Business Ethics and

Social
Responsibility
Code of Ethics in
Business
 MELC
1. define ethics;
2. explain why ethics is important in
business;
3. classify the given ethical issues; and
4. create a good situation from the choices
given.
• Match the items in Column A to its description in Column B. Write your
answers on a separate sheet of paper
Directions: Read each statement below and classify it according to its
ethical issue. Write only the letter of your answer on a separate sheet of
paper.
A. Ethical Issues in Production
B. Ethical Issues in Sales and Marketing
C. Ethical Issues in Finance
D. Ethical Issues in Human Resource Management
5. XYZ Company does not accept members of LGBTQIA+ community.
6. Reggie’s hotdogs are made under strict processing standards.
7. The company supervisor orders office supplies from her husband’s store.
8. Wyn Mobile, a new brand of computer, launched its new laptops at an
overpriced amount.
9. Marigold Enterprise rejects differently abled applicants.
Directions: Read each statement below and classify it according to its
ethical issue. Write only the letter of your answer on a separate sheet of
paper.
A. Ethical Issues in Production
B. Ethical Issues in Sales and Marketing
C. Ethical Issues in Finance
D. Ethical Issues in Human Resource Management
11.The food products of XYZ Corporation are well-sealed.
12.The administrative manager joins the contract bidding of their proposed
new building.
13.Mr. Reyes, the accountant, bribed the personnel to reduce their
company’s tax payable.
14. Cherry Beverages hired a famous commercial model for its
product promotion.
15. Chocmuch Manufacturing Corporation delivers its products on time.
 Analyze each situation below and identify what core principle is applied. Write the letter of
your answer on a separate sheet of paper.
Your choices:
A. fairness
B. accountability
C. transparency
1. The treasurer of a cooperative withdrew P20,000 cash from a bank. On her way to the office,
she passed by the public market and since it was market day, there were a lot of people in the
area. A man suddenly snatched her bag where the money was placed. Although shocked and
sad, she promised to pay the P20,000 through salary deduction.
2. The manager of the company ordered materials for their office extension. He/she declared
the actual amount and attached the official receipt for future reference.
3. The boss noticed that his/her two clerks were not talking to each other. He/she ordered the two
to come to his/her office one at a time to listen to both sides before he/she decides.
 DEFINITION OF ETHICS

The term Ethics is derived from the Greek word ethos which means
“characteristic way of thinking”. Ethics, as a science, does not only evaluate the
morality of our human conduct but also provides us with a common understanding
of the universal, objective, and irreversible moral principles that should govern our
human behavior and guide our moral decisions (Roa, 2011).

Ethics are moral principles that guide the conduct of the individual (Racelis,
2017). These are rules of behavior based on ideas about what is morally good and
bad (Merriam-Webster Dictionary).
 WHY IS ETHICS IMPORTANT IN
BUSINESS?

Ethical conduct, whether at the corporate, professional, or personal level, is a direct

reflection of the principles and values which regulate the person and the institution
he/she represents. Organizations establish their own culture that is socially expressed as
their ideals. Such principles or ideals have an impact on the relationships within the
company, efficiency, prestige, performance and retention of employees, legalities, and the
wider community they work in.

As a result, most organizations generate a list of organizational values and codes of

conduct to be recognized and adhered by all workers. Motivating and enhancing
constructive actions, and at the same time building an atmosphere that prevents unethical
behavior are vital obligations on the part of both administrators and workers
 HOW TO APPLY ETHICS

• At the individual level, organizations ought to concentrate on improving and

encouraging every employee to respect and adhere to ethical principles. Certain
aspects of individual ethics have their roots in the individual. Achieving a strong
sense of professionalism and recognizing certain professional decisions'
ethical implications are the key components of education, individual
reflection, and experience.
 1. ETHICAL ISSUES IN FINANCE

