Business

Ethics and
Social
Responsibility

S. Pintor, LPT
Topics:

- Business Ethics
- Corporate Social Responsibility
 • Moral principles by which
people conduct themselves
personally, socially, or
Ethics •
professionally
Beliefs about what is right
or wrong based upon
individual morals/ values &
social context
The Nature of Ethics Key term:
Most businesses are guided by Business ethics
business ethics.
Rules based on moral principles
about how businesses and
Different cultures, businesses, employees ought to conduct
and industries have different themselves
ethical standards
Areas of Business Ethics

• Creating safe products

• Creating jobs
• Fair treatment of employees
• Environmental protection
• Truthful about financial status
The Law of Ethics
Unethical business practices
include:

- Lying
- Offering merchandise known to
be substandard Philip Morris Advertised To Kids
The tobacco giant Philip Morris has been considered unethical for
years as a great deal of advertising from them targets kids. Despite
- Treating customers or stricter regulations, Philip Morris still prominently places ads and
products in magazines, convenience stores, and delis. They continue
employees unfairly to try to create the image of smokers being cool and are considered
the biggest reason for young smokers.
Law and Ethics Key term:
Sweatshop
A sweatshop is an example of an
unethical practice outlawed in A shop or factory in which
other countries workers are employed for long
hours at low wages and under
unhealthy conditions
The Law of Ethics
Conflict of interest is a major
ethical question that is generally
not illegal.

Key Term
Conflict of interest
A conflict between self-interest
and professional obligation
Law of Ethics
The Department of Labor and
Employment ( DOLE) –
Occupational Safety and Health
Center (OSHC) is a government
agency that champion the cause
of work safety and health in the
Philippines. It sets and enforces
work –related health and safety
rules.
Importance of Good Ethics • Unethical behavior toward
employees can lead to legal action
• Unethical business practices can or a high rate of employees
result in bad word of mouth and quitting.
result in lost sales.

Sample:

Apple Uses Slave Labor

Toyota Ignored Safety Apple relies on child slave labor that is working in dangerous conditions,
for ten hours each day while being exposed to cancerous vapors. The
conditions at the manufacturing plant Foxconn are bad enough that they
had to install "anti-suicide nets." The workers live in horrible conditions
In 2010, Toyota ignored information about safety and delayed and experience unreasonable workloads and humiliating discipline. Apple
investigating possible recalls. In 2009, they learned about sticking pedals has reduced some of their work with Foxconn, but they still rely primarily
and faulty brakes; instead of addressing the issue, they added side on them. Apple also used Irish tax loopholes to avoid some taxes.
airbags. In some cases, Toyota faced accusations of hiding evidence for
hundreds of cases involving death and rollovers, putting their drivers and
passengers at risk.
Importance of Good Ethics • If an employee violates a company or
professional code, the employee
• If a business violates government might be fired or lose his or her
regulations, the owner can be fined license.
or go to jail.

Matthias Rath Alternative Treatments for

HIV/AIDS Spreads Lies
Chevron Spills Toxic Waste Matthias Rath is a vitamin entrepreneur who used to be a doctor
and is considered to be the most powerful of all "crackpots." He
recommends vitamin pills to cure even serious ailments. In UK ads,
Chevron has attempted to avoid millions of dollars' worth of he claimed that 90% of cancer patients die within several months of
taxes plus 18 years' worth of unethical business practices. starting chemo, arguing that corporations let them die for profit.
When they dumped billions of gallons worth of toxic waste into Yet, he uses his lies to sell an HIV/AIDS "miracle cure", saying that
Ecuadorian rainforest, they were sued and tried to deny their HIV doesn't cause AIDS and antiretroviral drugs won't work, leading
involvement even though there was plenty of solid evidence. to the spread of infections in South Africa.
They even faked a letter from Ecuador's ambassador that
claimed to dismiss the lawsuit and worked to discredit the
judge, delaying the suit for two years.
Importance of Good Ethics
In business, people follow rules
as well as code of ethics.

Key Term
Code of ethics
A set of guidelines for
maintaining ethics in the
workplace.
 • Is it against the law? Does it
violate company or professional
policies?
• Even if everyone is doing it,
how would I feel if someone did
this to me?
• Am I sacrificing long –term
benefits for short-term gains?

Ethical Questions
 1. Identify the ethical dilemma.
2. Discover alternative actions.
3. Decide who might be affected.
4. List the probable effects of the
alternatives.
5. Select the best alternative

The Ethical Decision – Making Process

 The social responsibility of business
takes into consideration all that
business does or does not do to solve
the problems of society.
Corporate social responsibility (CSR)
means that companies take
responsibility for the impact of their
(business) activities on society. It is a
question of finding the right balance
between the three P’s: People, Planet,
and Profit.
Social responsibility -the duty to do
what is best for the good and society

Business and Social Responsibility

 • Responsibility to Customers
• Responsibility to Employees
• Responsibility to the
Community or Society
(environment)
• Responsibility to the investors,
suppliers and other partners

Areas of Social Responsibility

 Businesses should offer a good, safe product or service at a
reasonable price.

