BUSINESS ETHICS AND SOCIAL RESPONSIBILITY Journalistic Ethics- where journalists are

LESSON 1 expected to adhere to ethical considerations

such as truthfulness and accuracy
Business- defined as an organization or
enterprising entity engaged in commercial Environmental Ethics- Individuals and
industrial, or professional activities organizations face environmental dilemmas
 Can be profit or non-profit ganization related to environmental consideration and
For-Profit Organization- An Entity whose main sustainability
goal is to make money
 Shareholder Legal Ethics – lawyer and judges are bound
 Entrepreneur by ethical rules governing their conduct in
 Stockholder legal profession
 Corporation
 Sole proprietor Educational Ethics- teachers and educators
have ethical responsibilities towards their
The term ”Business” also refers to the students including fostering a safe and
ORGANIZED EFFORTS and ACTIVITIES OF inclusive environment
individuals to produce and sell goods and services Technological Ethics- With the increasing
for profit. influence of technology in our society, ethical
considerations become vital. Example includes data
Ethics- The word "ethics" originates from the privacy and security, ethical use of artificial
ancient Greek word “ethikos” which is derived from intelligence, and addressing the digital divide to
“ethos- meaning “character or custom” ensure equitable access to technology

“Ethikos”- Study of morality and the principle PERSONAL ETHICS - Individuals face ethical
that govern human behaviord choices in their personal lives, such as honesty in
relationships, integrity in decision-making, altruism
ETHICS in helping others, and respecting diversity and
 Moral principal and Values that guide inclusivity.
human behavior and decision making
SOCIAL JUSTICE AND HUMAN RIGHTS -
 Provide framework from evaluating
Advocating for social justice and human rights
action or choices base on principle such as
involves ethical considerations such as fighting
Honesty, fairness, integrity, responsibility,
against discrimination, inequality, and oppression,
and respect for others .
and promoting fairness, equality, and dignity for all
individuals and groups.
EXAMPLE OF ETHICS
VALUES, PRINCIPLES AND PURPOSE OF ETHICS
Medical Ethics- Where healthcare
VALUE (Tell us what’s good)- They are the things
professionals must make ethical
we strive for , desire seek to protect.
considerations daily such as respecting
patient PRINCIPLES (Tell us what’s right)- outlining how
Confidentiality, obtaining informed consent we may or may not achieve our values
for medical procedures, and prioritizing
PURPOSE ( your reason for being)- it gives life to
patient well-being over financial matters.
your values and principles
 company funds into their bank accounts
project quotations, invoices, etc. to deceive
WHAT IS BUSINESS ETHICS?
the company on
 Business ethics is applied ethics which can how much was spent on particular projects.
be defined as a written or unwritten code of This act is detrimental to the company
principles and values that govern decisions because employees who steal sometimes
and actions of individual within organization replace quality products with counterfeits
 Refers to implementing appropriate which are cheaper but cause damage in the
business policies and practices with regard future.
to arguably controversial subjects
 Business ethics not only apply to how the 3. CORRUPT PRACTICES
business interact with the world at large but Some common causes of corruption can be
also to their one on one dealing with seen during the employment process of an
single customer organization. They invite so many people to
BUSINESS ETHICS - In the business world, send their CVs and come for interviews but
ethical behavior is crucial for maintaining only people with the same political
trust with customers, employees, and affiliation with them get the job. This is also
stakeholders. Examples include companies common with companies that ask for
adhering to fair labor practices, providing contractors to bid for a project but the
accurate and transparent information to employees will only
consumers, and engaging in give them to their friends who may not even
environmentally bid at all. Get started with our workplace
sustainable practices. harassment form template
to receive feedback from employees

WHAT IS SOCIAL RESPONSIBILITY?

SITUATIONAL EXAMPLE OF BUSINESS Social responsibility means that
ETHICS individuals and companies have a duty TO
ACT IN THE BEST INTERESTS OF THEIR
1. OBEY THE COMPANY'S RULES & ENVIRONMENT AND SOCIETY AS A
REGULATION- At the start of an employee WHOLE.
contract, companies may need the
employee to sign various documents, Social responsibility, as it applies to
including the COMPANY RULES AND business, is known as CORPORATE SOCIAL
REGULATION AGREEMENT FORM. Also, RESPONSIBILITY (CSR).
the employee may be given a handbook
that may serve as a guide. Some common THE NATURE AND FORMS OF BUSINESS
rules are tardiness, inappropriate dressing, ORGANIZATION
and language, etc. Due to the excitement of
getting a new job, some employees do not BUSINESS- an active process that is an integral part
properly read these rules and may end up of human society. It is an organization where
deferring them in the future.. economic resources or inputs, such as materials and
services, are brought together and distributed to
2. THEFT/EMBEZZLEMENT Some deliver or to give consumer goods, products, or
employees are known for diverting outputs.
  *There is a lack of financial control
Profit- refers to the difference between the amount because of the looser structure of sole
received and the amount spent on something proprietorship.
purchased, produced or manufactured  There could be difficulty in raising
capital.
THREE TYPES OF BUSINESS ORGANIZATION

