Business Ethics and Social

Responsibility
(Q3)

Amihan Xenia Salem Ruizo-Tombocon

 Table of Contents

Module 1: Business Organizations and Economic Theories:

A Review
Introduction 1
Learning Outcomes 1
Lesson 1. Forms of Business Organizations 2
Lesson 2. Economic Theories 8
Assessment Tasks 9
Summary 13
References 13

Module 2: Business Ethics: An Overview

Introduction 14
Learning Outcomes 15
Lesson 1. Four Foundations Needed in Business 15
Lesson 2. Values, Morals, Ethics and Business Ethics 17
Lesson 3. Sources of Business Ethics 18
Lesson 4. Importance of Ethics in Business 19
Lesson 5. The Three Basic Business Ethics Concept 21
Assessment Tasks 22
Summary 25
References 25

Module 3: Foundations of the Principles of Business Ethics

Introduction 26
Learning Outcomes 26
Lesson 1. Classical Philosophies and their Implications 27
Lesson 2. The Impact of Belief System 32
Lesson 3. The Filipino Value System 40
Assessment Tasks 43
Summary 46
References 46
Subject Code: BESR

Subject Description: The subject deals with the fundamental

concepts, principles, and practices of ethical standards in the business
environment. It combines the theoretical foundations of setting up
business enterprises with the conduct of entrepreneurial activities in
the context of one’s accountability and social responsibility.

Specifically, the course aims to: (1) provide students with a basic
understanding of the mechanisms whereby companies can be made to
act in the best interest of shareholders, other stakeholders, and society
as a whole; (2) provide students with knowledge of general ethical
principles as applied to the special situations of business and the ability
to make informed judgments through case analyses; and (3) equip
students with the ability to formulate basic strategies in relation to
corporate ethics and governance.

Content Standards:

The learners demonstrate an understanding of:

1. the nature and forms of business organizations;

2. the purposes of establishing business enterprises;
3. the core principles underlying fairness, accountability, and
transparency in business operation and stewardship;
4. common practices in business organizations;
5. classical philosophies specifically, virtue ethics;
6. the impact of belief systems;
7. the Filipino Value System;
8. the responsibilities and accountabilities of entrepreneurs and
accountabilities of entrepreneurs toward the employees,
government, creditors, suppliers, consumers, general public, and
other stakeholders; major ethical issues in entrepreneurship;
9. models and frameworks of social responsibility in the practice of
sound business; and
10. the importance of doing business beyond profit motivation.
Introduction to the notion of SOCIAL ENTERPRISE.
Performance Standards:
The learners should be able to:

1. identify forms of business organizations and their characteristics;

2. explain the purpose of business organizations and their roles in
socio-economic development;
3. explain the core principles of fairness, accountability and
transparency in the socio-economic development of a country;
4. craft simple “codes of ethics” or “codes of right conduct”;
5. identify the classical philosophies and their implication for business
principles and practices;
6. describe various belief systems, and their similarities and differences
in relation to the business setting;
7. describe how the Filipino value system affects the attitude of
business constituents;
8. identify responsibilities to the business organization one belongs to;
9. explain the different models and frameworks of social responsibility;
10. Identify reasons for establishing business enterprises beyond profit;
and
11. prepare and implement a personal action plan to assist an existing
small business enterprise to practice ethics and social responsibility
in their business operation.

Subject Requirements:
 Assessment Tasks
 Written Works - 40%
 Performance Tasks (Activity) - 60%
Quarterly Grade 100%

Final Grade = (Third Quarter Grade + Fourth Quarter Grade)/2

 MODULE 1
BUSINESS ORGANIZATIONS AND
ECONOMIC THEORIES: A REVIEW

Introduction

Business, according to the book Business Ethics and Social Responsibility

(Roa, 2011), is as old as human civilization. In the beginning of human existence, men
took care of their own needs and wants, hunting animals and cultivating land for their
own food. As time went on, however, people became more proficient in doing one type
of work, or in producing a certain kind of goods. This in turn resulted to other people
seeking their products and services, which simply evolved to the kind of business and
trading we have now.

And so, as business is an activity that is part and parcel of human society, as
society will not exist without business. For as long as people have needs and wants,
there will always be business.

Learning Outcomes

At the end of this module, students should be able to:

1. differentiate the forms of business organizations; and
2. differentiate their purpose and roles in socio-economic
development.
Lesson 1. Forms of Business Organizations

A. SOLE PROPRIETORSHIP
Here are some important details about sole proprietorship, as discussed in the
book “Windows to Entrepreneurship: A Teaching Guide” (2013):
 Key Notes
- Most common and easiest to form.
- Owner has complete control, including financial obligations and debts of
the business.
- Undivided risks and rewards
- No government regulations
- Accounts for the largest number of business establishment in the
Philippines, despite of its limitations.

 Advantages
- Simple to operate
- can come up with quick decisions
- high secrecy
- direct motivation
- can add personal touch
- Flexible

 Disadvantages
- limited funds (for growth and expansion)
- limited skills (cannot be expert in all areas of operations: production,
marketing, financing, personnel, etc.)
- unlimited liabilities (private assets may be used to pay off creditors)
uncertain life (may depend upon the life of the owner)

Figure 1.1 Examples of Businesses Registered as Sole Proprietorship

Source: Tombocon, A. [Monsoon Bakes Logo], [Sikwati Café Logo]

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B. PARTNERSHIP

Here are some important details about partnership, as discussed in the book
“Windows to Entrepreneurship: A Teaching Guide” (2013):

 Key Notes:
- relationship between two or more persons who join to carry on a trade or
business.
- each person contributes money, property, labor, or skill, and expects to
share in the profits and losses of the business.
- partnership thus grew out of the limitations of a one-man business
- the need for more capital, provide better skills, or avail of specialization led
to the growth to partnership

 Advantages:
- Ease of formation and business secrecy
- Longer financial resources
- Specialization and balanced approach (diversified skills instead of
one-man show)
- Flexibility of operations
- Protection of minority interests
- Personal incentive and direct supervisions (shares in profits and in losses)
- Higher capacity of survival (can continue even after death of a partner)
- Better human and public relations (as number of partners makes it possible
to have a more personal touch and helps enhance the good of the firm to
make way for a steady progress).

 Disadvantages:
- unlimited liabilities
- limited resources (not suited for huge investment capital)
- risk of implied agency (fault of one, fault of all)
- lack of harmony (success depends on mutual understanding
between partners)
- Non-transferability of interests (no partner can transfer his share in the
firm to an outsider without the UNANIMOUS consent of all partners).
- Public distrust (as it is not subject to detailed rules and regulations).

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 Figure 1.2 Examples of Businesses Registered as Partnership
Source: http://carlariz.blogspot.com Source: https://zhostel.com/2012/08/kulinarya-
kitchen.html

C. CORPORATION

 Key Notes (Kenton, 2020)

- more complex than other business structures.
- A corporation is a legal entity that is separate and distinct from its owners. It
enjoys most of the rights and responsibilities that individuals possess.
- According to Section 2 of The Corporation Code of the Philippines, “A
corporation is an artificial being created by operation of law, having the right
of succession and the powers, attributes and properties expressly authorized
by law or incident to its existence”.
- Corporation is an entity that handles the responsibilities of the business.
- Incorporators are generally not personally liable for the debts of the
corporation.

