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M1 LEC01 INTRO TO ETHICS AND ETHICAL SCHOOLS OF THOUGHT

Introduction to Professional Values, Ethics, and Attitude (Part 1)

Accounting Scandals: Then and Now
● Most known accounting scandal ENRON: grand scheme of fraudulent financial reporting
● Wirecard

ETHICAL APPROACH
Ethics
● What? Ethics is a branch of philosophy together with epistemology, aesthetics, and
metaethics
● It involves defining, developing, defending and commending of what we mean what is
right and wrong
● A lot of inquiries
● Notions of right and wrong
● From the greek word: ethos meaning custom or character
● Latin: moralis means customs
● Root word: it talks about our custom/character/how we behave as an individual
● We behave in conformity with what we think is right and avoid those wrong behaviors
● Personal ethics: Can also pertain to your own notion of what is right or wrong

Normative Ethics (what is right and wrong conduct) (decision)

● Norm: is what should be right or wrong conduct (decision)
● Will you close the segment or shut down the operation or continue the operation?
● Normative: What is the right decision, right conduct, ethical decision?
● Three approaches:
○ Focus on the outcome - shutting down is more beneficial than continuing the
operation
○ Focus on the agent - as a business owner and one of your values is a common
good; shutting down is more beneficial but the employees will be unemployed;
focusing the characters and virtues you need to prioritize
○ Focus on the relationship - relationship that he has to your stakeholders
especially the duties rather than the agent itself
● What good action should you take?

Metaethics (What is meant by good?) (definition)

● Meta means high order
● What do we mean by right?
● Second order
● It is the foundation of the rules

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 ● Euthyphro dilemma: Is the pious loved by the gods because it is pious, or is it pious
because it is loved by the gods?
○ Is it good because the state tells you it’s good or it is itself really good that’s why
the state tells you it’s good?
○ One is inherent and one is referent/relational
● What is the rule of reason/gender?
● “What do you mean by good?”

Applied Ethics (How to resolve controversial issues? (Application)

● focuses on controversial issues
○ Issue on Computer Ethics - Artificial intelligence (Do you really have to program
the order of safety?)
○ Issue of sustainability - focuses on the planet and people (is it ethical for you to
have contractual workers?)
● Bioethics, business ethics, computer ethics, accounting ethics

ETHICAL THEORIES
Utilitarianism
● Ethical = most benefit, most number
● Util means use
● Outcome: benefit for more people
● Teleology because it focuses on outcome
● Straightforward approach
● Two versions utilitarianism
○ Rule: we must choose the action that conform to the general rule that would have
the best consequences
■ Lying - as a general rule lying will result to more harm than to more
benefit for the most number of people that’s why it's unethical to lie
■ Paying taxes - in the long run it’s more beneficial to the most number of
stakeholders if we pay correct taxes
○ Act: it examines the specific action itself rather than the general rule governing
the action (case to case basis)
■ Trolly problem - saving more vs. 1 person
● Difficult to apply

Deontology
● Ethical = in line with duty/obligation
● Duty and rights are correlative
● Ethical benchmark - what is more in line with my duty that is more ethical
● Example: what costing method/technique will you use for inventory?
○ FIFO profit is 8M
○ Weighted average profit is 6M
■ Utilitarianism: FIFO

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 ■ Deontology: choose what will 1) faithfully represent the company 2) more
relevant
● Two versions of deontology
○ Rule deontology: duty as a general rule
■ Categorical imperative by Immanuel Kant -
○ Act deontology: duty for particular action only

Virtue Ethics
● Ethical = in line with good character
● In line with personal virtues
○ Virtues (traits or characters that make a person ethical)
● Cardinal virtues - wisdom (prudence), courage, temperance, and justice
○ Wisdom - nagko-control sa ibang virtue
○ Temperance - trying to weigh what is the appropriate action for a particular
situation
○ Justice - how you relate to other people
● Focus on moral agent especially what are the virtue of that particular person treasures -
virtue ethics

● If your focus are those factors before the moral agent particularly the duties - deontology
● If your focus is the outcome as benefit - utilitarianism

M1 LEC02 ETHICS AND ACCOUNTING

Introduction to Professional Values, Ethics, and Attitude (Part 2)

Accountants are good at math(s)?
- Advance knowledge of mathematics is not a requirement to be a good professional
accountants
- What are the key areas we must be good at?