• Under the umbrella of finance and accounting, fairness in trading practices,

trading conditions, financial contracting, sales practices, consultancy
services, tax payments, internal audits, external audits, and executive
compensation are included, whereas specific corporate ethical/legal abuse
includes insider trading, bribery/kickbacks, misleading financial analysis, and
fraud on securities.
 2. ETHICAL ISSUES IN HUMAN
RESOURCE (HR) MANAGEMENT
• Human Resource Management 's tasks include hiring and orientation,
performance evaluation, training and development, labor relations, and health and
safety concerns. Among the ethical issues are discrimination by age (the young
ones are preferred over the older ones), gender preference, sexual orientation,
race, ethnicity, disability, and physical appearance are all ethical issues that the
HR oversees.
 3. ETHICAL ISSUES IN SALES AND
MARKETING
• Marketing ethics deals with the beliefs, standards and/or morals that advertisers
and marketing organizations will operate upon. Ethical marketing issues include
promotion of obsolete or harmful products/services; openness about
environmental threats; food ingredients (Genetically Modified Organisms);
possible health hazards or financial risks; protection for the privacy and
autonomy of consumers; truthfulness in advertising; and honesty in price and
delivery. Some claim that advertisements can affect the views of individuals and
their relationships with others, suggesting an ethical obligation to avoid
distorting those expectations and relationships.
• Ethics in marketing includes practices in pricing, which involves unlawful
acts such as price manipulation and price skimming. According to Hayes (2020),
price skimming is a product pricing strategy by which a firm charges the highest
initial price that customers will pay and then lowers it over time. On the other
hand, advertising has raised concerns over offensive advertisements, objectification,
and school marketing.
 4. ETHICAL ISSUES IN
PRODUCTION
• Business ethics typically deals with company's duties to ensure its goods and
industrial procedures do not inflict unnecessary harm. Many products and
services can be generated and used at zero risk and it can be difficult to assess
the ethical path. However, there are consumers who patronize products that
damage them, for example, tobacco products. Output can have adverse effects on
the environment like air pollution, destruction of habitats, and urban sprawl.
 6

Examples of Ethical Issues in Business

 CLASSIFY EACH PHRASE BELOW TO THE
CORRESPONDING COLUMN OF ETHICAL
ISSUES WHERE IT BELONGS. WRITE YOUR
ANSWERS ON A SEPARATE SHEET OF PAPER.

• 1. destruction of habitats
• 2. encountered misleading financial reports
• 3. overweight applicants are not allowed
• 4. hiring limited to religious affiliations
• 5. honesty in prices
• 6. truthfulness in advertising
• 7. fraud on securities
• 8. harm to environment
• 9. manipulation in prices
• 10. exaggerated advertisements
in Finance in Human in Sales and in Production
Resource Marketing
Management
 COMPLETE THE GIVEN PHRASES
BELOW FOR AT LEAST THREE TO
FIVE SENTENCES

•1. Ethics means

•2. Ethics is important in business
because
 READ EACH SENTENCE BELOW AND
CLASSIFY EACH ACCORDING TO THE
ETHICAL ISSUE WHERE IT BELONGS.

A. Ethical Issues in Finance

B. Ethical Issues in Human Resource Management
C. Ethical Issues in Marketing
D. Ethical Issues in Production
1. XYZ Company does not accept members of LGBTQIA+ community.
2. Diggie’s hotdogs are made under strict processing standards.
3. The company accountant orders office supplies from her husband’s store.
4. Strawberry, a new brand of computer, launched its new laptops at an overpriced
amount.
5. Lobo Enterprise rejects all differently abled persons.
6. Super Milk does not put on the can’s label the ingredients they used.
6. Super Milk does not put on the can’s label the ingredients they used.
7. The food products of XYZ Corporation are well-sealed.
8. The manager joins the contract bidding of their proposed new building.
9. Lotlot, the accountant, bribed the personnel to reduce their company’s tax
payable.
10. Robot Beverages hired a famous commercial model for its product promotion.
11. Chocolatey Much Manufacturing Corporation delivers its products on time.
12. RB Corporation’s employable age limit is 55 years old.
 WHAT IS CODE OF ETHICS?

• Code of Ethics is a set of rules about good and bad behavior. It is a guide of
principles designed to help professionals conduct business honestly and with
integrity. A code of ethics document may outline the mission and values of the
business or organization, how professionals are supposed to approach problems,
the ethical principles based on the organization's core values, and the standards to
which the professional is held.
 SAUCER AND SIMS (2013) OFFER
RECOMMENDATIONS FOR DEVELOPING CODE OF
ETHICS INBUSINESS ORGANIZATIONS:

• 1. Adopt code of ethics (use the Code of Ethics of other companies as a reference
• and modify according to the needs of the company).
• 2. Offer training on ethics (for management and employees).
• 3. Hire and foster individuals with ethical value.
• 4. Deal with immoral activities. Employees must know the implications and
effects of making unethical actions, and should be ready to accept
consequences.
 SAUCER AND SIMS (2013) OFFER RECOMMENDATIONS FOR
DEVELOPING CODE OF ETHICS INBUSINESS ORGANIZATIONS :