 Advantages (Woodruff, 2019):

- Owners have limited liability. The owners' assets are protected from the
debts and liabilities of the corporation. Shareholders are not held liable for
business losses.
- Easier to raise capital. It is easier to attract capital with the sale of stocks
and bonds. A corporation can have an unlimited number of investors.
- Easy to transfer ownership. Shares of stock can be sold.
- Corporations have perpetual lifetimes. The entity continues to exist beyond
the deaths of the owners.
- Certain expenses are tax deductible. Owners can receive tax-free benefits
such as deductions for retirement plans and insurance.

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  Disadvantages (AlburoLaw,com, n.d.)
- it is highly regulated by the Securities and Exchange Commission (SEC)
- need to comply with quarterly or annual reportorial requirements with the
SEC and those required by other agencies
- Special corporations need to submit additional requirements and further
regulated by other government agencies
- it may pose as a disadvantage to some that stockholders do not participate
in the day-to-day management.
- in some countries, corporations may be subjected to double-taxation.

Figure 1.3 Examples of Businesses Registered as Corporations

Source:https://blog.hubspot.com/ Source: https://toyota.com.ph/marketing/google-
logo-history

D. COOPERATIVE

According to the article “Advantages and Disadvantages of Cooperative Society

– Discussed” (n.d.), here are some important things we need to remember about
cooperatives.

 Key Notes:
- autonomous association of persons united voluntarily to meet their common
economic, social and cultural needs and aspirations through a jointly-owned
enterprise (e. g. Consumer Cooperative, Coop Bank, Multi-purpose, etc.).
- owned and managed by people who use/buy products and services, or work
there, or stakeholders.
- most common examples are: Multi-Purpose Cooperatives; Cooperative
Banks; Electric Cooperatives, Insurance Cooperatives; Transport
Cooperatives.

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 - Provide goods and services to its members to enable them to attain
increased income, savings, investments, productivity, and purchasing
power, and promote among themselves equitable distribution of net surplus
through the maximum utilization of economies of scale, cost-sharing and risk-
sharing
- Provide optimum social and economic benefits to its members;
- Allow the lower income and less privileged groups to increase their
ownership in the wealth of the nation; and
- Cooperate with the government, other cooperatives and people-oriented
organizations to further the attainment of any of the foregoing objectives.

 Advantages:
- Easy formation as it does not involve long and complicated legal formalities,
unlike corporations
- Limited liability as it is limited only to the extent of their capital in the
cooperative.
- Perpetual existence as death, insolvency, retirement, lunacy, etc., of the
members do not affect the perpetual existence of a cooperative society
- The membership of cooperative societies is open to all irrespective of caste,
color, creed and economic status. There is no limit on maximum members.
- Unlike other three forms of business ownership, a cooperative society is
exempted from income-tax and surcharge on its earnings up to a certain limit.
Besides, it is also exempted from stamp duty and registration fee.
- Government has adopted cooperatives as an effective instrument of socio-
economic change. Hence, the Government offers a number of grants,
loans and financial assistance to the cooperative societies – to make their
working more effective.
- The management of cooperative society is entrusted to the managing
committee duly elected by the members on the basis of ‘one-member one -
vote’ irrespective of the number of shares held by them. The proxy is not
allowed in cooperative societies. Thus, the management in cooperatives is
democratic.

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  Disadvantages:
- A cooperative society has to submit its annual reports and accounts with the
Registrar of Cooperative Societies. Hence, it becomes quite difficult for it to
maintain secrecy of its business affairs.
- The members of cooperative societies generally lack business acumen.
When such members become the members of the Board of Directors, the
affairs of the society are expected not conducted efficiently. These also
cannot employ the professional managers because it is neither compatible
with their avowed ends nor the limited resources allow for the same.
- In a way, lack of profit motive breeds fraud and corruption in management.
This is reflected in misappropriations of funds by the officials for their personal
gains.
- The success of a cooperative society depends upon its members’ utmost
trust to each other. However, all members are not found imbued with a spirit
of co-operation. Absence of such spirit breeds mutual rivalries among the
members. Influential members tend to dominate

Figure 1.4 Example of a CDA-Registered Cooperative that is based in Mindanao

Source: https://www.nationaltradefair.dti.gov.ph/vendors/don-bosco-multi-purpose-
cooperative-don-bosco-mpc-bios-dynamis/

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Lesson 2. Economic Theories

Economists carry a set of theories in their heads like a carpenter carries around a
toolkit. When they see an economic issue or problem, they go through the theories
they know to see if they can find one that fits. Then they use the theory to derive
insights about the issue or problem (SERDEF, 2013).

Figure 1.5 The Most Recognizable Economic Theories

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Assessment Tasks
TASK 1. (To be recorded as Written Works)
Having read and understood the different (and most common) business
organizations, as well as the different economic theories practiced, to you
personally, which business organization would you like to get yourself involved with?
W hat economic approach would you try to implement, if you happen to have
P1,000,000.00 worth of capital available for you. Explain briefly why it is so?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________

TASK 2. (To be recorded as Performance Task)

Before we proceed to the next modules, let us first try to get an “inventory” of our
general view about business and ethics. Choose your most honest answer to the
following questions. If your most honest answer is not in any of the ones provided,
kindly write them on the space provided for choice “E”. Take note of your answers
as we will revisit them in the coming modules.

1. The notion of relating business and ethics

a. should be clearly taught in school.
b. is very complex, and therefore, not for me.
c. is only for those in the managerial positions.
d. should be of greater interest for all.
e. _________________________________________

1. Which of the following is the most important personal characteristic of a good

businessman?
a. Willingness to serve the community
b. Openness and honesty
c. A sense of being “centered” as a person
d. Shrewd
e. _________________________________________

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3. Concerning honesty to customers, I believe that
a. it is not necessary to establish a good relationship.
b. it is essential if a relationship is to be established.
c. it should rarely be done.
d. it should be done only when you feel like doing it.
e. _________________________________________

4. Of the following factors, which is the most important in determining whether or

not a business enterprise will be successful?
a. The kind of person a businessman is
b. Skills and knowledge in the exercise of one’s profession
c. The amount of profit that one can generate
d. One being loved by the community and their employees
e. _________________________________________

5. Regarding the employer-employee relationship, I think that

a. the employer should remain objective in his dealings.
b. the employer should be a friend to his employees.
c. a personal relationship, but not friendship, is essential.
d. the employer should be strict and rigid
e. _______________________________________________

6. If I were an employee and was convinced that my supervisor was encouraging

trainees to participate in unethical behavior, I would
a. first discuss the matter with the supervisor involved.
b. report the supervisor to the owner.
c. Ignore the situation for fear of negative consequences.
d. Take a “hands-off, that is not my problem” attitude.
e. _________________________________________________

7. Of the following, my greatest fear when thinking of putting up a business is

a. that I will make a lot of mistakes.
b. that my customers won’t stay loyal to my business.
c. that I will identify too much with my business problems and won’t be able to have
a personal life.
d. that I won’t know enough or be skillful enough.
e. _________________________________________________

