Lesson 1: Ethical Issues

1. SEXUAL HARASSMENT
WHAT IS SEXUAL HARASSMENT?
Sexual harassment is an issue in the corporate world that must be looked into because it can create a
hostile and unhealthy workplace for the employees. For this reason, the Congress of the Philippines
enacted the Anti-Sexual Act of 1995 declaring sexual harassment unlawful in the employment,
education or training environment, and other purposes.
The Civil Rights Act of 1964 (Title VII) of United States of America, from which our law was
patterned defines sexual harassment as “Unwelcome sexual advances, requests for sexual favors,
and other verbal or physical conduct of a sexual nature constitutes sexual harassment when
submission to or rejection of this conduct explicitly or implicitly affects an individual’s
employment, unreasonably interferes with an individual’s work performance, or creates an
intimidating, hostile or offensive work environment.”
Republic Act No. 7877 defines sexual harassment as, “Employer, employee, manager, supervisor,
agent of the employer, teacher, instructor, professor, coach, trainer or any other person who, having
authority, influence or moral ascendency over another in a work or training or education
environment demands, requests or otherwise requires any sexual favor from the other, regardless
of whether the demand, request or requirement for submission is accepted by the object of said
act.”
WHY SEXUAL HARASSMENT OCCURS
Sexual Harassment occurs due to power struggle between men and women as a response to
a real or imagined loss of power or as an expression of retaliation or a flexing of the new power.
This also happens because some organizations and managers allow it to happen. Historically,
sexual harassment has always occurred but brought about changes in the traditional function of
men and women which greatly increased gender specialization and formed a new kind of workplace
in the western world. Men and women no longer work together on the farm or in the family
business. The responsibility of each became more specialized.
TWO TYPES OF SEXUAL HARASSMENT
Sexual Harassment falls in two general categories: 1. the “quid Pro Quo” Harassment,
and 2. the harassment that creates a hostile environment. “Quid pro quo” means “this for that”
(something for something) and is defined as requiring a sexual favor or interaction as a condition
of employment benefit (such as promotion, transfer pay raise). A manager uses his authority to
grant pay increases and promotions as a means to extort sexual favors from an employee, e.g., “Go
to bed with me and you will get that promotion you want.”
In the hostile environment type of harassment, abuses include verbal, physical, and visual
conduct that creates an intimidating, offensive, or hostile, environment, in the workplace that
interferes with work performance. This type of harassment may be based on race, religion, national
origin, sex, age, marital status, veteran status, sexual orientation, or disability. Some examples of a
hostile environment follow:

• Unwanted touching, patting, pinching, or brushing up against a person • Comments

about your body, leering, wolf whistling, cat calls, insults of a sexual nature, persistently
pestering for a date
 • Displaying or circulating pornographic pictures with the intention of harassing someone
/ Posting of explicitly sexual materials
• Workplace blackmail – i.e. suggestions that sexual favors may further your career (or
refusal may hinder it)
• Green jokes
• Obscene letters
• Sexual propositions
• Suggestive looks
It is helpful for the victim to directly inform the harasser that the conduct is unwelcome and must
stop. The victim should use any employer complaint mechanism or grievance system available.
Although the victim of sexual harassment and the person accused of a sexual harassment may be
peers, more frequently the victim is in a position of lesser power than the accused. The most
common example is the boss-subordinate situation. Harassment also occurs between customer /
client and providers.

HOW TO PREVENT SEXUAL HARASSMENT IN THE WORKPLACE

A significant step an organization can take in preventing sexual harassment in the
workplace is through creating a safe, secure, positive work environment by putting into practice a
strong sexual harassment policy. Some examples for policy development are:

• A broad anti-harassment / positive environment policy that includes a statement that

specifically addresses sexual harassment
• A separate sexual harassment policy that covers all organizational members
• Separate sexual harassment policy, one that addresses non-management employees and one
that addresses management
Sexual harassment is very costly and causes low morale among employees and decrease in
productivity. Annoyed, scared, disgraced people are incompetent of performing well. If not
dealt with, sexual harassment may result in costly lawsuits, dreadful publicity, and ruin of an
organization image that took years to establish.
Riddance of sexual harassment will come through the commitment of the organization and
employees. Most person, male and female, want a secure office, free from threats and
apprehension.
COMMUNICATING THE SEXUAL HARASSMENT POLICY
The best policy is ineffective if it is not communicated well. Even if the company already
has a well-written policy, it is important to expose it regularly through permanent posting on
bulletin boards, memos, articles in the organization’s newsletters, meeting and trainings. Training
programs may come up with various topics to support the anti-harassment programs and to assure
each employee of a safe and harassment-free workplace environment.

2. THE PROBLEM OF JUST WAGE

WORK AND COMPENSATION
 Work is said to be for the purpose of obtaining economic gain for the laborer. Most agree
that work is directed tom the promotion of life. The duty to take care of himself and not to be a
burden to others.

Being compensated for a week done or for services rendered is the very essence of
‘work’. One is willing to work in exchange for remuneration or rewards he will receive from working.
Such remuneration may include both financial and non-financial compensation. It can be in the form of
wages, shares on profit, harvest or commercial goods, in-kind payments, and other remunerative fringe
benefits.
The main objective of compensation is to create a system of reward that is equitable to the
employer and employee. Thus, the general concern is that justice should be a substance of
compensation.
THE QUESTION OF JUST WAGE
The question of “What is just a wage?” or “How do you define a ‘fair wage’”? has a long
story. A number of people all over the world commented on its definition and have argued on the
appropriate criteria to consider in setting the so-called ‘Just Wage’. A just wage is defined as that
remuneration which is enough to support the wage-earner in reasonable and frugal comfort. The
Catholic Church tells us, “a just wage is the legitimate fruit of labor.”
THE TEACHINGS OF THE CATHOLIC CHURCH IN WAGES
The question of just wages has played a dominant role in the teachings of five popes,
including the late Pope John Paul II, who returned to the theme repeatedly. Guidelines for most
compensation, according to their beliefs, were poetically expressed in their writings.
Rerum Novarum
At the turn of the century, Pope Leo XIII forced the question onto the world stage in 1891
with his ground-breaking encyclical Return Novarum (also known as the “Capital and Labor”, May
15, 1981). In it, Pope Leo addressed what he termed the “misery and wretchedness pressing so
unjustly upon the majority of the working class.” The pope wrote, “Members of the working classes
are citizens by nature and has the same rights as the rich”. Pope Leo did not attempt to calculate a
just wage. He simply decried the philosophy widespread then and today that the marketplace alone
should set wage structures. He said:
let workers and employers…make any bargains they like and in particular agree freely
about wages; nevertheless, there underlies a requirement of natural justice higher and
older than any bargain voluntarily struck; the wage ought not to be in any conditions
imposed by an employer or contractor, he is a victim of violence against which justice cries
out.

Rerum Novarum is one of the moat impassioned treatises ever written on the sacredness of work
and the dignity of the working person. Pope John XXII rightly called it the “Magna Carta of social
reconstruction.”
Catholic Bishops of the Philippines on Social Justice
The Catholic Bishops of the Philippines, in a pastoral letter on “Social Justice”, May 1949,
referred to a just wage as “family wage” that is commensurate to the needs of a modest average
Filipino Family. It stated that remuneration for work should guarantee man the opportunity to
provide a dignified livelihood for himself and his family on the material, social, cultural, and
spiritual level, taking into account the role and productivity of each, the state of the business, and
the common good. The bishops concluded their exhortation by reminding employers that workers
deserve a family wage “not in charity merely, but as duty to social justice”.
The encyclicals of the popes and the teachings of the Catholic Church reflect the importance
of just wage and the welfare of the workers. It encourages formation of labor unions and rejects
individualism. “For no person can stand completely alone, we need each other.” The role of unions
in negotiating minimum wages and working conditions is decisive in this area.
PHILIPPINE CONSTITUTION AND REPUBLIC ACT 6727
Spread in the various parts of the 1987 Philippine Constitution are specific pronouncements
and mandates on the protection and promotion of the rights of workers in the public and
private sectors, as indicated in letter “g” Sec. 2 Art. XIII.
“That the workers are entitled to a living wage.”
Republic Act No. 6727
The Wage Rationalization Act declared the policy of the State to rationalize the fixing of
minimum wages and to promote productivity-improvement and gain-sharing scheme to
ensure a decent standard of living for the workers and their families. The minimum wage
rates shall be adjusted in a fair and equitable manner, considering existing regional
disparities in the cost of living and other socio-economic factors.
Government Agencies Involved
In our country, determination of wages must also be equitable and just. The National Wage
and Productivity Commission (NWPC) and the Regional Tripartite Wages and Productivity
Boards (RTWPB) determine the minimum wage rates of the workers of each region of the
country. It is their duty that wage shall be as nearly adequate as is economically feasible to
maintain the minimum standards of living necessary for the health, efficiency, and general
well-being of the workers.
FACTORS TO CONSIDER IN FORMULATION OF FAIR WAGES
Every employer faces the problem of setting wage rates and salaries. It is easy to say that
companies should pay a fair and just wage. However, there are so many variables that no
one can say how much a person should be paid for a job. Further, that simple answer
becomes more complicated by the fact that remuneration also includes health care,
retirement plans, bonuses, commissions, and other incentives. The following more specific
factors should be taken into consideration to provide a clearer picture of what a just and fair
wage should be.
1. External Market Factors. These refer to the supply and demand for labor and the so-
called economic conditions and underemployment. The principle behind is that wages are
relatively high if there is scarce supply of labor, and the same is low if there are more
opportunities for labor.
2. Laws and Regulations. Workers should be paid in accordance with laws and regulations
issued by the government. It requires that employers pay at least the minimum wage. In our
country, the National Wage and Productivity Commission (NWPC) and the Regional
Tripartite and Productivity Board (RTWPB) determine the minimum wage. But still, the
minimum wage is not always acceptable as fair and just.
 3. Cost of Living. The cost of living relates to basic maintenance needs, and it must be seriously
considered in formulation of wages. A fair wage should be sufficient to meet the increased
cost of living. Thus, if the cost of living goes up by 10 percent, the wage should also go up
by 10 percent. Unfortunately, it is a fact that majority of employers cannot automatically
adjust wages with the increase of cost of living. However, it is certainly clear that ignoring
the cost-of-living means jeopardizing the welfare of workers.
4. Prevailing Industry Rate. Some claim that paying workers the average of what other
companies is paying for the same job results in a fair wage. However, such claim is not
universally valid because not all companies have a minimum wage high enough to maintain
a decent standard of living.
5. Organizational Factors. Assessment on what type of industry the organization operates, the
size of the company, and the organization’s profitability to justify its ability to provide fair
wages to its workers should be considered. Likewise, determining if the organization is
unionized or not and if the company is a capital or labor-intensive could contribute to the
establishment of fair wage.
6. Job factors. The nature of the job itself entails the formulation of a just wage. Duties,
responsibilities, and the skill requirements of the job are probably the most considerable
determinants of fair wage. An employee should be paid based on the complexity and
difficulty of his job. This concept, however, is not perfectly similar and true to all employers
due to indifference in interpretation of skills and tasks.
7. Individual Performances. The trend is that individual performances or productivity ratings
effect the determination of wage / salary increases. One who performs well in his job
deserves to receive a proportionate increase in pay. However, this does not justify providing
unfair wages to workers with low performance ratings.

