11

CHAPTER II

REVIEW OF RELATED LITERATURE AND STUDIES

Related Literature

The following articles consist of the same topic as the research.

Thus, it is deemed by the researchers to be relevant for this study.

Behavioral Management Theory

The behavioral management theory is often called the human

relations movement because it addresses the human dimension of work.

Behavioral theorists believed that a better understanding of human

behavior at work, such as motivation, conflict, expectations, and group

dynamics, improved productivity.

Elton Mayo's contributions came as part of the Hawthorne studies,

a series of experiments that rigorously applied classical management

theory only to reveal its shortcomings. The Hawthorne experiments

consisted of two studies conducted at the Hawthorne Works of the

Western Electric Company in Chicago from 1924 to 1932. The first study

was conducted by a group of engineers seeking to determine the

relationship of lighting levels to worker productivity. Surprisingly

enough, they discovered that worker productivity increased as the

lighting levels decreased — that is, until the employees were unable to

see what they were doing, after which performance naturally declined.
 12

In this case, Mayo and Roethlisberger concluded that the increase in

productivity resulted from the supervisory arrangement rather than the

changes in lighting or other associated worker benefits. Because the

experimenters became the primary supervisors of the employees, the

intense interest they displayed for the workers was the basis for the

increased motivation and resulting productivity. Essentially, the

experimenters became a part of the study and influenced its outcome.

This is the origin of the term Hawthorne effect, which describes the

special attention researchers give to a study's subjects and the impact

that attention has on the study's findings7. The mentioned article gives a

more thorough definition on behavioral management theory, thus giving

the researchers a much clearer understanding of it.

Hierarchy of Needs

Abraham Maslow, a practicing psychologist, developed one of the

most widely recognized need theories, a theory of motivation based upon

a consideration of human needs. His theory of human needs had three

assumptions:

 Human needs are never completely satisfied.

 Human behavior is purposeful and is motivated by the need for

satisfaction.
 13

 Needs can be classified according to a hierarchical structure of

importance, from the lowest to highest.

Maslow broke down the needs hierarchy into five specific areas:

 Physiological needs. Maslow grouped all physical needs necessary

for maintaining basic human well‐being, such as food and drink,

into this category. After the need is satisfied, however, it is no

longer a motivator.

 Safety needs. These needs include the need for basic security,

stability, protection, and freedom from fear. A normal state exists

for an individual to have all these needs generally satisfied.

Otherwise, they become primary motivators.

 Belonging and love needs. After the physical and safety needs are

satisfied and are no longer motivators, the need for belonging and

love emerges as a primary motivator. The individual strives to

establish meaningful relationships with significant others.

 Esteem needs. An individual must develop self‐confidence and

wants to achieve status, reputation, fame, and glory.

 Self‐actualization needs. Assuming that all the previous needs in

the hierarchy are satisfied, an individual feels a need to find

himself.7

The mentioned theory gives researchers an insight upon how each

level of needs can motivate one’s employee.

 14

Theory X and Theory Y

Douglas McGregor was heavily influenced by both the Hawthorne

studies and Maslow. He believed that two basic kinds of managers exist.

One type, the Theory X manager, has a negative view of employees and

assumes that they are lazy, untrustworthy, and incapable of assuming

responsibility. On the other hand, the Theory Y manager assumes that

employees are not only trustworthy and capable of assuming

responsibility, but also have high levels of motivation.

An important aspect of McGregor's idea was his belief that managers who

hold either set of assumptions can create self‐fulfilling prophecies — that

through their behavior, these managers create situations where

subordinates act in ways that confirm the manager's original

expectations7. The mentioned theory gives researchers a deeper

perspective between Theory X and Theory Y when it comes to different

approaches of the two in handling its employees.

Business Ethics

Business ethics is the study of appropriate business policies and

practices regarding potentially controversial subjects including corporate

governance, insider trading, bribery, discrimination, corporate social

responsibility, and fiduciary responsibilities. The law often guides

 15

business ethics, but at other times business ethics provide a basic

guideline that businesses can choose to follow to gain public approval.

This is to ensure that a certain basic level of trust exists between

consumers and various forms of market participants with businesses.

For example, a portfolio manager must give the same consideration to

the portfolios of family members and small individual investors. These

kinds of practices ensure the public receives fair treatment.