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8. Of the following motivations, the one that best expresses my reason for
wanting to be a businessman is
a. my desire to help people
b. my hope of changing the world in some way.
c. my need to see other people develop themselves as better human beings
d. the prestige and status that I associate with being a successful and
well-respected businessman.
e. ________________________________________________

9. When I consider being involved in business, I value most

a. the money I expect to earn.
b. the security I imagine I will have.
c. the knowledge that I will be intimately involved with people.
d. the personal growth I expect to experience through it.
e. _________________________________________________

10. Concerning the business owner’s responsibility to the community, I believe

that
a. the owner must educate the community concerning the nature of their
work.
b. the owner should attempt to change patterns that need changing.
c. community development is outside the scope of business.
d. The owner should become involved in helping customers use the
resources available in the community.
e. _________________________________________________

11. In advertising, I believe professional business people should

a. teach the public how to be wise consumers.
b. allow customers to discover for themselves what services are available.
c. provide guidelines for consumers so that they will learn how to evaluate
the available services.
d. help members of the community about asking for professional advise
overcome their fears.
e. __________________________________________

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12. My view of supervision is that
a. something I could use on a permanent basis.
b. a threat to my status as a professional.
c. valuable to have when I encounter a problem with a client.
d. a way for me to learn about myself and to get insights into how I work with
clients.
e. __________________________________________

13. Regarding issues of promotion, I will tend to promote people

a. based on their academic preparations (MBAs/DBAs).
b. who passed the rigid evaluation given by the company.
c. who are influential and with a lot of connections.
d. who can add substantially to our investments.
e. __________________________________________

14. If my philosophy were in conflict with the institution where I work, I would
a. seriously consider whether or not I could ethically remain working for the
company.
b. attempt to change the policies of the institution (in my level at the very
least)
c. agree to whatever was expected of me.
d. quietly do what I wanted to do, even if I had to be keep it to myself.
e. ____________________________________________

15. As a business student, how frequently do you get yourself in situations

where ethics is a concern?
a. Very rarely
b. Almost everyday
c. A few times a year
d. Never
e. ____________________________________________

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Summary
 The four most common business organizations are Sole Proprietorship,
Partnership, Corporation, and Cooperatives. Their main differentiation is
based on the number of owners, who and how it is being run, including its
many advantages and risks involved.
 Although there are plenty of economic theories being studied nowadays, the
four most popular economic theories are Mercantilism, Laissez-Faire,
Socialism and Socio-economic Development theories. They have influenced
quite a lot of nation leaders and business persons on how to run their
businesses, from then until now.

References
 Kenton, W. (2020, April 24). Corporation. Investopedia.Com.
https://www.investopedia.com/terms/c/corporation.asp#:~:text=A%20corpora
tion%20is%20a%20legal,as%20a%20%22legal%20person.%22
 Padilla, R. A. (2004). Business Ethics (1st ed.). Rex Bookstore, Inc.
 Roa, F. C. (2011). Business Ethics and Social Responsibility (2nd ed.). Rex
Bookstore, Inc.
 Windows to Entrepreneurship: A Teaching Guide. (2013). Small Enterprise
Research and Development Foundation.
 Woodruff, J. (2019, March 4). Advantages and Disadvantages of the
Corporate Form of Business Small Business. HoustonChronicle.Com.
https://smallbusiness.chron.com/advantages-disadvantages-corporate-form-
business-4389.html
 Types of Businesses: Their Advantages and Disadvantages. (n.d.)
AlburoLaw.Com. https://www.alburolaw.com/types-of-businesses-their-
advantages-and-disadvantages
 Advantages and Disadvantages of Cooperative Society – Discussed. (n.d.).
Yourarticlelibrary.Com.
https://www.yourarticlelibrary.com/business/cooperative/advantages-and-
disadvantages-of-cooperative-society-discussed/40799

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 MODULE 2
BUSINESS ETHICS: AN OVERVIEW

Introduction

Since business is an integral part of society, its activities must be examined from
the ethical perspective, in the same way that society examines politics, economics,
government, culture and religion from the moral point of view. This is fundamental for
the promotion of the common good, protection of the individual’s interests and
preservation of the human society in general. Without ethics, business will be a chaotic
human activity because there will be no common understanding about what’s right
from wrong conduct. (Roa, 2011)

It is within the structure of interaction of people that a lot of questionable practices

occur - misrepresentation, questionable pricing policies, false advertising,
misbranding, lying, adulteration, and unfair competition, among others.

The bottom line is, somewhere, somehow, people’s rights are being violated, their
values disrespected, and the interest of the common good disregarded. Sadly, the
selfish motive and personal interests of unscrupulous businessmen often make
businesses look bad, and unproductive.

For one semester, you are about to undertake a study of ethics in business.
Perhaps you have questions about just what the term “ethics” means in business
setting or how ethical principles can be followed in an organization over which you
have limited control. (Padilla, 2004)

Or simply put, you probably just want to learn more about how to handle yourself
when faced with ethical dilemmas so that your business organization/enterprise is
properly represented, your relationships are preserved, and your conscience is clear.
 Learning Outcomes
At the end of this module, students should be able to:
1. show how these organizations contribute to socioeconomic
development;
2. give examples of how fairness, accountability and transparency is
practiced in business and non-profit organizations;
3. share observations on business policies and practices; and
4. distinguish between good policies/practices and morally
unacceptable policies/practices.

Lesson 1. Values, Morals, Ethics and Business Ethics

Before we go deep further into ethics, it is important to understand first the

closely related concepts of VALUES and MORALS, in which ethics is often confused
with (SERDEF, 2013):

 When we say VALUES, this means:

- qualities or ideas which we care about, upholds, and considers important
- can be morally or ethically-based, or simply based on natural wants and
needs.
- can be good or bad, reasonable or unreasonable.
- We tend to act according to the things we value. (e.g., Family, love, friendship,
career, or money, etc)
- in business, it could be: efficiency, accountability, service excellence,
empowerment of workers, etc.

 When we say MORALS, this refers to:

- one’s individual perception of right and wrong, good and evil.
- while one’s perception of morality does not affect others, it does influence the
attitudes and values of a society.

 What then is ETHICS?

- these are the moral principles that represent a person or a group
 - how a person or group ACTS in regards to what they consider to be right and
wrong. (e.g., “should I gossip about my classmate?” “Should I lie to my
parents?”)
- it involves the notions of wrong, fair and unfair, moral and immoral.

 What about BUSINESS ETHICS?

- it is the application of general ethical principles and standards to the actions
and decisions of business organizations, and the conduct of their personnel.
- it is concerned primarily with the relationship of business goals and techniques
to specific human ends.
- normally, business ethics issues of companies influence the public’s attitude
towards business and can destroy trust. (e.g., #BoycottNutriAsia; or
boycotting of US companies involved in Chinese sweatshops.)
- these concerns questions about whether a specific business practice is
acceptable.
- usually, there is no universally accepted approach for resolving issues
- values and judgement play a critical role in the making of ethical business
decisions.
- good ethics means good business. Successful organizations and managers
take ethics seriously.

 What is ETHICAL DILEMMA?