The Food and Drug Administration (FDA)

- Protects consumers from dangerous or falsely advertised products.

Responsibility to Customers
• Fair competition is necessary
for the marketplace to operate
effectively.
• When companies conspire to
restrict competition, consumers
are affected.
- Less choice in products & prices
 Businesses can show responsibility • Meet legal standards
to employees in various ways:
• Fairness in recruiting, hiring,
• Providing work experience for promotion & compensation
people with limited job skills practices
• Volunteerism • Workplace safety minimum wage
/ overtime requirements
• Providing safe working conditions
• Protection from sexual
• Equal treatment harassment
• Fair pay • Provide work/life balance
• Family and Medical Leave

Responsibility to Employees
Equal Pay Act – Labor Code

The legal provision on equal pay is contained within the labor

code, which states that it is unlawful for any employer to
discriminate against any woman employee with respect to terms
and conditions of employment solely on account of her sex.
In accordance with Republic Act 7277, no disabled persons may be denied
access to opportunities for suitable employment. A qualified disabled
employee is subject to the same terms and conditions of employment and
the same compensation, privileges, benefits, fringe benefits, incentives or
allowances as a qualified able-bodied person.
The Anti-Age Discrimination in Employment Act of 2016 prohibits an
employer from the following:
a. Print or publish, or cause to be printed or published, in any form of
media, including the internet, any notice of advertisement relating to
employment suggesting preferences, limitations, specifications, and
discrimination based on age;
b. Require the declaration of age or birth date during the application
process; (3) Decline any employment application because of the
individual's age; (4) Discriminate against an individual in terms of
compensation, terms and conditions or privileges of employment on
account of such individual's age; (5) Deny any employee's or worker's
promotion or opportunity for training because of age; (6) Forcibly lay off an
employee or worker because of old age; or (7) Impose early retirement on
the basis of such employee's or worker's age.
If an employer does not comply with the Anti-Age Discrimination in
Employment Act of 2016, he might be punished with a fine ranging from
P50,000 to P500,000 or imprisonment ranging from 3 months to 2 years or
both.
The Department of Environment and Natural Resources – Environmental Management
Bureau (EMB) is mandated to implement the following national environmental laws:
Republic Act 6969 (Toxic Substances and Hazardous and Nuclear
Waste Control Act of 1990)
The law aims to regulate restrict or prohibit the importation, manufacture,
processing, sale, distribution, use and disposal of chemical substances and
mixtures the present unreasonable risk to human health. It likewise prohibits
the entry, even in transit, of hazardous and nuclear wastes and their disposal
into the Philippine territorial limits for whatever purpose; and to provide
advancement and facilitate research and studies on toxic chemicals.
Republic Act 8749 (Clean Air Act of 1999)
The law aims to achieve and maintain clean air that meets the National Air
Quality guideline values for criteria pollutants, throughout the Philippines, while
minimizing the possible associated impacts to the economy.

Responsibility to Community / Society and the

environment
• Republic Act 9003 (Ecological Solid Waste Management Act of
2000)
In partnership with stakeholders, the law aims to adopt a systematic,
comprehensive and ecological solid waste management program that shall
ensure the protection of public health and environment. The law ensures
proper segregation, collection, storage, treatment and disposal of solid
waste through the formulation and adaptation of best eco-waste products.
• Republic Act 9275 (Philippine Clean Water Act of 2004)
The law aims to protect the country's water bodies from pollution from
land-based sources (industries and commercial establishments, agriculture
and community/household activities). It provides for comprehensive and
integrated strategy to prevent and minimize pollution through a multi-
sectoral and participatory approach involving all the stakeholders.
 Responsibility of Entrepreneur towards Suppliers
1. To Pay Fair Prices of Goods
2. To Pay in Reasonable Time
3. To Inform about Changes in Market
4. To Give Guarantee of Minimum Price
5. To Motivate Indigenous Supplies
6. To Provide Technical Advice
7. To Inform Suppliers of Future Developments
8. To Promote Healthy Competition

Responsibility towards shareholders, suppliers ,

creditors etc.
Responsibility of Entrepreneur towards Creditors
1. To Obtain Loans on Reasonable Conditions
2. To Follow Mortgage Rules
3. To Follow Business Ethics
4. Proper Utilization of Debt Capital
5. Regular Payment of Installment and Interest
6. Repayment of Loan

Responsibility to Community / Society and the

environment