Module 1: NATURE AND FORMS OF BUSINESS ORGANIZATION

LEVELS OF BUSINESS ETHICS:

1. Macro

2. Corporate

3. Individual

FORMS OF BUSINESS ORGANIZATIONS:

• Sole Proprietorship - an unincorporated business that has just one owner who pays personal income tax on profits earned from the business

• Partnership - a formal arrangement by two or more parties to manage and operate a business and share its profits

> Limited Partnership (LP) - partnership made up of two or more partners in which the general partner oversees and runs the business while limited partners do not partake in managing the business

• Corporation - a legal entity that is separate and distinct from its owners

For-Profit Organization - entity whose main goal is to make money or generate profit

Not-For-Profit Organization - an organization with a purpose to further a social cause and provide a public benefit

Cooperative - business or other organization that is owned and run jointly by its members, who share the profits or benefits

PURPOSE OF BUSINESS IN ECONOMY

1. Providing goods and services

2. Provides jobs and employment

3. Create wealth

4. Innovate and deliver

5. Meets the needs of the people

Module 2: ESSENTIALS IN BUSINESS ETHICS

• Businesses are part of society. They are systems of organizations for people to produce goods and services

• Business have to be responsible to various stakeholders apart from its owner.

• There is more to business than making money,

Module 3: CORE PRINCIPLES OF GOOD CORPORATE GOVERNANCE

• Corporate Governance - the system of rules, practices, and processes by which a firm is directed and controlled

STAKEHOLDERS:

1. Business Owner - “shareholder”, wants fair return on investments

2. Management and Employees - wants fair compensation for work and proper safe workplace

3. Customer - wants good value of products and services

4. Suppliers - wants fair competition and good price

5. Investor - wants a reliable information and payment

6. Government - wants a legal and ethical governance

7. Community - wants social responsibility

IMPORTANCE OF GOOD CORPORATE GOVERNANCE

1. Operate more efficiently

2. Better ability to attract customer

3. Lower costs of capital and interest rates on loans

4. Better access to external finance

5. Higher firm valuation and share performance

6. Mitigate risks and safeguard against mismanagement

7. Sustain company growth

CORE PRINCIPLES OF GOOD GOVERNANCE

1. Fairness - each decision made requires balancing the interest of different stakeholders

2. Accountability - acceptance of responsibility

3. Transparency - quality of being easily seen through or understood

>Direct Communication - individual speaks their mind clearly and honestly

>Admitting Mistakes - someone takes responsibility for their actions and doesn't try to shift blame

The Philippine government operates under the guidance of Philippine constitution

The constitution sets the parameter of the law and defines what its citizens are legally entitled to.

• Stakeholders should be informed about the company activities, its plans in the future and the risks involved in its strategies.

• Policies and procedures establish the rules of conduct in an organization

• They are enforced to protect stakeholders of the corporation

COMMON PRACTICES IN BUSINESS ORGANIZATION

1. Employee conduct (accountability)

2. Equal opportunity (fairness)

3. Attendance and time off (accountability and fairness)

4. Computer use (transparency and accountability)

5. Non competition (Fairness)

6. Finance and accounting (transparency)

Policy - a set of rules or guidelines for your organization and employees to follow in order to achieve a specific goal

Procedure - the instruction on how a policy is followed

Employee Code of Conduct - set the duties and responsibilities each employee must follow as condition of employment

1. Proper dress code

2. Workplace safety procedure

3. Harassment policies

4. Policies on internet usage

Equal Opportunity - promote fair treatment in the workplace.

Attendance & Leave Management Systems - attendance policies not only outline the employee responsibility to adhere to work schedules but also define how employees may schedule leaves or notification of an absence or late arrival

Computer - companies may implement policies governing the use of computers and internet in the workplace to limit unnecessary and time wasting internet surfing and social usage.

