Good Governance

& Social
Responsibility
(BACC 2)

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 Saint Anthony’s College
Santa Cruz, Santa Ana, Cagayan | FAS School System
School Year 2021-2022 / 1st Semester

BUSINESS ADMINISTRATION DEPARTMENT

SUBJECT: GOOD GOVERNANCE & SOCIAL
RESPONSIBILITY
TOPIC: Ethics and Business
The Different Normative Ethical Theories
Commonly used in Business
Decision Making
Corporate Governance & Ethical
considerations
SCHOOL YEAR: 2021-2022 / 1ST SEMESTER
INSTRUCTOR: ZENAIDA B. GOZE, MBA

INTRODUCTION:

This course is designed to inform and stimulate discussion on issues of ethics and social
responsibility encountered in the business setting. The materials covered are intended
to allow you to recognize and manage ethical and social responsibility issues as they
arise, and to help you formulate your own standards of integrity and professionalism.
The overall course objectives are to increase the awareness on the ethical dimension of
business conduct; to contribute insight into the professional standards and the
responsibilities of business students in future careers; to develop analytical skills for
identifying and resolving ethical and social responsibility issues in business and to
practice making decision connected to ethical and social responsibility issues in a
business environment.

COURSE OBJECTIVES:

At the end of the module, you should be able to:

1. Define and discuss the principles and goals of business ethics, good governance and social
responsibility.

2. Explain the core principles underlying fairness, accountability and transparency in

governance and how the said principles are applied within the corporate context.

3. Identify major global and local issues and development that have led towards a greater
appreciation and understanding of good governance and social responsibility.

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ACTIVITY #1: Watch this video : (https://www.youtube.com/watch?v=cvuvqOUc1ko)

Situation: Your child as an adult: What would you stand for?

Let’s assume that you have children. Imagine them growing older and older until they are
adults, no longer living at home. Let’s say a friend of your adult child approaches him or her
and asks, “As you think back to your childhood, what your mother and father stood for? What
difference did they make in your life because he or she was your mother or your father? What
did you learn from this person?”

Your adult child pauses for a moment to think before responding. Now imagine how you
would hope he or she would respond to that friend. Imagine the conversation. What you hope
he or she would say.

In your workbook, write what you HOPE your adult child would say?

ACTIVITY #2:

LET’S FIND OUT! How you will answer ethical questions and know when and where to ask
the right questions. Examine yourself with all honesty and answer the
following based on your real experienced.

1) What are the facts of this particular case? (think of the case you encounter)

a. Do I have everything I need to know or am I acting on rumor?

____________________________________________________________________

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b. Am I letting bias or emotions distort the facts?

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c. Is this primarily a legal or policy issue instead of an ethical one?

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2) Who is involved? (In the case you identified)

a. Who is responsible for causing this issue or problem?

____________________________________________________________________

_____________________________________________________________________

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 b. Who is responsible for deciding what to do?

___________________________________________________________________

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c. Who will be harmed or helped by the actions taken?

____________________________________________________________________

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3) Why have I chosen the ethical action?

What values and principles am I basing my decision upon?

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NEW IDEAS: After the activities, I learned that:

________________________________________________________________________

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On ETHICS:

Ethics comes from a greek word ETHIKOS meaning its CHARACTER.

~ A study of behaviour especially in knowing what is right and what is wrong and
many shades of “gray”.

Conscience this separates man from the rest of the animal kingdom, transforming him into a
rational moral being- one who has the ability to discern wrong and to decide what is good for
him and for his society.

On NORMATIVE THEORIES OF ETHICS:

What appropriate principles do we rely on when making moral judgments?

~ There is no consensus among those who study ethics.

~ A variety of different moral principles and ethical considerations intertwine and

sometimes compete.

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 ~ Ethical dilemmas: Situations involving conflict between ethical principles or
normative priorities.

~ Dilemmas have deep impact on the evolution of ethical reflection.

Solving ethical dilemmas involves:

1. Appeal to theoretical constructs.

2. Re-evaluation of established moral standards and inherited intuitions.

On CONSEQUENTIALIST AND NONCONSEQUENTIALIST THEORIES:

1. Consequentialist theories: Those that determine the moral rightness or wrongness of an

action based on the action’s consequences or results.

2. Nonconsequentialist (or deontological) theories: Those that determine the moral rightness
or wrongness of an action base on the action’s intrinsic features or character.

