Ethical Challenges in

Business

Business Ethics and Social Responsibility

Presented by: Mrs. Jacqueline A. Toledana 1

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 The Four-Way Test, which was created
in 1932 by Rotarian Herbert J. Taylor
(who later served as RI president) when
he was asked to take charge of a
company that was facing bankruptcy.
This 24-word test for employees to
follow in their business and professional
lives became the guide for sales,
production, advertising, and all relations
with dealers and customers, and the
survival of the company is credited to
this simple philosophy. Adopted by
Rotary in 1943, The Four-Way Test has
been translated into more than a
hundred languages and published in
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thousands of ways..
 KNOW THE TERM

Ethics
is concerned with the study of morality and
the application of reason to elucidate specific
rules and principles that determine right and
wrong for a given situation.

Moral principles that govern a person’s

behavior or the conducting of an activity

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 Morality
is concerned with the norms, values,
and beliefs embedded in social
processes which define right and
wrong for an individual or a
community.

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 Business ethics

is the study of business

situations, activities, and
decisions where issues of right
or wrong are addressed.

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 Ethical issue

is an identifiable problem,
situation, or opportunity that
requires a person to choose from
several actions that may be
evaluated as right or wrong, ethical
or unethical

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 Ethical dilemna
An ethical dilemma (ethical
paradox or moral dilemma) is
a problem in the 
decision-making process
 between two possible
options, neither of which is
absolutely acceptable from an
ethical perspective. 
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 Ethical dilemma
An ethical dilemma (ethical
paradox or moral dilemma) is
a problem in the 
decision-making process
 between two possible
options, neither of which is
absolutely acceptable from an
ethical perspective. 
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 Quid Pro Quo
Is a Latin used in
English describes an
agreement between
two or more parties in
which there is a
reciprocal exchange of
goods and services.  
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 Fudiciary

is a person or organization
that makes financial decisions
on behalf of another party
who is legally obligated to act
in their clients’ best interests.

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 Nepotism
refers to preferential
treatment
It is the unfair use of
power in order to get jobs
or other benefits for the
family of friends.
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 Most of the ethical Concerns in the Workplace are
within your transactions with:

rendering of forced over time, toxic workplace, culture discrimation, questionable

Employees
use of company technology.

The Boss Harrasmen, Unethical Leadership, Unrealistic and Conflicting goals

Clients Bribery, false advertising, customer service issue

Government Declaration of financial status, complying with

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Ethics is important in
business because it builds
trust and
confidence in business
relationships. Unethical
actions may result in
negative
publicity, declining sales,
and even legal action.
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 01.
Bribery
Bribery is defined generally as
corrupt solicitation, acceptance,
or transfer of value in exchange
for official action.

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Bribery
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Bribery
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Bribery refers to the offering, giving,
soliciting, or receiving of any item of
value as a means of influencing the
actions of an individual holding a 
public or legal duty. This type of action
results in matters that should be
handled objectively being handled in a
manner best suited to the private
interests of the decision maker. As
such, bribery constitutes a crime and
both the offeror and the recipient can
be criminally charged. 19
Elements:
Proof of bribery requires demonstrating a 
“quid pro quo” relationship in which the
recipient directly alters behavior in exchange
for the gift. Because the relationship does
not occur directly enough, campaign
donations from corporations or individuals
to political candidates do not constitute
bribery. Another element of proving bribery
includes proving intent to influence the
discharge of another’s official duties. Some 
statutes also require proof that both parties
 understand and agree to the arrangement.  20
Bribes are often forged where corporate and government
interests align. Frequently, they involve kickbacks in the
awarding of public contracts. Some examples of bribes might
include:
• A construction guaranteeing an elected official ten percent
in kickback money in exchange for a large public
infrastructure contract
•  A manufacturing firm paying foreign officials money for
preferential treatment or to smuggle unregistered goods
across a border
•  A pharmaceutical firm bribes doctors, hospitals, or other
healthcare facilities with incentives to use prescribe their
drug to patients
•  A professional sports franchise bribes an official for
preferential treatment or to fix the outcome of a contest 21
Bribery
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02.
Conflict of Interest
and Loyalty

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 conflict of interest in the workplace
is when someone's personal
obligations or loyalties clash with
their duties in the workplace. The
conflict compromises their ability to
make impartial decisions, judgments,
or actions that serve the best
interests of their clients or employer.

Family, friendships, finances, and self-

serving interests are common factors
that lead to conflicts of interest.

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 A low-stakes example of a
perceived conflict of interest is
when a company draws winners
for prizes at its annual Christmas
party, and the big boss just so
happens to win the expensive trip
to Hawaii. Even if the draw is
conducted fairly, the outcome is
likely to leave the rest of the
employees a little suspicious
about the process. In this case,
the big boss should sit this one
out. 26
 A more serious perceived conflict
of interest example is a retail store
using a third-party delivery service
that employs the store's owner's
sibling. It could appear to be a
conflict of interest even if the
delivery service is the best option
available and the sibling isn't in a
position to benefit from the
arrangement directly.

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What Is a Conflict of Interest?
A conflict of interest occurs when an
entity or individual becomes unreliable
because of a clash between personal
(or self-serving) interests and
professional duties or responsibilities.
Such a conflict occurs when a
company or person has a 
vested interest—such as money, status,
knowledge, relationships, or
reputation—which puts into question
whether their actions, judgment, or
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decision-making can be unbiased.
Some examples of a conflict of interest
could be:
Representing a family member in
court

• Advising a client to invest in a

company owned by your spouse
• Hiring an unqualified relative or
friend

When such a situation arises, the party

with the conflict of interest is usually
asked to remove themselves, and it is29
 03.
HARRASMENT
One of the best ways to prevent
harassment is to educate everyone.

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According to the British Law:
Unwanted conduct related to a relevant
protected characteristic, which has the
purpose or effect of violating an
individual's dignity or creating an
intimidating, hostile, degrading,
humiliating or offensive environment for
that individual.”

You should make the meaning of

workplace harassment clear in your policiy
so your employees have a sound
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understanding of what it constitutes.
According to the British Law:
Unwanted conduct related to a relevant
protected characteristic, which has the
purpose or effect of violating an
individual's dignity or creating an
intimidating, hostile, degrading,
humiliating or offensive environment for
that individual.”

Companies and employers should make the

meaning of workplace harassment clear in
its policy so their employees have a sound
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understanding of what it constitutes.
Harassment at work examples include:

• Threats or abuse (spoken or written).

• [Unwelcome sexual advances.
• Offensive emails, tweets, or comments on social
networking sites.
• Offensive emblems or flags.
• Physical behaviour like gestures or facial expressions.
• Pranks, jokes, or teasing.
• Exclusion or victimisation.
• Insults.
• Spreading rumours.
• Undermining a competent employee with constant
criticism. 33
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 04.

Forced Overtime

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 Generally,no one should be
compelled to work overtime in
excess of the mandatory eight
hours on given day against his/her
will.

The Philippine Labor Code states

that overtime work required in
the following cases:

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Consequences of
Unethical Business
Practice

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5 Ways to manage
Ethical Issues
Read the article:
https://www.clearrisk.com/risk-managem
ent-blog/how-to-manage-ethical-risks-0

https://online.tamucc.edu/degrees/
business/mba/general/how-to-address-
ethical-issues-in-the-workplace/ 43
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Criteria for the Short Essay:

Sentence construction- 10 pts.

Organization of Ideas- 10 pts
Presentation (examples or evidences)- 10 pts. 45
TOTAL: 30 points