business to behave ethically and contribute to

economic development while improving the

The Social Function of Business quality of life the workforce and their families,
the local community, and society at large.

Why should a business be ethically sensitive? Businesses and Associations in the Philippines
spearheading the CSR movement in 1970s:
In 2002, all businesses in the world produced
more than $40 trillion worth of goods and a. Bishops Businessmen’s Conference of
services. Businesses play a major role in the Philippines (BBCP);
keeping the economy alive. The fundamental b. Associations of Foundations (AF);
reason for examining the activities of a business c. Philippine Business for Social Progress
from the social and ethical perspective of (PBSP)
business is for the promotion of the common
The Morality of Advertising
good.
Article 108 of the Consumer Act of the
Four main reasons that may persuade a Philippines (Republic Act No.7394) declares
business to act ethically:
that “The State shall protect the consumer from
1. Legal reasons; misleading advertisements and fraudulent
2. Public image reasons; sales promotion practices.
3. Pragmatic reasons; Article 110 states that “It shall be unlawful for
4. Moral reasons.
any person to disseminate or to cause
Business’ Role in Overcoming Poverty Trap dissemination of any false, deceptive or
misleading advertisement by Philippine mail or
Some studies show that SMEs, usually defined in commerce by print, radio, television,
as businesses with up to 250 employees – are outdoor advertisement or other medium for
believed to be important contributors to the purpose of inducing or which is likely to
economic growth and a tool to reduce induce directly or indirectly the purchase of
poverty in developing countries. Also, consumer products or services.
microfinance is believed to be an effective
tool in the arsenal of the war against poverty. Basic Employee Rights

The Social Responsibilities of Capitalist Business The Labor Code of the Philippines (Presidential
Practices Decree No. 442)lays down the rights of workers
in relation to wages, rights to self-organization,
Milton Friedman famously stated that the only collective bargaining, security of tenure, and
responsibility of a business is to gain and just and humane conditions of work.
increase its profits. On the other hand, William
Sauser, in the Journal of Business Ethics article Republic Act No. 6727 (Wage Realization Act)
“ethics in Business: Answering the Call,” mandates the fixing of minimum wages
explained that a business has four levels of applicable to different industrial sectors.
responsibility: 1) Earning a profit; 2) Legal Book Four of the Labor Code lays down the
responsibility; 3) Ethical responsibility; 4) Health, Safety, and Social Welfare Benefits
Discretionary responsibility. Corporate Social accorded to workers. Book Five entitled “Labor
Responsibility or CSR, is defined by the World Relations,” lays down the policies of the state
Business Council for Sustainable Development
with regard to labor. These policies are: 1) to
(WBCSD) as a continuing commitment by
promote and emphasize the primacy of free heating…” Business organizations should take
collective bargaining and negotiations, seriously the task of caring for the earth, by
including voluntary arbitration, mediation and regularly embarking on projects seeking to
conciliation, as modes of settling labor or diminish or eradicate pollution, and to renew
industrial disputes; 2) to promote free trade the natural resources they tend to use up or
unionism as an instrument for the deplete.
enhancement of democracy and the
promotion of social justice and development; Whistle Blowing
3) to foster free and voluntary organization of a Whistle blowing is the act, for an employee (or
strong and united labor movement; 4) to former employee), of disclosing what he
promote the enlightenment of workers believes to be unethical or illegal behavior to
concerning their rights and obligations as union higher management (internal whistle blowing)
members and employees; 5) to provide an or to an external authority or public (external
adequate administrative machinery for the whistle blowing).
expeditious settlement of labor or industrial
disputes; 6) to ensure a stable but dynamic
and just industrial peace; 7) to ensure the
Notions of Accountability, Fairness, and
participation of workers in decision and policy
Transparency
making processes affecting their rights, duties,
and welfare. Accountability – what it is:
Insider Trading  To be accountable is to be liable to
explain or justify one’s actions and
In stock market, it is characterized by buying or
decisions;
sharing shares of stock on the basis of
 Accountability is the process of
information known only to the trader(an
explanation and justification;
“insider” somebody belonging to the
 Holding to account is the process of
company, as opposed to the public) or to a
requiring explanation and justification,
few persons. In finance, it is the revenge of
but it is also testing, forming a
speculation. It is reward without risk.
judgment, and if necessary, taking
Pollution and Resource Depletion action;
 Accountability implies responsibility: it is
The Encyclical Laudato Si: On Care for Our reasonable only to hold people to
Common Home issued by Pope Francis in 2015, account for those things for which they
is a wakeup call to help humanity understand are responsible.
the destruction that man is rendering to our
environment and his fellow man. Paragraph 20, Accountability – what it is not:
which Is on pollution, waste, and the
 It is not synonymous with
throwaway culture, states: “Some forms of
responsibility.
pollution are parts of people’s daily
 It does not imply a management
experience. Exposure to the atmospheric
relationship.
pollutants produces a broad spectrum of
 It is not a “one off” annual event.
health hazards, especially for the poor, and
 It is not the same as appraisal.
causes millions of premature deaths. People
 It is not about confrontation,
get sick, for example, from breathing high
“putting someone in his place” or
levels of smoke from fuels used in cooking or
“giving him a hard time.”
Why is accountability important? Competence

Sound accountability structures are the most Technical Skills - Encompass the ability to apply
important aspect of prevention and detection specialized knowledge or expertise.
of corruption. A civil society organization
without proper accountability systems is fragile Human Skills - The ability to understand,
and open to rumors about mismanagement communicate with, motivate, and support
and abuse of power. Worst of all, it will prevent other people, both individually and in groups.
it from enjoying respect and full legitimacy in Conceptual Skills - Are the skills and the mental
the eyes of its stakeholders including those ability that managers should have to analyze
duty bearers whom it intends to engage with and diagnose complex situations.
advocacy. Accountability, then, is the
obligation to demonstrate that work has been Professionalism
conducted in compliance with agreed rules
and standards or to report fairly and
accurately on performance results vis-à-vis
mandated roles and/or plans.

Fairness

In the context of business organization, fairness

involves balancing the interests involved in all A working professional needs “rational
decision making including any decisions intelligence (RI).”
related to hiring, firing (including the
investigatory process), and the compensation
and rewards system. Fairness comes from the
Old English fæger, meaning “pleasing,
attractive.”

Overall, fairness has to do with justice, which is

to give another that which is due to him or her.
More concretely, justice: 1) looks at the Responsibility
balance of benefits and burdens distributed
Responsibility means making sure that the
among members of a group; and /or 2) can
company’s products and services meet the
result from the application of rules, policies, or
needs of the customers and the clients.
laws that apply to a society or group. In
general, the just results of actions override
utilitarian results.

Transparency

It is an issue that often emerged in the

documents by Pope Benedict XVI. Caritas in
Veritae (CV) referred to transparency seven
times. It is described as a personal quality
necessary to develop unity and communion
between individuals.