Main Ethical Concerns of the Philippine Society in relation to Business

Sison & Palma-Angeles(1997)

1. Rapid growth and liberation of the economy

Globalization
 ushered influx of foreign goods and greater market competition promise
 but small businesses are eaten up by giant multinational corporation
 also promoted consumerist and materialist culture

2. Inequitable distribution of wealth

Economic growth and development

 not really felt by those who are at the bottom

Widening gap between rich and poor

 more evident
 businesses are caught up with more unethical practices like labor exploitation

3. Environmental destruction

Modern infrastructures and rise of commercial establishments in urban spaces

 cannot be accepted as absolute indicator of genuine development

 if there is degradation in the environmental system

4. Corruption

Not only in government but also in the business sector,

Corruption

 rampant
 resulted to more company hiring business ethics consultant and developing their code of
ethics with corporate social responsibility

Bigger challenge

 applying the trainings on ethical conduct

 to daily decision
 build an ethical culture inside the firm

Filipino Value System

Felipe Lando Jocano, (Fil.Anthropologist, teacher and scholar)

 authored the book Filipino Value System (1997) that translates “value’ as:

A. Kahalagahan
  merit, significant, worth or price we give to object, sentiments and actions

B. Pamantayan

 from “pantay” means aligned or at the same level

 more fitting translation of value

Value

 standard we use as the basis of making decisions, choices and preferences

 Something positive and desirable
 there is no such thing as a negative Filipino value
 but only wrong use of the values due to foreign influence

3 BASIC ELEMENTS OF ‘PAMANTAYAN’ / VALUE

1.Halaga (Evaluative Core )

2. Asal (Expressive Core)

3. Diwa (Spiritual Core)

1. Halaga (Evaluative Core )

Filipinos

 Value “protecting the face”

 always think how people will feel

In business setting

 we do not simply confront an employee who obviously did a mistake

2. Asal (Expressive Core)

A person with mabuting asal (good moral character) has the standards of 1. Pakikipagkapwa
(Interpersonal Relationship)

2. Damdamin (Emotional Standard

3. Dangal (Moral Standard

3. Diwa (Spiritual Core)

 Related to soul
 provides the meaning of one’s action and life
 where we encounter the divine, and the source of strength to encounter trials

CORE TRAITS OF SUCCESSFUL FILIPINO WORKER , Jocano(1997)

Personal Traits

1. Katimpian (self-discipline)
2. Kapunyagian (perseverance)
3. Kasipagan (industriousness)
4. Katiyagaan (patience)
5. Katapatan (commitment)
6. Kagitingan (integrity)

Relation Traits

1. Marunong makisama (Able to get along with others)

2. Marunong makitungo (flexible)
3. Marunong makiramay (emphatic)
4. Madaling lapitan (approachable)
5. Madaling kausapin (easy to talk to)
6. Matulungin (helpful; supportive)
7. Masayahin (happy disposition; collegial)

Team Traits

1. May pagkabahala (concerned)

2. May paggalang (respectful)
3. May pananagutan (accountable)
4. May pagkalinga(caring)
5. May pagkikibaka (involved)
6. May pagmamalasakit (selfless)
7.

Ethics
 not just about non-violation of ethical codes about practicing values that enhance our
humanity

In Jocano’s book “Towards Developing a Filipino Corporate Culture” (1999),

 Western business management clashes with Filipino culture
 because we are subjective, personal and familial
 Therefore, managers should consider Filipino value system in the practice of business relations

Other Filipino Values

1. Family and Kinship

2. Kapwa

3. Damdamin
4. Bahala Na

5. Dangal

6. Relationship with God

1. Family and Kinship

 “The duties that arise from family relations are over and above what the law or strict justice
may dictate“(Sison,1997)
 One must be loyal to the family

Many businesses consider nepotism as violation

 managers should try to understand kamag-anakan system and put it in proper context

2. Kapwa

 “of the same nature” ,

 “of equal status”
 (Kaklase, kababayan,kapitbahay)

Pakikipagkapwa

 conviction that the other, though belonging to a different region, is a fellowman

 A human being who deserves to be respected, attended to and loved” (Manuel Dy,U.D.)
 Not just negative connotation of blind conformity
 but rather a willingness to subordinate in favor of others, in the spirit of harmony, friendship,
cooperation and deference to majority decision so that group goals can be easily achieved.
(Jocano,1997)

3. Damdamin

 emotion or feeling

Filipinos use rationality

 but often involve deep emotionalism

 more inclined to ethics of care and the ethics of virtue rather than utilitarianism and
deontological ethical theories

From damdamin comes

 the understanding of hiya(shame)

 Filipinos do not like to offend or shame people

4. Bahala Na
  has three meanings

1. Negative - Simply leaves everything to chance, lacks the initiative

2. Bathala means God, relies on God to solve his/her problem

3. Positive - Inner strength to dare, to take risk

5. Dangal (honor, dignity, or reputation)

o “Hindi na baleng mahirap, basta marangal”, knowing what is morally right.

