Name: _______________________________________ Grade/ Section: ______________

QUARTER 3 | WEEK 3-4 | ACTIVITY

Subject Area and Grade Level: Business Ethics and Social Responsibility | Grade 12
Learning Competency: 1. Formulate a “code of ethics” that reflect core
principles derived from analyses
Subject Matter: Code of Ethics in Business

Points to Remember

Definition of Ethics

The term Ethics is derived from the Greek word ethos which means “characteristic way
of thinking”. Ethics, as a science, does not only evaluate the morality of our human
conduct but also provides us with a common understanding of the universal, objective, and
irreversible moral principles that should govern our human behavior and guide our moral
decisions (Roa, 2011).

Ethics are moral principles that guide the conduct of the individual (Racelis, 2017).
These are rules of behavior based on ideas about what is morally good and bad (Merriam-
Webster Dictionary).

The Importance of Ethics

Ethical conduct, whether at the corporate, professional, or personal level, is a direct

reflection of the principles and values which regulate the person and the institution he/she
represents. Organizations establish their own culture that is socially expressed as their
ideals. Such principles or ideals have an impact on the relationships within the company,
efficiency, prestige, performance and retention of employees, legalities, and the wider
community they work in.

As a result, most organizations generate a list of organizational values and codes of

conduct to be recognized and adhered by all workers. Motivating and enhancing
constructive actions, and at the same time building an atmosphere that prevents
unethical behavior are vital obligations on the part of both administrators and
workers.

Application of Ethics

At the individual level, organizations ought to concentrate on improving and encouraging

every employee to respect and adhere to ethical principles. Certain aspects of individual
ethics have their roots in the individual. Achieving a strong sense of professionalism and
recognizing certain professional decisions' ethical implications are the key components of
education, individual reflection, and experience.
 Points to Remember

Examples of Ethical Issues in Business

Under the umbrella of finance and accounting, fairness

in trading practices, trading conditions, financial
contracting, sales practices, consultancy services, tax
payments, internal audits, external audits, and executive
Ethical Issue in Finance
compensation are included, whereas specific corporate
ethical/legal abuse includes insider trading,
bribery/kickbacks, misleading financial analysis, and
fraud on securities.
Human Resource Management 's tasks include hiring
and orientation, performance evaluation, training and
development, labor relations, and health and safety
Ethical Issue in Human
concerns. Among the ethical issues are discrimination
Resource (HR)
by age (the young ones are preferred over the older
Management
ones), gender preference, sexual orientation, race,
ethnicity, disability, and physical appearance are all
ethical issues that the HR oversees.
Marketing ethics deals with the beliefs, standards and/or
morals that advertisers and marketing organizations will
operate upon. Ethical marketing issues include
promotion of obsolete or harmful products/services;
openness about environmental threats; food ingredients
(Genetically Modified Organisms); possible health
hazards or financial risks; protection for the privacy and
autonomy of consumers; truthfulness in advertising; and
honesty in price and delivery. Some claim that
advertisements can affect the views of individuals and
Ethical Issue in Sales and their relationships with others, suggesting an ethical
Marketing obligation to avoid distorting those expectations and
relationships.

Ethics in marketing includes practices in pricing, which

involves unlawful acts such as price manipulation and
price skimming. According to Hayes (2020), price
skimming is a product pricing strategy by which a firm
charges the highest initial price that customers will pay
and then lowers it over time. On the other hand,
advertising has raised concerns over offensive
advertisements, objectification, and school marketing.
Business ethics typically deals with company's duties to
ensure its goods and industrial procedures do not inflict
unnecessary harm. Many products and services can be
generated and used at zero risk and it can be difficult to
Ethical Issue in Production assess the ethical path. However, there are consumers
who patronize products that damage them, for example,
tobacco products. Output can have adverse effects on
the environment like air pollution, destruction of
habitats, and urban sprawl.
 Points to Remember

What is Code of Ethics?

Code of Ethics is a set of rules about good and bad behavior. It is a guide of principles
designed to help professionals conduct business honestly and with integrity. A code of
ethics document may outline the mission and values of the business or organization, how
professionals are supposed to approach problems, the ethical principles based on the
organization's core values, and the standards to which the professional is held.

Saucer and Sims (2013) offer recommendations for developing Code of Ethics in business
organizations:

1. Adopt code of ethics (use the Code of Ethics of other companies as a reference and
modify according to the needs of the company).
2. Offer training on ethics (for management and employees).
3. Hire and foster individuals with ethical value.
4. Deal with immoral activities. Employees must know the implications and effects of
making unethical actions, and should be ready to accept consequences.
5. Take constructive measures. For example, give rewards to employees who admit
their mistakes. If the company is conscientious and smart, it can encourage
warehouse workers to take responsibility for their mistakes and even praise them
for coming forward, apologizing and ensuring that a faulty product is not purchased
by the customer. At first it seems counter-intuitive to reward an employee for a
mistake, but in the end, it provides everyone with the best result.
6. Carry out a social audit. Conduct survey to employees once in a while.
7. Cover all whistleblowers. These people detect illegal activities within organizations
and disclose the actions to the authority or managers. A whistleblower who works
sincerely, correctly reporting an issue, should be praised for his/her courage and
integrity, as opposed to being disciplined and ostracized. If an individual blasts the
whistle, it is possible that the company itself has failed internally to motivate and
improve fair and ethical conversations.
8. Empower the defenders of integrity. Support those who work with honesty and
integrity
9. Ensure executive commitment. The anonymity of those who report the problems
should be practiced.
10. Communicate the principles of conduct within the company and across the industry.
11. Assign an officer who is clearly responsible for the enforcement of ethical
standards. He/she can be consulted for advice.
12. Establish a procedure for violations of ethical standards, and fully review any
offenses reported.
13. Ensure high perseverance by the company's board of trustees.
14. Lead by example, above everything else.

It should be remembered that when faced with an ethical situation, the outcome of the
decision-making process should be considered. One way to tackle ethical situations is by
using the four-way test to evaluate decisions by asking four questions:
1. Is my decision truthful?
2. Is my decision fair to all whoPoints
are affected by it?
to Remember
3. Will this build the organization's goodwill?
4. Will the decision benefit all parties with
Components vestedofinterest
of Code Ethicsin the outcome?

Vision means something that you imagine; a picture that you see in your mind (Merriam-
Webster Dictionary). The vision statement helps to ensure the alignment of the decisions to
Activity 1A. Matching Type. Match the items in Column A to its description in Column B. Write
your answers on a separate sheet of paper.

Column A Column B
Tasks and decisions involving hiring and
1. Ethical Issue in Production
performance evaluation
Tasks ad decisions involving trading
2. Ethical Issues in Sales and Marketing
practices, conditions and tax payments
Tasks and decisions involving protection
3. Ethical Issues in Finance
of consumers and honesty in delivery
4. Ethical Issues in Human Resource Tasks and decisions ensuring that
Management products do not inflict harm.

Activity 1B. Classification. Classify each phrase below to the corresponding column of ethical
issues where it belongs. Write your answers on a separate sheet of paper.

a. destruction of habitats e. honesty in prices

b. encountered misleading financial f. truthfulness in advertising
reports g. fraud on securities
c. overweight applicants are not h. harm to environment
allowed i. manipulation in prices
d. hiring limited to religious affiliations j. exaggerated advertisements

Ethical Issues in
Ethical Issues in Ethical Issues in Ethical Issues in
Sales and
Finance Human Resource Production
Marketing

Activity 2A. Case Classification. Read each sentence below and classify each according to
the ethical issue where it belongs. Write the letter of your answers on a separate sheet of paper.

A. Ethical Issues in Finance C. Ethical Issues in Marketing

B. Ethical Issues in Human Resource D. Ethical Issues in Production

1. XYZ Company does not accept members of LGBTQIA+ community.

2. Diggie’s hotdogs are made under strict processing standards.
3. The company accountant orders office supplies from her husband’s store.
4. Strawberry, a new brand of computer, launched its new laptops at an overpriced amount.
5. Lobo Enterprise rejects all differently abled persons.
6. Super Milk does not put on the can’s label the ingredients they used.
7. The food products of XYZ Corporation are well-sealed.
8. The manager joins the contract bidding of their proposed new building.
9. Lotlot, the accountant, bribed the personnel to reduce their company’s tax payable.
10. Robot Beverages hired a famous commercial model for its product promotion.
Activity 2B. True or False. Identify whether each statement is true or false. Write your answer
in a separate sheet of paper.

Answer Statements
1. The company’s Board of Trustees should show perseverance.
2. It does not matter whether the decision is fair to all or not.
3. Social surveys should be carried out by the company.
4. The company may not fully review the offenses reported.
5. Each member of the organization should be fully aware of the
company’s principles.
6. The owner’s decision should be based on truth.
7. Do not mind immoral activities in the company.
8. The management should protect the whistleblowers.
9. The decision should build goodwill of the organization.
10. Ethics are social principles that guide the conduct of the individuals.

Activity 3A. Ethical Decision Making. What would you do under the following situations
below? Write your answers on a separate sheet of paper.

1. Being an advertising artist, you were instructed by the manager to make two layouts, but
you will only receive the price for one.
2. Your company would have to donate P 1,000,000 to charity, but you witnessed that the
accountant only gave P 700,000 instead of P 1,000,000.
3. Being one of the food processors in a manufacturing company, you know that the
ingredients listed on the label of your product are not completely true.

Activity 3B. Codes of Ethics. Read the situation and formulate a Code of Ethics for the
business. Write your answers on a separate sheet of paper.

Situation:
You just started an online business selling bags and shoes made in Laguna. You employed one
bookkeeper, one clerk, two utilitymen, and four (4) delivery personnel. Follow the format given
below:

Our Core Values

Our Vision
Our Values
Our Mission
Our Principles:
1st
2nd
3rd

Scoring rubric:

Relevance to the business (one point for each component) 6pts.

Mechanics (one-point for each component) 4pts.
Total 10 pts.