INSTRUCTIONAL MODULE IN ABM 2A

Business Ethics and Social Responsibilities

Week 12

TIME ALLOTMENT: 4 Hours

CONSULTATION HOURS: ABM 12A F1:00-3:00PM
ABM 12B F3:00-5:00PM

CONTENT: Continuation of Chapter III “Social Responsibility of Entrepreneurs”

LEARNING COMPETENCIES:
At the end of the week, learners are expected to formulate a morally defensible position on
ethical issues in entrepreneurship like basic fairness, personnel and customer relations distribution
dilemmas, fraud, unfair competition, unfair communication, non-respect of agreements,
environmental degradation, etc. ABM_ESR12-IVi-l-3.2; and ABM_ESR12-IVi-l-3.3

LEARNING RESOURCES:
Book:
1. Roa, Floriano C., Business Ethics and Social Responsibility 2nd Edition: Unlimited Books Library
Services and Publishing Inc., Manila, 2016
2. Flores Marivic F. DBA, Organization and Management: Mindshapers Co., Inc., Manila, 2017
3. Robert G. Medina, Entrepreneurship and Small Business Management: Rex Book Store, Manila,
2010

DISCUSSION:

 Ethical Issues in Business and Corporate Environment

In the multi-faceted global business environment of the 21st century, companies both big and small
face a huge number of ethical issues. Ethical issues include workplace sexual harassment, just wage, gifts
and bribery, conflict of interest, abuse of power, labor strikes and whistle blowing. In addition recruitment,
promotion, termination of employees raises ethical concerns also. Further, marketing and advertising, fair
pricing, trade secrets, product misrepresentation, multi-level marketing and pyramiding as well as - money
laundering, inside trading and tax evasion could pose problems for any company in terms of morals and
ethics.

 Workplace Sexual Harassment

Sexual harassment includes unwanted sexual advances, requests for Sexual favors, direct or
indirect threats or bribes for sexual activity, sexual innuendos and comments, sexually suggestive
jokes, unwelcome touching or brushing against a person, pervasive displays of materials with sexually
illicit or graphic content, and attempted or completed sexual assault. It varies depending on the
situation and people involved. Sexual harassment is not restricted by gender. Anybody, male or female,
can be a victim of sexual harassment. Simply, a man might harass another man, and a woman might
harass another woman.
Additionally, victims are not always of direct supervision. Conduct may still amount to sexual
harassment even if the victim is a co-worker, a supervisor in another area, or even a person not
employed in the victim’s workplace. In reality, a victim of sexual harassment does not necessarily have
to be the person directly being harassed; the victim could be an employee who is not directly but
negatively affected by the unpleasant conduct.
Usually, there are two forms of sexual harassment:
1. Quid pro quo (an employment decision) - Like in a promotion, an assignment, or even
keeping ones job and is based on submission to the sexual harassment. Unwanted sexual advances, requests
for sexual favors or other verbal or physical behavior of a sexual nature comprise quid pro quo sexual
harassment when:

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a. giving in to such conduct is made either openly or implicitly a term or condition
of employment or
b. giving in to or refusal of such conduct is used as the source for employment
decisions.

2. Hostile work environment - The sexual harassment makes the workplace environment
frightening, intimidating, or offensive. All verbal or physical conduct of a sexual nature constitutes hostile-
environment. Sexual harassment in this form has the intention of unfairly meddling with an employee’s
work performance. The law considers some factors to establish whether an environment is hostile,
including:
a. whether the behavior was verbal, physical, or both; how often it was done again;
b. whether the behavior was hostile or obviously unpleasant;
c. whether the supposed victim was a co-worker or supervisor; e, whether others
connived in committing the harassment; and
d. whether the harassment was aimed at more than one individual

Strategies for Prevention

There are several steps that a company can do to trim down the danger of sexual
harassment happening in the workplace. Here are some of them:
1. Implement a clear sexual harassment policy - The employee handbook should
contain a policy devoted to sexual harassment. That policy should include:
a. definition of sexual harassment;
b. definite terms that sexual harassment will not be tolerated;
c. discipline or fire any wrongdoers;
d. an understandable procedure for filing sexual harassment complaints;
e. full investigation of any complaint received, and
f. not tolerating retaliation against anyone who complains about sexual
harassment;

2. Train employees - At least once yearly, do training meetings for employees. These
meetings should educate employees what sexual harassment is all about, make clear that employees have a
right to a workplace without fear of sexual harassment, assessment of complaint procedure, and support
employees to use it.

3. Train supervisors and managers - At least once yearly, carry out training
meetings for supervisors and managers that are separate from the employee meetings. The meetings
should teach the managers and supervisors concerning sexual harassment and give details on how to deal
with complaints.

Based also on Legal Penalties of Republic Act (RA) 7877, there are already set penalties
for those who committed sexual harassment:
1. Imprisonment of not less than one (1) month but not more than six (6) months
2. Fine of not less than Ten Thousand Pesos (P10, 000) but not more than Twenty
Thousand Pesos (P20, 000)

 Just Wage
Wages are the price that workers receive for their labor in the form of Salaries, bonuses,
royalties, commissions, and fringe benefits, like paid vacations, health insurance, and pensions. Wages
differ among nations, regions, occupations, and individuals.
In view of that, the Church identifies three principles that are necessary for implementation of
the just wage: the principle of need, the principle of equity, and the principle of economic order.
1. Need relates to the wage rate necessary to keep going the individual worker and his family.
Workers who reside in more classy cities require a higher wage.

