Business Ethics and Social Responsibility

Week 1
The course 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.

The Role of Business in Social and Economic Development

• a driver of innovation

• a creator of wealth

• a harbinger of economic freedom

• address array of social, economic and ecological issues

What factors do you need to consider in setting up a business?

1) In setting up your business, do you want to minimize the costs of getting started? Do you hope to
avoid complex government regulations and reporting requirements?

2) How much control would you like? How much responsibility for running the business are you willing
to share? What about sharing the profits?

3) Do you want to avoid special taxes?

4) Do you have all the skills needed to run the business?

5) Are you likely to get along with your co-owners over an extended period of time?

6) Is it important to you that the business survive you?

7) What are your financing needs and how do you plan to finance your company?
8) How much personal exposure to liability are you willing to accept? Do you feel uneasy about
accepting personal liability for the actions of fellow owners

• The Sole Proprietorship

-It is a business owned by one person. The individual who starts a business is called an entrepreneur.

The Advantages of Sole Proprietorship

• Easy set up and licensing

How to Set Up a Sole Proprietor Business in the Philippines?

Requirement: Filipino Citizen

1. Register Your Business Name at the Department of Trade & Industry (DTI)

Certificate of Registration

2. Register with the Barangay

Barangay Certificate of Business Registration

3. Register the Business with the Mayor’s Office

Mayor’s Business Peermit

4. Register with the Bureau of Internal Revenue (BIR)

Fill the ‘BIR Form 1901’ to get Certificate of Registration

The Advantages of Sole Proprietorship

• Easy set up and licensing

• Total control

• Profits to owner

• Profits taxed once

• Few government regulations

The Disadvantages of Sole Proprietorship

• Limited Capital

• Unlimited Liability

• Limited human resources

 • Limited life

• The Partnership

It is a business owned by two or more persons. When partnership is formed, the partners sign a special
legal agreement: Partnership Agreement

The Partnership Agreement

• Names of the partners

• Name and nature of the business

• Amount of investment by each partner

• Duties, rights and responsibilities of each partner

• Procedures for sharing profits and losses

• How assets will be divided when and if the partnership is dissolved

General Partners and Limited Partners

The general partner is a business partner who has decision-making authority, takes an active role in the
operation of the business, and has unlimited liability for all losses or debts of the partnership.

A limited partner is business partner who does not take an active role in decision making or in running
the business. A limited partner’s liability is limited to the amount of his/her investment in the business

The Advantages of Partnership

• Easy set up and licensing

• More skills and knowledge

• Available capital

• Total control by partners

• Profits taxed once

The Disadvantages of Partnership

• Unlimited Liability

• Possible disagreement among partners

 • Shared profits

• Limited life

Examples of Partnership Businesses

How to Set Up a Partnership Business?

1. Register Your Business Name at the Securities and Exchange Commission (SEC)

Certificate of Registration from the SEC

2. Obtain a Barangay Clearance

Barangay Clearance

3. Register with the Social Security System (SSS)

4. Obtain Permit from the Mayor’s Office

Certifcate of Mayor’s Permit

5. Register Your Business with the Bureau of Internal Revenue (BIR)

BIR Certificate of Registration

The Corporation

A corporation is a business organization that operates as a legal entity that is separate from its owners
and is treated by law as if it were an individual person.

Batas Pambansa Blg. 68 The Corporation Code of the Philippines defines a corporation.
How to Set Up a Corporation?

The Corporation: Paperwork and Documents

The application to operate a corporation is called the articles of incorporation. The application includes
information such as the corporate name and the type of business in which the corporation will be
involved

Corporate by laws are the rules by which a corporation will operate. It may include how the company
will elect directors of the corporation and when the stockholders meet.

The corporate charter is a license to operate a corporation. It states the purpose of the business and
spells out the laws and guidelines under which the business will operate.

The Corporation: Issuing Stock

The ownership of a corporation is divided into units, which are shares of stocks.

Stockholders/shareholders (if non-stock, members) are the legal owners of the corporation and each
stockholder receives a stock certificate as a proof of ownership.

A closely held, or private corporation is one whose shares are owned by relatively small group of
people. The shares are not traded openly in stock markets.

A publicly held corporation is one that sells its shares openly in stock markets, where anyone can buy
them. Most of these corporations trade their stock on an exchange.
When a closely held corporation decides to sell its stock on the open market, the decision is known as
going public

The Advantages of Corporation

• Ability to raise capital

• Limited liability

• Continued life

• Separation of ownership and management

The Disadvantages of CorporationThe Disadvantages of Corporation

• Complex and expensive set-up

• Slow decision-making process

• Taxes

The Limited Liability Company (LLC)

It is a company which combines some advantages of a partnership and the corporation. In an LLC, the
liability of the owners is limited to their investment and profits are taxed only once.

Merger and Acquisition

A merger occurs when two companies combine to form a new company.

An acquisition is the purchase of one company by another with no new company being formed.

A hostile takeover occurs when a company is purchased even though the company’s management and
Board of Directors do not want to be acquired.

Examples of Mergers and Acquisitions

Disney and Pixar / Marvel Acquisition

Google and Android Acquisition

Exxon and Mobile Merger

Examples of Mergers and Acquisitions

The Not-for-profit Corporation

It is an organization formed to serve some public purpose rather than for financial gain. It enjoys
favorable tax treatment

The Cooperative

A cooperative is a business owned and controlled by those who use its services. Individuals and firms
who belong to the cooperative join together to market products, purchase supplies and provide services
for its members.