3.GIFT GIVING AND BRIBERY

GIFT-GIVING
Gift-giving is merely an act of extending goodwill to an individual in an effort to share
something with particular others. Giving gifts to customers, clients, and business partners is a common
practice in the business community. It is normally observed during special occasions like Christmas, New
Year, and sometimes even during birthdays.

Businesses usually engage in gift-giving for the following reasons:

• To show appreciation to a favor received.
• To effectively establish goodwill with business partners.
• To advertise; and
• To compete effectively against competitors.
The following are the common forms of gift-giving:
• Samples
• Raffle Coupons / certificates
• Rebates / cash refunds
• Padding expense accounts
• Premiums
• Prizes
• Patronage awards (rewards)
• Tie-up promotions
• Allowance
• Free goods
 • Tips
IS GIFT-GIVING ETHICAL OR UNETHICAL?
Business gifts of clients and business associates can raise conflict-of-interest problems, and
knowing where to draw the line, between what is right and wrong, is not always easy. The clear
point is that those who cross that line, intentionally or not, end up in big trouble.
Examples:
Supposing you are a lawyer by profession and,
• Linda, a former client, has steered a half dozen prospective clients your way this year, and
several of them have become valued clients of your firm. Would it be an appropriate
gesture, would it not, to thank her by inviting her and her husband out for dinner?
• Jose, your former classmate in law school (now an established law practitioner), has referred
a case that just resulted in a significant settlement. Would there be anything wrong with
sending him a pair of concert tickets as a “thank you”?

It is indeed difficult to determine the morality of giving gifts. Most agree that accepting and
receiving bribe is a violation of professional ethics, but we may not always find it easy to determine
what is and is not a bribe. Certainly not all examples of giving and accepting gifts and amenities
quality as bribery, just as not all cases of taking another’s property should be considered theft.
FACTORS IN DETERMINING THE MORALITY OF GIFT-GIVING
1. Value of the gift. Is the gift nominal in value, or is it substantial enough to influence a
business decision? The terms “nominal” and “substantial” in this point of view is relative.
It varies on belief and culture of a particular group of people and society. However, from
the majority point of view, a valuable gift is definitely unethical. It is for this main reason
that the “goodwill” motives of the giver are open to doubt.
2. The purpose of the gift. As long as the gift is not intended or received as bribe and remains
nominal, there does not appear to be any serious problem. What is important to this question
of purpose is the consideration of whether the gift is directly tied to an accepted business
practice or not. For example, gifts like appointment books, calendars, or pens and pencils
with the donor’s name clearly imprinted on them may be perceived as a form of
advertisement.
3. Circumstances under which the gift was given or received. A gift given during the holiday
season, for a store opening, or one attached to a special event is circumstantially different
from one unattached to any special event or occasion. Another question is whether the gift
was given openly or secretly. Openly given gifts raise fewer questions than those gifts
known only to the donors and recipients.
4. Position between or relationship of the giver and receiver. Could the recipient’s opinion,
influence, or decision result in preferential treatment in favor of the donor? In superior and
subordinate relationship, for instance, the donors or the recipients have to make it clear that
they do not intend to allow the gift to influence their actions and decisions.
5. Acceptable business practice in industry. Could the act be considered acceptable in this
kind of business? Monetary gifts and tips are usually practiced in numerous service
industries. When gratuities are an integral part of customary business practice, they are far
less prone to prose moral questions.
6. Company Policy. If firms explicitly forbid the practice of giving and receiving gifts to its
customers, vendors or suppliers, associates, or corporate directors, then gift-giving would
 normally be wrong.
7. Laws and Regulations. Certain federal, state, or local government institutions may impose
law that forbids accepting gifts from firms with which they do business. When these gift
transactions violate the law, they are clearly unacceptable.
Still, the ultimate moral judgement hinges on whatever an objective party could reasonably
suspect that the gift might lead the recipient to sacrifice the interest of the firm for his/her own
personal gain.

BRIBERY
Bribery is defined as a practice of giving remuneration for performance of an act that is
inconsistent with the work contract or the nature of the work one has been hired to perform. It is
intended to induce people inside the business of other organizations to make decisions that would
make decisions that would not be justifiable according to normal business or other criteria. It was
then identified to be a form of corruption and is generally immoral and for most is illegal.
Remunerations, termed as bribes, can be in a form of money, gifts, entertainment, or preferential
treatment.
Examples of bribery:
• a motorist offered a certain amount of money to a police officer in order not to be issued a
ticket for speeding.
• a citizen seeking paperwork or utility line connections gave an expensive gift to a
functionary in exchange for a faster service.
• a construction company shared percentage of its income to a civil servant in order to win a
contract; and
• a narcotics smuggler bribed a judge to lessen criminal penalties.
In some cases, the briber holds a powerful role and controls the transaction; in other cases, a
bribe may be effectively extracted from the person paying it.
Bribery is obviously unethical because of the following reasons:
• it is generally used as an instrument to gain personal or corporate advantage;
• it corrupts the concept of justice and equality.
• bribery produces cynicism and a general distrust of institutions.
• it destroys people’s trust in the integrity of professional services, of government and the
courts, of law enforcement, religion, and anything it touches; and
• it treats people as commodities whose honor can be bought and sold. It thus tends to
degrade the respect we owe to other human beings.

4. THE MORALITY OF ADVERTISING

Advertising plays a very significant role in marketing goods and services. Without advertising,
the consumers would not be aware of the presence of diverse products and services available in the
market.
Sometimes, even the mere presence of advertising can sell a product due to consumer perception that a
heavily advertised products is a product of “good value”.
Famous marketing guru Philip Kotler defines advertising as “any paid form on non-personal presentation
and promotion of ideas, goods, or services by an identified sponsor.” Wells, Burnett and Moriarity,
likewise defined advertising as “paid non-personal communication from an identified sponsor using mass
media to persuade or influence an audience.”
The primary purpose of advertising is to inform potential buyers of the availability of a certain
product by providing relevant information on its uses, benefits and how it might serve the needs
and wants of individuals. However, the use of advertising today has not been serving its intended
purpose since very little information is conveyed to consumers and more often the information is
not even useful. Advertising is part of the selling process and its goal it to persuade consumers to
buy the products being advertised. The economic system is characterized by high degrees of
business competition where very producer would want to have a piece of the consumer’s demand;
as a result, advertisements typically end making misinterpretations or false claims.
From the point of morality, advertising in itself is not bad or immoral since it helps achieve the
goals of both the seller and buyer. It only becomes immoral when, in the attempt to persuade
consumers, the advertisements become deceptive, misleading, and manipulative. Since the primary
function of advertising is to sell goods, its purpose should not be limited to supplying consumers
with appropriate information, but it should also educate the public or mold the public’s opinion in
choosing products that they need, and not become manipulated in buying what they do not need.
. Some advertisements contain sentence and express propositions which are appropriately
evaluated in terms of truth and falsity. The ad is said to be immoral when it makes a false claim,
which the advertiser knows to be false, for purposes of misleading, misinforming, or deceiving
potential customers. It is considered immoral because the advertiser in the ad is lying, and lying is
considered immoral. Using the criterion of truth in advertising, let us examine some of the issues
related to the moral dimension of advertising.
Some Issues in Advertising
Deceptive Advertising
Deceptive ads are those which either make a false statement and therefore, lie or which
represent the product without making any statement. Deceptions may occur not only through
sentences or propositions but also through pictures, individual words, or through certain
combinations of objects which can deceive the eye and mind. A typical example of a deceptive
advertising is one where pictures from the box of the product do not look the same as the contents
of the product, in this case, the picture is said to be deceptive.
Semantics in advertising is also allowed in some conditions to allow certain leeway in some
products. In the case of cosmetics, since it is considered as luxury items, consumers expect various
cosmetics to be packed in attractive bottles, boxes, or containers for aesthetic purposes. It cannot
be sold just as well if the packaging is simple or unattractive. This is also true with shampoo, hair
conditioners, and lotions. The use of these products do not guarantee that an ordinary person will
look like the models pictured in the ads. Most people understand the semantics in advertising and
do not take the implied claims of the products literally.

Use of “Weasel Words”

