CONTROL NO.

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MODULE IN
GE 8: ETHICS
LESSON 9
(BUSINESS ETHICS)
FINAL

Name:
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Year & Section:
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Contact Number:

JOHN SYREL HUQUIRE PABILONA, RL

Teacher
TOPIC: (BUSINESS ETHICS)

GE 8: ETHICS | JOHN SYREL PABILONA 1

Objectives:

 Define business ethics,

 Explain the theories of business ethics,
 Identify the 4 p’s of marketing,
 Discuss the 5 stages of Corporate Ethical development; and
 Give business ideas based from business ethical standards.

Introduction:

Ethics consists of the standards of behaviour to which we hold ourselves in our

personal and professional lives. It establishes the levels of honesty, empathy, and
trustworthiness and other virtues by which we hope to identify our personal behaviour
and our public reputation. In our personal lives, our ethics sets norms for the ways in
which we inter act with family and friends. In our professional lives, ethics guides our
interactions with customers, clients, colleagues, employees, and shareholders affected
by our business practices. According to John Donaldson (1989), ‘Business ethics in
short can be described as a systematic study of moral (ethical) matters pertaining to
business, industry or related activities, institutions or practices and beliefs’. In defining
business ethics Laura Nash (1990) observed that the moral standards of business are
not different to that of an individual. ‘It is the study of how personal moral norms apply to
the activities and goals of commercial enterprise.
It is not a separate moral standard, but the study of how the 2 business context
poses its own unique problems for the moral person who acts as an agent of this
system’. Similar view was voiced by Strenberg (1994). He also opined that ethics mainly
refers to distributive justice in deciding the business activities. ‘Business ethics applies
ethical reasoning to business situations and activities. It is based on a combination of
distributive justice – that is, the issuing of rewards for judgment that is placed on all
activities’. ‘Organizational ethics is concerned with good and bad or right and wrong
behavior and practices that take place within a business context. Concept of right and
wrong is increasingly being interpreted today to include the more difficult and subtle
questions of fairness, justice and equality’.

ACTIVITY NO.1: There is an on-going debate about the success of having a business
and being a full-time employee. For you, what is best in the pursuit of your success?
Provide both advantage and disadvantages of putting-up business or career using the
table below. (10 POINTS)

GE 8: ETHICS | JOHN SYREL PABILONA 2

 ADVANTAGE

BUSINESS
DISAVANTAGE

ADVANTAGE

CAREER
DISADVANTAGE

ASSIGNMENT: Identify the 4 P’s of marketing and give example of each. (10 POINTS)
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5 STAGES OF CORPORATE ETHICAL DEVELOPMENT

Reidenbach & Robin’s model proposes that there are five stages of organizational
morality and ethics. Organizations typically progress through these as they develop,
though not all organizations pass through all of the stages.

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At the lowest stage, referred to as “amoral”, an organization’s concern for profits far
outweighs its concern for ethics.

Organizations demonstrate an increasing concern for ethics at the cost of profit as they
progress through the “legalistic”, “responsive” and “emerging ethical” stages of moral
development.

Once organizations have fully balanced their

concern for ethics and profits, they have
reached the last stage or moral development
and are considered to be “ethical”
organizations.

The model argues that an organization’s

culture (the shared values and believes of its
members, or ”the way we do things here”),
which is heavily influenced by leadership
role-modelling, is the foundation on which
organizational morality develops. The model
was inspired by theories of personal moral
development.

Stage 1 – Amoral organizations

The lowest level of organizational development occurs in Amoral organizations. At this

level the only concern the organization has is for profit and it will break any ethical or
moral rules in the pursuit of that profit. Organizations like this typically don’t last long.

Stage 2 – Legalistic organizations

The lowest level of sustainable moral development for organizations occurs in

Legalistic organizations. Organizations at this stage understand the rules and adhere to
existing legal and regulatory frameworks. They’re often willing to stay just on the right
side of the law in their pursuit of profits. These organizations adhere to laws not through
any form of ethics or morality, but simply because doing so is their only route to
sustainable profit.

Stage 3 – Responsive organizations

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The middle level of organizational morality sees the emergence of Responsive
Organizations. While these organizations are still highly focused on profit, there’s an
increasing awareness of morality and a desire to “do the right thing” where possible. At
this stage, organizations are responsive in their morality and not yet proactive and
seeking to be moral and ethical leaders.

Stage 4 – Emerging ethical organizations

The penultimate stage of moral development results in Emerging Ethical Organizations.

At this stage organizations nearly balance their concern for morality and profit. These
organizations increasingly and proactively consider morality and ethics in their strategic
and operational decisions. They usually look to undertake their business ethically as a
matter of principle and these behaviors start to permeate their wider organizational
culture.

Stage 5 – Ethical organizations

The ultimate stages of moral development that organizations can achieve are reflected
by Ethical Organizations. At this stage an organizations concern for ethics is perfectly
balanced with their concern for profits. Decisions about the organization’s direction and
operations are all made with concern for their ethical impact, and the leadership
demonstrate and role-model high levels of morality. These organizations are moral
leaders within their industries and their internal cultures are highly moral.

ACTIVITY NO.2: If you will be putting-up a business, what type of business would you
like and what kind of qualifications will you look if you will be hiring employees based
from ethical standards?
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GE 8: ETHICS | JOHN SYREL PABILONA 5

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