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Business ethics and social responsibility

Corporate Law (Cotabato State University)

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ACTIVITY SHEETS
BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
2nd Semester First Quarter
Week 2
MELC : 1. illustrate how fairness, accountability, transparency
and stewardship is observed in business and non-profit
organization.
2. Formulate a “code of ethics” that reflect the core
principles that derived from analyses.

LESSON 1 – The Core Principles Underlying Fairness, accountability, and

Transparency in Business Operation and Stewardship.

A Good Corporate Governance in all businesses and even in non-

profit organizations such as foundations is very important in order to build
trust and confidence with the investors, donors, and the community in
general. A good corporate governance builds the integrity of the
institution. Below are the Core Principles of a Good Corporate
Governance:

ACCOUNTABILITY
Accountability is the obligation of an individual or organization to account
for its activities, accept responsibility for them, and to disclose the results
in a transparent manner.

Accountability in the context of a business organization is the

obligation to demonstrate that work has been conducted in compliance
with agreed rules and standards or to report fairly and accurately on
performance results vis-à-vis mandated roles and/or plans.
Examples of accountability:
1. A company salesman admit he lost the company’s sales
and he admit his mistakes.
2. An architect who is assigned on a project is the one to be
blamed if the project did not meet the deadlines.
3. An Employee recommended his/her cousin to be their
company liaison, but the latter stole the cellphone of their
secretary. Therefore, the Employee who recommended
maybe blamed for recommending his/her cousin and
should pay or replace the lost cellphone.

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FAIRNESS

It is the quality of making judgments that are free from discrimination.

Fairness in the context of a business organization involves balancing the
interests involved in all decision-making including any decisions related to
hiring, firing (including the investigatory process), and the compensation
and rewards system. Hiring the right people is one of the most important
decisions an organization makes.

Examples of fairness:

1. A manager listening to both sides of the story before judging who is right
and who is wrong.
2. A customer paying the right price for the right price for a product
purchased or for a service received.

TRANSPARENCY

Transparency is defined as being authentic in the way an organization

message themselves externally – to stakeholders, to prospective
customers and talent, and within the community. It allows stakeholders to
understand whether the activities of social institutions provide a genuine
service to civil society and whether money is used appropriately.
Thus, transparency means there is lack of hidden agendas or
conditions, accompanied by the availability of full information required of
collaboration, cooperation, and collective decision-making.
Examples of transparency:
1. Having an open process of decision-making such as hiring
additional employees.
2. Reporting accurately the company’s financial situation and risks
to investors.
3. Holding and selecting bids according to an open pre-defined
process.
Activity 1.
Directions. Classify each situation below whether it shows fairness,
accountability, or transparency, by putting a emoji that you like in the
proper column.
Situation Fairness Accountabilit Transparency
y
E.X. The manager shows the receipt to the
accountant.
1.The accounting clerk took her /his noon break but
forgot to lock her/his locker. To her/his dismay, all
the collections the whole morning were stolen.
2.The purchasing officer of the company paid the exact
amount for the supplies.
3.The book sales of Victory bookstores Corporation is
open for those who are interested.
4.Isaac an employee discovered that his salary was
short by Php 500.00 and asked the payroll officer who,
in turn, show him the records.
5.ABC garments company gave all its employees 13th

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month pay.

Activity 2.
Directions. Construct a short paragraph for each number.
1. I could show fairness by
_____________________________________________________
_____________________________________________________
_____________________________________________________
______
2. I could show accountability by
_____________________________________________________
_____________________________________________________
_____________________________________________________
______
3. A could show transparency by
______________________________________________________
______________________________________________________
_
_
_
_
_

Scribd.com/document/496457
407/bus-ethics-q3-mod2-The-Core-Principles-Underlying-Fairness-Accountability-and-
Transparency-in-Business-Operation-and-Stewardship-final

LESSON 2: ETHICS
ETHICS
The term Ethics is derived from the Greek word ethos which means
“characteristics way of thinking”. Ethics as science does not only evaluate
the morality of our human conduct but also provides us with common
understanding of the universal, objective, and irreversible moral principles
that should govern our moral decisions. (Roa,2011)
These are rules of behavior based on ideas about what is morally
good and bad. (Merriam-webster Dictionary)

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IMPORTANCE OF ETHICS IN BUSINESS

Ethical conduct, whether at the corporate, professional, or personal
level, is a direct reflection of the principles and values which regulate the
person and the institution he/she represents.
Organizations established their own culture that is socially expressed
as their ideals. As a result, most organizations generate a list of
organizational values and codes of conduct to be recognized and adhered
by all workers. Motivating and enhancing constructive actions, and at the
same time building an atmosphere that prevents unethical behavior are vital
obligations on the part of administration and workers.

ETHICAL ISSUES IN BUSINESS

1. Ethical Issues in Production

Business ethics typically deals with company’s duties to
ensure its good and industrial procedures do not inflict
unnecessary harm. Many products and services can be
generated and used at zero risk and it can be difficult to
assess the ethical path. . However, there are consumers who
patronize products that damage them, for example, tobacco
products. Output can have adverse effects on the environment
like air pollution, destruction of habitats, and urban sprawl.

2. Ethical Issues on Business

Under the umbrella of finance and accounting, fairness in
trading practices, trading conditions, financial contracting,
sales practices, consultancy services, tax payments, internal
audits, external audits, and executive compensation included,
whereas specific corporate ethical/legal abuse includes insider
trading, bribery/kickbacks, misleading financial analysis, and
fraud on securities.