The concept of business ethics began in the 1960s as corporations

became more aware of a rising consumer-based society that showed

concerns regarding the environment, social causes, and corporate

responsibility. The increased focus on so-called social issues was a

hallmark of the decade.

Since that time period, the concept of business ethics has evolved.

Business ethics goes beyond just a moral code of right and wrong; it

attempts to reconcile what companies must do legally versus maintaining

a competitive advantage over other businesses. Firms display business

ethics in several ways8. The mentioned article gives a more narrowed

definition about Business Ethics thus, it gives a small background about

it.

Managerial Behavior and Decision making 

 16

Organizations need managers who are able to contribute

significantly to the attainment of organizational goals. It is therefore

necessary for organizations to select, train, develop and promote people

who will be able to make such a contribution. The question “what makes

a manager effective” remains largely unanswered, despite numerous

studies of managerial behavior, management styles and managerial

effectiveness. Such studies have shown us what managers do and how

they do things, but the effectiveness of these actions is still elusive.

Important conclusions from these studies are firstly that situational

factors are generally considered important in determining effectiveness.

Secondly, effective managers have a broad repertoire of behaviors at their

disposal. Finally, effective managers use situational factors to determine

which behavior is appropriate in a particular setting. These conclusions,

however, do not give an insight into the covert processes behind effective

managerial behavior9. The literature that was mentioned gave the

researchers a more thorough understanding of how behavioral

management can significantly influence the operation of a business.

 PHILOSOPHY AND FILIPINO VALUES

A brief introduction to the philosophy of human values is necessary

for an understanding of Filipino values and values education. A Filipino

experiences family closeness and solidarity (pagpapahalaga sa pamilya),

politeness (use of po or ho), hospitality (tuloy po kayo), gratitude (utang

 17

na loob) from "within", that is, subjectively and emotionally, unlike a

non-Filipino observer, social scientist, or psychologist who studies

Filipino values objectively from "without" or "from a distance". Such

Filipino values as social acceptance, (pakikisama, amor propio, economic

security, pagmamay-ari), and trust in God (paniniwala sa Diyos,bathala

or Maykapal) find their philosophical basis in man's dynamic openness

toward nature and the world (e.g., the value of hanap-buhay ng

magsasaka), one's fellow man (the values of paggalang, hiya, katarungan,

pag-ibig), and God (the values of pananampalataya, panalangin,

kabanalan).

This dynamic openness of man is an openness to the possibilities of

the future. That is why values are something to be realized. Take the

value of peace. The Philippine situation is now characterized by

insurgency; conflict between the NPA, the MNLF and the AFP; vigilante

groups; hostility and division--in short, an absence of national peace and

order. Human values are not merely private. All values have a social

aspect. The government official who demands porsiyento, the fireman or

policeman who extorts tong or lagay for a service which is his duty, all

contribute to the worsening graft and corruption. We are all responsible

for one another (tayong lahat ay may pananagutan sa isa't-isa).

Values are both subjective and objective. They involve a subject or

person who values (e.g., a young girl) and an object or value to be

 18

realized (e.g.,pagkamahinhin). Justice is objective because it is a value

that should be realized by all. It also becomes subjective if justice

becomes a value for me. There is an objective difference between value

and disvalue, pleasure and pain, life and death, poverty and affluence,

heroism and cowardice, truth and error, right and wrong, holiness and

sinfulness. The difference is not only in the mind or a matter of personal

taste or preference. Even if I close my eyes to the ugly poverty around

me, the poor will not disappear.

Values are not objective in the sense that they are found in some

static heaven: they are relational and embodied in person-value-types

(ideal moral persons). For example, to a tipong-mukhang kuarta [an

avaricious look] profit is more important than service; to a tipong-politiko

[political type], pera [money], propaganda,politika [politics] are more

valuable than honesty; tipong siyentipiko [scientist type] or tipong-artista

[actor type] personify agham [science] and sining [art];tipong madasalin

[pious type] may exemplify kabanalan (piety). Cory Aquino embodied all

that we wanted our President to be--credible, honest, just, with a strong

faith in God and in our people. The ideal type or Filipino model during

the "parliament of the streets" was the tipong-maka-Diyos (religions),

makatao(people-oriented), makabayan (nationalistic) 10. The mentioned

literature helps researchers in understanding filipino philosophy,

specifically its values.