Another deceptive technique in advertising is ambiguity. When ads are ambiguous, they
are considered deceptive. The use of weasel words is often complementary to ambiguity in
advertising. Weasel words are used to avoid or recoil from a direct or straightforward statement.
One example of a commonly used weasel word is “help”. Help means to “aid” or “assist”.
According to one author, the word help has been generally used to say something that could not be
said. We are usually accustomed to ads that contain phrases like: helps fight, prevent, helps stop,
helps you feel, helps overcome, helps you look. Other commonly used weasel words are: like,
virtual or virtually, can be, up to, as much as, and many others
Given this fact, advertisers have the responsibility of avoiding the dangers of misleading through
ambiguity as the ads are subject to interpretation. Not only the people’s money, health, loyalties,
and expectations at stake but also, to a great extent their treatment of truth. It is for these reasons
that ambiguity becomes a serious moral concern in advertising.
Exaggeration
Consumers might also be misled through exaggeration. Exaggeration occurs when
advertisements tend to make false claims of the benefits of the goods or services which is actually
unsupported by valid evidence for example, claims that a pain reliever provides “extra pain relief”
or is “50 percent stronger than aspirin,” that it “upsets the stomach less frequently” or is “superior
to any other nonprescription painkiller on the market” contradict evidence that all analgesics are
effective to the same degree (Washington Post health supplement). Much of the exaggeration is
usually done by manufacturers of vitamins and other dietary supplements, while, some rug
companies do the same. Exaggeration often goes hand-in-hand with concealed information.
Advertisers conceal facts by suppressing information that is unflattering to their products. That is,
they deliberately neglect to mention or distract consumers’ attention away from information,
knowledge which would probably make their products less desirable.
One example of exaggeration in advertising is Trident chewing gum which has long
advertised that it helps fight cavities, but its ads (which describe Trident as a “dental instrument”)
clearly exaggerate the benefits of chewing Trident. Indeed, chewing gum can help remove debris
on dental enamel, but eating an apple or rinsing one’s mouth with water can also do the same. The
sugar substitute used by Trident which is sorbitol can indirectly promote tooth decay.
Psychological Appeals
Advertisers play on several different tactics to get people interested in their products. These
are some advertisements that are directed at arousing human emotional needs rather than reason.
This is one area in advertising that presents a serious moral concern. Richard F. Taflinger defines
psychological appeal as a visual or aural influence on subconscious mind and emotions. It
influences by implying that doing what is suggested (in the case of advertising, buying the product
or service) will satisfy a subconscious desire. It is not subliminal, which include elements in visual
or aural presentation that are not consciously perceived but influences behavior. Taflinger further
states that if a psychological appeal could not be perceived, it would have no effect at all. In fact,
it is blatantly obvious the moment one knows such appeal exist. It does not aim at intellect. In fact,
intellect can often get in the way of the effect of an appeal. Further, psychological appeal does not
have to make sense, and often should not have to be effective.
Some of the psychological appeals that advertisers use to motivate people to buy products
are: power, prestige, personal enjoyment, masculinity, femininity, curiosity, imitation, acceptance,
approval, self-esteem, self-preservation, altruism, and the most pervasive of all are sexual pitches.
The use of sex in advertising is a two-edged sword. Although it is extremely powerful and
effective when aimed at one gender, it often does so at the social expense of other. Since humans
live in a social world, consideration must be given to the feelings of the people in that world.
Ads Directed at Children
 Most advertisers have recognized that advertising to children is effective and eventually
became a big business recently.
The aim of advertisers is for children to pester their parents to buy things for them. Children
generally remember what they see. Young children are naïve and gullible and are particularly
vulnerable to enticements made by advertisers. Consider for example an ad where children are
shown that after drinking a certain chocolate drink, a child gains enough power to lift large objects.
Adults can clearly distinguish that this is purely persuasion and would not be misled by the idea;
however, children lack experience and independent judgement to distinguish the real meaning of
the advertisement.
One advertising expert said that kids are the most pure consumers in that they tend to
interpret ads literally. The problem with this thinking is that children are not able to draw a line
between children’s shows and commercials; they see commercials as a form of entertainment.
Moreover, movies and television shows are being linked to the selling of toys and other items
featured in commercials with characters stamped on various products. Since children are highly
susceptible to misleading advertising, there is a need to protect them from possible manipulation
that leads to the kind of role advertising must play in society dominated by media.
5. OFFICE ROMANCE
People at work see each other every day, work together as teams, sometimes partners on specific
project. Through this, they get a sense of fulfillment and find encouragement from one another.
Sometimes, people at work get attracted to each other. Survey says that somewhere from 25 to 33
percent of the employees at a given Company have had office romances once in their careers.
about three-fourths of the people in the survey believe that a romance at the office is acceptable.
However, Others believe that it is uncalled for and unprofessional to mingle romance with business
purposes.
WHAT IS OFFICE ROMANCE

Office romance is defined as a relationship between two people who are employed by the same
organization. It is characterized by mutual attraction. Between the parties and the desire for a
personal, romantic relationship. Office romances very likely to happen as long as men and
women worked together. though it has probably been increasing in the last few decades due to the
increasing number of women in the corporate world, it seems that workplace has become the
perfect venue for dating people. Work offers numerous reasons for attractive social benefits: to be
with people with the same economic, social, interest and educational levels; The chance and
moment to get to know each other; continued intimacy with one another and shared tasks; the
opportunity to share emotional experiences; and the Accessibility of information for background
checks.
The Company’s Stand
The company is trapped in the middle of office romances present in the organization. Top
management does not want to interfere unduly with their employee’s personal life and their right
for privacy. Conversely, they do not want a workplace where employees are uncomfortable to
work. Therefore, a lot of companies come up with a policy that covers office romances and educate
all employees on the guidelines and effects through trainings and seminars.
Benefits of Office Romance
Office romance offers benefits for the employees in particular and also for the company in general.
These benefits include friendship, mutual support each other at work, and other personal
experiences. Employees involved in a love relationship overcome rough times at work because of
mutual support and inspiration. Employees, likewise, tend to view work as fun even when pressures
begin to pile up. Romance becomes the reason to keep their jobs. Love and companionship in the
office give the employees the relief and reason to overcome problems that come along their way.
A lot of people also believe that the workplace is the right venue to find the person to marry and to
nurture long-term relationships. s survey conducted by AMA (American Management Association)
Says that 49 percent of office romances have resulted to long term relationship or marriage.
Disadvantages of Office Romance
Like any other relationships, office romance is risky. it is sensible to have a head start about the
possible outcomes of a workplace romance before engaging into it.
Damaged Professional Reputations
It is likely that having relationships whether in offices or in any other workplace can damage work
reputations. All the survey say that two-thirds said that their romance revelation by itself did not
affect their corporate standing, if it is wise to be aware of the company policy relating to office
relationships and your organization’s reaction towards it. If the involvement is between the boss
and subordinates, then the circumstance becomes more complicated. Transfer, reassignment,
performance review, relocation, career advancement and reprimands, employee’s opinions and
perceptions can be very difficult and awkward. Integrity will be placed in questionable situation
within the corners of workstations.
Disturbed Co-workers
The biggest concern is the reaction of co-workers and if they will support the relationship or not.
even if the relationship is discreet, co-workers will eventually find out what is happening - time is
the only question. The employee’s reaction is important for the organization. They will have an
idea that favoritism, unfair treatment, and bias may arise from the relationship.
Changes in Productivity
The productivity of the people involved in the romance and that of even the spectators of the
relationship are at stake. The change in productivity depends on whether their morale is greatly
affected by their relationship. the time spent on gossiping, attempts to ruin and sabotage the
relationship, complaints about the relationship affects employee’s productivity. It also includes the
aftermath of an office romance that did not work out.
Dating the Boss
The most disturbing type of romance is one that involves the supervisor or manager and a
subordinate. It is more prone to create a hostile environment among other subordinates, especially
if it goes out-of-hand resulting to sexual harassment case. Also, decisions and actions relating to
employees’ careers will be placed in scrutiny and integrity will be questioned.
Extramarital Affairs
Extramarital affairs may also occur inside the office. these are obviously risky and subject
tomorrow issues. It is an unfortunate fact of liberal lifestyle that broken homes and divorce are
increasing and one reason points the office romances. Survey says that more than half of married
men and almost more than 1one-third of married women attest the falling for adulterous affairs.
this is a major watch-out for companies and also for employees.
Ethical Issues in Office Romance
Interventions
Office romance has always been an issue for companies especially the question on when it is best
for organizations the control romance in the office. Some companies want to restrict their
employees to engage in office romance. Others are in favor of the positive effects of office romance,
but many want to lessen the bad effects. For example, some companies may allow relations between
co-workers with the same rank.

6.THE PROBLEM OF FAIR PRICING

The concept of price comes in many forms depending on the notion on how it is used. But the more
familiar question on the concept of price is implementing a fair price.
In business, the price of business corporation charges its customers for a product or service is the total cost
of investment bless target profit. On the other hand, the consumer thinks it as the amount of money
charged for a product or service.
Determining A Fair Price
On why a price for product or service has to be established assumes two theories. 1st, is that man is
entitled to enjoy the fruits of his labor and as an effect sets a price he deems reasonable for his
produce. Theory 2 advocates that price depends on the law of supply and demand and fair is that
one obtained by a fair competition. Accordingly, prices are determined differently such that the
price in a fixed price system is fair when a seller gives the lowest price for his good that he's willing
to accept no other forces within. Bargaining or the movable price system takes place in an open
market where prize is fair when it tends to reach the lowest point possible due to strict competition.
Fair price related to fair return and bidding or determined depending on the value on which the
return is based and qualifications of the given bid.
Ethical Issues in FairPrice
In the limelight of the business area, prices are normally set differently and consequently, receive
pressure to line up to ethical standard. These are some ethical issues brought by pricing: true cost
of the product is concealed. Some companies normally do not show the real cost of the product is
a closed book policy or under the cloud of confidentiality hence the price may not be fair for the
consumers.
Suggested retail price. The impact on the consumers of a suggested retail price is one that is
open to a lot of interpretations making price determination subject to doubt and suspicion.
Use of electronic scanners. the use of electronic scanners in grocery or Department stores is
not a foolproof method for pricing fairly. It is subject to manipulation and system failure.
Promotional pricing. Promo prices such as sale items manipulate consumers in buying
products that are thought to be cheaper. Odd price policy on the other hand, deals with both
price and advertising ethics that uses odd numbers such as 49.99 instead of 50. Odd price has
a psychological impact on consumers making them believe that they are paying a lesser price.
Follow the leader pricing. Follow the leader pricing is done to purposely make the buyers
believe that what is being sold is the same as the well-known brands. This technique takes the
impression that products that are priced higher have better quality, while in fact they can be
sold for less.
 Price gouging (gaw-jing). Price gouging takes advantage of an economic situation. An
example is pricing canned goods higher during storms and natural calamities.
Price fixing. Price fixing uses the power off the retailer among the producers
correspondingly controlling product price.
The question underlying unethical pricing is considered in terms of relationship between seller
and buyer. We are faced with questions such as do we consider product price, quality and
benefits or does it involve different considerations? Is it ethical to charge different customers
with different prices for the same product or service? An example is the “Suki” system of the
Filipino business which compromises the fair price of a regular customer from the new ones.
Conclusion
For a business venture to progress, it needs to have an ample amount of profit. Profit can be
narrowly defined as income less expenses; However, profit is more broadly categorized on building
a reputation for excellent products, services, and business practices. Moreover, profits provide
owners with a return on their investment, to increase pay for workers, to buy additional resources,
to research new products or services, and to support their communities. The price it pays to
customers must also be equal to its internal factors that run the whole business enterprise. It is
therefore the balance between the two that determines the fair price. Businesses therefore set prices
high enough to make a profit, but not too high but not too high or consumers may think the price
is unfair.
On the account, setting a fair price is a difficult ethical and legal issue. It does not draw a clear line
between sharp business proposition and the price gouging, or between a reacting to the market and
colluding with the market through a competitive strategy. Businesses will keep their prices as low
as they can in order to sell more than their competition. Consumers help decide which prices are
fair when they decide which product to buy. Just price therefore represents itself in the obligations
of the buyer and the seller. The seller has the duty to give the best product it has and consequently
the buyer has the responsibility to pay what is right for the given products. In any case, duties and
rights of both the consumer and the producer give way to a fair price.