3. Ethical Issues in Human Resource (HR) Management

Human resource management’s task includes hiring and
orientation, performance evaluation, training and
development, labor relations, and health and safety concerns.
Among the ethical issues are discrimination by age (the young
ones are preferred over the older ones), gender preference,
sexual orientation, race, ethnicity, disability, and physical
appearance are all ethical issues that the HR oversees.

4. Ethical Issues in Sales and Marketing

Marketing ethics deals with the belief, standards and or/morals
that advertisers and marketing organizations will operate upon.
Ethical marketing issues include promotion of obsolete or harmful
products/services; openness about environmental threats; food
ingredients (Genetically Modified Organism); possible health hazard
of financial risk; protection for the privacy and autonomy of the
consumers; truthfulness in advertising; and honesty in price and
delivery.

Ethics in marketing includes practices in pricing, which

involves unlawful acts such as price manipulation and price
skimming. . Price skimming is a product pricing strategy by which a
firm charges the highest initial price that customers will pay and lower
it over time. (Hayes 2020), Adverting has raised concerns over
offensive advertisements, objectification, and school marketing.

Activity 2.1
Directions: Classify each phrase below to the corresponding column of ethical issues
where it belongs.

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1. Honesty in prices.
2. Truthfulness in advertising.
3. Fraud in stock market
4. Harm to environment.
5. Manipulation in prices.
6. Exaggerated in advertisements.
7. Destruction of habitats.
8. Encountered misleading financial reports.
9. Overweight applicants are not allowed.
10. Hiring limited to religious affiliations.

In Finance In Human Resource In Sales Marketing in Production

Management

LESSON 3 CODE OF ETHICS

Is a set of rules about good and bad behavior. It is a guide of principles designed
to help professionals conduct business honestly and with integrity. A code of ethics
document may outline the mission and values of the business organization, how
professionals are supposed to approach problems, the ethical principles based on the
organization’s core values, and the standards to which professional is held.

Recommendation for developing Code of Ethics in business organizations. Saucer and

Sims.(2013)

1. Adopt code of ethics.

2. Offer training on ethics (management and employees)
3. Hire and foster individual with ethical value.
4. Deal with immoral activities. Employees must know the implications and effects
of making unethical actions and should be ready to accept consequences.
5. Take constructive measures. Give rewards to employees who show honesty and
admit their mistakes.
6. Carry out social audit. Conduct survey to employees occasionally.
7. Cover all whistleblowers. A whistleblower who works sincerely, correctly reporting
an issue, should be praised for his/her courage and integrity, as opposed to
being disciplined and ostracized.
8. Empower the defenders if integrity. Support those who work with honesty and
integrity.
9. Ensure executive commitment.
10. Communicate the principles of conduct within the company and across the
industry.
11. Assign an officer who is clearly responsible for the enforcement of ethical
standards. He/she can be consulted for advice.
12. Established a procedure for violations of ethical standards, and fully review any
offenses reported.
13. Ensure high perseverance by the company’s board of trustees.
14. Lead by example, above everything else.

One way to tackle ethical situations is by using the four-way test to evaluate
decisions.

Four -way test consist of asking questions:

1. Is my decisions truthful?
2. Is my decision fair to all who are affected by it?
3. Will this build the organization’s goodwill?
4. Will the decision benefit all parties with vested interest in the outcome?

Code of Ethics contains the following:

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1. Vision – the vision is statement helps to ensure the alignment of decisions to the
company goals.
Example: To make innovations that everyone could access and adapt
depending on their needs.
2. Values -values in business help to ensure that all of the employees work towards
the company goals.
Example: We commit ourselves to serve our customers with quality
and outmost request.
3. Mission – The mission statement clearly and guide the business or organization
in its decision-making.
Example: To inspire all the young athletes of the country., tell them to
dream and go for it!
4. Principles – moral rules or beliefs that help you know what is right and wrong
and that influence your actions. (Merriam-Webster.)
Example: Customer have to be respected. Make sure to deliver
quality products.

Sample code of Ethics of ABC Company

OUR CORE VALUES

Our Vision: To lead the car industry by giving our customers quality
clothing.
Worthy of their money and unmatched customers services.

Our Values: We act with the highest standards of integrity.

We respect individuals and treat them fairly.

OUR MISSION
To work efficiently and enthusiastically to make ABC Company the
country’s to clothing industry while serving our customers punctually
and courteously.

OUR PRINCIPLES
1st ABC Company shall adopt a zero-tolerance policy towards bribery
and corruption in whatever form.
2nd All company officers and employees shall conduct business in
accordance with Philippine laws and regulations; and
3rd We shall act in good faith and observe sense of professionalism at
all times.

Code of Ethics aims to lessen conflicting issues as it explains to what

degree such conflicts can be avoided and what parties can do if
these conflicts happen.

Activity 3.1
Directions. Read the situation and formulate a Code of Ethics for the
business.

Situation:
You just started an online business selling Customized cakes and
cookies. You employed one bookkeeper, one clerk, three utility
personnel and 3 delivery drivers. Follow the format given below.

Our Core Values

Our Vision
Our Values
Our Mission
Our Principles:

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1st
2nd
3rd
Rubrics:
Relevance to the business 6 points
Mechanics 4 points
(one point for each Vison, Values, mission, principles)

Acknowledgements

Scribd.com/document/496457

407/bus-ethics-q3-mod2-The-
Core-Principles-Underlying-Fairness-Accountability-and-Transparency-in-Business-
Operation-and-Stewardship-final

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