 19

Related Studies

The succeeding studies are identified by the researchers wherein

behavioral management and ethics basically are being observed in a kind

of major way. Furthermore it can guide the researchers in conducting the

study, which literally is fairly significant.

In a recent study, a group of researchers conducted a study about

the management status of Walmart in the US. Furthermore, they stated

how the business is not doing well considering the feedback from the

employees it was handling. They stated that the dynamic business

environment has created a number of challenges for today’s

organizations. The shifts in the multicultural approach and socio-

economic structure have resulted in the changes in needs of the

employees and in the factors that motivate them to perform well in the

workplace. The company is also encountering some issues in the context

of Walmart organizational behavior. Additionally, the employees working

at Walmart have reported the discrimination issue which affects them

and their work performance. The strategy of cost cutting through offering

lower wages and the adoption of authoritarian culture are the major

organizational issues faced by the companies. However, the employee

dissatisfaction has been further increased due to the incidents of

discrimination in the organization which has also created a negative

impact on the reputation of Walmart. Gender discrimination can be

 20

defined as the actions makes specific denial of privileges, opportunities,

or rewards to a group or a person due to their gender. Every organization

practices its unique style of leadership along with developing their

specific culture. Over a passage of time, Walmart has developed an

authoritarian culture where the leader has the ultimate decision making

ability and there is centralization of power. Authoritarian culture puts

more emphasis on discipline and obedience among the employees. In

simple words, this type of culture implies that a leader is capable of

understanding what is good for the company and will always cater the

interest of the organization (Becton, Carr, Mossholder and Walker, 2017).

The store level management in Walmart is being pressurized due to the

authoritarian culture for the purpose of increasing the productivity of the

lower level managers, workers and the stockers. Various problems have

emerged as a result of the hyper centralized management created at

Walmart. The workers are not able to share their viewpoints due to the

workplace conditions. As per the readings obtained to develop this study

on Walmart organizational behavior, there is one way communication

system followed at the organization which only focuses on providing the

instructions to the subordinates. Also, the authoritarian culture at

Walmart has left it with no scope for innovation which is creating a

negative impact on the future growth of the company (Caraway, 2016) 11.

The study helps researchers about how authoritarian culture inspected

in Walmart affects the security and welfare of its employees.

 21

A related study was conducted by Espejo, Abigael C. It is entitled

“The Filipino Family and its Influence on Business Ethics”. Ethical

practices in the organization are highly influenced by the behavior of

both customers and employees. What is often overlooked, however, is

how the owners of family-owned businesses influence the ethical nature

of the entire organization. Defining business ethics requires an

understanding of the interaction of the two separate concepts that make

them up: business (organizational entities that share a common goal:

maximizing the shareholder’s value) and ethics (moral principles of

defining what is right or wrong behavior). It refers to the application of

the analysis on making business decisions according to moral

principles. Business ethics in the Philippines is highly embedded on the

country’s geography, demographics, culture and history. The country

generally follows Catholic-based ethical practices, as influenced by the

300-year Spanish invasion strategy. This influence steams not only

through the business ethical standards, but through the formulation of

laws and policy guidelines as well. Based on the Catholic doctrine, the

most common judgement basis of business ethics lies on the concepts of

what is makasalanan (sinful) and what is mabuting gawa (virtuous

action).  However, the country’s geographical spread, language

differences, and diversified traditions and practices, contribute on the

 22

complex perspective on business ethics, which may include the

following: 

-what is tama (right, correct) and what is mali (wrong)

-what is pwede (allowed) and what is bawal (prohibited) 

-what is mabuti (good) and what is masama (evil) 

-what is makatarungan (deserved) from what is not12

This study opens up its doors to the researchers in understanding

how certain family customs influence the ethical nature of the entire

organization.

Synthesis of the State-of-the-Art

The cited related literature helped the researchers in fully

understanding the theme of the study and how it really applies in most

businesses. Understanding first the uses of behavior management as

well as ethics will give a much wider idea on how those things are of use.

Furthermore, the cited related literature also helped the researchers in

formulating the theoretical and conceptual frameworks of this study.