• 5. Take constructive measures. For example, give rewards to employees who admit their mistakes.
If the company is conscientious and smart, it can encourage warehouse workers to take responsibility
for their mistakes and even praise them for coming forward, apologizing and ensuring that a faulty
product is not purchased by the customer. At first it seems counter-intuitive to reward an employee for a
mistake, but in the end, it provides everyone with the best result.
• 6. Carry out a social audit. Conduct survey to employees once in a while.
• 7. Cover all whistleblowers. These people detect illegal activities within organizations and
disclose the actions to the authority or managers. A whistleblower who works sincerely, correctly
reporting an issue, should be praised for his/her courage and integrity, as opposed to being disciplined
and ostracized. If an individual blasts the whistle, it is possible that the company itself has failed
internally to motivate and improve fair and ethical conversations.
• 8. Empower the defenders of integrity. Support those who work with honesty
• and integrity.
 SAUCER AND SIMS (2013) OFFER RECOMMENDATIONS FOR
DEVELOPING CODE OF ETHICS INBUSINESS ORGANIZATIONS:

• 9. Ensure executive commitment. The anonymity of those who report the

• problems should be practiced.
• 10.Communicate the principles of conduct within the company and across the
• industry.
• 11.Assign an officer who is clearly responsible for the enforcement of ethical
• standards. He/she can be consulted for advice.
 SAUCER AND SIMS (2013) OFFER RECOMMENDATIONS FOR
DEVELOPING CODE OF ETHICS INBUSINESS ORGANIZATIONS:

•.
• 12.Establish a procedure for violations of ethical standards, and fully review any
• offenses reported.
• 13.Ensure high perseverance by the company's board of trustees.
14.Lead by example, above everything else.
 THIS FOUR-WAY TEST CONSISTS OF
ASKING FOUR QUESTIONS:

1. Is my decision truthful?
2. Is my decision fair to all who are affected
by it?
3. Will this build the organization's goodwill?
4. Will the decision benefit all parties with
vested interest in the outcome?
 CODE OF ETHICS CONTAINS THE
FOLLOWING:
1. Vision means something that you imagine; a picture that you see in your mind
(Merriam-Webster Dictionary). The vision statement helps to ensure the alignment of the
decisions to the company goals.
• Example: To make innovations that everyone could access and adapt depending on
their needs

2. Values (value means something thought of as important or useful)

• Values in business help to ensure that all of the employees work towards the company
goals.
• Example: We commit ourselves to serve our customers with quality service and
utmost respect.
 CODE OF ETHICS CONTAINS THE
FOLLOWING:

• 3. Mission- a specific task with which a person or a group is charged (Merriam-

Webster Dictionary). The mission statement clearly and effectively guides the
business or the organization in its decision-making.
• Example: To inspire all the young athletes of the country… tell them to dream and go
for it!

• 4. Principles- moral rules or beliefs that help you know what is right and wrong and
that influence your actions (Merriam-Webster Dictionary).
• Examples:
• Customers have to be respected.
Make sure to deliver quality product.
 SIMPLIFIED SAMPLE OF CODE OF
ETHICS: XYZ COMPANY
Our Core Values
Our Vision: To lead the car industry by giving our customers quality cars worthy of their money and unmatched
customer services
Our Values:
We act with the highest standards of integrity.
We respect individuals and treat them fairly.
Our Mission:
To work efficiently and enthusiastically to make XYZ Company the country’s top car dealer while serving our customers
punctually and courteously
Our Principles:
1st: XYZ Company shall adopt a zero-tolerance policy towards bribery and corruption in whatever form;
2nd: All company officers and employees shall conduct business in accordance with Philippine laws and regulations;
and
3rd: We shall act in good faith and observe sense of professionalism at all times.
Directions: Read each sentence below and write the words thumbs up if it is true or
thumbs down if it is not. Write your answers on a separate sheet of paper.
1. The company’s Board of Trustees should show perseverance.
2. It does not matter whether the decision is fair to all or not.
3. Social surveys should be carried out by the company.
4. The company may not fully review the offenses reported.
5. Each member of the organization should be fully aware of the company’s
principles.
6. The owner’s decision should be based on truth.
7. Do not mind immoral activities in the company.
8. The management should protect the whistleblowers.
9. The decision should build goodwill of the organization.
10. Ethics are social principles that guide the conduct of the individuals.
Directions: Complete each statement by filling the appropriate word in the blank.
Write your answers on a separate sheet of paper.
11-12 Code of Ethics is a set of rules about _____ and _____ behavior.
13. The possibility of giving _____ action often minimize doing offensive behavior.
14. The people who detect illegal activities and report the same to proper
authorities
are called _____.
15. It is highly suggested that administrators should lead by _____.