The Cooperative

1. All members have an equal say (one vote per member regardless of the shares held)
 2. Open and voluntary membership

3. Limited interest on share capital

4. Surplus is returned to members according to amount of patronage

The Advantages of a Cooperative

• Democratic management

• Assistance from the government

• Elimination of middleman’s profit

• Fairly stable life

The Disadvantages of a Cooperative

• Limited capital

• Lack of managerial talent

• Lack of motivation

• Lack of secrecy

• Dependence on government

The Most Common Types of Cooperative

• Credit Cooperative

• Consumers Cooperative

• Producers Cooperative

• Electric Cooperative

• Marketing Cooperative

• Housing Cooperative

• Farming Cooperative

Basic Classification of Business

Service Businesses

They provide intangible products (professional skills, expertise, advice and other similar products)
 a. Service – offer services/labor (e.g. interior decorators, entertainers, salons)

b. Financial – generates profits through investment and management of capital (e.g. banks)

c. Transportation – deliver goods and individuals to their destinations for a fee (e.g. bus operators)

d. d. Utilities – produce public services, usually under a government (e.g. electricity, water
treatment facilities)

Merchandising Businesses

They buy products at wholesale price and sells the same at retail price. They are know as ‘buy and sell’
businesses. They make profit by selling the products at higher than their purchase cost. They sell the
products without changing its form.

a. Retailers and Distributors – act as middlemen and get goods produced by manufacturers to the
intended consumers (e.g. grocery stores, distributors, resellers, convenience stores)

Manufacturing Businesses

They buy product with the intention of using them as materials in making new product. They
combine raw materials, labor and factory overhead in its production. The manufactured goods
will then be sold to the costumers.

Basic Classification of Business

a. Agriculture and Mining – produce raw materials such as plants or minerals (e.g. farms)

b. Manufacturers – produce products, either from raw materials or from component parts then
sell the products for profit (e.g. cars, clothing)

c. Real – estate – sell, rent and develop properties (e.g. land, residential homes, buildings)

d. Information – generates profits primarily from the sale of intellectual property (e.g. movie &
recording studios, publishers, internet and software companies)

Hybrid Businesses – may be classified in more than one type of business (e.g. restaurant:
making fine meals: manufacturing | sells a bottle of wine: merchandising | fills customer orders:
service)

The Big Idea.

Knowing the nature and purpose of business will help us make ethical decisions for our business
EXAMPLES

Case: Business Ownership Decision

Pamela owns a pet-sitting business. People hire her to take care of their pets when they go out of
town. As part of her service, Pamela also brings in her client’s mail and water their plants. Her
business is booming, and she needs to make some critical decisions about its future. Help Pamela
decide what to do now. Should she expand her business? Add employees? Take on a partner? Present
advantages or disadvantages of each of your suggestion.

Case: Solve Money Problems

Beverly Diaz is the sole proprietor of All Wet, a boat rental company that operates in Lake Sebu. She
saved Php 35,000 to establish the business. However, the competition from other companies with
better equipment has caused losses for All Wet. Beverly also own a Php 33,000 worth of stock in a
corporation that is being managed poorly. She fears that the corporation will go out of business.
Which investment poses greater financial risk? Why?

The Toy Manufacturer’s Dilemma

You are the owner of a medium business enterprise that manufactures and sells toys. You found out
that you are using a particular chemical that is suspected to be harmful to people, especially children.
You consider discontinuing the use of the said substance. However, the alternative chemical is very
expensive and it might take months before you can arrange its purchase and shipment. Consequently,
this means a possible three-month temporary work stoppage period for your 56 workers. You are well
aware that these workers are completely dependent on the wages that they receive from you.

How will you resolve this case?

What are the values that are in conflict here? What are the other issues involved?

Do you think simple gut feeling or intention and plain moral uprightness would suffice to resolve it?
Why?

What does it tell us about the importance of studying business ethics?

Quiz: Which of the following statements are True or False

a. A sole proprietorship business is started by one person.

b. The liability of a sole trader is limited.

c. A sole trader cannot maintain business secrecy.

d. Sole tradership is suitable for small scale business.

e. There is no risk involved in sole proprietorship business.

Core Principles in Business Operations Business Ethics and Social
Responsibility-Week 2

The Nature of Ethics

Ethos (Greek) means “character, habit, dwelling place”

Ethimos means “regularity and routine”

Ethos refers to one’s character which is a product of what one does regularly and repeatedly so
that it has already become a routine.

1) Ethics is the discipline that examines one’s moral standards or the moral standards od a
society. It asks how these standards apply to our lives and whether those standards are
reasonable or unreasonable.

(2) Ethics is the study of what is good and evil, right and wrong, and just and unjust.

(3) Ethics is a practical science designed to test logically the rightness or wrongness of human
acts.

mos [plural mores] (Latin) refers to one’s disposition, character, temperament, manners,
customs, or the proper behavior of a person in society.

In day-to-day conversation, we interchange the usage of the term “ethical” and “moral”.

Ethics and Law

“As long as you follow the law then you have got no problem.”
What is Business Ethics?

It is the application of ethical behavior in a business context. Acting ethically in business means
more than simply obeying applicable laws and regulations: It also means being honest, doing
no harm to others, competing fairly, and declining to put your own interests above those of
your company, its owners, and its workers.

What is Social Responsibility?