7.TRADE SECRETS
A trade secret is the legal term for confidential business information. That piece of information allows the
company to compete effectively. Examples of trade secrets include customer identities and preferences,
vendors, product pricing, marketing strategies, company finances, manufacturing processes, and
other competitively valuable information. This includes essentially any confidential business information
Such as customer lists, financial information, employee data, production costs or sales data, and
documents memorializing important negotiations.
Corporations normally justify the keeping of trade secrets by the following arguments:

1.The information must not be generally known or readily ascertainable through proper
means. Information known to someone or known to non-competitive versus is still capable
of being a trade secret. In fact, more than one competing company can claim trade secret
rights in the same information independent of one another. Information generally known to
once competitors is not a trade secret.
2.The information must have independent economic value due to its secrecy. It is more
concerned on the money that the company has spent in developing the information.
 3.The trade secret Holder must use reasonable measures under the circumstances to protect
the secrecy of the information. Failure to adequately protect the company's proprietary
information will allow competitors and employees to reduced profits. The trade secret loss
will help prevent such misfortune if the company acts in accordance with its requirements.
Imagine if a top employee leaves company and that employee has learned every major area
of the company. If he sets up a business in direct competition with his previous company or
even becomes an employee of the toughest competitor, he can post serious problems to his
previous company. This individual can be stopped if proper measures and protection are to
be observed. Proper protection requires action today to be ready for tomorrow.

8. PRODUCT MISREPRESENTATION AND CAVEAT EMPTOR

MISREPRESENTATION
Misrepresentation is observed when there is a transformation of information to disinformation.
Intentional misrepresentation -a scenario whereby the person is fully aware or
deliberately misrepresents things, commonly known as lying.
Unintentional misrepresentation- the person is not aware and not deliberately act on
misrepresenting things. It is a situation where the person involved believes that it is the right
and acceptable thing to do. It is also commonly called as white lie.

Types of Lying
• Use of ambiguous terms is the act of deliberately using vague terms or open-ended
statements that can have several meanings to mislead people that one is telling the
truth.
• Use of false statements is the act of making a statement from which false conclusion
may be drawn eventually misleading others. This type of lying is often observed in
advertising a product to be the “best-seller” brand.
• Through action is a type of lying where the person gets caught in the act of
wrongdoing but denies the accusation.
• Suppression of correct information is an intentional or unintentional act of hiding
the correct information which eventually misleads others. The act is sometimes
observed in some crime scenes where in a witness conceals the truth from the
investigating body for the sake of his own security or unwillingness to be involved
in the crime.
BUSINESS PRACTICES INVOLVING MISREPRESENTATION AND
LYING 1.DIRECT MISREPRESENTATION
A. Deceptive Packaging- The objective is to create an impression wherein the buyers or the
end users will see an improvement, either by size or by weight without any change in the price. It
can also be done the other way by introducing a new packaging and lowering the price. The
concept is to create an illusion.
B. Adulteration- is the unethical practice of corrupting a genuine commodity by imitating or
by adding something to increase its bulk or volume, or even substituting an inferior product
for a superior one for the purpose of profit or gain. It is an unethical practice since it does not meet the
 industry standard. It can be done through repacking.
C. Misbranding or Mislabeling- is the act of copying a product’s design to the closes possible
way, giving an impression that it is the same with the leading brand. It is based on the sole purpose.
of deceiving the customers as to the quality or quantity of the product being sold.
Misrepresenting the quality of goods also occurs by labeling an inferior product as if it’s of superior
quality.
D. Short weighing- is the most common type of direct misrepresentation. It can be easily spotted in
wet and dry markets. Weighing scales are easily tampered by intentionally offsetting the
calibration of the dials.
E. Short-changing- is taken directly from the situation where the seller gives the customer
less than the change he should get.
F. Short measuring- is an unethical practice observed in products that depend on length and or
volume. The meter stick or standard is shorter than the real length or smaller in volume than the
standard. It is sometimes observed in textile market and electrical shops.

G. Short-numbering – the seller means giving the consumer the quantity by piece of the
product less than the number he has paid for. It is often practiced when the product being sold
comes or is packed in a manner that would make counting difficult or inconvenient for the
customer. Eg. Bond paper, toilet paper, paperclips, toothpicks, match sticks.
H. Misleading advertising- the term “false” means any representation or symbol that is
inconsistent with facts and where the deviation would be unacceptable to a significant number
of the general or relevant public and would lead to misunderstanding or incorrect decisions.
2.INDIRECT MISREPRESENTATION
Indirect misrepresentation is characterized by omitting adverse information about the product or
service. It is passive deception and not as obvious compared to direct misrepresentation.
Indirect misrepresentation is purposely done so that the product/service maintains its good image
by deliberately omitting adverse information to mislead customers into thinking that the product is
reliable and durable, and problem free. The following are common practices involved in indirect
misrepresentation.
A. Caveat emptor means “Let the buyer beware” and is a practice very common among
salesmen. Based on this concept, it is the responsibility of the consumer to determine for
himself the defects or negative features of the product. It is the principle that the buyer alone
is responsible for checking the quality and suitability of goods before a purchase is made.
B. Business Ignorance- is passive deception because the businessman is unable to provide the
customer with the complete information, he needs to make a fair decision. It is the duty of
the businessman to know the nature of the product he is selling, the goods in the market and
what quality of a share of stock depends upon the stability of the stockholders.
C. Ignorance of costs. The cost of manufacture, the cost to sell, and the attendant administrative
costs is another form of business ignorance which is just as harmful and inexcusable as
ignorance of the product one is selling. A company, which does not know its costs, may sell
at a price lower than the costs of manufacturing the product and bringing it to the market.
The company may then become a menace to the other similar companies in that it may force
them to sell at below cost, making the whole industry unprofitable. At the other extreme, a
company that does not know its real costs may charge such a high price and further burden
 the customer who is already reeling from the continuing blows of inflation. It may price itself
out of the market and not sell at all.

9. THE MORALITY OF LABOR STRIKES

Strike action (or simply strike) describes collective action undertaken by groups of workers in the form of
a refusal to perform work. This is a tactic often employed by labor unions during collective bargaining
with an employer. In ordinary usage, the term ‘strike’ is often used to describe all work stoppages,
regardless of the origin of the dispute. In many stoppages, the precise origins of the dispute are
unclear, or are contested by the different sides involved. For this reason, the decision to describe a
stoppage as a strike or as a “lockout” may be influenced by one’s perspective or political outlook.
Workers go on strike for different reasons:
• For higher compensation
• To improve workplace
• For shorter working days
• To stop their wages from going down
• For more benefits
• Because they think their company has been unfair.
Conditions of employment include wages, hours, sanitation and safety, and several other
circumstances that affect the work of the workers. The union aims at safeguarding and increasing
present benefits. They, of course do wrong when they use the power of their organization to extort
more.
What are the Basic Rights of Employees?
An act to strengthen the constitutional right of workers to self-organization and free collective
bargaining and to penalize unfair labor practices, further amending for the purpose articles 244,
247, 248, 249,250 and 289 book of presidential decree number 442, as amended, otherwise known
as the labor code of the Philippines.
Types of Strikes
• A sit-down strike is a strike in which workers show up to work but refuse to work. It may
include preventing transports from entering or leaving in an institution or a company. • A
general strike is a strike affecting all areas of a labor force across many industries, typically
throughout an entire country or a large section thereof.
• A sympathy strike is a strike initiated by workers in one industry and supported by
workers in a separate but related industry.
• Unfair labor practice strike is an action taken by an employer including any agent or
representative of an employer., that is believed to be detrimental to the interest of an
employee organization.
• A jurisdictional strike refers to a concerted refusal to work undertaken by a union to assert
its members’ right to particular job assignments and to protest the assignment of disputed
work to members of another union or to unorganized workers.
• An economic strike. Is based on a demand for better wages or benefits than the employer
wants to provide.
• A wildcat strike is against the will of the leadership of the union, or without a union, or
without a union.
 • A slow-down- a form of work stoppage in which employees deliberately reduce their
individual production.
• A recognition strike is a kind of strike forcing employers to recognize and deal with
them.
The right to strike is integral to the process of wage bargaining in an industrial economy. Everyone
believes that a quality work rendered by an individual in an industry deserves improvements in
salaries and benefits. A worker has no other means of defending his real wage other than seeking
an increased money wage. If a capitalist does not grant such an increase, he can be forced to come
to a negotiating table by striking workers. An employee has a right to withhold his labor services
from an employer if he does not like the pay and benefits the employee offers. If each individual
has this right, then a group of like-minded individuals can exercise this right together. In other
words, all individuals may withhold their labor services of the same time.
Workers who are willing to work for a strike and the employer who wishes to hire them have a
legitimate right to do so. Moreover, they may agree to accept the very terms of employment that
the strikers considered to be acceptable. Replacement workers have the same job -related natural
rights as a striking-workers.
The following conditions must be present for a to strike to be moral:
1.There is a sufficient and just reason for it; It is usually based on the claim that the labor
has arrived this job, or that he has at least the right to decent conditions of employment, and
consequently that he may use force to protect this right against the unjust aggression of the
man who has seized it.
2.The need to create the intended good results must be proportionate to the evil effects; As
against the employer, the strikers have no right to destroy his property; As against the men
who take the places of the strikers, no violence is lawful when the action of the strikers is
justified by their own needs. Now, it is certain that the good effects to be obtained through
the use of violence are practically never sufficient to outweigh the evil effect; The interests
and rights of a class must yield before the interests and rights of the community.
3. The means employed are lawful. At most, the right to a job is merely the right to continue
economic relations with a particular employer. It is consequently, similar to the right of a
merchant to the patronage of his customers, or the right of any man to pursue a lawful good
by lawful means.
CASE 4: Nurse in Distress

A woman was working as a head nurse at a clinic that employed about 20 people. The owner
and manager was a member of a religious cult. During business hours, everything seemed normal
for the head nurse to manage the office of this size, but during the 2-hour lunch break, all the
employees must go to the rooftop and attend in-house teachings. These courses encompassed
everything from the communication skills to office efficiency. They were all designed by a man
who founded a religious cult of which the owner was a member. Granted that they were business
seminars, staff members and employees including the head nurse felt those teachings were
heavily colored with religious influences. They had to understand every word as an important
key in learning lessons. However, most of the words could not be understood because they
cannot be found in dictionaries. Whenever she would ask her boss, about a word, they would
usually end up discussing the cult leader’s works and eventually she would have to read
paragraphs out of the religious teachings to fully understand everything. She felt as though she
was being brainwashed but could not complain because she loved her work.