- a situation in which a difficult choice has to be made between two courses of
action, either of which demands to go beyond moral principle.
- many business people report that ethical dilemmas they face are difficult
because it involves people (employees, colleagues, peers, and bosses) with
whom they have to work with, and with whom they are dependent.

Quotable Quote!
“A man is responsible at least for what he freely wills, whether as a mean or an end”

Lesson 2. Six Foundation of Ethical Business Practice

In all social interaction, ethics or simply honesty, makes for the most stable
foundation. It is the basis for satisfying and lasting friendships, marriages, and other
relationships.

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 Same is true when conducting business with people and institutions you deal
with (employees, customers, government, etc.). If you build a business with these four
as your foundations, the building won’t crumble.

Figure 2.1 Foundation of Ethical Business Practices

When we hear the word ethical, several ideas come to mind, most notably good
(versus bad) and right (versus wrong). Six concepts form the foundation of trust upon
which ethical business practice is built (SERDEF, 2013).

 Ethics refers to a set of rules that describes what is acceptable conduct in society.
Ethics serve as a guide to moral daily living and helps us judge whether our
behavior can be justified.

 Values are defined as the acts, customs, and institutions that a group of people
regard in a favorable way.

 Morals are a set of rules or mode of conduct on which society is based. Certain
moral elements are universal, such as the laws forbidding homicide and the basic
duties of doing good and furthering the well-being of others. Morals and ethics are
very similar; both pertain to society’s ideas of right and wrong.

 Integrity is to be honest and sincere. Integrity is defined as adhering to a moral

code in daily decision making. Integrity Put simply, when people and businesses
possess integrity, it means they can be trusted.

 Character drives what we do when no one is looking. Each person has the ability
to build, change, or even destroy his or her own character. We can build our

28
 character through the way we live—by thinking good thoughts, and performing
good acts.

 Law is a series of rules and regulations designed to express the needs of the
people. Laws frequently provide us with a sense of right and wrong and guide our
behavior, but not always. While murder is against the law, it does not stop
someone from killing another out of hatred, anger, or in defense of a personal
philosophy. It is worth noting that an illegal act can be ethical. One of the most
famous examples is Martin Luther King, Jr.’s violation of the law with marches and
sit-ins during the fight against segregation.

Lesson 3. Sources of Business Ethics

Business ethics studies proper business policies and practices regarding

potentially controversial issues like corporate governance, insider trading, bribery,
discrimination, CSR, and data protection, among others.

This is to enable entrepreneurs and business people to make RESPONSIBLE

DECISIONS and MAINTAIN HIGHLY ETHICAL BEHAVIOR when running a business.

In the coming modules, we will discuss furthers the many influences and
sources of business ethics, but this usually covers three things: the LAW being applied
in the country where one lives, the RELIGION one practices, and the CULTURE one
grew up to or was exposed to (SERDEF, 2013).

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 Figure 2.2 Typical Sources of Business Ethics

Lesson 4. Importance of Ethics in Business

According to the book Windows of Entrepreneurship: A Teaching Guide

(SERDEF, 2013), ethics is important in business because:

 Entrepreneurs are today urged to look seriously into ethics because more and
more people realize that the saying “we are our brother’s keeper” is true.

 Capital and money in the enterprise may be depleted, but the character of the
entrepreneur outlasts these material resources.

 Ethics is internally imposed by the character of the entrepreneur. Honesty cannot

be imposed from outside the person. Honesty should be part of the person’s
character, carried over from the person’s upbringing and character development.

 Without ethics, the entrepreneur will fall under the weight of corruption (lack of
conscience or character)

 We do not only want to grow and develop, but to grow and develop in the RIGHT
WAY.

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 Sustainable development should be centered not on science, not on technology,
but on Man. Human beings (employees, customers, suppliers, members of the
community where business is located) need to live healthy, dignified, and
productive lives, in harmony with nature.

 An entrepreneur must run his business taking into account his responsibilities, not
only towards himself, but also towards others and towards nature. He must run his
business based on high ethical standards.
- Doing business ETHICALLY builds:
- Consumer Loyalty
- Keeps good employees
 Improve productivity in the workplace

 Creates a stable environment that minimizes unexpected problems/legal

problems.

 A country whose base of job-generating, income-producing entrepreneurs stick to

high standards of conduct, is likely to sustain its socio-economic growth because
it maximizes the country’s prosperity, harmony, productivity and natural resources.

 Since ethics are moral guidelines that govern good behavior. Behaving ethically
in business is widely regarded as good business practice.

 A company that cheats its customers, exploits its workers, avoid paying taxes may
thrive for a while but will be hard-pressed to survive over the long run.

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Lesson 5. The Three Basic Business Ethics Concept

 HONESTY
- should be the hallmark of a company’s dealings with its employees, customers
and the public.
- employers should communicate with its employees internal developments that
may affect them: layoffs, reorganization moves and austerity measures.
- manifested through truthful and ethical advertising, proper labeling and naming
of what goes into the product, and charging reasonable cost for the quality of
the product or service it sells.
- keeping its words to everyone it deals with and in everything it does.

 INTEGRITY
- related to honesty, keeps agreements and promises. Whether it is a
promise to give a raise to an employee, or to supply top quality merchandise.
Integrity means keeping one’s word and following through.
- it is saying no to graft and corrupt practices (giving/accepting expensive gifts;
secret commissions; kickbacks; payoffs to politicians, bureaucrats, etc. in
exchange for a favor/contract, undue advantage)
- can be manifested by empowering their people - shifting from forcing
employees to act a certain way to more freedom to take initiatives (from
authoritarianism to shared responsibility).

 FAIRNESS
- paying employees just wages for their work and dedication.
- giving customers value for their money by not overcharging them or sneakily
downsizing the product that is sold to them.
- paying suppliers on time.
- encouraging a healthy competitive atmosphere in the market.
- not engaging in cutthroat competition (maligning and spoiling images of
competitors using foul means)
- Fair play means profit is made not through deceptive acts.
-creates WIN-WIN situation for all parties (employee-employer; company-client;
company-supplier; business-competitors)
-in business, fairness means never taking unfair advantage through manipulation,
concealment, abuse of privileged information, misrepresentation, etc.

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 Assessment Tasks
TASK 1. (To be recorded as one of your Performance Task.)
A. The items listed below are common ethical concerns of those in business.
Read them carefully. Do you see them as ethical concerns? Are these things that
may bother you in the future? From an ethical standpoint, put a check on the
corresponding box (rating scale) that reflects your level of concern. Five (5) being
the highest degree of concern and one (1) as the lowest.

5 4 3 2 1
Making decisions affecting employees’ lives

Administering some company policies

Supporting some “unwritten” company policies

Resolving employee grievances

Misrepresenting issues to others

Disrupting work of others due to conflict between

groups
Assigning people to hazardous work

Withholding important data to “protect” others

Covering up drug/alcohol abuse among

employees, peers and senior managers.
Making it “rough” for employees’ so they will quit

Assigning work for reasons other than

employees’ qualifications
Submitting incorrect reports or altering records

Permitting substandard quality in products or

services
Deferring actions on health and safety issues

Stealing or permitting others to steal or misuse

company time, tools or materials

33
B. Which among the following did you rank 3 or higher? Why do you think the
following may bother you in the future? Explain briefly.
_____________________________________________________________________
_____________________________________________________________________
____________________________________________________________________

TASK 2. (To be recorded as one of your Performance Task.)