It is an ethical framework and suggests that an entity, be it an organization or individual, has an

obligation to act for the benefit of society at large. Social responsibility is a duty every
individual has to perform so as to maintain a balance between the economy and the
ecosystems.

Core Principles in Business Operations

Fairness is concerned with actions, processes, and consequences, that are morally right
honorable, and equitable. In essence, the virtue of fairness establishes moral standards for
decisions that affect others. Fair decisions are made in an appropriate manner based on
appropriate criteria.

Fairness: ability to make judgments free from discrimination or dishonesty

The value of fairness is about the process of decision-making, not the outcome.
8 Ways to Instill Fairness at Work

1. Control your power.

2. Model it.

3. Avoid favoritism.

4. Change the rules.

5. Consider perceptions.

6. Be honest.

7. Acknowledge mistakes.

8. Live the Golden Rule.

Justice means giving each person what he or she deserves.

Principle of Justice

“Equals should be treated equally and unequals unequally”. (Aristotle)

“ Individuals should be treated the same, unless they differ in ways that are relevant to the
situation in which they are involved”. (Velasquez, Andre, Shanks)

Different Kinds of Justice

1. Distributive Justice refers to the extent to which society’s institution ensure that
benefits and burdens are distributed among society’s members in ways that are just and
fair.

2. 2. Retributive or Corrective Justice refers to the extent to which punishments are fair
and just. It seeks to punish wrongdoers objectively and proportionately.

3. 3. Compensatory Justice refers to the extent to which people are compensated for their
injuries by those who have injured them; just compensation is proportional to the loss
inflicted on a person.

Accountability is the obligation of an individual or organization to account for its activities,

accept responsibility for them, and to disclose the results in a transparent manner. It includes
the responsibility for money or other entrusted property
Corporate accountability involves being answerable to all an organization's stakeholders for all
actions and results

How to Develop Accountability in Workplace

1. Have the difficult conversation.

2. Address the poor performance as soon as possible.

3. Consider your employees.

4. Set SMART goals.

5. Follow through and follow up.

Transparency is lack of hidden agendas or conditions, accompanied by the availability of full

information required for collaboration, cooperation, and collective decision making

Corporate transparency describes the extent to which a corporation's actions are observable
by outsiders

6 Ways to Create Transparency at Work

1. Leadership needs to be on the same page.

2. Open the decision-making process.

3. Hire right.

4. Encourage face-to-face communication.

5. Treat all employees the same.

6. Open your financials.

7. Open your doors.

Stewardship is the responsible planning and management of resources

A mission statement define a company's goals in three important ways:

• It defines what the company does for its customers.

• It defines what the company does for its employees.

• It defines what the company does for its owners.

Examples of Mission Statements

Build the best product, cause no unnecessary harm, use business to inspire and implement
solutions to the environmental crisis.

Build the best product, cause no unnecessary harm, use business to inspire and implement
solutions to the environmental crisis.

To be Earth’s most customer-centric company, where customers can find and discover anything
they might want to buy online, and endeavors to offer its customers the lowest possible prices.”

To give people the power to share and make the world more open and connected.”

“To enrich people’s lives with programmes and services that inform, educate and entertain.”
We will provide branded products and services of superior quality and value that improve the
lives of the world’s consumers.”

Code of ethics

A code of ethics is a guide of principles designed to help professionals conduct business

honestly and with integrity.

A code of conduct is a set of organizational rules or standards that describe a business' values,
beliefs, and ethical standards to which the business and its employees must adhere.

Foundations of the Principles of Business Ethics

The classical Philosophies and their Implications on Business

Week 4

Waste no more time arguing about what a good man should be. Be
one.” – Marcus Aurelius

The philosophy of business considers the fundamental principles that

underlie the formation and operation of business enterprise; the nature
and purpose of business, and the moral obligations that pertain to it.

- Significantly influenced by philosophy, ethics and economic theory ( “

Philosophy of Business”, 2016)

The Classical Philosophies and Business Philosophies

“ Business Philosophy denotes a way of doing business or a business

outlook, instead of the more academic philosophical meaning of
philosophy of business.”
Business Ethics- a part of philosophy of economics, which operates on
the ethical operation of a private business

Philosophers and their teachings

1.Socrates: The Gad-fly at the Marketplace

- best known for the Socratic Method

- Inspiration for Plato, the thinker widely held to be the founder of the Western
Philosophical tradition.

- At the age of 70 , he was put to death at the hands of his fellow citizens on charges of
impiety and corruption of the youth

Socratic Method - a way of thinking that allows individuals to define their own purpose of
learning and explore this purpose through open-minded questioning of what they hold to be
true
How can Entrepreneurs find value in Socratic Method?

Entrepreneurs are bombarded by assumptions based on what others and they themselves
believe to be the best plan of action for pursuing a business idea.

Acquisition of knowledge is what an entrepreneur should do to create business venture. Which

means They should do constant questioning and testing assumptions. ( beliefs of the market
wants, where oppurtunities lie, effectiveness of product feature)

What do entrepreneurs learn from Socrates?

1. The Socratic Method provides focus through clarity of purpose

continues to answer questions like, “ Why are we here? Why do we exist as an organization?”

2.Use the Socratic Method to develop and reinforce an entrepreneurial mindset

-develop mindsets which involves interpreting complexity, difficulty, and uncertainty as

opportunity to test assumptions, run experiments, and create knowledge from these activities

Socrates insisted on our right to think for ourselves. Too often, he warned, humans sleepwalk
through life, simply going along with the crowd

• Does your organization encourage independent thinkers and people who follow their
conscience?