10.WHISTLEBLOWING
Whistleblowing. The disclosure by an employee of confidential information which relates to
some danger, fraud, or other illegal or unethical conduct connected with the workplace, be it for
the employer or his fellow employees.
A whistle-blower is someone in an organization who witnesses behavior by members that is
either contrary to the mission of the organization, or threatening to the public interest, and who
decides to speak out publicly about it.
He is a person, employee, or officer of any institution (profit or non-profit, private or public) who
believes that he has been ordered to perform some act or he obtained knowledge that the institution is
engaged in activities which:
a. are believed to cause unnecessary harm to third parties;
b. are in violation of human rights;
c. run counter to the defined purpose of the institution or organization; and
d. informs the public of this fact

If the employee just complains to someone inside the company, that is not whistle blowing, and the
employee is not protected by the whistle-blower laws. However, the employee may be protected
under other laws. For example, it is illegal to fire someone for complaining of sexual harassment or
discrimination.
Four elements encompass whistleblowing:
1. the disclosure of information, be it internal or external, must be made in good faith;
2. the disclosure must be made by a current, former, or prospective employee.
3. the information must be linked with misconduct on the part of the employer; and
4. evidence of the misconduct should exist as well as information Regarding the identity
of the wrongdoer.
5.
TYPES OF WHISTLE-BLOWING
1. Internal whistleblowing occurs within the organization. It is going “over the head of
immediate supervisors to inform higher management of the wrongdoing.”
2. External whistleblowing occurs outside the organization. It is revealing illegal and immoral
activities within the organization to outside individuals or groups such as media men,
public interest groups, regulatory body, for non-government organizations.

a. current - those who blow the whistle on present employers.

b. alumni - those who blow the whistle on former employers.

c. open – whistle-blower discloses his identity.
d. anonymous – whistle-blower who does not disclose his identity.
 Another important facet of whistle-blowing research involves the potential for retaliation
by management. Due to lack of support from management and supervisors, external
whistleblowing has been shown to be consistently related to retaliation. Studies also revealed
that whistle blowers experience each of the following forms of retaliation:
- Lost their job or were forced to retire
- received negative job performance evaluations
- had work more closely monitored by supervisors
- were criticized or avoided by co-workers
- were blacklisted from getting another job in their field
On the contrary, internal whistleblowing produces less retaliation than external
whistleblowing. Along with management retaliation, the majority of the whistle-blowers also
experienced severe emotional effects of their whistle-blowing activity:
- severe depression or anxiety
- feelings of isolation or powerlessness
- distrust of others
- declining physical health
- severe financial decline
- problems with family relations
It is important to note the negative effects of whistleblowing. Every year, thousands of
employees, managers, corporate executive officers, officials witness wrongdoing on the job. Some
speak out. Their actions may ultimately save ethics and millions of pesos. But rather than receive
praise for their integrity, these whistle-blowers are often targeted for harassment, intimidation,
demotion, and dismissal. In the context of corruption and bribery, this situation has particular
relevance, unless people are enabled and encouraged to blow the whistle when a bribe is solicited,
the fight against corruption has little chance to succeed. The primary aim of whistle blowing is that
concerns about corruption and bribery can be properly raised and addressed in the workplace or
with the person responsible.
HOW TO BLOW THE WHISTLE?
1. Before taking any irreversible steps, talk to your family or close friends about your
decision to blow the whistle.
2. Be alert and discreetly attempt to learn of any other witnesses who are upset about their
wrongdoing.
3. Before formally breaking ranks, consider whether there is any reasonable way to work within
the system by going to the first level of authority. If you do decide to break ranks, think
carefully about whether you want to “go public” with your concerns or remain anonymous
source. Each strategy has implications: the decision depends on the quantity and quality of
your evidence, your ability to camouflage your knowledge of key facts, the risk you are willing
to show, and their willingness to endure intense public scrutiny.

4. Develop a plan, such as strategically timed release of information to government agencies

so that your employer is reacting to you instead of vice-versa.
5. Maintain good relations with the administration and support staff.
6. Before and after you blow the whistle, keep a careful record of events as they unfold. Try to
construct a straightforward, factual log of the relevant activities and events on the job, keeping
in mind that your employer will have access to your diary if there is a lawsuit.
7. Identify and copy all necessary supporting records before drawing any suspicion to your
 concerns.
8. Read the cycle of isolation research and identify and seek support network of potential
allies, such as elected officials, journalists, and activists. The solidarity of key constituencies
can be more powerful than the bureaucracy you are challenging. 9. Invest on funds to obtain
legal opinion from a confident lawyer.
10. Always be on guard not to embellish your changes.
11. Engage in whistle blowing initiatives on your own time and your own resources, not your
employer’s.
12. Do not wear your cynicism on your sleeves when working with the authorities.
IS WHISTLE BLOWING MORALLY PERMISSIBLE
It is morally permissible if it meets the following conditions:
(cf. Richard de George. 1995. Business Ethics. Fourth Edition. New York: Prentice Hall, Inc.)
• The company must be engaged in illegal or immoral practice or about to release which does
a serious harm to individuals or to society in general. The more serious the harm, the more
serious the obligation.
• The employee should report his concern or complaint to his immediate superiors. • If no
appropriate action is taken, the employee should take the matter up the managerial line,
before he or she is obliged to go public.
• The employee must have a good reason to believe that by going public, he will be able to
bring about the necessary changes.
• It is done from the appropriate moral motive - as provided in the definition of whistle
blowing.
• The whistle blower, except in special circumstances, has exhausted all internal channels for
dissent before going to public.
• The whistle blower has compelling evidence that the inappropriate actions have been
ordered or have occurred.
• The whistle blower has active after careful analysis of the danger: How serious is moral
violation? How immediate is the problem?
• Can the whistle blower point to a specific misconduct?
• The whistle blowing has some chance of success

11.MULTI-LEVEL MARKETING (MLM) AND PYRMIDING

MULTI-LEVEL MARKETING
Multi-level marketing is a system of selling in which one signs up other people to assist
him, and they, in turn, recruit others to help them. It is a system of selling through many levels of
distributors, thus the word “multilevel marketing”. Each gets a percentage on the price of the
product being sold. This is also known as direct selling companies. Common companies of this
type are Avon Cosmetics, Triumph International, Sara Lee Direct Selling, and Tupperware Phils.
Most became successful because the main focus of their activities is the product sales.
However, there are many multilevel distributorship schemes that often call themselves a “network”
but are nothing more than sophisticated chain letters. They are thinly disguised pyramids which
operate like a real “pyramid” claiming participants can earn lots of money by concentrating their
efforts on recruiting distributors rather than on selling a product. They promised to pay
commissions up to two or more levels of downlines. The companies of these types require people
 to pay a joining fee or they simply call it an “investment” usually several thousand pesos. But
oftentimes, the joining fee is quite a big amount for the startup kit.
PYRAMIDING
In the classic pyramid scheme, participants attempt to make money solely by recruiting
new participants into the program. the hallmark of these schemes is the promise of Sky-high returns
in a short period of time are doing nothing other than handling over your money and getting others
to do the same.
Pyramid schemes focus on the exchange of money and recruitment. at the heart of each
pyramid is typically a representation that new participants can recoup their original investments by
inducing others to make the same investments. each person you bring to your pyramid is promised
future monetary rewards or bonuses based on your advancement up the structure.
The fraudsters behind a pyramid scheme may go to great lengths to make the program look
like a legitimate multi-level marketing program. But despite their claims to have a legitimate
products or services to sell, these fraudsters simply use money coming in from new recruits to pay
off early stage investors. But eventually the pyramid will collapse. At some point the schemes get
too big, the promoter cannot raise enough money from new investors to pay earlier investors, and
many people except those at the very top of the pyramid, lose their money. Many losers pay for a
few winners.
Pyramiding operates on recruitment. It starts with one person but encourages six
participants to join. The six recruits will again get six to join making the number of people involved
36. The 36 new members will get six recruits each to have a total of 216. The 216 will again recruit
six persons each to have 1,206 participants in the pyramid. At the 13th level, they need to have 13
billion new recruits to sustain the pyramid which is already impossible. The pyramid collapses
when no new participants can be recruited.
The direct selling Association of the Philippines or DSAP presented the final 8-point test to
determine a pyramiding company. according to them, if the answer to any of all these statements
is no, then beware. you might just be a victim of a pyramiding scam.
1. Are there legitimate products?
2. Is there an intent to sell the products?
3. Do the products have fair market value?
4. Is there a compelling reason to buy the products being offered?
5. Is there a product return policy?
6. Will you receive commission on the joining fees of your prospect?
7. Is there a correlation between recruiting and distributor’s commissions? 8. If recruitment is to be
stopped today, will participants still make money?
Market saturation: An inherent problem in a pyramid
Pyramid’s design can saturate the market with no one noticing. It is designed to recruit so
many salespeople, who in turn will attempt to recruit more salespeople, and so on until the market
is saturated. It is unstoppable, a human “churning” machine with no “off button”. Out of control
by design, Its gears will grind up the money, time, and entrepreneurial energy of the well-meaning
who joined to supplement their income. When the inevitable destiny occurs, the only money that
may be made is not from the product or service but from the losses of people down the organization.
Moral Issues in Pyramiding
 1. Too much materialism and greed
Testimonies of those at the top, contents of brochure, or video tape of disguised MLM will
more likely to be shown to you to encourage you to join with the promise of success, large
new homes, luxury cars, money in the bank, a grand vacation all over the world, or even a
Lear jet.
2. They con the public, making them believe that they are a legitimate MLM Once they
add a product for cover, and call it an MLM, and people are willing to accept them. They
look so legitimate in public, so decent. So many decent people are involved. But they exploit
the most vulnerable of people: the desperate, the out of work, the ignorant. It is hard to tell
whether an organization is pyramiding or a legitimate MLM. MLMs have become so large
that they are difficult to stop. Some multinational MLMs spend million to protect, lobby, and
insulate themselves from the law. The question is where is the money coming from? Selling
the product? But then everyone knows that the real incentive in most MLMs is the pyramid
aspect that the more you recruit the higher the commission. 3. The intentions are bad
They work under false pretenses. By sponsoring your parents and sisters, you will profit at
their expense. You sell them products they do not need or products that they can barely
afford. Further, these schemes work against the universal law of honesty, justice, and
fairness.
Legal Issues of Pyramiding
The Department of Trade and Industry can take action under two existing laws:
Art. 53 of RA 7394 (the Consumer Act of the Philippines) states that chain distribution
plans or pyramid sales shall not be employed in the sale of consumer products.
RA 3883 or Business Name Law - which empowers DTI cancel license of any business
which does not confirm with the registered business name or style.
Tips to consider when you make our decision before joining a plan:
1. Consult the 8-point test presented in this chapter.
2. Beware of plans that claim to sell miracle products or promise enormous earnings. Just because a
promoter of a plan makes a claim does not mean it is true. Ask the promoter of the plan to
substantiate claims with hard evidence especially when the claims about the product or your potential
earnings seem too good to be true.
3. Do not pay or sign any contract in an opportunity meeting or any other high pressure
situation. Insist on taking your time to think over a decision to join.
4. Remember that no amount of personal testimonial and affirmation that there is money to
gain in pyramiding will dispute the fact that pyramiding, does not create knew wealth. The only
wealth gained by any participant is a loss by another participant.