1. Service Businesses- Provide services to

customers rather than products. Ex: makeup 2. PARTNERSHIP - It is a business relationship
service, spa, etc. between two or more people. It refers to an
2. Merchandising Businesses- Sell to arrangement where individuals share a business
customers products they buy from other venture's profits and liabilities. The partners give
businesses. Ex. Sari-sari stores, groceries feedback on how to use the capital and other
3. Manufacturing- Turn basic inputs into critical strategic decisions that may provide
products which are sold to consumers. different perspectives.

FORMS OF BUSINESS ORGANIZATION ADVANTAGES:

 Partnership business lacks
1. SOLE PROPRIETORSHIP - It is a one-person formality as compared with
business. The owner has full control over the managing a limited company or
finances and operations and decides alone. corporation.
 It is easy to start. The partnership
ADVANTAGES may be created either verbally or in
 Tax preparation is faster. Simply file an writing.
individual income tax return including  You share the burden. You have
losses and profits to your business. * Sole companionship and support.
proprietorship has lower start-up costs.  Every partner would add his/her
 Handling money for the business is own expertise, skills, experience,
easier. and connections to the business,
 Sole proprietorships have the least thus giving it a greater chance of
government rules and regulations that success.
affect them.  There is better decision-making.
 The sole proprietor can own the business Two heads are better than one.
for as long as he/she wants, and when  There is privacy. The business
he/she wants to move out, he/she can cash deals may be kept confidential by
in and sell the business. the partners.
 Even in common practice, the sole  The partners own and control the
proprietor can pass the business down business.
to his/her heir.  The more partners there are, the
more funds are available in the
DISADVANTAGES: company, which can be used for
 The sole proprietor is personally liable for possible expansion. Its borrowing
all debts and actions of the enterprise. capacity is also likely to be higher.
  There is easy access to profits in a  The corporation pays taxes on its income
business partnership. The partners depending on its type and the
just have to divide the profits. shareholders pay dividend taxes, so income
gets taxed twice.
DISADVANTAGES:  The management team of a corporation
 The business does not have any can operate the business without any real
independent legal status. oversight from the owners.
 The business has no separate legal
personality, so the partners are
personally liable for the debts and losses
incurred.
 The partnership business often seems to
lack the sense of prestige more closely
associated with a corporation.
 partnership will often find it more difficult
to raise money than a corporation.
 There is a potential of differences and
conflicts.
 Decision-making can be slower because
there is a need for consultation among
partners.

3. CORPORATION - It is an entity created by law

that is independent and distinct from its owners
and relies on the corporate laws of the state in
which it is incorporated to continue its existence.
Corporations have an advantage in generating
money for the company. It can raise funds by
selling shares of stocks. It files taxes separately
from its owners.

ADVANTAGES:
 The liability of the shareholders of a
corporation is limited up to the amount of
their investments.
 A publicly held corporation may sell
shares or issue bonds to raise substantial
amounts.
 It is easy for a shareholder to sell shares
in a corporation.
 A corporation's life has no limit,
ownership can pass through many
generations.

DISADVANTAGES:
CORE PRINCIPLES OF FAIRNESS,
ACCOUNTABILITY, AND TRANSPARENCY

Organizational Silos - This refers to the isolation or

compartmentalization or division within an
organization, where different departments or teams
operate independently with little communication or
collaboration between them. It can hinder overall
efficiency and innovation. stakeholders.