Accounting as a Profession
- sometimes people will dictate profession for being paid of what they do
- some says being a professional is when you get paid for your skill (in
macroeconomic view of profession, it’s not accurate)

● Mastery of a Highly Technical Skill

○ This is the reason why you are studying for your BS degree
○ It usually culminates in the passing of the licensure and certification examination
such as local licensure examination for CPAs, CMA exams/certifications for
management accountants, and CISA exam for accounting information
professionals.

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 ○ Will we stop with the mastery of a highly technical skill for a certain discipline to
be called a profession? No, this is just the starting point. After mastering a highly
technical skill, we need to adhere to a common code of ethics.
■ This distinguishes professionals from nonprofessionals -> there is a
certain code of ethics you need to follow
● Adherence to Code of Ethics
○ certain code of ethics that you need to follow normally when you are dealing with
a professional engagements
■ General Code of Ethics for professional accountants
■ Code of Ethics for management accountants and
■ Ethics Guidance for the Accounting Information System Professionals
○ The mastery of a certain highly technical skill and adherence to code of ethics
culminates with your accountability to society
● Accountability to Society
○ We are professional because we profess our acceptance of accountability to
society as a whole.
○ This is where we distinguish self interest vs public interest
○ When you decided to enter a profession you also decided to object your
preferences and happiness secondary to the common good/interest of the
general public
○ Accept the responsibility to the society/common good

Accounting Metaphors of the Accounting Profession

- metaphors as devices used to understand certain complex reality — we will use these
metaphor to capture our conceptual system of the accounting profession
- These metaphors are not exclusive - they are equally present in our daily lives as
accountants
- The goal is for us to be cognizant that these metaphors exist and both metaphors are
important in our understanding of the accounting profession.

1.As applied finance view

● Called the master metaphor - because most of the accountants would implicitly
subscribe to this.
● Accounting as applied finance - when we look at our job as accountants as normally
driven by value (financial value) -> the use of tools (relevant costing; cost benefit
analysis, incremental analysis)
○ This view is evident in Ball and Brown, 1968; Beaver, 1968; 1992 Lev
■ Lev argues that accounting disclosure just like any other activity is driven
by cost benefit analysis
○ Act utilitarian approach
○ Compute profit (2 ways - transactional and net approach)
■ Net approach - anchored on the marginal theory in economics and
finance

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 ■ Net worth approach - anchored on marginal theory in accounting and
finance

Pava - these metaphors are not normally being discussed in accounting circles whether in the
academe or in the profession but this will have implicit evidence /indirect evidence in practice.
Pava - says that the cracks of this metaphor are very obvious.
2. Accounting as applied ethics
● the primary supporting documents are provided by
○ Bowie, 1991
○ Dolfsma, 2005
○ Pava, 2010
● Pava - argues that this metaphor views ethics as a foundation of accounting and not only
accounting ethics as an afterthought
● This is where we apply the concept of self interest vs public interest. This where we give
weight more to public interest and subject our interest secondary only.
● Dolfsma - argues that accounting as applied ethics resembles a very deontological
approach towards the profession and communitarian approach
○ Another author: One of the reasons why we keep our book of accounts is a moral
one because we want to know what we owe to whom and how much we owe to
whom.
○ Dolfsma: One of the foundational reasons why we account for things is because
we want to track our duty to the other party (duty to the suppliers)
○ Dolfsma: There are communitarian undertones to this view, that’s why we adhere
to GAAP (in philippines -> PFRS)

These metaphors are not exclusive. They would go hand in hand as you become professional
accountants in the future.

Accountants and Ethics

● When, where, how do we integrate professional ethics in our professional lives as
accountants?
● Life cycle: Study -> Pass the licensure examination-> Practice
● When would professional development come in as an accountant? Starts when you
prepare for your bachelors degree
○ Before passing the licensure: Initial professional development and
○ After passing: continuing professional development
○ Before passing: APA: aspiring professional accountants
○ After passing: PA: professional accountants

What should you be good at?

1. Technical skills - covered by IES 2 (brain)
a. This is where you should be good at PFRS (techniques, theories)
2. Professional Competence (hand)
a. Normally refer to soft skills

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 b. Communication skills (oral or written)
i. People skills (managing teams)
ii. Bargaining skills
iii. Negotiation skills
3. Professional Value, Ethics, and Attitude (soul and heart)
a. As supported by Pava and Dolfsma, the foundation of professional life
b. Particular of professional skill that will integrate technical skills and professional
competence

Where is Ethics in our practice as accountants

1. Whether initial or continuing, there must be professional value, ethics and attitude
2. It would serve as foundation of our practice

Where is your ethical development in your life cycle as a professional accountant?

