BUSINESS ETHICS

AND SOCIAL RESPONSIBILITY

CORPORATE SOCIAL RESPONSIBILITY
Businesses have legal obligations to obey laws AT THE MINIMUM. They also have economic
responsibility to produce goods and services to society's demands. However, beyond legal and
economic duties, many business oganization exert efforts to give back to the society

Cporate Social Responsibility refers to:

• Practices and activities that business organizations adopt in the course of their operations.
• These practices and activities have social and environmental impacts and relevance

Practicing CSR means business organizations commit to developing business policies and business
practices that ensure:

• Sustainability of environmental resources;

• Ethical treatment of employees; and
• Protection of community welfare

Business organizations have at least three social responsibilities that are described in three levels,
basing on how demanding or binding the responsibility is.
1. Duty not to cause harm to others;
2. Prevent harm at all cost; and
3. Responsibility to do good
SOCIAL RESPONSIBILITIES
DUTY NOT TO CAUSE HARM
• Duty not to cause harm even if an action may result in avoidable harm is not explicitly prohibited by the law.
• If a company caused harm to a property or person, and if the harm could've been avoided by exercising due
care or proper planning, then both ethics and law should be held liable for violating responsibilities.
• Here, the harm is already caused, and the business enterprise is responsible to avoid further harm.

RESPONSIBILITY TO PREVENT HARM

• Companies sometimes don't cause harm but have the potential or capability to prevent harm.
• Company's ethical responsibility: prevent harm from happening.
• Often referred as duty of care.
• All organizations have duty of care to their stakeholders employees, stockholders, and the society, in general.
Example: Having an organizational policy or specific rules and regulations. Anti-Sexual Harassment Act of 1995
• An organization (based from last module) formulates code of conduct which serves as an organization's
reference when certain decisions have to be made.
• This is particularly important when violations or offenses in the workplace during work hours occur, wherein
the employer can be held liable for or losses caused.
• Companies create and implement programs and protocols not only to maintain the quality of their
products/services but to ensure the health and safety of their employees.
Responsibility to do Good

• Business organizations have the social responsibility to do good things by making the society a better place.
• Providing social solutions to social issues
• Giving support to education, arts, and culture.
• Companies have already taken CSR initiatives to positively impact the environment, people and overall, the
society.
• Motivation
• Bottom line is companies are socially responsible to do good for others, and not merely run a business for
profits.

MODELS OF CORPORATE SOCIAL RESPONSIBILITY

• Economic Model
• Philantropic Model
• Social Web Model
• Integrative Model
EMPLOYER RESPONSIBILITIES AND EMPLOYEE RIGHTS

Business organizations need employees to ensure that they will be able to deliver products and services to their
customers and more. In a business organization, an employee will have to make decisions on how to treat others in
the workplace and how s/he wants to be treated.

ETHICAL ISSUES AND CHALLLENGES

Businesses organizations face ethical decisions in the workplace and in managing their employees
Research shows that business organizations that place employees at the core of their strategies produce higher long-
term returns to shareholders.

Employee-related issues:
• Contractualization of employees known as "endo" (end of contract)
• Faimess at work
• Care and concem for employees
• Immediate supervisor or manager handling the employees
• Incentives (bonuses) recognition (awards), benefits (bealth insurance, retirement program)

TERMINATION OF EMPLOYMENT DUE TO AUTHORIZE AND JUST CASES

• Under the Labor Code of the Philippines, an can only terminate its relationship with an employee if there is a just
or an authorized case.
• Employers need to practice due process (just/authorized) for termination/separation.
JUST CAUSE

• Serious misconduct
• Willful obedience: Gross and habitual neglect of duty,
• Fraud or breach of trust, and
• Commission of a crime of offense against the employer, his or her family. or representative

AUTHORIIZED CAUSE
• Installation or labor-saving devices:
• Redundancy,
• Retrenchment to prevent losses;
• Closure and cessation of business; and
• •Disease/illness
Due process
effective mechanisms and procedures to ensure that there is justice and fairness among employees when
disciplinary action is taken by employers

Code of Conduct or Employee Manual

It contains sanctions that are imposed for certain infractions committed by an employee.

Due Process Requirement for Termination of Employment

• Termination of employment based on just causes also requires observance of due process.
• The termination must meet the substantial and procedural requirements the reason or cause for the termination
and procedure of how the termination decision has been reached and communicated.

Twin-notice rule:
1. A notice apprising the employee of the act or omission for which his or her dismissal is sought
2. Notice informing the employee of the employer's decision to dismiss him or her, after being afforded by fair and
reasonable opportunity to be heard

Employers are required to serve a written notice of termination to the employee of at least 30 days before the
effectivity of termination.