On EGOISM

1. Egoism. The view that morality coincides with the self-interest of an individual or an
organization.

Egoists: Those who determine the moral value of an action based on the principle of
personal advantage. An action is morally right if it promotes one’s long-term interest.
An action is morally wrong if it undermines it.

2. Personal egoists: Pursue their own self-interest but do not make the universal claim that all
individuals should do the same.

3. Impersonal egoists: Claim that the pursuit of one’s self-interest should motivate everyone’s
behavior. Egoists do not necessarily care only about pursuing pleasure (hedonism) or behave
dishonestly and maliciously toward others. Egoists can assist others if doing so promotes their
own advantage.

(3) Egoism - Psychological egoism: The theory of ethical egoism is often justified on the ground
that human beings are essentially selfish. Even acts of self-sacrifice are inherently self-
regarding insofar as they are motivated by a conscious or unconscious concern with one’s own
advantage.

THE NEED FOR BUSINESS ETHICS:

* Moral considerations- business ethics provides opportunity for man to practice his
morality, to apply his own standards of right and wrong in business.

* Religious considerations- it provide an outlet for the religious to practice the

teachings of their religion through their dealings with fellow human beings.

* Professional considerations- a professional man exhibits the competence, honesty

and fair dealing that professionalism requires him to do.
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 * Profit considerations- man needs to be reminded that he is in business not just for
today but for all the tomorrows that are yet to come.

* To help businessmen and would-be businessmen to determine what business

practices are right and what are wrong.

SCOPE AND BASIS OF BUSINESS ETHICS

Business ethics covers all conduct, behaviour and judgment in business. This includes the
slightest deviation from what is right to illegal and dishonest acts that are punishable by law.
Generally, actions that are not forbidden by law are ethical. In some cases, however, what is
legal (not forbidden by law) may be unethical.

Business ethics is based on the personal values and standards of each person engaged in some
business. There is still no uniform standard of right and wrong from which all businessmen
may base their actions.

EVOLUTION OF ETHICS OR MORAL STANDARDS

Sociology- the study of group behavior tells us that the earliest grouping of men was a kinship
group. The earliest group was the family and the expanded in patriarchal and matriarchal
society was the clan or tribe. In a family or clan, forbidden acts include to neglect and be cruel
to one’s children and to steal. Required acts include respect for elders, caring of parents in
their old age, and respect for another person’s property which included one’s wife.

INFLUENCE OF ECONOMIC SYSTEM:

The success of an individual is determined by his material possessions and his standing in the
economic world. The richer the man is, the more successful he is thought to be. As the success
of individual depends on economic gain, the force that spurs is the search for profit.

PHILOSOPHICAL BACKGROUND OF BUSINESS ETHICS

* Greek and Graeco Roman Ethics

* Christian Ethics or the Doctrine of love

* Medieval Ethics

* Modern Ethics

* Pragmatism or Instrumentalism

* Other Schools of Ethical Philosophy

GREEK AND GRAECO ROMAN ETHICS

* Aristotle- the most famous of Greek philosophers and gave his share in the search
for truth through his doctrine of the mean or ethics of moderation. He explains this

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 by stating that every situation stimulates in man a certain kind of emotion such as
fear, anger, and punishment. These reactions are just natural but showing too much
or too little of these reactions, it becomes a vice (his term for “wrong”. “do things
moderately”.

* Epicurus- founded the doctrine of pleasure or the school of epicureanism and

believes that pleasure is the sole good and pain is the sole evil. Pleasure should not
be rejected unless it would lead to painful consequences. Pain should not be chosen
unless it ultimately leads to greater pleasure.

CHRISTIAN ETHICS OR THE DOCTRINE OF LOVE

* This school holds that ethics springs from man’s relationship with God.

* To love God, and to love one’s neighbour as one’s self.

* Firmly rooted in the teachings of the old and New Testament.

( Ten Commandments of God)

MEDIEVAL ETHICS

* Abelard- he dominated ethical thought during the middle ages. He maintained

that man’s actions are good or bad depending on their cause and intention. An
action is good not because it is intrinsically good but because it has good intention.
(eg. Selling below cost)

MODERN ETHICS

* Hobbes- He agreed that there is a need for moral laws but he also said that it
would be foolish to observe them if others do not.

* Businessmen recognize the need for rules to guide business decisions, they still
cheat, lie and misrepresent things rationalizing that others do it anyway.