Non-Compete Agreement - clause in contract specifying that an employee must not enter into competition with an employer after the employment period is over

Finance - accounting policies deal with how money is handled in the company how acquisitions and liabilities are recorded

Accounting - well managed finance department should have a clear guidelines on purchase, petty cash disbursement and recording

Module 4: ETHICAL ISSUES IN BUSINESS

• Ethical Issue - is a problem, situation, or opportunity requiring an individual, group or organization to choose among several actions that must be evaluated as right or wrong

>misuse of company time and resources

(time theft, using company software and internet services for personal business)

>abusive or intimidating behavior

(physical threats, false accusations, profanity, insults, wage theft, bullying)

Ethical Issues in Global Business

• Product Safety

• Plant Safety

• Advertising Practices

• Human Resource Management

• Environmental Problems

• Business Practices

Common Business Ethical Challenge

• Conflict of Interest - business decision may be influenced for personal gain

• Whistle-Blowing - employee’s disclosure of illegal, immoral, or unethical practices in the organization

• Honesty and Integrity - telling the truth and adhering to deeply felt ethical principles in business decision

• Loyalty vs Truth - business people expect employees to be loyal and truthful but ethical conflicts may arise

Ethical Challenges in Doing the Business

1. Bribery - accepting money/ gifts in return for preferential treatment

• Persuading or rewarding improper behavior

• Offering any money or reward for personal gain

1. Conflict of Interest and Loyalty: a “conflict of interest” is a situation in which financial or other personal considerations have the potential to compromise or bias professional judgment and objectivity

• Overreaching or Fraud - making profit at expense of client

• Financial Interest in the Case - being financially involved in the litigation of the client

• Gifts - accepting more than nominal value

• Intimate Relationship - dating current and probably former client

1. Harassment:

• Sexual Harassment - unwanted sexual conduct and it can happen anywhere, at any time.

• Unwanted Flirting , pressing someone after being told to stop

• Cat Calling, telling someone they have nice legs or to smile

• Touching Without Consent

• Sexual Favors

• Crude Gestures or jokes, sexual jokes or humping gestures

Practices To Observe in Office and in Real Life:

1. Do not touch people appropriately

2. Never date someone who works for you

3. Do not demean others or make suggestive comments

4. Watch your language and watch jokes being shared for what seems humorous to some may offend others

Forced Overtime - generally, no one should be compelled to work overtime in excess of the mandatory eight hours on any given day against his/her well

1. When country is at war or national or local emergency declared by chief executive

2. When it's necessary to prevent loss of life or property in case of imminent danger to public safety

3. When there is urgent work to be performed on equipments to avoid serious loss or damage to employer

4. When work is necessary to prevent loss or damage to perishable goods

5. Where completion of work which has been started before eight hours is necessary to prevent serious obstruction to business

Module 5: BUSINESS ETHICS

• Business Ethics - the moral principles and business values that govern the way businesses and individuals engage in business activity

• Corporate Culture - values, standards, attitudes, and beliefs shared by the members of an organization

Core Values Examples:

1. Generosity

2. Leadership

3. Harmony

4. Wisdom

5. Community

6. Creativity

7. Simplicity

8. Excellence

• Values - principles or standards of behavior: one’s judgment if what is important in life

• Affects behavior and character

• Related to everyday life

• Beliefs - conviction or acceptance that something exists or is true, especially without proof

• Affects morals and values

• Mostly related to religion

Corporate Culture

1. Team Oriented Culture - believes that if an employees are happy, the more productive they become

2. Elite Culture - only hires qualified individuals who are meant to lead the way

• Prioritizes work

• Ranks up quickly

• Works for long hours

1. Horizontal Culture - everyone gets to pitch their ideas or has a voice

2. Conventional Culture - they work in traditional manner and has a dress code

• Code of Ethics - sets company’s mission, vision, objectives, and responsibilities

• Mission Statement - description of company’s culture, values, and purpose.

• Statement of why an organization exists

• Vision Statement - description of the desired future of for the company

Code of Conduct Key Elements

1. Introduction

2. Mission, Vision, Goals, and Objectives

3. Framework

4. Suggestion (if needed)

5. Set a clear whistle-blowing policy

6. List the available resources

7. Revision