A. Listed below are several individuals and institutions that have
influenced human society. Check each one whom you believe has in one
way or another influenced you in your own conduct.

_____ 1. Father
_____ 2. Mother
_____ 3. Brother/Sister
_____ 4. Other Relatives
_____ 5. Friends
_____ 6. Teacher
_____ 7. Religious Organizations
_____ 8. Youth/Peer Groups
_____ 9. Sports/ Military/ Career Hero
_____ 10. Political Leaders
_____ 10. TV Personalities
_____ 11. Social Media/Social Media Influencers
_____ 12. Books and Articles
_____ 13. Religious Writings/Scriptures
_____ 14. Others (please specify) ______________________________

B. Out of all those you have chosen, pick one that has influenced you the
most in your life, and describe CLEARLY how such influence changed your
ethical viewpoint and behavior.

_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________

34
_____________________________________________________________________
_____________________________________________________________________

TASK 3. (To be recorded as one of your Written Works.)

Case Study #1.

As head of the Human Resource Department, you received a phone call

from one of your bosses (who was also the Board President, aside from
being your godparent), asking to determine whether you received his
daughter’s application for a current job opening. You indicated that it had,
indeed, come in, but that the closing date for the paperwork/filing of
applications had passed.

“Oh,” he said, “you are not going to let a qualified candidate be excluded
because of a closing date, are you?” Then he added quickly, “but let me not
interfere.”

As you hung up the phone, you replayed the conversation in your mind and
pondered the implications.

Later that day, your senior manager asked to see you. Despite him offering a
chair, he chose to stand by the door that he had just closed and said, “I
heard that one of our bosses’ daughter has applied for the opening. You are
going to consider her, are you? She worked here years ago, and there were
problems. The place will be up in arms if you take her back.” He smilingly
added, “I just want to let you know and to help.” Then he turned on his heel
and left.

Question:

If you were placed with this situation, how are you going to resolve this
dilemma, and why? Discuss briefly.
____________________________________________________________________
____________________________________________________________________

35
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

Summary

 Values is anything that we deem is important for us .

 Morals is what we believe is right and wrong.
 Ethics is how we behave based on our moral standards and those that we
value.
 Business Ethics is how we apply our ethical standards in our
business/organization. Normally, business people are subjected to ethical
dilemmas because of differences in ethical and moral standards which is
based on what is valued by the individual and/or the company.
 Three (3) most important business ethics concept are: Honesty, Integrity and
Fairness.

REFERENCES

 Padilla, R. A. (2004). Business Ethics (1st ed.). Rex Bookstore, Inc.

 Roa, F. C. (2011). Business Ethics and Social Responsibility (2nd ed.). Rex
Bookstore, Inc.
 Small Enterprise Research and Development Foundation. (2013). Windows
to Entrepreneurship: A Teaching Guide. Small Enterprise Research and
Development Foundation.

36
 MODULE 3
FOUNDATIONS OF THE PRINCIPLES OF
BUSINESS ETHICS

Introduction

From the beginning, human beings have been puzzled with ethical questions:
“What should we do? What should we NOT do”? We have struggled to develop a
system that produces the greatest good for the individual and for the society. (Padilla,
2004)

According to those who study history and philosophy, infants would not survive
without a nurturer who teaches them about right and wrong behavior. In human society,
a series of nurturers and teachers influence the ethical views of each individual.

Since nurturers and role models give us the criteria we use to make ethical
decisions, it is but right to know clearly, which among these individuals and institutions
influenced us the most.

Learning Outcomes

At the end of this module, students should be able to:

1. illustrate how these philosophies are reflected into business
practices;
2. explain how the belief system influence business practices;
3. infer how Filipino value system influence business practices; and
4. Generate ways to improve business practices guided by the
philosophies, belief system or Filipino values.

37
Lesson 1. Classical Philosophies and their Implications

SOCRATES

Socrates believed, to the contrary of many around him, that the most pertinent
questions that philosophy had to deal with related to how people should live their
lives, what kinds of actions were righteous, and how people should live together
in communities and states (Ray, 2017).

He essentially invented a new mode of investigation to define virtuous and

ethical behavior called Dialectic, where he engaged in long conversations with
ordinary citizens about ideas like justice, righteousness and virtue. It was a
philosophical inquiry performed by conversation rather than by solitary
contemplation (Ray, 2017).

He introduced the SOCRATIC METHOD, which was a way of thinking that

allows the individuals to define their own purpose for learning and explore this
purpose through open-minded questioning of what they hold to be true.

 SOCRATES’ THREE TENETS (ROA, 2013):

(i) Virtue (moral excellence) is identical with knowledge.

(ii) Vice (moral evil) is identical with ignorance (lack or moral knowledge).
(iii) No one commits an evil act knowingly. Doing wrong arise out of ignorance.

Socrates firmly believed that knowledge and understanding of virtue, or "the

good," was sufficient for someone to be happy. To him, knowledge of the good
was almost akin to an enlightened state. He believed that no person could willingly
choose to do something harmful or negative if they were fully aware of the value
of life. He also stated that ethical system must be based on logic and reasoning.

 CRITIQUE on SOCRATES’ PHILOSOPHY:

On Socrates’ third tenet, as a person may have prior knowledge but deliberately
commits an evil act to satisfy his hidden motive. A person should not use
ignorance to excuse himself in doing evil.

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PLATO

According to Dorothea Frede (2017), there is unhappiness when a person

knows that what he is doing is wrong. He also stated that good people do not need
laws to act responsibly, while bad people will find a way around the law.

Plato formalized the Socratic method which is a method of hypothesis

elimination, in that better hypotheses are found by steadily identifying and
eliminating those that lead to contradictions.

 CRITIQUE on PLATO’S PHILOSOPHY (Frede, 2017):

Plato’s principle of idealism focuses on the idea that there is evil in this world
because the soul is imprisoned in the body of the person. This principle is geared
towards perfection of the soul, but, because people are not perfectly created, they
commit immoral acts. However, it is said that the soul can be perfected by knowing
what is needed to maintain a healthy soul, by doing what is moral and right.

ARISTOTLE

Aristotle emphasized that virtue is practical, and that the purpose of ethics is
to become good, not merely to know. Aristotle also claims that the right course of
action depends upon the details of a particular situation, rather than being
generated merely by applying a law.

Aristotle believed that ethical knowledge is not only a theoretical knowledge,

but rather that a person must have "experience of the actions in life" and have
been "brought up in fine habits" to become good. For a person to become virtuous,
he can't simply study what virtue is, but must actually do virtuous things (Roa,
2013)

He also stressed that in everything that we do, we must avoid doing the
extremes, as any lack or excess of it is a form of evil or vice. For example, in taking
food, we must eat accordingly with the proper amount of proportion to our body’s

39
needs. Any excess or deficit in the food intake can cause problems to our health
(e.g. too much food - gluttony; no food - starvation).