• Does it allow people to give critical feedback to managers?

• Does it create opportunities for good people to blow the whistle on bad behaviour?
2. Plato: The Philosopher- King

Plato ( 427-347 B.C.E)

Good People do not need laws to tell them to act responsibly, while bad people will find a
way around the laws”- Plato

- Student of Socrates and teacher of Aristotle

- He wrote in the middle of fourth century B.C.E in ancient Greece
- Writings are influenced by Heraclitus, Parmenides and Phythagoras
- He attacks on the Sophists (teachers who instructed young statesmen in the arts of
rhetoric and debate for fee. They taught that values are relative, so that the only
measure of who is right is who come out on top – MORAL RELATIVISM)
Plato’s Theory of Forms

- Cultivates the our capacity for abstract thought (ability to understand ourselves by
reasoning)

- The theory of forms differentiates the abstract world of thought from the world of
senses (appealing to our emotions and desires), where art and mythology operate.
Plato also argued that abstract thought is superior to the world of senses.
 - Plato describe the soul into three parts ( labelled appetitive, spirited, and rational)

Education for the Health of the State

Plato identify that education is one of the most important aspects of a healthy state. He
recognizes the need to teach children from a young age to live virtuous lives and to seek
wisdom.
3. Aristotle: All or nothing

Aristotle ( 384-322 B.C.E)

Happiness is the meaning and the purpose of life, the whole aim and end of human
existence”- Aristotle
- Makes contribution to logic, metaphysics, mathematics, physics, biology, botany, ethics,
politics, agriculture, medicine, dance and theatre
- Student of Plato
He was referred to as “The Philosopher” he first classify the ideas of human knowledge
into distinct disciplines such as mathematics, biology, and ethics
Implications to Business
Happiness is the touchstone of ethics, and therefore of character
It does not only mean pleasure.
“The rational person doesn’t seek money for its own sake. The rational person uses
money so that they can spend their time on good moral words and developing their
minds”
The role of the leader is to create an environment in which all members of an
organization have the opportunity to realize their own potential.
Ethical Questions that are directly relevant to corporate leaders who wish to behave
in ethical ways.
1. Am I behaving in a virtuous way?
2. How would I want to be treated if I were a member of this organization
3. What form of social contract would allow all our members to develop their full potential
in order that they may each make their greatest contribution to the good of the whole
4. To what extent are there real opportunities for all employees to develop their talents
and their potential?
5. To what extent do employees participate in decisions that affect their work?
6. To what extent do all employees participate in financial gain resulting from their own
ideas and efforts?

More Aristotelian Questions

1. Am I working more than my share of rewards, more than my contribution is worth?
2. Does the distribution of goods preserve the happiness of the community?
3. Does it have a negative effect on morale? Would everyone enter into the employment
contract under the current terms if they had different choices?
4. Would we come to a different principle of allocation if all the parties were represented
at the table?

4. Immanuel Kant: Duty Based Ethics

Immanuel Kant (1724-1804)

Act only according to that maxim by which you can at the same time will that it should
become a universal law”- Immanuel Kant
- A German Philosopher who advanced the theory of deontology or deontological ethics
– the theory of duty and obligation
- Deontology- proposes that ethical behaviour is simply doing God’s will. Since most of us
that is good, then goodwill and loving other human beings as God loves us is the
universal Principle on which moral behavior must be based
The Three Maxims
 Kant believes that the categorical imperative is the basis to determine whether one’s
action is deemed to be ethically correct. There are three maxims
First Maxim: an action can only be considered as ethically correct if it can be accepted
or made into a universal laws (Bowie, 1999)
Second Maxim: that a person should be treated as an end not the means to achieve an
end (Bowie, 1999)
Third Maxim: Each individual should act as a member of an ideal kingdom where he or
she both the ruler and subject at the same time (Bowie, 1999)

5. Jeremy Bentham & John Stuart Mill: Utilitarianism

John Stuart Mill ( 1806-1873)

A person may cause evil to others not only by his actions but by his inaction, and in
either case, he is justly accountable to them for the injury.”- John Stuart Mill

- Profoundly influenced the shape of nineteenth century British thought and political
discourse
- Morality has it that people will justify not the end and means.
7. Jeremy Bentham (1748-1832)

Jeremy Bentham (1748-1832)

The said truth is that it is the greatest happiness of the greatest number that is the measure
of right and wrong”- Jeremy Bentham

- English Philosopher and Political Radical

- Known for his Moral Philosophy which is the UTILITARIANISM

which evaluates actions based upon their consequences.

Utilitarianism

revolves around the concept of “ the end justifies the means.”

-it believes that outcomes as a result of an action have a greater value compared to the later. It
is also states that the most ethical thing to do is to take advantage of happiness for the good of
the society

-as a result, utilitarianism depends on consequentiality

TYPES OF UTILITARIANISM

Foundations of the Principles of Business Ethics

The Impact of Belief Systems in the Business Settings

Week 5

Impact of Belief Systems in the Business Setting

Judaism, Christianity, Islam, Hinduism, Buddhism, Confucianism, Taoism and Shintoism are the
world’s eight major religions. Each has its own organized system of beliefs, ceremonies, and
worship and each offers prescriptions for the positive endeavour in both life and in business.