* Utilitarianism- Found by Jeremy Bentham and John Stuart Mill. Their philosophy is
summarized in the phrase “the greatest good is the greatest pleasure of the greatest
number”.

* Moore- believed that the two distinct problems in ethics are: the problem of
determining what state of affairs are true and what actions are right.

* Moore- the right action is the one that will bring the greatest amount of intrinsic
good to the individual. (eg. When a student faces an exam and he has a lot of
alternatives.

* Immanuel Kant- echoed Abelard’s thinking that a man’s action is good or bad
depending on its cause or intention (motive). if the act came from a sense of duty,
then the motive is good and act is right.

* Hegel- An act must be judged right or wrong not only by its motive and
commonality but also by its content. The content of an act comes from the laws,
institutions and customs of the community. The rightness and wrongness of an act
depends on its harmony with the laws and traditions of society. (eg. It is not right
for a Christian to ave two wives because it is against his beliefs.)
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PRAGMATISM OR INSTRUMENTALISM

* Led by two philosophers James and Dewey. It espouses that moral problems come
from conflicts between impulses or desires. Any action that will bring harmony to
this conflict is the right one. However there is no absolute good since every solution
gives rise to further conflicts which must be dealt wit in the same way.

OTHER SCHOOLS OF ETHICAL PHILOSOPHY

* Naturalism or the Ethics of Domination- this school believes that what is natural
or normal is right. Any action that is abnormal or unnatural is wrong.

* Rationalism or the Doctrine if Reason- believes that reason is right and emotion is
wrong. It is not Rationalization, which is finding excuses for doing what one wants
because of self-interest, impulse or emotion.

* Humanism or the Principle of Humanity- believes that man is inherently good and
thus he should not be subjected to indignities or evil acts of his fellowmen. He
should be respected and revered not cheated, lied and taken advantage of.

* Hedonism or Doctrine of Pleasure- similar to epicureanism in that it believes that

pleasure is the main goal of life.

CONFUCIAN ETHICS

*Confucius, a Chinese philosopher said that righteousness begins with the

individual. His prescriptions to righteousness has a multiplier effect. If each
individual governs himself well, his family will also be governed well. If each family
is well governed, then the whole country will also be well governed.

EVALUATION:

DEBATE: Via Zoom.

* Which of the different schools of ethical philosophy would you most believe in/go
for? Would you oppose much?

* Come up with reasons/justifications/examples/proofs to support your answers.

* Find your group depending on the answers you had given.

* Assign a leader to present your response via zoom…

TOPIC 2: GOOD GOVERNANCE:

ACTIVITY 1

In the midst of the reality of COVID 19 if you are a leader, how will you react to situations in a
place where there is an organized social distancing and unorganized social distancing?

Write your answer in a Yellow pad.

ACTIVITY 2

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Considering that you are a TAX PAYER, how will you evaluate the kind of leadership having
facilities prepared by the government in the congress with social distancing and facilities
prepared without social distancing?

Express your views and opinions on the two situations.

NEW IDEAS: In this activity, I learned that:

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On Good Governance:

The concept of “governance” is not new. It is as old as human civilization. Simply put
“governance” means: the process of decision-making and the process by which decisions are
implemented (or not implemented). Governance can be used in several contexts such as
corporate governance, international governance, national governance and local governance.
Since governance is the process of decision-making and the process by which decisions are
implemented, an analysis of governance focuses on the formal and informal factors involved
in decision-making and implementing the decisions made and the formal and informal
structures that have been set in place to arrive at and implement the decision. Government is
one of the actors in governance. Other factors involved in governance vary depending on the
level of government that is under discussion. In rural areas, for example, other actors may
include influential land lords, associations of peasant farmers, cooperatives, NGOs, research
institutes, religious leaders, finance institutions political parties, the military etc. The situation
in urban areas is much more complex. Figure 1 provides the interconnections between actors
involved in urban governance. At the national level, in addition to the above actors, media,
lobbyists, international donors, multi-national corporations, etc. may play a role in decision
making or in influencing the decision-making process. All actors other than government and
the military are grouped together as part of the “civil society”. in some countries in addition
to the civil society, organized crime syndicates also influence decision-making, particularly in
urban areas and at the national level. Similarly formal government structures are one means
by which decisions are arrived at and implemented. At the national level, informal decision-
making structures, such as “kitchen cabinets” or informal advisors may exist. In urban areas,
organized crime syndicates such as the “land Mafia” may influence decision-making. In some
rural areas locally powerful families may make or influence decision-making. Such, informal
decision-making is often the result of corrupt practices or leads to corrupt practices.