People in the business world

 challenged to keep their dangal in spite of temptations for pure profit-seeking

 at the expense of trampling on other people’s rights, violating principles of truth and justice,
and destroying the environment

6. Relationship with God

Filipinos

 value their relationship with God

Important events

 interpreted as having the “hands of God” at work in human affairs

Jaime Bulatao, a Filipino scholar observed split-level Christianity(religiosity)

o A double standard morality or moral hypocrisy where Filipinos are religious but at the same
time violating ethics and justice

Ethical Issues in Consumer Relations

Most common ethical issues regarding seller –buyer relationship :

A. Consumer Protection
1. Market Approach
2. Contract Approach
3. Due Care Approach
4. Social Costs Approach

B. Advertising Ethics
1. Ethical implications of an advertisement
 2. Consumer Bill of Rights

C. Marketing to Children
1. Code of Ethics promulgated by the Advertising Board of the Philippines

D. Fair and Just Price

2. Three conditions of fair pricing

Fall under marketing ethics

o subdiscipline within the field of business ethics

A. Consumer Protection

1. Market Approach

 assumed that the free market will ensure the protection of the buyers from unreasonably high
prices and low-quality and hazardous products
 assumes that there is less need for government intervention to assure product safety and
quality

o The natural laws of the market would be enough, and the demands of the consumers would
become the guiding principle for the sellers

 will not be beneficial to the consumers

 because there is a need to clearly define the duties of both the seller and the buyer
 (when it comes to protection from the potential harms that products can cause)

Weakness of Market Approach

 assumes that there is perfect competition in the market economy. But this is a wrong
assumption

Reasons that prove that there is no perfect competition:

a. Buyers often lack information regarding the details of the products due to their complexity

b. Many consumer markets are usually monopolies and oligopolies

Monopoly

 single firm produces the entire market supply of a good or service

Oligopoly

 few sellers control most or all the market and sell similar or identical products

To further prevent further injustice, business ethicists had developed three approaches:

2. The Contract Approach

3. The Ethics of Due Care

4. The Social Costs Approach

2. The Contract Approach

 claims that sellers and buyers always enter into a contractual agreement
 Even if there is no written contract, the agreement is implied

Seller

 duty-bound to deliver safe and value-for-money products and services

Buyer

 protected because the seller makes a promise

Four important duties of business

1. Duty to comply with express and implied claims of reliability, service life, maintainability and safety

2. Duty of disclosure

3. Duty not to misrepresent

4. Duty not to coerce

1. Duty to comply with express and implied claims of reliability, service life, maintainability and safety

 pertains to the seller’s moral obligation to deliver what it claims to be the products’ features

For reliability

 it will function in a particular manner that the buyer is led to believe

For service life

 used effectively for a period

For maintainability

 pertains to the comfort of repairing the product and maintaining it in proper condition

For safety

 refers to the duty of the seller to make the product as safe as possible

2. Duty of disclosure

 pertains to the seller’s moral obligation to

 reveal the relevant facts about the products and the terms and conditions of the sale

3. Duty not to misrepresent

 pertains to the seller’s deliberate

 attempt to deceive and mislead the buyer just to sell the product

Bait-and-switch tactic

 involves an advertiser luring customer into the store by offering a product at an unrealistically
low price (the bait)

4. Duty not to coerce

 pertains to the moral obligation of the seller

 not to take advantage of a buyer’s fear, emotional stress, immaturity and ignorance that may
hinder the buyer’s ability to choose freely whether to buy or not to buy

3. Due care approach

 Buyer and the seller are not on equal footing

Seller

 always more knowledgeable about the details of the product

Buyer

 relies on the expertise of the manufacturer and to a certain extent of the retailer

There will always be information asymmetry

  situation when “two parties do not possess the same information or do not have the same
access to information

Ethics of due care

 states that the seller has the duty to take all the necessary precautions
 so that the buyer will not be harmed by the product

Caveat emptor (let the buyer beware)

 duty of the buyer to check the product if it is of good quality

Caveat vendor (let the seller beware)

 duty of the seller to assure that the product is safe and not defective

Duty of due care

 when the manufacturer specifies the hazards of the product through warning labels and clear
instructions

Failure to take “due care”

 breach of moral duty

 violates the rights of the consumer who may be injured

4. Social Costs Approach

 manufacturer has full responsibility for all the harms that the product may cause the buyer
 calls this the strict products liability
 doctrine that the seller of a product has legal responsibilities to compensate the user of that
product for injuries suffered

Social cost

 part of the cost to be shouldered by the manufacturer

Safe products

 Expected
 consumers are protected from harm,
 manufacturers gain the full trust of the consumers
Limitations of social costs approach

1. Injustice to the manufacturer

 Since one has a moral responsibility,

 Only the harmful effect is foreseeable and he or she did nothing to prevent it.

2. Not assure that accidents will

not happen

 could make consumers more complacent and irresponsible

 since they can get manufacturer can be liable.

3. Small businesses

 would not be able to afford high insurance expenses

The Consumer Act of the Philippines

In the Philippines, the fundamental law that protects the rights of the consumers is Republic Act 7394
(The Consumer Act of the Philippines). Its main objectives include the following:

1. Protection against hazards to health and safety

2. Protection against deceptive, unfair, and unconscionable sales acts and practices

3. Provision of information and education to facilitate sound choice and the proper exercise of rights
by the consumer

4. Provision of adequate rights and means of redress

5. Involvement of consumer representatives in the formulation of social and economic policies