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2. Equity defines what is appropriate to a person because of the worth of the particular skills,
effort and talent that person is capable to bring to the job. So, somebody with the skills needed to create
new products must be paid more than the person who just tosses burgers.
3. Economic order refers to the reality that the individual’s work and the firm itself must
produce adequate values to give the wages. Simply, fair wages must be sustainable. This means that for
similar work, it is just that a successful enterprise like Apple may pay a higher wage than a struggling
start-up business or not-for-profit organization.

Just Wage Determination

The policy in setting minimum wage rates take into account the needs of workers,
employers’ capacity to pay, and requirements for socio-economic development. The following
factors should be taken into consideration in determining wage and salary structure of workers:
1. External market factors 5. Organizational fact
2. Laws and regulation 6. Job factors
3. Cost of living 7. Individual performa
4. Existing industry rate

The Issue of Minimum Wage versus the Living Wage

A minimum wage is a national floor level set by the government. Various countries have
lay, down lawful national minimum wage for workers. It is usually decided in the course of
negotiations between government, industry and sometimes trade unions. On the other hand
this method does not constantly work as proposed. There is at times no genuine representation
of workers, or the method is used only once in a while, or overlooked in the actuality of the
workplace.
A living wage is what workers need to give their families decent standards of living. The
national minimum wage in many countries is often not adequate to allow a worker to supply his
family with a decent living standard. A living wage is sufficient to meet primary needs and to
provide some discretionary income. The primary needs comprise a standard level nutrition,
housing, transportation, energy, healthcare, childcare, education and savings within regulated
working hours without overtime hours. Some living wage supporters wanted to make the minimum
wage equivalent ty the living wage which they describe as a “living minimum wage”.

The issue about living wage worldwide is increasing and mainly due ty the following reasons:
a. The increasing trend of “the working poor” people who are working but unable to make
ends meet because wages are too low since the 2008 recession.
b. The increasing gap between national minimum wages and cost of living.
c. The rising consciousness and worry of consumers about working conditions.
d. The sustained development of international standards for business and ethics.

Minimum wage rates fail workers who are at lowest end of the pay scale because without a
living wage workers may be compelled to:
a. work too much overtime hours or multiple jobs,
b. become bonded laborers,
c. put their children into work as a replacement for school,
d. be deprived of their primary human rights to food, shelter, nutrition health, housing and
education and experience social denials such being unable to take part in cultural events,
e. be unable to withstand crises such as ill health.
 Gifts and Bribery
A gift is something of worth given with no anticipation of return. Gifts can be monetary, actual
items or they can be tickets to sporting event, entertainment, travel, rounds of golf or restaurant meals.
The premise of giving gifts is an ancient way to express gratitude, appreciation and love.
A bribe is the same thing given in the expectation to influence the recipient's conduct. It may be
money, goods, rights in action, property, preferment, privilege, emolument, objects of value, advantage,

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 or merely a promise to induce or influence the action, vote, or influence of a person in an official or
public capacity.

The Morality of Accepting Gifts

Refusing gifts may be recommendable in some cases, but in most economic situations to
inhibit absolutely isn’t practical. People make business dealings in similar manner they make
friendships and romance and most other social things. Turning everybody down every time can
probably dampen ones professional relationships.
There is actually no magic guide but they can help one to see things more clearly. More
or less, here’s the list according to William Shaw and Vincent Barry from their book Moral
Issues in Business, as follows:
a. Conflict of interest - The appearance of a conflict that arises because of the gift. Not
every gift raises conflict of interest concerns.
b. Gift’s value - The number or price allows a clean dividing line. Anything above a
particular amount gets classified as potentially pressuring a decision and so causing a conflict of interest.
While any gift worth less may be judged insignificant, too small to intimidate professionalism. The magic
number depends on who's involved and the general context.
c. Gift’s purpose - No one can look closely into the soul of another. However
something presented during the holiday season may be more tolerable than the same thing presented just
before a major activity is being prepared.
d. Gift or entertainment - Traditionally, a distinction has been drawn between giving
gifts and paying for entertainment, As a rule of thumb, the former is something one can take home and the
latter is enjoyed on the spot, Entertainment while on business discussion is just normal business, Gifts, on the
other hand, appear much more like bribes because they don’t exist in the context of normal business
conversations.
e. A circumstance when the gift is given - It’s much easier to accept the gift without
feeling trapped by an obligation to throw business and just respond to the gesture. A gift must also be given
openly 80 as not to raise ethical issues.
f. Power to bestow favors in return for gift - The gift may result to preferential treatment
in favor of the donor especially in a superior-subordinate relationship. The donor or the recipient must make it clear
that the gift is not to influence any action or decision.
g. Industry accepted practice - In some industries the accepted practice is no gifts,
period. However, there are industries like some service industries which accept monetary gifts and tips. Being
an essential part of the customary business practice, they are less likely to pose any moral issues.
h. Organization’s policy - Sometimes policy provides words but no guidance. When
true guidance is provided, an employee may fairly reason that following it is fulfilling professional obligations
to the employer. If the practice of the company is not to accept gift, then gift-giving is as a rule is wrong.
i. Laws - Commonly, laws on gift giving and receiving is relevant to public officials and
those working with them (politicians, judges, lawyers, businesses doing work for the government). As is always the
case, the legal right doesn’t in itself make ethical right.

LEARNING TASK:
Learning Task will be given in Week 13 Module.

Prepared by: Approved by:

CRISTINE S. DAYAO, LPT AISEN FAITH C. MARRERO, LPT, MPA

Teacher Principal, Senior High School

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