Name: _________________________________ Name of Teachers: MARILYN TORRES______

Grade/Section: _________ Date of Submission: ____________________

BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

4TH t QUARTER-Module 2 (Week 2)
BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

Most Essential Learning Competency: 3.2 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.

Objectives:
At the end of this lesson, learners are expected to:
1. Examine the different issues and problems in business, and the business enterprise from the
moral perspective
2. Develop a framework for analysis and resolution of ethical dilemmas and problems affecting
business.
3. Acquire basic information about questionable business practices and their impact to its
stakeholders.
4. Develop problem solving skills to resolve ethical problems in the business and corporate
world.

Discussion:

Major ethical issues in Entrepreneurship (basic fairness, personnel and customer relations,
distribution dilemmas, fraud, unfair competition, unfair communication, non-respect of agreements,
environmental degradation, sexual harassment, etc.)

Introduction

Business is a productive human activity that brins beneficial contribution to both people and society.
It produces employment, fair deals, creativity, advancement of technology, customers’ satisfaction,
among others. Ironically, however, business is also an activity that provides an opportunity for some
unscrupulous people to take advantage of others, e.g., the abuse of fiduciary relationship between
employers and employees and between buyers and sellers. In this lesson we will examine the broad
array of ethical issues and problems that affects the flow of business as a dynamic yet complex human
activity.

Principles of Fairness

Fairness requires that we: Treat all people equitably based on their merits and abilities and handle all
essentially similar situations similarly and with consistency. Make all decisions on appropriate criteria,
without undue favoritism or improper prejudice.

Seven Fairness Principles:

1. Distributional Fairness
2. Non-discrimination Fairness

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 3. Golden-Rule Fairness
4. Positive Reciprocity
5. Negative Reciprocity
6. Privacy Fairness
7. Maximum benefit Fairness

Fairness requires that we:

• Treat all people equitably based on their merits and abilities and handle all essentially similar
situations similarly and with consistency.

• Make all decisions on appropriate criteria, without undue favoritism or improper prejudice.

• Never blame or punish people for what they did not do, and appropriately sanction those who
violate moral obligations or laws.

• Promptly and voluntarily correct personal and institutional mistakes and improprieties.

• Not take unfair advantage of people’s mistakes or ignorance.

• Fully consider the rights, interests, and perspectives of all stakeholders, approach judgments with
open-minded impartiality (setting aside prejudices and predispositions), conscientiously gather and
verify facts, provide critical stakeholders with an opportunity to explain or clarify, and carefully
evaluate the information.

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ETHICAL ISSUES AND DILEMMAS IN BUSINESS

Ethical Issues are problems, situations, or opportunity that requires an individual, group, or
organization to choose among several actions that must be evaluated as right or wrong, ethical or
unethical.

Ethical Dilemmas are problems, situations, or opportunity that requires an individual, group or
organization to choose among several actions that have negative outcomes.

Types of Ethical Issues and Dilemmas in Business

1. Misuse of company time and resources 8. Sexual Harassment

2. Abusive or intimidating behavior 9. Fraud, forgery
3. Lying, Dishonesty, Cheating 10. Financial Misconduct
4. Conflict of interest 11. Insider Trading
5. Bribery and corruption 12. Intellectual Property Rights
6. Corporate Intelligence 13. Privacy Issues
7. Discrimination 14. Environmental Issues.

1. Misuse of company time and resources, a major form of observed misconduct in organizations.
Example: Using company computer software and internet services for personal business is one of the
most common ways employees misuse company resources.

2. Abusive or intimidating behavior. This is a common ethical problem for employees.

What is abusive or intimidating means?

The concepts of abusive or intimidating behavior can mean anything form physical threats, false
accusations, annoying behavior, profanity, insults, yelling, harshness, ignoring someone, or even
unreasonableness. Meaning of these words may differ from person to person.

Bullying is associated with a hostile workplace where a person or group is threatened, harassed or
overly criticized. Concept of bullying is now a legal issue, with millions of Filipinos reported having
experienced or witnessed bullying at work, and anywhere.

3. Lying (Dishonesty also Cheating)

Distorting the truth is unethical in business, it is damaging. A lie becomes illegal if it is determined by
the judgment of courts to damage others.

3 types of Lies
1. Omission lying- intentionally not informing others of any differences, problems, safety warnings, or
negative issues related to the product or company that significantly affects awareness, intention or
behavior.
2. Commission lying- creating a perception or belief by words that intentionally deceive the receiver
of the message. Involves using of words, creating or fabricating words.

3. Joking

A joke may start out as “just a joke” — but for managers in particular, its impact can have far-reaching
consequences.

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Employees who laugh together have been shown to be more creative, more collaborative and more
productive. Executives who incorporate laughter and jokes in their work (as long as they are
appropriate in nature) have been shown to be better at motivating employees. However, new
research has found that a leader’s use of humor can be a mixed blessing, with sometimes surprising
negative effects on organizational behavior. Leader humor can act as a powerful signal to team
members about the acceptability of norm violations, which can in turn lead to increased incidents of
deviant behaviors, such as sharing confidential information, falsifying financial claims, or drinking
alcohol on the job. While humor can be an effective organizational tool, leaders must remain mindful
of their status as role models.

4. Conflict of interest
This exists when an individual must choose whether to advance his or her own interests, those of the
organization, or those of some other group. To avoid conflicts of interest, employees must be able to
separate their private interests from business dealings.

5. Bribery and Corruption

According to Transparency International, 68% of countries worldwide have a serious corruption
problem, and not one single country is corruption-free.

In 2016, the Institute of Business Ethics (IBE) identified the most commonly reported business ethics
issues as bribery, corruption, fraud and money laundering. These acts applied to a range of business
sectors, with unethical behavior being most frequently recorded from the finance, retail and
technology sectors.

Bribery is the practice of offering something (usually money) in order to gain an illicit advantage. It is
unlawful act, and one of the biggest business ethics issue.

Types of Bribery:
Active Bribery means the person who promises or gives the bribe commits the offense.
Passive Bribery is an offense committed by the receiver of the bribe.

Under the Philippines Law, the Revised Penal Code, Articles 210, 211, 212 penalized Bribery as a
crime involving moral turpitude. The ANTI-GRAFT AND CORRUPT PRACTICES ACT (RA. No. 3019 as
amended by R.A. No. 3047, P.D. No. 77 and B.P. Big. 195). This was enacted to deter public officials
and employees from committing acts of dishonesty and to improve the tone of morality in public
service.

EXERCISES:
Activity 1. Enumerate different issues and problems in business that affects the business enterprise
from the moral perspective.

Activity 2. Develop a framework for analysis or resolution of ethical dilemmas and problems affecting
business in your areas or community or municipalities.

Activity 3. Give an example of a company or business you know about questionable business practices
and their impact to its stakeholders.

Activity 4. In general, what are the effects of Bribery and Corruption in a business, company or
organization?

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