 ARISTOTLE’S FOUR CARDINAL VIRTUES (Roa, 2013):

(i) PRUDENCE, also known as practical wisdom, is the most important virtue
for Aristotle. In war, soldiers must fight with prudence by making judgments
through practical wisdom. This virtue is a must to obtain because courage requires
judgments to be made.

(ii) TEMPERANCE, or self-control, simply means moderation. Soldiers must

display moderation with their enjoyment while at war in the midst of violent
activities. Temperance concerning courage gives one moderation in private which
leads to moderation in public. (VICE/EVIL: Recklessness)

(iii) COURAGE, is “moderation or observance of the mean with respect to

feelings of fear and confidence.” Courage is “observance of the mean with regard
to things that excite confidence or fear, under the circumstances which we have
specified, and chooses its course and sticks to its post because it is noble to do
so, or because it is disgraceful not to do so.” Concerning warfare, Aristotle believes
soldiers are morally significant and are military and political heroes. War is simply
a stage for soldiers to display courage, and is the only way courage can be
exemplified. Any other action by a human is simply the copying a soldier's ways;
they are not actually courageous. (VICE/EVIL: Cowardice)

(iv) JUSTICE, means giving the enemy what is due to them in the proper
ways; being just toward them. In other words, one must recognize what is good
for the community and one must undertake a good course of action (VICE/EVIL =
Unjust).

 CRITIQUE on ARISTOTLE’S PHILOSOPHY:

The principle of Aristotle is the most appropriate and proper for application.
His idea gives a person a sense of responsibility not only to himself but to his
surroundings - the environment and the people. Too much emphasis, however, on

40
 the middle ground could lead to mediocrity and lack of desire to achieve greater
and loftier goals.

IMMANUEL KANT

Kant, unlike Mill, believed that certain types of actions (including murder, theft,
and lying) were absolutely prohibited, even in cases where the action would bring
about more happiness than the alternative. He introduced the concept of
Deontology (Johnson, and Cureton, 2019).

For Kantians, there are two questions that we must ask ourselves whenever
we decide to act (Johnson and Cureton, 2019):

(i) Can I rationally will that everyone act as I propose to act? If the answer is no,
then we must not perform the action.

(ii) Does my action respect the goals of human beings rather than merely using
them for my own purposes? Again, if the answer is no, then we must not perform
the action. (Kant believed that these questions were equivalent).

Kant’s theory is an example of a deontological moral theory–according to

these theories, the rightness or wrongness of actions does not depend on their
consequences but on whether they fulfill our duty.

Kant also discussed Morality (Roa, 2011) as:

(i) “a priori”. (not based and not derived from experience)
(ii) It is universal. (it applies to everybody)
(iii) It is absolute. (moral laws are complete and fixed)
(iv) Moral laws are immutable. (moral laws cannot be changed)

As to the question “Why must we do good? Kant answers by saying that “we
must do good because we must, it is our duty to obey immediately without
questioning.”

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  KANT’S CATEGORICAL IMPERATIVE (CI) AND ITS MAXIMS

Categorical Imperative, simply put, is an unconditional obligation, or an

obligation that we have, regardless of our will or desires. Its three maxims are
(Taylor, J, 2017):

(i) Principle of Universality/Universalizability - requires that for an action to be

permissible, it must be possible to apply it to all people without a contradiction
occurring.

(ii) Principle of Humanity - Kant expresses the principle of humanity as follows:

“Act in such a way that you treat humanity, whether in your own person or in the
person of any other, never merely as a means, but always at the same time as an
end”

(iii) Principle of Autonomy - a person is autonomous only if his choices and actions
are unaffected by factors that are external, or inessential, to himself. Thus, a
person lacks autonomy, or is heteronomous, to the extent that his choices or
actions are influenced by factors such as convention, peer pressure, legal or
religious authority, the perceived will of God, or even his own desires (Taylor,
2017)

 CRITIQUE on KANT’S PHILOSOPHY:

Duty cannot be the only motive in the performance of an act because there
are other motives that are more worthy and more noble than the concept of sense
of duty. Motives such as love, pity, mercy are just some examples of these (Roa,
2011).

JEREMY BENTHAM AND JOHN STUART MILL

They introduced the concept of Utilitarianism, whose main principle can be

best explained by the maxim: “Do whatever produces the greatest good for the
greatest number”. This theory argues that what makes an act right is the

42
 consequences, and not the motive, of an action. Thus, making utility/usefulness a
norm of morality (Roa, 2011).

According to Roa (2011), to a utilitarian, the effects determine the goodness

or badness of an action. If an act administers happiness, then it is good. If it
hinders it, then it is bad. An act is only good if and when igt gives good results, if
it works, if it makes you succesful, and if it makes you attain your purpose.
Otherwise, it is bad. Utilitarian principle disregards the importance of motive
because motive is known only to the person committing the action.

Mill also emphasized that utilitarianism refers to mental pleasures when it

defines happiness as pleasure, as human being desires greater pleasure because
man has faculties more elevated than animals.

 CRITIQUE on BENTHAM AND HILL’S PHILOSOPHY (Roa, 2011):

Utilitarianism makes morality relative (what is pleasant/ useful to one, may not
be to another) and extrinsic (confuses nature of the act with the effect of the act,
much like mistaking symptoms with the disease).

Utilitarianism also tends to be biased on the majority (the greatest good is the
greatest pleasure/happiness of the greatest number). As although the majority
could be correct by virtue of their number, the minority could also be right.

Lesson 2. The Impact of Belief System

JUDAISM

Jewish affirmations about God and humans intersect in the concept of Torah
(refers to the five books of Moses, and is the central and most important document
of Judaism) as the ordering of human existence in the direction of the divine.
Humans are ethically responsible creatures who are responsive to the presence
of God in nature and in history. Although this responsiveness is expressed on
many levels, it is most explicitly called for within interpersonal relationships.
(Baron, Vajda, Novak, Silberman, Gaster, and Dimitrovsky, 2020)

43
 What is particularly striking about Jewish ethical concerns is the affirmation
that God is not only the source of ethical obligation but is himself the paradigm of
it. In the so-called Code of Holiness (Leviticus 19), imitation of divine holiness is
offered as the basis of human behavior.

Mitzvah, refers to any commandment, ordinance, law, or statute contained in

the Torah (first five books of the Bible) and, for that reason, to be observed by all
practicing Jews and be performed as a religious duty. Jews consider all good
deeds as the fulfillment of mitzvahs, for such actions express God’s will
(Encyclopedia Britannica, 2018)

In Judaism, a just society requires just people, and a just person functions
within a just society. “Were you honest in business?” is actually one of the first
questions asked during judgement in the next world, as quoted in the Talmudic
Tradition.

Jews are then (Baron et.al., 2020):

(i) Obligated to pay their workers on time.
(ii) Pay their workers a living wage.
(iii) Treat their workers with dignity and respect.

It is very important for Jews not to steal company time, by avoiding spending
too much time online, or another discussion when at their job.

CHRISTIANITY

Christians, early on, are taught (Grudem, 2018):

(1) The Golden Rule, “do unto others what you want others to do unto you.”
(2) Stewardship - mankind was appointed to be stewards of the earth.
(3) Trust - Christian business professionals depend on the Lord’s leadership for
their business. Trusting Him to provide strategic direction, resources and earnings.