On GOOD GOVERNANCE:

What is governance?

Generally governance refers to a process whereby elements in society world power, authority
and influence and enact policies and decision concerning public life and uplifment.

It comprises all the processes of governing-whether undertaken by the government of a

country by the market or by the network- over a social system and whether through the laws,
norms, power or language of an organized society.

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Governance therefore means the process of decision-making and the process by which
decision are Implemented or not implemented through the exercise of power or authority by
the leaders of the country and or organizations. Good governance has 8 major characteristics.

 Participatory

 Consensus oriented

 Accountable, transparent

 Responsive

 Effective and efficient

 Equitable

 Inclusive

 Follows the rule of law

It assures that corruption is minimized, the views of minorities are taken into account and that
the voices of the most vulnerable in society are heard in decision-making. It is also responsive
to the present and future needs of society.

ON THE RULE OF LAW

Good governance requires fair legal frameworks that are enforced impartially. It also requires
full protection of human rights, particularly those of minorities. Impartial enforcement of laws
required an independent judiciary and an impartial and incorruptible police force.

ON TRANSPARENCY

Transparency means that decisions taken and their enforcement are done in a manner that
follows rules and regulations. It also means that information is freely available and directly
accessible to those who will be affected by such decisions and their enforcement. It also
means that enough information is provided and that it is provided in easily understandable
forms and media.

ON RESPONSIVENESS

Good governance requires that institutions and processes try to serve all stakeholders within
a reasonable time frame.

ON CONSENSUS ORIENTED

There are several actors and as many viewpoints in a given society. Good governance requires
mediation of the different interests in society to reach a broad consensus in society on what
is in the best interest of the whole community and how this can be achieved. It also requires
a broad and long-term perspective on what is needed for sustainable human development
and how to achieve the goals of such development. This can only result from an understanding
of the historical, cultural ans social contexts of a given society or community.

ON EQUITY AND INCLUSIVENESS

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A society’s well being depends on ensuring that all its members feel that they have a stake in
it and do not feel excluded from the mainstream of society. This requires all group, but
particularly the most vulnerable, have opportunities to improve or maintain their well being.

ON EFFECTIVENESS AND EFFICIENCY

Good governance means that processes and institutions produce results that meet the needs
of society while making the best use of resources at their disposal. The concept of efficiency
in the context of good governance also covers the sustainable use of natural resources and
the protection of the government.

ON ACCOUNTABILITY

Accountability is a key requirement of good governance. Not only governmental institutions

but also the private sector and civil society organizations must be accountable to the public
and to their institutional stakeholders. Who is accountable to whom varies depending on
whether decisions or actions taken are internal or external to an organization or institution.
In general an organization or an institution is accountable to those who will be affected by its
decisions or actions. Accountability cannot be enforced without transparency and the rule of
law.

From the above discussion it should be clear that good governance is an ideal which is difficult
to achieve in its totality. Very few countries and societies have come close to achieving good
governance in its totality. However, to ensure sustainable human development, actions must
be taken to work towards this ideal with the aim of making it a reality.

ACTIVITY ON GOOD GOVERNANCE

1. What governance means?

2. Explain whether the following statement is true or false:

“ Governance is exercised only by the government of a country”

3. Explain how governance can be used in the following:

a. National government

b. Local government

c. International government

4. Explain briefly the eight basic characteristics of good governance.

5. Transparency and accountability are synonymous. Explain whether the statement is correct
or not.

6. Explain whether the following statement is true or false:

“Responsiveness usually result to effectiveness and efficiency”

7. Define corporate governance

8. What does corporate governance structure involves?

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9. State the purpose of corporate governance

EVALUATION:

* If you will be given the chance to be future President of the Philippines, how will
you achieve sustainable human development?

* Make a prayer on how to achieve good governance in your way.

READING REFERENCES:

Business Ethics

By: Reynaldo A. Padilla, PhD

Business Ethics and Social Responsibility

By: Cynthia Zarate, MBA

Corporate Governance, Business Ethics, Risk Management and Internal Control

By: Ma. Elenita Balatbat Cabrera, BBA, MBA, CPA, CMA

Prepared by:

MRS. ZENAIDA B. GOZE, MBA

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