- Both in initial and continuing development

Accountants and Ethics

Competence Area Proficiency Level Learning Outcomes

Professional Intermediate (moderate Apply a questioning mindset critically to

skepticism and level of ambiguity, assess financial information and other
professional complexity, and relevant data
judgment uncertainty)
Identify and evaluate reasonable
alternatives to reach well reasoned
conclusions based on all the relevant facts
and circumstances

- professional skepticism: combination of critical assessment of evidential matter and

questioning mind
- professional judgment: application of training, knowledge, and experience in context of
making decisions in accounting and auditing

Competence Area Proficiency Level Learning Outcomes

Ethical principles Intermediate (moderate Explain the nature of ethics

level of ambiguity,
complexity, and Explain the advantages and disadvantage
uncertainty) of rules based and principles-based
approaches to ethics
Identify ethical issues and determine when
ethical principles apply

Analyze alternative courses of action and

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 determine the ethical consequences of
these

Apply the fundamental ethical principles of

integrity, objectivity, professional
competence and due care, confidentiality,
and professional behavior to ethical
dilemmas and determine an appropriate
approach

Apply the relevant ethical requirements to

professional behavior in compliance with
standards

Commitment to the Intermediate (moderate Explain the role of ethics within the
public interest level of ambiguity, profession and in relation to the concept of
complexity, and social responsibility
uncertainty)
Explain the role of ethics in relation to
business and good governance

Analyze the interrelationship of ethics and

law, including the relationship between law,
regulations, and the public interest

Analyze the consequences of an ethical

behavior to the individual the profession
and the public

From: Drivers of Change of Future Skills ACCA

- professional quotient framework
1. Technical and ethical: they go hand in hand; techniques must be always partnered with
ethics; treated as one
2. Intelligence: thinking and reasoning skills (apply certain accounting standards critically)
3. Creative: ability to use existing knowledge in new situation therefore generating new
ideas
4. Digital quotient: knowledge of emerging digital platforms and technology — Auditing
cloud computing system
5. Emotional intelligence: ability to identify emotions and harness those emotions whether
your personal emotions or the emotions of others
6. Vision: ability to anticipate future trends by extrapolation — participation in vision
planning. It is important when you try to look at the future direction of the trend.
7. Experience: ability to understand the client/customer, provide them the desired outcomes
and manage their expectation

Lesson Summary:
● Macro Level view of accounting

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 ○ Why do we say that accounting is really a profession?
■ Mastery highly technical skill
■ Common code of ethics
■ Accountability to the general public
○ Metaphors
■ Accounting as applied finance
● Applies the rules of economic and finance of accounting (marginal,
cost benefit analysis)
■ Accounting as applied ethics
● Complementary metaphors— two equally important views
● Look at the international education standards- what particular
areas of professional value, ethics and attitude you must be good
at and what particular level (intermediate level) and be able to
perform the outcomes
● Look at the ACCA report - at the heart of the professional quotient
is technical and ethical quotient - they are taken together

M1 LEC03 CONTEMPORARY ETHICAL ISSUES PART 1

Module 1.3: Issues in Business and Accounting Part 1

1. Sustainable Development and Growth
2. Ethics of Digital Finance
3. Self versus Public Interest
4. Bright versus Gray Lines
5. Enhanced Governance Mechanisms

-these issues are considered systematic because they permit the levels — micro, meso, macro
— levels of decision making in business

Sustainable Development and Growth

- sustainability came about when organizational stakeholders started to demand more
from organization over economic and financial returns
- encompass our notion of performance — from profit we include performance related to
people and the planet

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 M1 LEC04 CONTEMPORARY ETHICAL ISSUES IN
ACCOUNTING AND BUSINESS PART 2

Sustainability Presentation and Accountant

Professional Development Outcomes
1. Appreciate sustainability as a business paradigm and a worldview
2. Recognize the role of accountants in the sustainability agenda
3. Develop a working consciousness about sustainability is a worldview

BTCUSD Crypto Chart

● Bitcoin: digital finance trend, it works on the assumptions of the distributive ledger,
primarily it should deliver the selection of a finance with the distribution of wealth
○ Bitcoins price grows astronomically throughout the years
○ Current price of bitcoin in Philippine peso is 2.38M to 2.4M
○ So, on a profit perspective it gives us a little hope that normal investors can
benefit from this redistribution of wealth
○ From a people perspective, there is a tendency up wealth redistribution through
capital gains