How World Religions View Business Ethics (Mele, 2016)

- believers want to know how they can translate their religion’s vision into the business
environment

- religious ethics provides a set of consistent and reasonable statements regarding

business.

- business is dealing with people of different religions and ignoring misinterpreting

religious ethical approaches can cause serious problems

1. Judaism: Jewish Business Ethics

-Form of an applied Jewish ethics that examines ethical issues that arise in a business
environment.
 -The Torah mentioned that there are over 100 Mitzvot concerning the fitness of one’s
money than concerning the fitness of food.
-The subject thus receives an extensive treatment in Rabbinic Literature
TALMUDIC TRADITION – in one’s judgement in the next world the first question asked is
: “ were you honest in business?”
Honesty in Business
Avot de-Rabbi teaches that “ Character is tested through business
The secret of conducting one’s business in faithfulness. What brings into the house, that
is what one earns, should be in faithfulness. What we take out, what we spend our
money on should be also in faith.”
Honesty in Business
1. Requirement of accurate weights and measures
“ You shall not falsify measures of length, weight, or capacity. You shall be balance, an
honest weight, an honest ephah, and honest hin”

2. Prohibition of Monetary Deception

“ When you sell anything to your neighbor or buy anything from your neighbor, you shall
not deceive one another”

3.Prohibition of Verbal Deception

“ Do not deceive one another, but fear your God, for I the Lord am your God”

4. Stealing a Person’s Mind

“stealing of mind/knowledge,” refers to a kind of dishonest misinterpretation or

deception

5. Putting a Stumbling Block Before the Blind

“Prohibition against misleading people.” Example real estate should not dupe a young
couple into buying a home with structural faults in order to make a fast buck.

6. Treatment of Workers

“pay workers on time, strive to pay their workers with living wage, to treat workers with dignity
and respect”

7. Not Wasting Time at Work

Employees should avoid spending too much time on-line or other diversions when at their job
6. Whistleblowing

In any case of wrong doing, there is an obligation to rebuke the person doing wrong if it can be
assumed there is a reasonable chance the rebuke will be listened to, and the rebuke can be
administered without substantial personal cost to the reporter”

2.Christianity: Crucial Principles

1. Golden Rule

2. Stewardship

3. Trust

4. Justice

5. Diligence

6. Generosity

3.Islam: Ethics from the Qur’an

Prophet Muhammad was ideal human being. He was the best teacher, preacher, and guide; the
best statesman, lawgiver, judge, diplomat, negotiator of treaties, and military commander; the
best family man, a kind father, a good neighbour, and fried of his people. He was also a very
honest and successful businessman.

Plato’s Theory of Forms

- Cultivates the our capacity for abstract thought (ability to understand ourselves by
reasoning)

- The theory of forms differentiates the abstract world of thought from the world of
senses (appealing to our emotions and desires), where art and mythology operate.
Plato also argued that abstract thought is superior to the world of senses.

Major Principles of fair business dealings according to IslamMajor Principles of fair business
dealings according to Islam

1. No fraud or deceit, the Prophet is to have said, “ When a sale is held, say, “ There’s not
cheating.” (Al-Bukhari)

2. Sellers must avoid making too many oaths when selling merchandise.

3. Mutual consent is necessary.

 4. Be strict in regard to weights and measures

5. The Prophet forbade monopolies

6. Free enterprise, the price of the commodities should not be fixed unless there is a
situation of crisis or extreme necessity.

7. Hoarding merchandise in order to increase the prices is forbidden.

8. Transaction of haram items, such as intoxicants, are forbidden.

Other Principles of Islam

• Honesty

• Truthfulness

• proficiency

4.Hinduism: Non-violence

It is estimated that about 950 millions of people practice Hinduism, mainly in India.

Ethical principles of Hinduism: ahimsa (Non-Violence), detachment (abandonment of the fruits

of the action), Truthfulness, Not to steal, Self-control, discipline, appropriate words and
thoughts, and motivation to achieve the goal.

Yamas (restrains or abstentions)

1. Non-Violence (ahimsa)

2. Truthfulness (satya)

3. Not to steal (asteya)

4.Sexual Moderation (brahmacarya)

5. Non-possession (aparigraha)

Niyaamas (Observances or Rules)

1. Purity (shauca)

2. Satisfaction (santosa)

3. Austerity/Self-discipline (tapas)
 4. Self-knowledge (svdhyaya)

5. Surrending to God (Ishvarapranidhana)

Hinduism

Karma (action) is one of the salient features of Hinduism and teaching of Gita, thus a person has
the right to do his Karma but not to think of its fruits.

- Detachment and selflessness

Five Core of Tata Values

• Integrity

• Understanding

• Excellence

• Unity

• Responsibility

Implications to Business

Ethical Questions that are directly relevant to corporate leaders who wish to behave in
ethical ways.

1. Am I behaving in a virtuous way?

2. How would I want to be treated if I were a member of this organization

3. What form of social contract would allow all our members to develop their full potential
in order that they may each make their greatest contribution to the good of the whole

4. . To what extent are there real opportunities for all employees to develop their talents
and their potential?

5. To what extent do employees participate in decisions that affect their work?

6. . To what extent do all employees participate in financial gain resulting from their own
ideas and efforts?

More Aristotelian Questions

1. Am I working more than my share of rewards, more than my contribution is worth?

2. Does the distribution of goods preserve the happiness of the community?

3. Does it have a negative effect on morale? Would everyone enter into the employment
contract under the current terms if they had different choices?

