BUSINESS ETHICS

• Business is any activity that seeks to provide goods and services to others while operating at a profit
• Forms of Business Organization

  • Sole proprietorship
  • Partnership
  • Corporation
• Types/Nature of Businesses


  • Service Businesses
  • Merchandising Businesses
  • Manufacturing Businesses
• Sole Proprietorship


  Owned and managed by one individual
• Characteristics of Sole Proprietorship

  •single ownership

  •not separate entity from owner

  •Owner Receives all profits and shoulders all losses

  •Lack of continuity

  •No special taxes

  •less legal formalities
• Partnership


  (as stipulated in the article 1767 of the civil Code of the Philippines) A contract agreement between two or more persons who bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves
• Types of partners

  • General partner
  • Limited partner
• General partner


  • Has unlimited liability, is active in managing the firm
• Limited partner


  • Has limited liability, invests money but does not have management responsibility
• Limited partners' liability for the debts of the business is limited to the amount they put into the company, their personal assets are not at risk
• Classification of partners according to contribution

  • Capitalist partner (money or property)
  • Industrial partner (personal services)
  • Capitalist-industrial partner (both money/property and personal services)
• Agreement has 2 ways

  •oral

  •written
• Characteristics of partnership

  •Two or more owners.

  •Contractual Relationship.

  •Sharing of profits and losses.

  •Existence of lawful business.

  •Unlimited and limited liability

  •No special taxes
• Corporation: an artificial being created by operation of law having right of succession and the powers, attributes, and properties expressly authorized by law of incidents to its existence (RCC).
• hat is the act of the corporation.

  Republic act 11232 or the revised corporation code of the Philippines.
• Attributes of corporations

  •it is an artificial being.

  •created by operation of law.

  •having the powers attributes an properties
• Characteristics of corporations

  •separate legal entities.

  •limited liability

  •ability to raise money for investment.

  •perpetual life.

  •Extensive paperwork.

  •Double taxation.

  •Difficulty in termination.

  •Separation of ownership from management.
• What is the hierarchy of corporations

  •Owners/stakeholders(elect of BOD)

  •Board of Directors (officers)

  •officers (set of corporate objectives and select managers)

  •managers(supervise employees)

  •employees
• The role of the society.

  •To create wealth.

  •To meet the needs of the people.

  •To maintain a conductive and ideal place of work.
• Fairness: express the just and reasonable treatment of the stakeholders,free from discrimination and according to the rules and principles of the business
• 2 aspects in business ethics:

  •Fair results.

  •Fair Procedures.
• What are the 5 fair procedures?

  •Fair notice.

  •Impartiality.

  • gather facts.

  •fair hearing.

  •Evaluate.
• Accountability: it refers to the obligation and responsibility to give an explanation or reason for company's action and conduct
• Transparancy:openess, a willingness by the company to provide clear information to shareholder and other stakeholders.
• Common practices in business organization:

  •Employee Conduct.

  •Equal Opportunity.

  •Attendance.

  •Computer use.

  •Finance and Accounting
• Types of Corporate Culture

  • Team-oriented Culture
  • Elite Culture
  • Horizontal Culture
  • Conventional Culture
• Team-oriented Culture


  • Prioritizes the employee's happiness
  • Characterized by regular socializations, employees interact with different departments
• Elite Culture


  • Hire only the best qualified individuals, and are expected to lead the way
  • Employees often prioritize work, and are expected to work long hours
• Horizontal Culture


  • Everyone is encouraged to pitch in their ideas
  • Your job title is not very important
• Conventional Culture


  • Work in a more traditional manner
  • A dress code is normally employed in companies
• Code of Ethics


  • Sets the company's vision, mission, values, objectives and responsibilities to guide employees on how to deal with different scenarios in the workplace
  • Serves as an expectation and guideline for employee conduct
• The code of ethics applies to all employees
• Classical Philosophers

  • Socrates: Dare to disagree
  • Plato: The Power to Rule
  • Aristotle: Let People Seek Fulfillment
  • Confucius: Confucian values
• Socrates' influence on business

  We must "dare to disagree" when we see that an organization is going in the wrong path
• Plato's influence on business


  Only those persons who possessed scholarly as well as ethical qualities should be trusted with the control to rule above others
• Aristotle's influence on business


  • Governments and organizations need to build the best systems to let humans fulfil their natural drives
  • Employees will work and perform better if you give them tasks which they find meaningful and morally worthwhile
  • Employees will be more motivated if you give them the opportunity to feed their natural curiosity through learning opportunities
• Confucian values' influence on business

  • Can aid in the creation of business leaders who are true leaders of society, and who can hold a sense of righteousness and moral power
  • The Golden Rule: "Do unto others as you would have them do unto you"
• Major Religions

  • Christianity
  • Islam
  • Hinduism
  • Buddhism
• Christianity


  • Ethics is based on the standards of behavior taught by Jesus
  • Christianity emphasizes justice in the form of honoring contracts or agreements and working for a common good
• Islam


  • Islam is essentially a free-market religion, urging all people to pursue their livelihoods
  • Islam forbids certain business activities including: (1) interest on loans, (2) trade through coercion, (3) dishonesty, (4) poor treatment of workers, and (5) commodity hoarding