STEWARDSHIP-Pangangalaga/Pamamahala
CODE OF ETHICS
-Stewardship refers to the responsible management
and care of resources, assets, or duties entrusted to
an individual or organization. It involves acting in
the best interests of others or the common good
rather than solely for personal gain.
- Stewardship can apply to various contexts,
including environmental stewardship, financial
stewardship, and ethical stewardship in leadership
roles. It emphasizes accountability, transparency, ORGANIZATIONAL CULTURE - is the system
and long-term sustainability in decision-making and of shared actions, values, and beliefs that develops
actions. within an organization and guides the behavior of its
members (Schermerhorn, Osborn, Uhl-Bien, Hunt
ENVIRONMENTAL SUSTAINABILITY - - -The 2012)
company implements eco-friendly initiatives, such
as reducing waste, conserving energy, and investing 1. Team-oriented culture - prioritizes employees’
in renewable resources. It sets ambitious happiness.
sustainability goals and regularly tracks and reports 2. Elite culture - employees often prioritize work
its progress to stakeholders. and expected to work long hours.
3. Horizontal culture - everyone is encouraged to
ETHICAL LABOR PRACTICES - The company pitch in their ideas
ensures fair wages, safe working conditions, and 4. Conventional culture - employees work in a
opportunities for professional development for its more traditional manner
employees worldwide. It conducts regular audits of
its supply chain to prevent labor abuses and ensures LAYERS OF CULTURAL ANALYSIS
compliance with international labor standards.

COMMUNITY ENGAGEMENT - The company

actively engages with the communities where it
operates by supporting local charities, volunteering
time and resources, and participating in community
development projects. It listens to community
concerns and collaborates with local stakeholders to
address social and environmental issues.

TRANSPARENCY AND ACCOUNTABILITY - OBSERVABLE CULTURE - culture refers to the

The company maintains transparent communication visible elements of culture within an organization
with its shareholders, customers, employees, and that can be easily identified by individuals both
other stakeholders. It discloses relevant information inside and outside the organization.
about its business practices, financial performance,
and sustainability efforts through annual reports, 1. Dress code - How employees dress at work,
corporate social responsibility (CSR) disclosures and whether it's formal business attire or more casual
public statements. clothing.
2. Office layout - The physical arrangement of
By practicing stewardship in these ways, the workspaces, meeting rooms, and common areas
company demonstrates its commitment to within the office.
responsible corporate citizenship, long-term 3. Symbols and artifacts - Logos, mission
sustainability, and creating shared value for all statements, awards, and other tangible items that
represent the organization's values and identity.
4. Rituals and ceremonies - Regular events or
activities such as team meetings, annual parties, or
recognition ceremonies.

SHARED VALUES - are the core beliefs and

principles that members of an organization hold in
common. These values guide behavior, decision-
making, and interactions among employees

1. Customer focus - Prioritizing customer

satisfaction and delivering high-quality products or
services.
2. Innovation - Encouraging creativity, risk-taking,
and continuous improvement.
3. Integrity - Acting with honesty, transparency,
and ethical conduct in all business dealings.
4. Collaboration - Emphasizing teamwork,
cooperation, and open communication among
colleagues.

CULTURAL ASSUMPTIONS - are the implicit

beliefs, attitudes, and norms that shape behavior and
interactions within an organization. While not
always explicitly stated, these assumptions influence
how employees perceive and interpret their
environment.

1. "We promote from within": The belief that

internal talent development is prioritized and valued
over external hires for leadership positions.
2. "Work hard, play hard": The expectation that
employees are dedicated and committed to their
work, but also encouraged to enjoy social activities
and downtime together.
3. "Failure is a learning opportunity": The
perspective that setbacks or mistakes are seen as
opportunities for growth and improvement rather
than grounds for punishment.

A CODE OF ETHICS is a guide of principles

designed to help professionals conduct business
honestly and with integrity. A code of ethics
document may outline the mission and values of the
business or organization, how professionals are
supposed to approach problems, the ethical
principles based on the organization's core values,
and the standards to which the professional is held. grocery chain might also include a statement about
refusing to contract with suppliers that feed
BUSINESS ETHICS refers to how ethical hormones to livestock or raise animals in inhumane
principles guide a business's operations. Common living conditions.
issues that fall under the umbrella of business ethics
include employer-employee relations,
discrimination, environmental issues, bribery and THE ADVANTAGE OF ETHICS IN
insider trading, and social responsibility. While ORGANIZATION
many laws exist to set basic ethical standards within 1. Strategic Decision-Making
the business community, it is largely dependent Small business owners make decisions at the
upon a business's leadership to develop a code of executive level of their company. A code of ethics in
ethics. a small business can provide a foundation on which
to base all decisions that affect internal and external
COMPLIANCE-BASED CODE OF ETHICS stakeholders, such as employees or residents in the
Compliance-based codes of ethics not only set local community.
guidelines for conduct but also determine penalties
for violations. 2. Day-to-day Decisions
- Business owners are not the only decision-making
In some industries, including banking, specific laws employees in a small business. Due to the larger size
govern business conduct. These industries formulate of small businesses, frontline employees have less
compliance-based codes of ethics to enforce laws leadership and more responsibility than employees
and regulations. Employees usually undergo formal in larger organizations.
training to learn the rules of conduct. Because
noncompliance can create legal issues for the 3. Company Reputation
company as a whole, individual workers within a - Small businesses strive to gain a competitive
firm may face penalties for failing to follow advantage. The benefits that come from a good
guidelines. reputation in the market can be enough to gain
significant market share from larger competitors.
To ensure that the aims and principles of the code of
ethics are followed, some companies appoint a 4. Legal Considerations
compliance officer -The benefits of law and its legal framework make
ethical decision-making very important to
This type of code of ethics is based on clear-cut businesses. Good corporate governance can protect
rules and well-defined consequences rather than you if an employee commits a crime on behalf of the
individual monitoring of personal behavior. Despite company. For example, if a sales manager cheats on
strict adherence to the law, some compliance-based your suppliers, your charter can help convince the
codes of conduct do not thus promote a climate of court that your company does not condone such
moral responsibility within the company. behavior.