12.UNFAIR COMPETITION
Is competition good or bad? competition is healthy and can be a motivation for firms to produce
better products or offer better services. without competition, Firms can just relax and quality will
suffer. Thus, competition becomes bad only when it eliminates a competitor like in cutthroat
competition. Some practices include under cost selling or selling their products below cost just to
get rid of their competitors.
Different Kinds of Competition:
 1. A monopoly is defined as a market situation where there is only one provider of a product
or service. It is an extreme type of imperfect competition characterized by a lack of
competition and a lack of viable substitute goods.
2. Oligopoly, on the other hand, denote a situation where there are few sellers for a product or
service. It is a type of imperfect competition where they cannot dictate price like a
monopoly can but the members of an oligopoly often turn into friendly competitors, since
it is in all the members interest to maintain a stable market and profitable prices.
3. Perfect competition is a situation in which no firm or consumer is large enough to dictate
prices. The prices are dictated by the law of supply and demand which states that when the
supply is scarce, the prices go up and when the demand goes down, the prices will go the
same way.
Difference between a War and Competition
In a war, two contenders fighting hurl directly at each other, whereas in the business
competition, two or more parties are vying for the opportunity to provide the customers’ needs
whether it is a product or service. In short, competition is a rivalry to serve the customer.

Difference between Fair and Unfair Competition

Fair competition is doing business under ethical rules of conduct, behavior and judgment. It is
obtaining success in business through the merits of its products or services while unfair competition
is unethical business practice. It is doing business with the goal of profit without regard to others.
In general, unfair competition consists of:
• Deceptive trade practices such as misrepresentation and false advertising

• Business interference to prevent competitor from continuing with its business process or
business contract
• Anti-competitive market practices such as under cost selling to kill the competitor
• Defamation of a competitor or badmouthing a competitor to customer
• Caveat emptor or indirect misrepresenting by withholding information from the buyer
• Violation of intellectual property rights such as copyrights, patents, trademarks, and service
marks
The Intellectual Property Code of the Philippines (R.A 8293)
R.A. 8293, otherwise known as Intellectual Property Code of the Philippines aims to
provide an intellectual property and industrial property system which will enhance the
development of domestic and creative activity, facilitate transfer of technology, attract foreign
investments, and ensure market access for our products.
Article 168 of RA8293 is specifically about unfair competition on the use of trademarks,
service marks, and trade names. this article states that a person who was identified in the mind of
the public the good he manufacturers or deals in, his business from those of others, whether or not
a registered mark is employed, has a property right in the goodwill of the said goods identified,
and will be protected as any other property rights.
The following should be deemed guilty of unfair competition:
a. Any person who is selling his goods and gives the general appearance of the goods of
another, either in the goods themselves or in the wrapping of the packages, which would
 likely influence buyers to believe that the products being offered are those of a
manufacturer or dealer other than the actual manufacturer;
b. Any person who, by any artifice, or device, induces the false belief that such person is
offering the services of another who has identified such services in the mind of the public;
and
c. Any person who shall make false statement in the course of trade shall commit any other
act in bad faith to discredit the goods, services, or business of another.

13. MONEY LAUNDERING

A Brief History
The term money laundering Is said to originate from mafia ownership of Laundromats in the
United States. Gangsters there were earning huge sums in cash from extortion, prostitution,
gambling, and bootleg liquor. They needed to show a legitimate source for these monies.
One of the ways in which they were able to do this was by purchasing outwardly legitimate
businesses and by combining their illicit earnings with legitimate earnings they received from
these businesses. Laundromats were chosen by these gangsters because they were cash businesses
and this was an undoubted advantage the people like Al Capone who purchased them.
Al Capone, however, was prosecuted and convicted in October 1931 for tax evasion. It was for this
that he was sent to prison and not for the predicate crimes which generated his illicit income.
According to author Robinson (Jeffrey Robinson. [1997] Inside Money Laundering: The World’s
Third Largest Business. U.K. Simon and Schuster), that money laundering originated from this
time is a myth. He states that:
“Money laundering is called what it is because that perfectly describes what takes place –
illegal, or dirty, money is put through a cycle of transactions, or washed, so that it comes out the
other end is legal, or clean, money. In other words, the source of illegally obtained funds is
obscured through a succession of transfers and deals in order that those same funds get eventually
be made to appear as legitimate income.”
It would seem, however, that the conviction of Al Capone for tax evasion may have been
the trigger for getting the money laundering business off the ground.
Meyer Lansky (affectionately called ‘the Mob’s Accountant’) was particularly affected by
the conviction of Capone for something as obvious as tax evasion. Determined that the same fate
would not befall him, he set about searching for ways to hide money. Before the year was out he
had discovered the benefits of numbered Swiss Bank Accounts. This is where money laundering
would seem to have started in the according to Lacy (Robert Lacy. [1951] Meyer Lansky and the
Gangster. Boston: Little, Brown and Company), Lansky was one of the most influential money
launderers ever. The use of the Swiss facilities give Lansky the means to incorporate one of the
first real laundering techniques, the use of the ‘loan-back’ concept, which meant that hitherto
illegal money could now be disguised by ‘loans’ provided by compliant foreign banks, which could
be declared to the revenue if necessary, and a tax deduction obtained into the bargain.
‘Money laundering‘ as an expression is one of fairly recent origin. The original sighting
was in newspapers reporting the Watergate scandal in the United States in 1973. The expression
first appeared in a judicial or legal context in 1982 in America in the case US vs $4,255,625.39
(1982) 551 F Supp.314.

Since then, that term has been widely accepted and is in popular usage throughout the world.
What Is Money Laundering?
Money laundering is the process of disguising illegally obtained money so that the funds appeared
to come from legitimate sources or activities. Money laundering occurs in connection with a wide
variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and
terrorism.
The principal objective of money laundering is to convert cash to some other form of asset to
conceal the illegal sources of origin has cash income.
Money laundering how big is the problem?
Estimated size of the money laundering problem totals more than 500 billion dollars annually
worldwide. This is a staggering amount and detrimental by any calculation to the financial systems
involved. Clearly the problem is enormous. It is also clear that money laundering extends far
beyond hiding drug profits.
Money laundering process
Money laundering is a diverse and often complex process basically involves three independent
steps that often occur simultaneously
1.Placement - It is during the placement stage that physical currency enters the financial
system and illegal proceeds are most vulnerable to detection. When illicit monies are
deposited at a financial institution, placement has occurred. The purchase of money orders
using cash from a criminal enterprise is another example of placement.
2. Layering. Separating the proceeds from criminal activity from their origins through layers
of complex financial transaction. Layering describes an activity invented too obscured trail
which is left by dirty money. During the layering stage, a launderer may conduct a series of
financial transactions in order to build layers between the fonts and their illicit source. This
nature can make it very difficult for investigators to follow the trail money. To avoid scrutiny
by law enforcement or bank regulatory authorities, the cash may be divided into amounts
less than $10,000 in “ Smurfing” of a large number of individuals to make small deposits
and withdrawals structured transfer of amounts below federal reporting requirements at the
remittance business .
3. Integration -Providing an apparently legitimate explanation for illicit proceeds. During
process, illicit funds are integrated with the monies from legitimate commercial activities as
they enter the mainstream economy. Thus, take on the appearance of legitimacy. Illicit
monies into a legitimate economy is very difficult to detect unless an audit trail had been
established during the placement of layering stages.
How Fighting Money Laundering Helps Fight Crime
Money laundering is a threat to the good functioning of a financial system; however, it can also
be the Achilles’ heel of criminal activity.

Most importantly, however, targeting the money laundering aspect of criminal activity and
depriving the criminal of his ill-gotten gains means hitting him where he's vulnerable. Without a
usable profit, the criminal activity will not continue.
14.CONFLICT OF INTEREST
Conflict of interest in the business context occurs when a person acts in a way that is to his advantage at
the expense of the employing organization. At the time of
hiring. When an employee agrees to the terms of a contract, there is also an implicit agreement that the
employee will not sacrifice the interest of the organization for the personal interest. Conflict of interest
violates the principles of impartiality. The interest may be financial or not.
The common factors that create conflict of interest are commercial bribes and gift. A
commercial bribe can be in the form of money., tangible goods, or services. An employee receives
something from a person outside the firm with the understanding that when there is a transaction
between that person of the firm he represents and the employee’s firm. Commercial extortion
occurs when an employee demands consideration from a person outside the firm as transaction
occurs.
Accepting a gift is unethical if it acts as a bribe or extortion in that it influences the imperial
judgement of the employee. The value of the gift, its purpose, the circumstances surrounding the
actual presentation of the gift, the accepted business practice in the region, and the company policy
regarding gifts should be taken into consideration when evaluating whether or not ethical issues
are involved.
General Principles
The term conflict of interest means something more than individual bias. There must be
an interest ordinarily financial, that could be directly affected by the work of the committee.
It applies only to current interests. It does not apply to past interests that have expired, no
longer exist, and cannot reasonably affect the current behavior. Nor it apply to the possible interest
s that may arise in the future but does not currently exist.
TYPES of TYPICAL CONFLICTS OF INTEREST
1. Self-dealing- For example, you work for the government and use your official position to
secure a contract for a private consulting company you own. Another instance is using your
government position to get a summer job for your daughter.
2. Accepting benefits. – bribery is one example; substantial (non-toke) gifts are another. For
example, you are the purchasing agent of your department and you accept a case of liquor
from a major supplier.
3. Influence peddling. Here, the professional solicits benefits in exchange for using her
influence to unfairly advance interest of a particular party.
4. Using your employer’s property for private advantage. This could be as obvious as
stealing supplies for home use.
5. Outside employment or Moonlighting. An example would be setting up a business on
the side that is in direct competition with your employer. Another case would be taking on so
many outside clients that you do not have the time and energy to devote to your regular
employer.
6. Post-employment- here is a risky situation can be one in which a person who resigns form
a public or private employment and goes into business in the same area. For example, a former
public servant sets up a practice lobbying the former department in which she was employed.
15. INSIDER TRADING
Insider trading refers to the significant facts that have not yet made public and are likely to
affect stock prices. It is being prohibited by the rules and regulations of the securities and exchange
commission. (SEC). The US securities and exchange commission considers an “insider” to be
anyone who has pertinent information that is not publicly available, and that gives the trader an
advantage over public. Thus, secretaries, lawyers, consultants, financial partners and others who
have access to inside information and who might ordinarily be considered outsiders
become insiders because of their knowledge as do all others, who are given the pertinent information.
Moral Argument
1. One is that of someone within the firm using information for his or her own private gain,
at the expense of the firm. (conflict of interest)
2. The other is the use of information by someone within the firm to secure personal
advantage over those not in the firm. (breach of loyalty)
Ethical Issues Related to Insider Trading.
• It violates fiduciary (involving trust) relationships between insiders and outside clients.
• It promotes greed and personal gain at the expense of others.
• It renders the transaction between two contracting parties as unfair.

