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BUSINESS ETHICS
Module 1: NATURE AND FORMS OF BUSINESS ORGANIZATION
LEVELS OF BUSINESS ETHICS:
Macro
Corporate
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
Providing goods and services
Provides jobs and employment
Create wealth
Innovate and deliver
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:
Business Owner - “shareholder”, wants fair return on investments
Management and Employees - wants fair compensation for work and proper safe workplace
Customer - wants good value of products and services
Suppliers - wants fair competition and good price
Investor - wants a reliable information and payment
Government - wants a legal and ethical governance
Community - wants social responsibility
IMPORTANCE OF GOOD CORPORATE GOVERNANCE
Operate more efficiently
Better ability to attract customer
Lower costs of capital and interest rates on loans
Better access to external finance
Higher firm valuation and share performance
Mitigate risks and safeguard against mismanagement
Sustain company growth
CORE PRINCIPLES OF GOOD GOVERNANCE
Fairness - each decision made requires balancing the interest of different stakeholders
Accountability - acceptance of responsibility
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
Employee conduct (accountability)
Equal opportunity (fairness)
Attendance and time off (accountability and fairness)
Computer use (transparency and accountability)
Non competition (Fairness)
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
Proper dress code
Workplace safety procedure
Harassment policies
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
Bribery - accepting money/ gifts in return for preferential treatment
Persuading or rewarding improper behavior
Offering any money or reward for personal gain
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
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:
Do not touch people appropriately
Never date someone who works for you
Do not demean others or make suggestive comments
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
When country is at war or national or local emergency declared by chief executive
When it's necessary to prevent loss of life or property in case of imminent danger to public safety
When there is urgent work to be performed on equipments to avoid serious loss or damage to employer
When work is necessary to prevent loss or damage to perishable goods
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:
Generosity
Leadership
Harmony
Wisdom
Community
Creativity
Simplicity
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
Team Oriented Culture - believes that if an employees are happy, the more productive they become
Elite Culture - only hires qualified individuals who are meant to lead the way
Prioritizes work
Ranks up quickly
Works for long hours
Horizontal Culture - everyone gets to pitch their ideas or has a voice
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
Introduction
Mission, Vision, Goals, and Objectives
Framework
Suggestion (if needed)
Set a clear whistle-blowing policy
List the available resources
Revision