As for the related study, the researchers found a study on the

behavior management and ethical ways in Walmart. Though the

researchers expected the results to be more on how behavior

management and ethical ways in Walmart effectively helps the business

as well as the employees working. Because of this, it gave the researchers

 23

the idea that not all businesses are fully aware of the current status of

the employees as long as the business is operational. Additionally, the

researchers also found a study which talks about the ethical practices of

the businesses in the Philippines. It briefly stated the historical

background of the origin of ethical behaviors, whereas the country

followed Catholic practices that were influenced by Spaniards.  It also

explained that, depending on the geographical location, demography,

culture, and history, different forms of ethical practices are observed. 

Research Gaps

Though there are many articles that for all intents and purposes

talk about behavioral management and ethics, the researchers find it

difficult for all intents and purposes to look for studies that really relate

to the said topic specifically in Sorsogon. However, the researchers found

one study which talks about business ethics and geography in the

Philippines.

It is important to note that it is rare for people to conduct a study

about behaviors and ethics in the Philippines, specifically to the

identified locale which is Sorsogon City, due to some unavailability of

tools and equipment in conducting so. That is why our team is having

trouble correlating / juxtaposing information; preventing us from

creating a coherent content.  As for us, we will continue to conduct the

proposed study in order to gain additional knowledge and understand

 24

why conducting a research on behavior and business ethics can help any

types of businesses specifically in Sorsogon. 

Definition of Terms

The following important terminologies used in this study are

further explained by the researchers. This is for the purpose of letting the

readers easily understand the things being talked about in the study.

 Behavioral Management. A method of behavioral modification

which focuses on maintaining order. It is less severe than

structured behavior modification and is focused on shaping and

maintaining positive behaviors while discouraging negative

behaviors13. This is basically how the managers treat their

employees in order to have a healthier work environment.

 Ethics and Business Ethics. Ethics, as defined in the Merriam

Webster Dictionary, is a set of moral principles14. Business ethics

on the other hand, is the study of appropriate business policies

and practices regarding potentially controversial subjects including

corporate governance, insider trading, bribery, discrimination,

corporate social responsibility, and fiduciary responsibilities. 14

Ethics generally means doing the right thing. Business ethics, on

the other hand 

 Managerial Behavior. Implementation of motivation, ability and

opportunity in status-quo daily organizational operations 16. This is

 25

how the managers implement regulations to influence the

effectiveness of their employees.

 Decision Making. It is a process often used by the managers in

making decisions for the sake of the business.

 Operation of a Business. It is the function of the business which

includes the workers, managers, and the machines working

together to keep the business alive.

 Values. Are core beliefs and practices from which people operate.17

 Philosophy. Is an activity people undertake when they seek to

understand fundamental truths about themselves, the world in

which they live, and their relationships to the world and to each

other.18

 Customs - defined as a cultural idea that describes a regular,

patterned behavior that is considered characteristic of life in a

social system.19

 Hierarchy of Needs - A theory proposed by American psychologist

Abraham Maslow that categorizes human desires by the force and

necessity of the desire. It is most frequently arranged as a pyramid,

with the most important needs at the bottom.20

 Managerial Posture / Style. - is a way in which a manager works to

fulfill their goals. Management style includes the way that a

manager plans, organizes, makes decisions, delegates, and

manages their staff.21

 26

 Organization - such as a company, an institution, or an

association – comprising one or more people and having a

particular purpose.22

Theoretical Framework

The study focuses on how the manager and the employees improve

the business in line with their behavior. Additionally, it also focuses on

the business ethics that are being implemented by the manager taking

into account the culture and beliefs of their employees in order to have a

healthy work environment.

The study will take its point on behavioral management theory of

Mary Parker Folett. Follett thought that workers of all levels should

integrate to reach the organization's goals. If conflict arises, there should

be a conscious effort to pull instead of push, and to work together as a

team. Because each member is doing their part, overall, they'll be more

likely to be content with the result. Furthermore, group power should be

valued over personal power. Organizations do not exist for one person's

benefit, but rather the entire company of workers. If this selfless mindset

prevails, then all workers will feel like they're on the same team, rather

than in competition with each other.23

There are two theories supporting the main theory that was

discussed. Maslow’s Hierarchy of Needs7 is a theory that focuses on the

basic, to a more complex needs of the employees. It states that there are
 27

three categories of needs of every employee, namely; basic needs,

psychological needs, and self-fulfillment needs. (1)The basic needs

include physiological needs like food, water, and shelter. It also includes

the safety needs where security and safety is to be given. (2)Next are the

psychological needs, where belongingness and love needs as well as

esteem needs are included. Under belongingness and love needs, it

includes the intimate relationships and friendships of the employees. On

the other hand, esteem needs include prestige and feeling of

accomplishment. (3)And the third category is the self-fulfillment needs

where it is the peak of all the categories. This category includes achieving

one’s full potential and including creative activities.