Remember!
• Sexual harassment is an unwelcome sexual advances, requests for sexual favors, and other verbal
or physical conduct of a sexual nature constitutes sexual harassment when submission to or
rejection of this conduct explicitly or implicitly affects an individual’s employment.
• A justified wage is a fair level of compensation paid to an employee that takes into account
both market and non-market factors.
• Gift-giving is merely an act of extending goodwill to an individual in an effort to share
something with particular others. Free goods
Bribery is defined as a practice of giving remuneration for performance of an act that is
inconsistent with the work contract or the nature of the work one has been hired to
perform.
• Ethics in advertising is important, because by acting ethically with their advertising, a
company is being responsible towards the needs of the customer
• Office romance is defined as a relationship between two people who are employed by the
same organization.
• FairPrice is the amount of money that it is reasonable to pay for goods or services. • A
trade secret is the legal term for confidential business information. That piece of information
allows the company to compete effectively.
• Misrepresentation is observed when there is a transformation of information to
disinformation.
• Caveat emptor means “Let the buyer beware” and is a practice very common among
salesmen. Based on this concept, it is the responsibility of the consumer to determine for
himself the defects or negative features of the product. It is the principle that the buyer
alone is responsible for checking the quality and suitability of goods before a purchase is
made.
• Strike action (or simply strike) describes collective action undertaken by groups of workers
in the form of a refusal to perform work.
• Whistleblowing is the disclosure by an employee of confidential information which relates
to some danger, fraud, or other illegal or unethical conduct connected with the workplace,
be it for the employer or his fellow employees.
 • smurfing involves the use of multiple individuals and/or multiple transactions for making
cash deposits, buying monetary instruments or bank drafts in amounts under the reporting
threshold.
• Multi-level marketing is a system of selling in which one signs up other people to assist him,
and they, in turn, recruit others to help them. It is a system of selling through many levels
of distributors, thus the word “multilevel marketing”.
• In the classic pyramid scheme, participants attempt to make money solely by recruiting
new participants into the program. the hallmark of these schemes is the promise of Sky
high returns in a short period of time are doing nothing other than handling over your
money and getting others to do the same.
• Unfair competition is essentially a deceptive or wrongful business practice that
economically harms either consumers or business entities.
• Money laundering perfectly describes what takes place – illegal, or dirty, money is put
through a cycle of transactions, or washed, so that it comes out the other end is legal, or clean,
money. In other words, the source of illegally obtained funds is obscured through a succession
of transfers and deals in order that those same funds get eventually be made to appear as
legitimate income.”
• Conflict of interest in the business context occurs when a person acts in a way that is to his
advantage at the expense of the employing organization.
• Insider trading refers to the significant facts that have not yet made public and are likely to
affect stock prices. It is being prohibited by the rules and regulations of the securities and
exchange commission. (SEC).

The Filipino Value System

The Filipino value system refers to the set of values that a majority of the Filipino have historically
held important in their lives. It includes their own unique collection of consistent ideologies, moral codes,
ethical practices, etiquette, and cultural and personal values that are encouraged by their society.

Although with any society, the values that an individual holds sacred can vary on the basis of religion,
upbringing and other factors.
Generally, the distinct value system of Filipinos is rooted chiefly in personal association systems,
particularly those based in kinship, obligation, friendship, religion (particularly Christianity), and
commercial relationships. The values of Filipinos have been looked upon by foreigners as weakness
instead of strength due to the nature of how they may be badly treated and influenced due to these values.
Some may see that Filipino values as an obstacle to the growth of the country and yet others may say that
this is what makes the country powerful.

BAHALA NA

Trust in God or the concept of Bahala na is a principle used when a person does not know what to
accomplish or is too slothful to do anything at all. This belief to put fate in God’s hands may be a sign of
how religious Filipinos may be. Further, it may show that the Filipinos are free-spirited and that they put
their life in fate’s hands.
For most Filipinos, everything is already fixed or destined. Negatively, bahala na could bring about a
false sense of security with God as an insurance or a security blanket. For example, if God wants Filipino
families to have plenty of children (anak ay kayamanan), so God will take care of everything and the
family has nothing to worry about. Bahala na could be the cause of the lack of national resourcefulness
and of that discipline necessary for national growth.
When bahala na reigns, nothing ever gets completed. Pot-holed roads, uncollected garbage, countless
unsolved murders, carnapping and smuggling remain year after year. There have been less arrested,
convicted or jailed for unjustifiable murder or for notorious graft and corruption. A sense of national
disappointment, defenselessness, and hopelessness grips the nation yet the people no longer care. Nothing
going to takes place, Bahala na.

UTANG NA LOOB
Gratitude or utang na loob is when one does not fail to remember the fine actions that others
may have done particularly at times of great need. This debt of gratitude is at times abused by those who
have done well to others. They may request favors or things that may either be difficult to deal with or
beyond the means of the one in debt.

With this system, people are forced to do something in exchange for what others do in favor. A man
who, in spite of having been helped by a friend, declines to help the latter when his need crops up is hated
and called walang utang na loob or ingrate. This value has been taken advantage by others especially the
politicians. This utang na loob may result to faithfulness and a source for graft and corruption.

NINGAS COGON

Ningas is a noun which means flame, blaze or combustion, while cogon is a grass which can be easily
burned with its representation. Ningas cogon means the fast burning of cogon, which signifies

Filipinos’ way of eagerness only at the beginning but then quickly losing enthusiasm soon after to
continue it, or the lack of a follow-up. It is usually observed as a negative value.

The phrase refers rather regrettable tendency to start projects and never finish them. Many business
meetings seem optimistic and fruitful, fueled by the adrenaline rush of money to be made, and confident
to lead to grand and wonderful things. All too often, the projects under discussion fail to get off the
ground as the parties involved move on to other projects This is typically for the reason that some
participants were hesitant to demonstrate their doubts in the first place. They desired to go along with the
group compromise and share their fervor. While this has the short-term advantage of everyone leaving the
meeting with a pleasant buzz, the longer-term results consist of confusion, disappointment, and bitterness.

PADRINO SYSTEM

Padrino System, or patronage in the Filipino culture and politics is the value system where one gets
support, endorsement, or political appointment through family affiliation (nepotism) or friendship
(cronyism), as against to one’s worth. The padrino system in the Philippines has been the root cause of
many controversies and corruption.

This is identical to Compadre System whereby an enterprising subordinate will convince his superior to
be the godfather of his son to get promotion or salary increase. These crooked practices often lead to the
ballooning of bureaucracy such that a department secretary may have four undersecretaries and
countless assistant secretaries. In the disguise of reorganization to restructure the bureaucracy, a new
administration can fire or retire early. Thousands of civil servants and replace them with their own
people.

Using the padrino system can get a businessman easily started if the padrino would stand as go between
for introducing and vouching his character in order to get the business deal. Surely using the padrino
system can guarantee a good business deal. However, the padrino would anticipate that there would a
thing of value in exchange for the favor. For example, a person or group who wants to transact business
with government on average would look for support from hard faced and thick-witted officials and are
only too happy to force to their demands. In most instances the expenses acquired in the dealings could
be justified by both parties as grease money or padulas. It is also within lawful limits since there is no
evident an express transfer of cash or gifts.

MANAŇA HABIT

The manaña habit is something that Filipinos have learned from the Spaniards. The word manaña
means tomorrow or specified future time period it is also known as procrastination in plain English
and mamaya na in Filipino. It could also mean putting something off until another time period this
trade was instilled to the Filipinos during the Spanish era in which they use this have it in work
and serious business as a silent objection to the invaders.

The manaña habit can also be considered as the procrastination virus since it brings a lot of negative
effects to people. This habit has made Filipinos become lazier and less efficient in doing tasks. It is also
one of the greatest reasons why they become less productive and why they give their outputs late which
prevents them from growing as human beings period since it made them lazier, it cost them to achieve
less instead of achieving higher goals and it caused them to miss a lot of opportunities. The manaña
habit really must not be practiced by Filipinos.

Financially, it's perfect to describe lack of preparation for the future. Many Filipinos postpone saving or
getting insurance, feeling they can do so on another sunny day or when their finances are steadier. When
they at last decide to do it, it's too late because the premiums are too high or they are already sick and
want the money badly.

Most Filipinos also miss out on saving for retirement. Instead, they use all their money on their
children, thinking that when they aged the good turn will be given back to them. This is the same load
that their own parents forced on them. It becomes a vicious cycle.

In business setting, people work as a team in any corporate setup. No one works alone. Each one is
part of a team or a group, and the success or failure of each team is based on the other teams in the
organization. So, if one team member delays a task and falls behind schedule there is a domino effect of
postponements that go through the whole organization.

Everyone is guilty of procrastination. When warrant for the delays, some occasionally come up with
lame excuses to cover up the aftermath of the manaña habit. So, to reverse the effect, people rush to meet
the deadline, and often it results into a poor, disordered chaos whose fallout could very well suggest
losing an important account, wastefulness, and lose client confidence.
AMOR PROPIO/SELF-RESPECT

A more popular is Spanish word which means self-love. Also coming from the Spanish, it is a concept
that predated the Spanish occupation. It is a sense of self-esteem or self-respect that stops a person from
swallowing his pride. It includes sensitivity to personal insult or offense. A minor remark or offensive
gesture, though insulting, would not prompt a sense of amor propio. The stimulus that sets it off- is only
that which hits at the Filipino's most highly valued attributes.

This level of Amor propio can even be seen in modern libel and slander laws in the Philippines.
Someone can be held civilly guilty for defamation of character even if the allegations are absolutely and
objectively true.

For example, a person may feel reluctant to collect a long unpaid financial debt or item borrowed. This is
because to raise the matter face to face me place a person’s amor-propio at risk and can be the root for the
latter to break out. This situation is not only true to individuals but to business as well.

DELICADEZA

Delicadeza is a Spanish term which means daintiness when translated in English. It is defined as an act
of being refined or delicate in tastes or manners. But in simple terms, it is a sense of good manners or
how to behave rightly in all situations. It is an etiquette that was passed on to Filipinos as a legacy of the
Spanish culture. It could also mean proper decorum or strict adherence to what's right, moral or ethical.
Perhaps it can be better understood by saying that those who don't have it meaning walang delicadeza or
makapal ang mukha, or thick faced. Nevertheless, whatever it is, very few among public officials
appeared neither ready, nor willing to abide by it.

In more plain and simple language it means the sensitiveness of someone, the opposite of which is lack
of sympathy. It is the refined responsive bearing of somebody contrary to gross lack of remorse. In effect,
it even conveys elementary good manners and right conduct as lady and gentleman in actuation and
behavior.