44
 (4) Justice - we must conduct business fairly. Provides fair wages and appropriate
work conditions to employees, and only engages in endeavors that are pleasing
and acceptable to the Lord.
(5) Diligence - productively uses whatever knowledge, skills and resources He has
given us, no matter how great or small. Idleness and laziness have no place in the
life of a Christian business professional. Hard work is essential.
(6) Generosity - go beyond worldly expectations of generosity. Try to reach more
people and donate to charitable institutions.

10 Things You Should Know about Christian Ethics (Grudem, 2018):

(i) Christian ethics teaches us how to live.
(ii) The ultimate basis for Christian ethics is the moral character of God.
(iii) Christian ethics is based on the bible.
(iv) Christian ethics is essential to the proclamation of the gospel.
(v) Christian ethics teaches how to live for the glory of God.
(vi) Obeying God bring numerous blessings to our daily lives.
(vii) Willful sin brings several harmful consequences.
(viii) Christian ethics teaches us to consider four dimensions of any action,
and nine possible sources of information (action, attitudes, motives, and
results)
(ix) We should never think that God wants us to choose a “lesser sin.” As
choosing the “lesser evil” was never taught in the scriptures. Even Christ
who in every respect has been tempted as we are, yet without sin” (Heb.
4:15), and by the promise of 1 Corinthians 10:13, which says that God will
always provide a “way of escape.”
(x) Using the Old Testament for ethical guidance requires an understanding
of the history of redemption.

ISLAM

In Islam, it is believed that Allah blesses business dealings if both the buyer
and the seller are true to each other. It encourages truthfulness in business
transactions and raises the status of a truthful merchant, as it is believed that
honesty is the true secret of success in business.

45
 The ethical system in Islam is presented in light of Shariah – the Islamic
social/legal system. According to Islam, whatever leads to welfare of the individual
or society is morally good and whatever is injurious is morally bad. The ethical
system prescribed in Islam is eternally divine and forms the foundation of an
Islamic society. Islamic ethics prescribe its followers to zealously guard their
behavior, words, thoughts, and intentions and observe certain norms and moral
codes in their family affairs; in dealings with relatives, neighbors, and friends; in
their business transactions; in their social affairs; and in private and public life
(Mohammed, 2020).

Major Principles of Ethics in Islam:

A. No fraud or deceit.
B. Avoid making too many oaths/promises.
C. Mutual consent is necessary.
D. Be strict regarding weights and measures.
E. No to monopolies. And if ever there is, profit margin need to be small.
F. No to hoarding.

Islam places the highest emphasis on ethical value in all aspects of human
life, as ethics governs all aspects of life.

Honesty is a must, both in dealings with Muslims and non-Muslims alike.

For Muslims, Truthfulness leads to righteousness, which then leads to

Paradise (Jannah).

Proficiency for Muslims means that no matter their occupation, a Muslim

person must carry out his duty with efficiency and to the best of his abilities.

Trust is a moral virtue and duty incumbent on a Muslim in the performance of

his affairs. It demands sincerity in work, avoid fraud, deception., and other dubious
means in selling his merchandise.

Equality is teaching traders to be moderate in all things, giving fair, equal and
unbiased treatment to all customers, and always giving right to the right.

46
 Islam also puts certain conditions and restrictions to avoid conflicts between
employers and employees. It is a must for them to give fair wages on time, provide
good working conditions, and give suitable work and excellent brotherly treatment
to all workers (Mohammed, 2020).

Islam also has its own distinctive value-based ethical system

for business dealings. It prescribes certain specific guidelines governing business
ethics, which are dictated primarily by the notion of halal (lawful or permitted) and
haram (unlawful or prohibited) as per Islamic jurisprudence (fiqh).

Here are some sources of income that are prohibited in Islam:

A. Bribery
B. Usurping other’s property
C. Fraud
D. Stealing and robbery
E. Income from sources of vulgarity
F. Gambling
G. Wine and its business
H. Interests
I. Hoarding of food stuff

HINDUISM

Hindus also believe in samsara or reincarnation, the cycle of rebirth, a cycle that
only ends when a person discovers his or her essential nature as the spirit. This
is called moksha.

Another key belief linked to the theory of reincarnation is the law of karma, which
is the law of cause and effect. Karma states that what we set into motion has a
habit of catching up with us. The idea of ahimsa or the principle of non-violence is
central in this, as hurting others amounts to hurting ourselves. Humans have to
bear the consequences of what they do, if not in this life, then in the next life.

The Five Yamas (negative things to abstain from) of ancient Hindu ethics:
Ahimsa (non-violence)
Satya (truth, non-falsehood)

47
Asteya (non-stealing)
Brahmacharya (celibacy if unmarried and non-cheating on one's partner if
married)
Aparigraha (non-possessiveness)
The Five Niyamas (positive things to strive for) of ancient Hindu ethics:
Śauca - purity in body, speech and mind
Santosha - contentment, acceptance of circumstances with optimism
Tapas - perseverance, meditation, austerity
Swadhyaya - lifelong learning
Pranidhan - right attitude, contemplation.

Three (most famous) Gods:

Brahma (Creator) - creative force of the universe who is at the centre of collective
worship. Brahma is often represented as an old, thoughtful king with four
arms and four faces that look in all directions.

Vishnu (Preserver) - god of light and warmth, preserver of order and harmony.
Vishnu is often depicted lying on a many-headed cobra which symbolizes cosmic
energy and time.

Shiva (Destroyer) - destroys and re-creates the universe. He most frequently

appears as a bronze statue where Shiva stands on a dwarf demon and dances.
In the images Shiva has four arms and long hair.

Three Spiritual Paths

Karma Yoga (selfless action as a way to perfection)
Bhakti Yoga (loving devotion towards a personal God)
Jnana Yoga (path of knowledge)

An ethical life in Hinduism is essential for a liberated life, one without craving, one
that is content, attained through knowledge and by abstaining from evil.

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BUDDHISM

Founded by Siddharta Gautama (the Buddha), Buddhism is said to be a religion

of liberation, to relieve all forms of human suffering. Buddha’s ethics is centered on the
truth of suffering and its elimination (Goodman, 2017).

According to Buddha, every individual man has three (3) characteristics which
constitutes the truth of human suffering, namely: suffering ( dukkha), impersonality
(anatta), and impermanence (anicca). To eliminate suffering, Buddha teaches his
celebrated Four Noble Truths - Buddha’s Doctrine of the Middle way (Master Hsing
Yun, 2013):
1. Life is permeated by suffering.
2. The origin of suffering is craving (tanha)
3. Suffering can be eliminated through the elimination of craving.
4. The elimination of suffering is possible through the Eight-fold Path.