VALUE-BASED CODE OF ETHICS 5. Build Customer Loyalty

A value-based code of ethics addresses a company's A loyal customer base is one of the keys to long-
core value system. It may outline standards of term business success because servicing existing
responsible conduct as they relate to the larger customers costs less marketing than acquiring new
public good and the environment. Value-based customers. A company's reputation for ethical
ethical codes may require a greater degree of self- behavior can help create a more positive image in
regulation than compliance-based codes. the market and attract new customers through word
of mouth. Conversely, a reputation for unethical
Some codes of conduct contain language that behavior can increase the chances of a company
addresses both compliance and values. For example, acquiring new customers, especially in the age of
a grocery store chain might create a code of conduct social media, as dissatisfied customers can quickly
that espouses the company's commitment to health spread information about negative experiences they
and safety regulations above financial gain. That have had. You will lose your sexuality.
6. Retain good employees calls. According to Leadership Skills for Life,
-Talented people at all levels of an organization codes of conduct need to be detailed because some
want to be fairly rewarded for their work and efforts. questions, like whether or not taking a company pen
Companies that treat their employees fairly and home is ethical, will render many answers.
openly are more likely to retain good talent. However, it can be noted that such codes can be
Employees who don’t believe the reward system is cumbersome, contradictory and ultimately
fair won’t be fully engaged at work. ineffective when people, including supervisors who
cannot enforce the codes and still have a productive
7. Positive work environment workplace, abandon them in favor of “common
- Employees are required to behave ethically from sense”. On the other hand, a company in which the
the first interview. Ethical employees are perceived value of honesty is embedded and appreciated can
as team players rather than individuals. You develop result in a culture where no one would consider
positive relationships with colleagues. Their bosses taking a pen.
trust them with confidential information, which
often gives them more autonomy. Employees who 3. Unethical Corporate Behavior
are caught lying by their superiors have limited In some cases, codes of conduct may facilitate
opportunities for advancement in the affected unethical corporate behavior. Codes of conduct that
organization and risk being fired. An extreme case limit employees ability to speak out against the
of bad ethics is employee theft. corporation can keep them quiet for fear of job loss
or legal retribution even if the company is engaging
8. Avoid Legal Issues in an unethical practice. Further, codes of conduct
- Business owners often take shortcuts in pursuit of can be used to set ethical-looking rules that
profits, such as not fully complying with managers are instructed not to follow so if any
environmental regulations or labor laws, ignoring misconduct occurs it is the individual employee, not
worker safety risks, or using standard materials in the corporation that will be blamed.
their products. You may want to remove it. The
penalties if you are caught can be severe, including 4. Lack of Stability
court costs, fines, and sanctions from government Although many codes of conducts are developed out
authorities. The resulting negative publicity can of corporate values, mission statements and even
cause lasting damage to a company's reputation and past incidents of company impropriety, there is
is even more costly than legal fees and fines. rarely anything holding corporations to their own
codes of conduct. In other words, they are not stable,
Disadvantages of an Employee Code of Conduct and owners or boards of directors can revise them to
1. Inequality include the company’s current needs and desires--be
Codes of conduct are often drafted, in part, to ensure they ethical or not—at any time.
that all members of an organization are treated
equally. However, often those in upper-level
management and creative positions are given a
“bye” on certain codes, like those restricting how the
workers talk about the company or to what degree
employees are allowed to have personal
relationships outside the work. Accordingly, if
companies are going to have codes of conduct they
should reconsider any code that cannot be applied
equally.

2. Unenforceability
Some codes of conduct, perhaps because of
employee misconduct in the past, take a
micromanagement approach, dictating detailed
minutiae like the kinds of material that can be worn
in the office or the exact length of personal phone