4. Would we come to a different principle of allocation if all the parties were represented
at the table?

5.Buddhism: Maxims for Business

- Ancient philosophical system that follows the teachings of Buddha

- Emphasizes the cultivation of mindfulness and values a spiritually minimalistic

worldview, eschewing dependence and worldly attachment

1.Work Hard, No Excuses

“ Too cold, too hot, too late” can always be the excuses to those who do not want to work.
They let their chance pass by.

2. Work Hard but Rest Well

“ None can live without toil”

3. Be mindful

“ You will always be getting praise and blame, but do not let either affect the poise of the
mind: follow the calmness, the absence of pride”

4.Follow the Eight fold Path

5. Discover your World

“ Your work is to discover your world and then with all your heart give yourself to it”

6. Serve Others

“ The most valuable service is one rendered to our fellow humans.”

7. Engage

“ Every individual has a responsibility to help guide our global family in the right direction.
Good Wishes are not sufficient; we must become actively engaged.

8. Be at Present

“ Do not dwell in the past, do not dream of the future, concentrate the mind on the present
moment”

9. Embrace Change

“ You can only lose what you cling to”

10. Take one step of a time

“A jug fills drop by drop”

6.Confucianism

- Do not impose on others what you do not wish for yourself- Confucius

1. Humaneness

2. Rite and right

3. Integrity

4. Loyalty

5. Filial piety

6. Respect

7. Small Profit is not a loss

 8. Taoism

1. The “Way”
2. Non Action
3. Naturalness
4. Compassion, Moderation, & Humility
5. Good Behavior
6. Non-Discriminatory, Gender- Neutral
7. Leadership by example

9.Shintoism: The Way of the Gods

1. The Natural Order

2. Impurity

3. Purification

4. Everything has a soul

5. Superiority of Groups

6. Four Circles of Business Relationships

7. Balancing Debt and Benefits

8. Highly Contextual Culture

9. Face-Saving

10. Perception of Work

11. Concept of Authority

12. Non-Verbal Behavior

a. handshake

b. bowing

c. Eye Contact

Foundations of the Principles of Business Ethics

The Filipino Value System and Its Effects on Business

Filipino value system

• Defined by the way people live their family as an influence of one’s culture.

• It refers to the set of values or the value system that a majority of the Filipino have
historically held important in their lives.

The Filipino Value System and Its Effects on Business

A. Utang na Loob

-debt of gratitude means that one does not forget the good deeds that others may have
done to him or her especially in times of great need. This debt of gratitude is sometimes
abused by those who have done well to other as they may ask favors or things that may
either be unreasonable or beyond the means of the one in debt.

B.Filial Piety

• a virtue of respect for one’s parents, elders, and ancestors. Filipinos are taught to
become polite and respectful individuals. This is also due to the influence of Christianity
that tells them to honor both parents and elders. The use of “po” and“opo” when in
conversation with an elder or someone who is older is a manifestation of how Filipinos
respect their elders.

• Filial Piety may be good or bad for business depending on a lot of considerations, but it
definitely affects the way business is conducted especially when the business person is
confronted with ethical issues.

C.Padrino

-patronage in the Filipino culture, business, and politics is the value system where
one gains favor, promotion, or political appointment through family affiliation or
friendship, as opposed to one’s merit.

D. Suki

• The word “suki” is a Filipino term which means “loyal customer”. This so-called“ market-
exchange partnership” can be developed into an agreement where one can be a regular
customer and supplier.

E. Bahala na
 • been loosely translated as “come what may.” Hence, it is referred to as the Filipino
version of fatalism that is, leaving everything in the hands of fate. But “ bahala na”
actually comes from the word “Bathala na,” which means God.

F. Mañana Habit

-from the Spanish word “Mañana” which literally means “tomorrow” or “an unspecified
future time.” Hence, Mañana habit refers to procrastination or putting off for tomorrow what
can be done today

.Punctuality and Tardiness

Related to “mañana habit” is the Filipino’s sense of time. Filipino time is minutes or even
hours late of the standard time. In other words, Filipinos tend to be late in meetings, events,
etc.

G. Amor Propio

• literally means, “love of self” or self-love. Amor propio refers to a person’s feeling of
self-respect and personal worth or the quality of being worthy of esteem or respect,
sometimes an inflated feeling of pride as superior to others or sometimes even feelings
of excessive pride.

H. Filipino Family Values

1. Hospitality –refers to friendly and generous reception and entertainment of guests, visitors, or
strangers.

This trait is particularly favorable in business, especially in the service sector.

2. Humor, Adaptability, and Creativity – Filipino’s sense of joy and humor is evident in their optimistic
approach to life and its travails. The ability to laugh at themselves and their predicament is an
important coping mechanism that contributes to emotional balance and capacity to survive. These
are manifested in the ability to adjust too often difficult circumstances and prevailing physical and
social environments. Filipinos have a high tolerance for ambiguity that enables them to respond
calmly to uncertainty or lack of information. Filipinos often improvise and productive and innovative
use of whatever is available. These qualities have been repeatedly demonstrated in their capacity to
adapt to living in any part of the world and in their ability to accept change.

3. Resilience, Resourcefulness and the Ability to Survive – As a people who have been constantly
under the rule of numerous powerful countries over time, and as a place that is constantly plagued
by natural calamities, Filipinos have developed a sense of resourcefulness of the ability to survive
 with whatever they have. Filipinos have the extraordinary ability to make something out of basically
nothing for the sake of survival.