Theory X and Theory Y7 are the other supporting theories. This is

focused more on the manager rather than the employees. To give more

an in-depth look at the two theories, Theory X style, has a negative view

of employees (pessimist) and assumes that they are unmotivated,

untrustworthy, and incapable of assuming responsibility. As a result,

they think that team members need to be prompted, rewarded or

punished constantly to make sure that they complete their tasks. On the

other hand, the Theory Y manager assumes that employees are not only

trustworthy and capable of assuming responsibility, but also have high

levels of motivation.

The schematic illustration of the theoretical framework of the

study is shown in figure A.

28
 29

Conceptual Framework

Every business operation is dependent on the way the manager

handles its employees. If the manager doesn’t take into account their

comfort, the business that they are handling will most likely fail with the

reason that the employees find it difficult to work in an environment

where they feel discriminated against. Furthermore, every business is

always affected by a number of factors, both internal and external. These

internal factors are factors that are within reach of the firm or able to

manage and be controlled in no time. On the other hand, external factors

are the phenomenon that cannot directly be controlled by the firm.

As the process evolves, we’ve determined some underlying factors

which directly affect the overall productivity in the workplace, specifically

on the employee section.   The internal factors, however, will be

categorized in two; positive and negative. The positive internal factors are

those that can benefit the employees as well as the business itself. These

factors include the hierarchy of needs, good allocation of jobs, and

participative leadership style. On the other hand, negative internal

factors include a toxic work environment, poor human resource

 30

management, and a delusional manager. These are the factors that affect

the employees in a negative way, thus also affecting their performance.

Furthermore, there are external factors that affect the business and its

operation from the outside. It includes; economic issues whereas it limits

the operation of the business in terms of manpower, technological

deficiency, seasonal/climatic factors, change in employment regulation,

and economic discrimination this passes down directly to the department

of labor and employment, reducing the efficiency in production. 

The researchers also believed some certain variables within the

business profile of a particular organizational institution are vital to the

success and are critical to the failure of its operations. Business profile

may be characterized by the following indicating variables, to wit: (a)

Type of organization, (b) form of business organization, (c) Organizational

structure, (d) Products offered, and (e) Number of Manpower

The schematic illustration of the theoretical framework of the

study is shown in figure B.

 31

NOTES
7
https://www.cliffsnotes.com/study-guides/principles-of-

management/the-evolution-of-management-thought/behavioral-

management-theory
8
https://www.investopedia.com/terms/b/business-ethics.asp 
9
https://link.springer.com/chapter/10.1007/978-94-015-9827-

9_11
10
https://www.scribd.com/document/408836546/Philosophy-

and-Filipino-Values
11
https://www.totalassignmenthelp.com/free-sample/walmart-

organizational-behaviour-and-leadership
12
https://www.cfainstitute.org/-/media/regional/arx/post-

pdf/2017/10/13/the-filipino-family-and-its-influence-on-business-

ethics.ashx#:~:text=Business%20ethics%20in%20the

%20Philippines,300-year%20Spanish%20invasion%20strategy.
13
https://www.alleydog.com/glossary/definition.php?

term=Behavioral+Management#:~:text=Behavioral%20management%20is
 32

%20a%20method,behaviors%20while%20discouraging%20negative

%20behaviors.
14
https://www.merriam-webster.com/dictionary/ethic
15
https://www.investopedia.com/terms/b/business-

ethics.asp#:~:text=Business%20ethics%20is%20the%20study,social

%20responsibility%2C%20and%20fiduciary%20responsibilities.
16
https://www.igi-global.com/dictionary/managerial-

behavior/55895
17
http://psychology.iresearchnet.com › cultural-values
18
https://philosophy.fsu.edu/undergraduate-study/why-

philosophy/What-is-Philosophy 
19
https://www.thoughtco.com › Sociology › Key Concepts
20
https://www.simplypsychology.org › maslow
21
https://www.lawinsider.com › Dictionary
22
https://www.valamis.com › hub › management-styles
23
https://www.business.com/articles/management-theory-of-

mary-parker-follett/