Maxims for Business (Master Hsing Yun, 2013):

A. Work hard, rest well.
B. Work hard, no excuses.
C. Be mindful.
D. Follow the Eight-fold Path:
Ditthi - right view/understanding (seeing reality, free from illusions)
Sankappa - right intentions
Vaca - right speech (saying the truths, non-harm in speech)
Kammata/Kammanta - right action (non-harmful actions)
Ajiva - right livelihood (way of making a living that does no harm to others)
Vayama - right effort(improve overtime)
Sati - right mindfulness (freedom from temptations, cravings and distractions)
Samadhi - right concentration (the highest state of mental concentration that
a person can achieve while still bound to the body and which unites him with
the highest reality.)
E. Discover your world.
F. Serve others.
G. Be at present.
H. Embrace change.
I. Take one step at a time.

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CONFUCIANISM

Confucian virtues provide an indigenous conceptual framework to understand

character strengths and positive development in Chinese culture. Furthermore,
when service leadership is considered in Chinese contexts, these virtues should
be regarded as important cornerstones (Shek, 2013).

According to Professor Daniel T.L. Shek (2013), here are some of the most
important virtues in confucianism:

REN simply means humaneness or being able to balance ethics with the pursuit
of profits.
ZHONG means loyalty, but by no means a subservience to authority.
XIN means honesty and trustworthiness, which leads to a harmonious society.
GONG means respect. “You watch my back, I’ll watch yours”

TAOISM

Taoist ethics are concerned less with doing good acts than becoming a good
person who lives in harmony with all things and people, and is therefore
inseparable from Taoist spirituality - as both contain the same ideas.

If a Taoist wants to live well they should take all their decisions in the context
of the Tao, trying to see what will fit best with the natural order of things. A Taoists
thus always do what is required by events and their context, but they only do what
is required, no more (BBC, 2009).

In practice Taoism recommends the same sorts of moral behavior to its

followers as other religions. It disapproves of killing, stealing, lying and
promiscuity, and promotes altruistic, helpful and kindly behavior. Taoists believe
such good behavior is an essential part not only of self-improvement but of
improving the world as a whole.

The Taoist ideal is for a person to take action by changing themselves, and
thus becoming an example of the good life to others. They should develop
themselves so that they live their life in complete harmony with the universe. So
the philosophy is not do good things; but become a good person (BBC, 2009).

50
 Changing oneself in that way will make the world a better place, because as
a person behaves well towards other people and the world, the community will
respond by becoming better itself.

Taoism requires human beings to be humble and recognize that not only are
they not obliged to make the world a better place, they are actually so ignorant of
what is really happening that they are likely to make things worse if they do take
action (BBC, 2009).

SHINTOISM

An ethnic religion in Japan, Shinto focuses on Kami-no-michi or the way of

the Gods. This basically highlights good behavior which for them is an essential
part for self-improvement and the world as a whole.

The virtue of of Shintoism is Jyoumei Seichoku is a word that can be broken

down to 4 components; Jyou (浄), Mei (明), Sei (正), Choku (直). Jyou means to
be clean, Mei means to be bright, Sei means to be honest, and Choku means to
be on the right road.

Work is understood as a form of self-expression of the great life force. For

Shintoists, company is more important than job title. When a Shintoist is asked of
their work, instead of them giving their job title or nature of work, they will give you
their company’s name instead. It symbolizes how proud they are of the
organization where they belong, no matter how big or small their roll is. Their being
family-centered is also evident, in as much as their loyalty to their fellow Japanese
and their country is, too.

Lesson 3. The Filipino Value System

UTANG-NA-LOOB
- means debt of gratitude
- sometimes abused by those who have done well to others, as they may ask
favors or things that are unreasonable or beyond means.

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FILIAL PIETY
- respect for one’s parents, elders or ancestors
- may be good or bad for business depending on a lot of considerations especially
on ethical issues.

PADRINO
- source of controversies both in government and in private sector
- connections, a.k.a “backer” is taken advantaged of so people can be hired solely
on this, even if they are unqualified or incompetent.

SUKI
- the “loyal customers”
- a.k.a market-exchange partnership, this value is essential to survival of most
businesses.

BAHALA NA
- literally means “come what may”
- “whatever happens, God has willed it”
- a state of helplessness or resignation, but, may also refer to a person’s
ignorance, lack of interest, or laziness to do anything at all.

MAÑANA HABIT
- procrastination
- putting-off for tomorrow, that which can be done today.

AMOR PROPIO
- love of self
- e.g. spending more than can afford to avoid being judged based on their actual
economic status.

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 POSITIVE FILIPINO TRAITS
- Hospitality
- Humor
- Adaptability
- Creativity
- Resilience
- Resourcefulness
- Faith
- Religiosity
- Hard work

 NEGATIVE FILIPINO TRAITS

- Bribery
- Corruption
- General disregard for rules
- Pagtatakip/Pagtatakpan
- Gossiping
- Ningas Cogon

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Assessment Tasks

Task 1. (To be recorded as Written Works)

Answer questions honestly and briefly.

Aside from the teachings of the religion you personally practice,

which other religion’s teachings do you think could best guide you in
running your business ethically? Explain briefly.
____________________________________________________________
____________________________________________________________
____________________________________________________________

Of the five (6) philosophers, which one of them came closest to how
you view ethics and business together? Why do you say so? Explain
briefly.
___________________________________________________________
___________________________________________________________
___________________________________________________________

Which of the presented Filipino Value System do you wish to be

erased from our culture, and why? Explain briefly.
___________________________________________________________
___________________________________________________________
___________________________________________________________

Among the positive Filipino traits, which are you most proud of? And,
which negative Filipino traits are you most embarrassed about?
Why? Explain briefly.
___________________________________________________________
___________________________________________________________
___________________________________________________________

54
Task 2. (To be recorded as Performance Task)
1. Share one instance in your life where you have personally
witnessed/experienced an unethical treatment, and what you did to address
it?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________

Task 3. To be recorded as Performance Task

Answer the questions following the Case provided.

Case Study #2.

A cement company began its plant operation in Cebu. Local residents,

initially, were very happy especially that the company was able to employ
thousands of local residents. However, after a few years of operation, the
plant started to emit large volumes of pollution which was believed to be
the cause for some local residents to fall sick. Aside from this, constant
vibration and loud noise were also coming out of the plant.

Local residents decided to file a class suit against the cement company
asking for an injunction to close the plant. The residents were claiming
that the pollution, loud noise and vibrations posed dangers to their health
and damage to their properties.

The plant was examined and found to have been using the best
technology available in running the plant. So, the court refused to issue an
injunction arguing that closing the plant would do more harm than good to
both parties. The court instead ruled that the company be paying the
residents a one-time fee to compensate for the damages done. The
amount to be received was computed based on the fair market price if the
residents were inclined and able to rent their property.

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Questions:
1. Was the decision of the court fair? Why or why not?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________

2. If you were the owner of the cement plant, what will you do to solve the
problem?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________

3. Discuss the cost and benefit analysis of the case from the perspective of
Bentham and Mills’ Utilitarianism.
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________

56
 Summary

 With so many different sources and influences we get to encounter on a

regular basis, it is understandable why we have different views and takes on
what ethics is and how it should affect how we run our businesses. We may
however take note that no matter the religion, or whoever the philosopher was,
we can generally say that ethics and business must and should always be
bound by honesty, integrity and fairness.

References

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 Mohammed J.A. (2013) The Ethical System in Islam – Implications for
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