Someone without delicadeza is basically despised, clearly disrespected or even already hated by
neighbors, by the community or the people in general. He may eventually packs-up and goes away,
finally leaves or simply disappears of the public in the now. In Philippine politics, for instance elected
officials must not engage themselves in any business operating in their localities. They must have
delicadeza not to have vested interest on those money creating activities. Unofficial must not receive any
5% to 7% institutionalized standard operating procedure or SOP from infrastructure projects out of
delicadeza.

In various business organizations, big or small, there are leaders or managers who preferred to save
himself from the liability of erroneous decisions by pointing fingers to his staff when the truth is, he is
part of the mess. However, there are also who give up one's position of authority when becoming
involved in a matter of impropriety and resign out of delicadeza.

HIYA
 Shame or hiya is a very common Filipino value. It is a sense of social propriety and conforming to
societal norms of behavior. Filipinos believe they must live up to the accepted standards of behavior and
if all they failed to do so they bring dishonor not only upon themselves, but also upon their family. If
someone is publicly embarrassed, criticized, or it does not live up to expectations, they feel shame and
lose self-esteem. To the Filipino, as two other Oriental peoples, he added something that a person must
possess to a high level. He who does not have hiya is called walang hiya or shameless. Because of this
value come a Filipino would do something stupid in order to save face.

It is said that Filipinos would go to enormous extents in order not to be placed in shame. Filipinos feel
pressure to meet the status call of the society when it comes to economic standing. One sign of this
might be a readiness to squander more than they can afford on a party they then be embarrassed by their
economic status. For example, a Filipino although he has neither money nor property, will borrow
money from relatives, neighbors or friends in order to have a feast for the baptism of his son or
daughter. In another instance, an employee would abstain from asking questions from his supervisor
even if he is not quite certain what to do because of hiya.

Most Filipinos just turned silent and kept their mouths shut to corruption in both business and
government para walang mapahiya.

PAKIKISAMA/PAKIKIPAG KAPWA TAO

Loyalty or pakikisama is another Filipino value. This is the shared sense of identity and
consciousness of the other person. It is treating others with the respect and dignity as an equal and not
someone below the individual. Filipinos are said to be loyal to their friends and fellow men in order to
guarantee the peace in the group. This is evident in their fundamental sense of justice and fairness and
concern for others wellbeing. Filipinos recognized the indispensable humanity of all people in regard
others with respect and empathy. With this orientation, Filipinos develop sympathy to the nature and
quality of interpersonal relationships, which are their main costs of security and happiness.

Consists of doing somebody a good act, like helping a man build a house without asking for payment, or
helping a man look for a job, and so on. If he does these in other related things, he is said to be mabuting
makisama. If he does the opposite, he's called masamang makisama. Pakikisama does not mean doing
corrupt or dishonest things in order to look good to others. Pakikisama is a positive value and means
doing somebody a good turn.

Pakikisama can cause some problems. Several people will attempt to reason out using the word
pakikisama to take advantage of a situation like tapping on cable or electricity, borrowing things are
money and probably never be returned, and never be able to refuse because of the feel of betraying them.
Basically, in business it is a practicing practical Translation of one’s pakikipagkapwa-tao because the
intention is to offer things and services of value to others to get better their standards of living. The
businessman that has Bucky pick up what hour does not cheat his customers through overpriced or
underweight goods. He does not destabilize his competitors by underpricing or damaging them. He does
not also mistreat his workers by underpaying or overworking them. Likewise, he does not cheat the
government by avoiding or evading taxes period at the same time, other Filipinos who benefit from fruits
of the businessman will give him back his share. Customers pay, competitors play fair, and workers
demonstrate malasakit over the business. What all developed well, it should promote and uphold the
vision of Filipino enterprise.

FAMILY ORIENTATION

The basic units of the Philippine social organization are the elementary family which includes the
mother, father and children, and the bilateral extended family which embraces all relatives off the father
and the mother period of particular significance is the sibling group the unit formed by brothers in
sisters. There are no clans or a similar unilateral kinship groups in the Philippines. The elementary
family and a sibling group formed the chief basis of shared action.

The Philippines is known to be a family centered nation. The Filipinos recognize your family is an
important social structure that one must take care of. They give importance to the safety and unity of
wants family. The Filipino family so intact that it is common for members of the same family work for
the same company. It is also common to find the whole clan living in the same areas that the Filipinos are
afraid to be too far from their own family. Family lunches with whole clan with up to 50 people, that
extend until the line of 2nd cousins are not strange. The Filipino puts a being close to one's family
members.

A Filipino’s life is the family. Not like in Western countries, Filipinos upon turning 18 years old are not
obliged to move out of their parents’ home and get a place for himself. The Filipinos do not send their
elders to nursing homes to be taken care of they believe that when their elders are powerless to live alone,
the time has come for them to pay their respects and to be able to save their parents just as they were
nurtured when they were younger. People also get strength from their family, thus a child may have
several godparents to ensure his future in case his parents will not be there for him.

This family is always of vital importance in the Philippines. Not surprisingly, most business
organizations have the Filipino family as their model. The superior and subordinate often exists in the
bata relationship. But that system basically similar to that of between parent and child. (bata meaning
child). As a result, paternalistic management styles are the standard.

As expected, a paternalistic in hierarchical management structure means that decision-making in most

organizations is prepared by the top officials. And unless one has some excellent inside connections or
referrals, his initial Contacts are not likely to be with the decision maker. Getting to know someone who
can and will act on a proposal like signing a contract or writing a check often has to be done through one
or more gatekeepers. These processes can take assuming eternity

In addition, most business settings have dance networks of God parents and other quasi-relatives. The
Filipino family is classified rather largely and consists of many people who are called Tito (uncle), tita
(auntie), pinsan (cousin), even if they are not related by blood. In many companies a good fraction of
employees falls into this category. This means they are not likely to be fired for incompetence except if
they really make a chaos of things. In bigger firms, the nepotism may occur in the Department a level and
maybe less prominent, but it possibly still exists.

HOSPITALITY
Hospitality refers to the relationship between the guests and the host.
Although Filipinos are not the only people in the world who can be friendly and welcoming, their attitude
towards other people is said to be exceptional. The host entertains and gives relieve to the guest while
staying in House of the host.
The Filipinos are very hospitable when it comes to their fellowmen. They will invite their visitors to
come into their homes and offer them treats such as snacks and drinks after a long journey. There are also
instances when Filipinos will serve only the best to their visitors even if at times, they may not be able to
afford it. They also go the extremes as to give up the comfort of their own bedrooms for their guests and
to the point of sleeping on the floor jus to ensure that their guests are comfortable. Even the humblest
home along the road can serve as a shelter for a stranger who has lost his way.

For Filipinos, serving other people the best of what they have is an honor and promise of true
friendship keeping the growth of tourism industry in the country largely depends on its people’s
hospitality which essentially impacts how tourists perceive the place in general. Filipino people are direct
players in the industry because their hospitality is being seen and experienced by travelers and it speaks of
the nation as a whole.

JOY AND HUMOR

This famous trait is the ability of the Filipinos to find joy and humor in everything. It sheds light on the
optimism and positivity of Filipinos in whatever situation they are in so as to remain determined in going
through struggles or challenges. Filipinos have cheerful, optimistic ad fun-loving approach t life and its
ups and downs. They have a pleasant disposition, a sense of humor, and a propensity for happiness that
contribute not only the Filipino charm but also the indomitability of the Filipino spirit. Laughing is an
important coping mechanism.
Businessmen always think positive towards their life, their business and themselves. They are not
controlled by failure and misgivings and always look forward. A person with positive mental attitude sees
hindrances as opportunities and does not hold their mind from negative forces and frustration so that it
has liberty to visualize, expand, dream and grow.

FLEXIBILITY, ADAPTABILITY, CREATIVITY

Studies show that Filipinos often have a dislike to a set of standardized rules or procedures. They
are known to follow a natural clock or organic sense of time-doing things they feel is correct. They are
present oriented which means that one attends to a task or requirement at the time it is needed and does
not worry much about the future engagements. This allows the Filipino to adapt and be flexible in doing
the tasks at times not bound to a particular schedule or timeframe. This allows them think on their feet
and be creative in facing whatever challenge or task they have even when it is already right in front of
them.
These are manifested in the ability to adjust to often complicated situations and prevailing
physical and social environments. Filipinos have a high patience for uncertainty that enables them to
respond coolly to ambiguity or lack of information. Filipinos often improvise and make productive and
innovative use of whatever is obtainable. These qualities have been repeatedly demonstrated in their
capacity to adapt to living in any the world and their ability to allow change.

No one knows the future, and nothing is ever constant or without deviation or change. This situation
means that flexibility, adaptability and creativity are the most important business which are basically vital
to success. When obstacles appear, when tested businesspeople have to persist with their ideas, they
continue with their hard work and think of success. Subsequently, the most wanted results will come
enduring and dedicated determination.

FAITH AND RELIGIOSITY

The Philippines is approximately 5% Christian (mostly Roman Catholic) 10% Muslim, and 5%
other religions. Some peoples in upland areas that resisted 300 years of Spanish colonial rule. This is a
reflection of the Filipino’s strong faith in God as seen in their various practices. This includes the
numerous church holidays they observe, the customary and obligatory Sunday Mass, the individual’s
basis of their moral standpoints, the influence of the church on the minds, actions, and opinions of the
majority, importance of the sacraments, praying at almost any possible time of the day. The extreme
practices during Holy Week and so on.

Filipino businessmen placed God as the center of their businesses. A businessman with faith and
religious for instance serves not just his customers, but all of humanity in the planet. Every business
transaction entered into is founded on honesty and integrity. Managers also demonstrate servant
leadership which is an attitude and set of practices that deepens the lives of individuals, creates better
organizations and eventually builds a more just and caring humanity.

ABILITY TO SURVIVE

The Filipinos as a people who have been constantly under the rule of numerous powerful countries
has over time, developed a sense of resourcefulness or the ability to survive with whatever they have.
They have the extraordinary ability to make something about of basically nothing.

Filipinos make do with what is available in the environment. Garbage scavengers in the poor
Manila areas are not looking for just reusable goods among the garbage but, increasingly also for food to
feed their families. This survival instinct is related to the Filipinos other strengths. A basic optimism,
flexibility and adaptability, hard work, and a deep faith in God. It is noticeable in the millions of Filipinos
who bravely live through the harshest economic and social situations.

Filipino businessmen do not only aim to survive the competition and the current economic
atmosphere, but they are also competent to manage growth and stay relevant.

HARDWORK AND INDUSTRY

With resourcefulness comes hard work. Filipinos are very determined and persevering in
accomplishing whatever they set their minds to. Filipinos over the years have proven time and time again
that they are a people with an industrious attitude. Sadly, this is seen by others as Filipinos being only