Resilience, Resourcefulness and the Ability to Survive are particularly good traits in the business
setting.

4. Faith and Religiosity – The Philippines is approximately 92.5 percent Christian (mostly Roman
Catholic), 5.6 percent Muslim, and 1.9 percent other religions, including the Taoist-Buddhist
religious beliefs of Chinese and the indigenous animistic beliefs of some peoples in upland areas that
resisted 300 years of Spanish colonial rule.

This is a reflection of the Filipinos’ strong faith in God as seen in their various practices. This includes
the numerous Church Holidays they observe, the customary (and obligatory) Sunday Mass, the
individual’s basis of their moral standpoints, the influence of the Church on the minds, actions, and
opinions of the majority, importance of the Sacraments, Praying at almost any possible time of the day,
extreme practices during Holy week, etc. While not a guarantee, being religious is a positive trait that is
favorable in business and in the workplace.

5. Hard Work and Industry –Filipinos are universally regarded as excellent workers who perform well
whether the job involves physical labor and tasks or highly sophisticated technical functions. This
propensity for hard work, which often includes a highly competitive spirit is driven by the desire for
economic security and advancement for oneself and one’s family.

I. Negative Filipino Traits

1. Bribery and Corruption - Bribery is a specific offense which concerns the practice of offering
something, usually money, to gain an illicit advantage and Corruption is an abuse of a position of
trust in order to gain an undue advantage. Bribery and Corruption in the Philippines are almost a
culture whether it is in government or in business. They are embedded deep within the system
and reinforced by a complex web of economic and social factors which include personal
ambitions and a twisted sense of loyalty to friends and kin. Bribery and Corruptions are
unethical business practices.

2. General Disregard for Rules – Many Filipinos have a penchant for breaking rules. This social
phenomenon is not exclusive to hardened criminals either a look at everyday life in the country
shows Filipinos from the entire social strata nonchalantly breaking the rules, whether it is
something as benign as jaywalking and loitering and falling in line or as dangerous as beating the
 red light. This penchant for breaking rules has no place in the workplace, particularly, because,
everyone in the workplace is expected to follow the rules.

3. Pagtatakpan – “pagtatakpan” attitude refers to the covering-up of the shortcomings or

wrongdoings of another person. This may involve the whole group justifying the wrongdoings,
or at least proving excuses for them, of a group’s errant members if only top reserve group
integrity. “Pagtatakpan is an offshoot of “Pakikisama,” which is not ethically wrong in itself.
While “pakikisama” is viewed as group cooperation or solidarity in a positive sense, pagtatakpan
is pakikisama to a fault or solidarity to the extreme.

4. Gossiping – Many Filipinos are fond of talking about the others’ business. It is not just the
women, but the men too, are into gossiping. Even men can also be nosy on other people’s lives.
Gossiping is unethical in business and in the workplace. It inflicts others and destroys the
reputation and relationships of those who are involved-whether professional or personal
relationships.

5. Ningas-Cogon – is an idiomatic expression which refers to a burning cogon grass that quickly
burns and quickly burns out too. This refers to the initial enthusiasm over a new project or job
which quickly fades away. The enthusiasm or eagerness cannot be sustained, hence the work is
either unfinished or done haphazardly.

Consistency, persistence, and hard-work are the desired traits in the workplace and not “Ningas-
Cogon”

Foundations of the Principles of Business Ethics

WEEK 9
When you hear the words “Filipino businessman,” what comes to mind?

• Hardworking,” “persistent,” and “optimistic”—these are words strongly associated

with the Filipino culture. More so, these are also the usual words that paint the
character of businessmen in the Philippine setting.

• But, are these the only words to describe them? Thankfully, we have a very colorful
and emotionally engaged culture that is embedded in the work we do. Looking at how
our country’s top businessmen have built their empires from the ground up is
sufficient evidence that the ingredients to becoming a Filipino leader take more than
just hard work, persistence, and optimism.
 • To be an embodiment of the values that every local enterprise should uphold, every
Filipino business leader must be an exemplar of five particular traits: empathy,
humility, curiosity, passion, and servant leadership.

• Be the change you want to see.

Trait 1: Pagmamalasakit (Empathy)

How this can be helpful: Filipinos are very social beings, and they always look after their fellow
countrymen, wherever they are in the world. Being a naturally empathetic nation allows us to
have a sense of service towards others. And, who else would be a better fit for other-centric
company than a leader who practices pagmamalasakit?

Indifference seems to be the easiest route to ward off difficulties, but that was not an option
for the late Mariano Que. Instead of turning his back on the aftermath of World War II, he
seized the opportunity to help Filipino communities rise above the ashes by providing easier
and more affordable access to medicines. Que invested his money to sell Sulfathiazole, an
antimicrobial drug that was highly sought yet limited at that time. Selling the drug at individual
packs made it more affordable for poverty-stricken neighborhoods, allowing Que to save
hundreds of lives simply by putting empathy into action. Today, the pharmaceutical employee
is now known as the honorable founder of Mercury Drug Store

What leaders can achieve:

Studies have shown that mastering empathy is an essential leadership trait that increases
workplace satisfaction and employee engagement.

When employees know that they are understood, it lessens workplace stress, making way for a
more productive environment. Moreover, empathy fosters openness among groups, which
encourages individuals to speak up and get their ideas across. This allows leaders to gain a
source of new perspectives that could help them effectively build relationships and improve
systems.

