CODE OF ETHICS LC

1.7
• 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
• Ethics are moral principles that guide the conduct of
the individual. These are rules of behavior based on
ideas about what is morally good and bad.
 WHAT IS CODE OF ETHICS? LC
1.7
• 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.
 Why is Ethics important in LC
business?
1.7
• 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.
 How to Apply Ethics LC
1.7
• 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.
 Examples of Ethical Issues in LC
Business
1.7
• Ethical Issues in Finance
• Ethical Issues in Human Resource (HR) Management
• Ethical Issues in Sales and Marketing
• Ethical Issues in Production
 Examples of Ethical Issues in LC
Business
1.7
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.
 Examples of Ethical Issues in LC
Business
1.7
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
 Examples of Ethical Issues in LC
Business
1.7
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.
 Examples of Ethical Issues in LC
Business
1.7
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.
 CODE OF ETHICS LC
1.7
Saucer and Sims (2013) offer recommendations for
developing Code of Ethics in business organizations: 1.

1. Adopt code of ethics

2. Offer training on ethics
3. Hire and foster individuals with ethical value.
4. Deal with immoral activities.
5. Take constructive measures.
6. Carry out a social audit.
7. Cover all whistleblowers.
 CODE OF ETHICS LC
1.7
Saucer and Sims (2013) offer recommendations for
developing Code of Ethics in business organizations: 1.
8. Empower the defenders of integrity.
9. Ensure executive commitment.
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.
12. Establish a procedure for violations of ethical
standards, and fully review any
offenses reported.
 CODE OF ETHICS LC
1.7
Saucer and Sims (2013) offer recommendations for
developing Code of Ethics in business organizations: 1.

13. Ensure high perseverance by the company's board of

trustees.
14. Lead by example, above everything else.
 CODE OF ETHICS LC
1.7
It should be remembered that when faced with an
ethical situation, the outcome of the decision-making
process should be considered. One way to tackle ethical
situations is by using the four-way test to evaluate
decisions. 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 LC
1.7
Code of Ethics contains the following:

1. Vision means something that you imagine; a picture

that you see in your mind. The vision statement helps to
ensure the alignment of the decisions to the company
goals.
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.
 CODE OF ETHICS LC
1.7
Code of Ethics contains the following:

3. Mission- a specific task with which a person or a group

is charged. The mission statement clearly and
effectively guides the business or the organization in its
decision-making.
4. Principles- moral rules or beliefs that help you know
what is right and wrong and that influence your actions
 CODE OF ETHICS LC
Common Practices in Business Organizations 1.7
1. Decorum- is defined as appropriate, polite behavior in a
particular society. Office Decorum is about the Do’s and Don’ts to
be practiced in the workplace.

2. Protocol- means an official set of procedures for what actions to

take in a certain situation. It is the proper procedure of conduct and
a standard of set of rules that allow employees to communicate
with each other. The business protocol is an important aspect of the
formation of relationships within a company and between
companies.
DECORUM LC
1.6
 CODE OF ETHICS LC
Common Practices in Business Organizations
1.7
3. Policies and Procedures- provide employees a clear
understanding of what is being expected of them. They also
provide a fair, predictable, and consistent approach in managing a
workplace and its issues.

4. Marketing- refers to the activities that undertakes to promote the

buying and selling of its product and services. It includes
promotion, doing research, advertising, selling, and distribution of
the services and its goods.
 CODE OF ETHICS LC
Common Practices in Business Organizations
1.7
5. Bookkeeping- is a system of maintaining records and data of a
particular business with a centralized book of records to balance
daily sales and cash receipts as well as to reconcile bank accounts.
It is considered as the organization of financial information in
which you are keepingyour records organized and make it easier to
locate and provide to appropriate parties.

Features of Bookkeeping:
a. Recording financial transactions
b. Posting debits and credits
c. Producing invoices
 CODE OF ETHICS LC
Common Practices in Business Organizations
1.7
6. Reportorial Requirements- Compliance with this practice is
stringent for companies that sell securities to the public, are listed
in the stock exchange, or are classified as public companies. It is
stipulated by laws such as the Securities Regulation Code and the
Corporation Code of the Philippines.

7. Documentation- refers to all books, records, files, business

records and plans, reports, correspondence, documentation in
respect of the agreement, and other financial and customer data.