
 modern businesses have a
Objectives of a Union responsibility to society that extends
 decent work beyond the stockholder or investors in
 decent pay the firm
 decent lives  concept whereby companies integrate
social and environmental concerns in
1. Democratization of Wealth their business operations and in their
 equal opportunities for everyone interaction with their stakeholders on a
 ensuring that the workers receive voluntary basis
just wage and safe working  approach that an organization takes in
conditions balancing its responsibilities toward
different stakeholders when making
2. Democratization of Power legal, economic, ethical, and social
 balancing the power between decisions
employer and employee
Five Dimensions of CSR
3. Humanizing the Working Class 1. Environmental

Page 9 of 10
  direct assertion of concern for
the natural environment

2. Social
 business is conscious of its
impact to the communities
3. Economic
 preserving the economic viability
or profitability of the business
organization
4. Stakeholder
 importance of how other
stakeholders such as employees,
suppliers, and customers are
fairly and justly treated
5. Voluntariness
 going beyond the requirements
of the law and as being
motivated by ethics and values

Triple Bottom Line

 economic prosperity, environmental
quality and–the element which
business has tended to overlook–
social justice
 profitable growth is completely
compatible with doing the right thing
 People
 Planet
 Profit

CSR
 Corporate Accountability
 Corporate Social Performance
 Corporate Performance
 Corporate Citizenship

Page 10 of 10