Trait 2: Pagpapakumbaba (Humility)

How this can be helpful: There is an old Filipino proverb that says, “He who does not know how
to look back at where he came from will never reach his destination.”

The road to success is not a forward-moving path. More often than not, it is a journey that
requires looking back and learning from the past. Thus, the only way to achieve such a feat is
through humility.
 • The life of Socorro Ramos, co-founder of the National Bookstore, is an illustration of
how humility enables a person to carry on despite hardships. Ramos had to witness a
series of unfortunate events from the break-out of World War II to the wrath of fire and
consecutive typhoons—all of which resulted in her store ending in wreckage. These
would seem like obvious signs to look for greener pastures elsewhere. But adversities
did not stop Ramos from keeping her end goal in mind: to raise a nation of readers
through lower-priced books. Eventually, her humility and advocacy paid off with her
business enjoying over 75 years of success.

• What leaders can achieve:

One great definition of humility is that it is “not thinking less of yourself; it is thinking of
yourself less.” Instead of placing your conveniences dead center in every project, you
become more mission-oriented. In turn, your team gains the same focus and a clearer
picture of where all of you ought to go.

Trait 3: Pagkamausisa (Curiosity)

How this can be helpful: Curiosity is made up of two parts: The first is admitting that there are
many things one does not know, and second is having an eager desire to learn more. Through
these two, individuals not only gain a deeper understanding of themselves, but they also get a
chance to build partnerships, solve problems, and most importantly, remove complacency.

• A perfect example of a brand born out of curiosity is Jollibee, the local-gone-global fast
food brand headed by Tony Tan Caktiong. A literal bee-con of hope for Filipinos from
every socio-economic background, the fast food giant started out as a little ice cream
parlor in Cubao. If not for Caktiong’s curiosity, he would never have discovered what
truly appealed to consumers’ tastes. His desire to learn how he could further grow his
business led him to find out that Filipinos, despite living in a tropical country, were more
allured by burgers than ice creams. From there, Caktiong expanded his enterprise, giving
both foreigners and overseas Filipino workers (OFWs) a taste of home.

• What leaders can achieve:

Sometimes branded as the most valuable leadership trait you can have, being a curious
leader enables you and your organization to stay competitive, as it continuously seeks
out new ways of doing things—from new processes to entire industries.

Trait 4: Pinoy Pride (Passion)

How this can be helpful: Filipinos are emotionally connected people. From international boxing
matches to political stances, there is nothing quite like how passionate Pinoys are.

Take a look at billionaire tycoon Lucio Tan. Before acquiring a wide portfolio of successful
businesses, Tan had to work part-time from high school up until college. And even after that, he
continued to persevere despite losing his first business. His failed venture eventually led him to
success in the tobacco industry and later on, in banking, brewery, and real estate, apart from
owning a 4-star airline.

Tan has definitely grown an empire. It is safe to say though that his real passion lies
in philanthropy—providing transport to allow OFWs to come home from an amnesty period in
Kuwait, making donations for the war-torn communities in Marawi, and advocating for
education and healthcare, among others.

What leaders can achieve:

Being a passionate leader is not necessarily limited to the stereotype of a “loud, pizzazzy”
person who is always making inspirational speeches or raising their voice in the boardroom.

A study found out that passionate leaders are the ones who go deep: They display “depth of
commitment and quiet attention to detail” that is unmatched. By being this way, they inspire
loyalty and caring relationships among their employees.

Trait 5: Pakikisama (Servant Leadership)

How this can be helpful: As the famous saying goes, “No man is an island entire of itself; every
man is a piece of the continent.” This is true for any group, and it is especially applicable when
it comes to professional organizations and their leaders.

After all, the concept of pakikisama is a great way to remind everyone, especially leaders
themselves, of the bigger picture. Being a servant leader means you remember that you are
part of a community. Not only will this combat crab mentality, but it will ultimately promote a
culture of pakikisama. Nobody is too good to do all the work, and it is all for one as it is one for
all—even at the top.

What leaders can achieve:

The practice of servant leadership has been shown to increase a leader’s influence in producing
more thoughtful and balanced group decisions—ultimately promoting trust and a culture of
learning in the workplace. When it comes down to it, there's no better act of service than a
leader who empowers others through his own actions.

A perfect example would be Jaime Zobel de Ayala, a man who embodies an unwavering
commitment to achieving sustainable development, be it in water, power, real estate, finance,
telecommunications, education, or healthcare. Zobel de Ayala, who was recently honored by
the United Nations for his positive impact in the Philippine business community, heads one of
the country’s most respectable conglomerates. Even with immense power, he displays a
cunning sense of “stewardship,” acknowledging that his family’s legacy is not without
responsibility, especially towards the country.

The future is Filipino.

By paying attention to how our national culture is embedded into the fabric of Philippine
companies, leaders have higher chances of success by adopting these qualities that bring out
the best side of our often complex, sometimes contradicting traits.

In turn, they also ensure that company culture thrives while preserving and honoring national
culture—a custom that is important to Filipinos and their sense of being makabayan.

After all, at Globe Business, we are committed to helping build a Philippines where families’
dreams come true, businesses flourish, and ultimately, the nation is admired for its collective
good.

With a booming economy and promising future, Filipino leaders can be sure that Globe
Business is with them every step of the way as they innovate the Philippine business landscape
for the better.