Comparative graph of the electricity needed by the whole world

● it takes more electricity to power the collective bitcoin transactions in switzerland,
greece, israel and ireland
○ in an environmental perspective, the power needed by bitcoin is larger than
switzerland and ireland
○ Bitcoin can further the profit and the people agenda when you look at a planet
agenda there seems to be a problem because it’s energy intensive -> which has
an effect on our greenhouse gases so environmental concerns will arise
● When we look at it at our perspective (one perspective only) it becomes a little bit myopic
or shortsighted
○ So what sustainability gave us is the fuller view of our collective experiences as
humans living in this planet

Defining Sustainability
● A way of doing business in an interdependent world… (Savitz and Weber)
○ Notion that sustainability is not a silo framework — it does not treat one aspect
individually, it looks at the business as an organic entity with interdependencies
○ Sustainability is a way of living in an interdependent world
○ Whether we are looking at the people or the businesses our, actions are
predicted to some more actions and our actions can trigger some more actions in
our environment whether directly or indirectly
● …through profit creation, environmental protection, and improving stakeholders affairs
(Savitz and Weber)

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 ○ It is contrary of what has been the prevailing business model in the past
● Corporate sustainability agenda should pursue the triple bottom line (Elkington)
○ People, profit and planet

Sustainability Challenges
- Laininen (2019) identified sustainability as the greatest challenge that the collective
world faces right now
- We can consider consider sustainability not as a challenge but an adaptive challenge
- Adaptive challenge: the way to solve adaptive problems and challenges it’s just
through technical solutions, we need to dig deeper
1. Entails a great amount of unlearning on personal and cultural levels (Laininen)
2. Entails transformational learning in organizations (Laininen)
a. For us to appreciate the sustainability challenge it’s not enough to educate
people in just the head, it has to be some effective aspects and some sorts of
psycho motors
3. Triple bottom line framework as paradox (Walker, Yu, & Zhang)
a. Paradox - logically contradicting conjecture that runs contrary towards normal
understanding of things
b. Triple bottom line for organizations is like a three-leg stool and cut one leg and it
will not stand
c. When we pursue the triple bottom line framework in business organization we
should be able to pursue at least three of them within the considerable amount of
time
d. They are not separated, segregated, individual. They are interactive. You cannot
pursue one bottom line only, you should be able to pursue all of them at the same
time.

- Sustainability, whether worldview or business paradigm, is a challenge and this

challenge is not one of those technical challenges that we can solve by simply passing
laws or by simply regulation. This is something that entails unlearning the relearning and
learning both in personal and cultural levels with the aim of transforming our vision in the
world.

Accounting Metaphors
- metaphors: not direct comparison but (_______?) of the things you compared
through this metaphors
1. Accounting as applied finance
a. Decision making: cost benefit, relevant costing, materiality (pervasive notion
across our practice as accountants)
b. However undertaking a purely finance and economic concept can give us a
myomic view of what accounting is
c. How do we integrate this with the notion of sustainability? It talks about profit
however that’s also the danger. If as an accountant we will focus only on the

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 profit side it blind us — it does not give as full picture of the phenomena or the
context we are trying to understand
i. When we teach accounting using purely finance it sounds incomplete
ii. So when we teach relevant costing — do we shut down the plant -
emphasize that our analysis for this point is only quantitative, we need
factor qualitative factors as well
d. Do we construct a dam that will benefit the people but will destroy the planet and
will displace some indigenous people?
2. Accounting as applied ethics
a. Requirements of ethics: Critical thinking, knowledge of moral codes, and action
b. More related on the people and planet

Role of Accountant
● Accountants as Preparers of Sustainability Reports
○ Sustainability reports are just subject matter information — form of the
sustainability
○ Sustainability is the substance
○ Sustainability reports - form that will capture the substance of sustainability
efforts
○ If the report cannot capture the sustainability efforts of the entity or the reports try
to window dress the sustainability efforts of the entity then the report is not
serving its purpose.
● Accountants as Assurers of Sustainability Reports

CSRA

Final Note:
● Adopting a sustainability worldview entails transcendence, of ourselves, our reference
groups, and our time horizons

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○ Transcendence - starts of you being sensitive to what is happening around you.
For you to appreciate your role and how it relates to the larger picture. For you to
be able to sacrifice yourself towards your passion you need to understand what
you are sacrificing.

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 M1 LEC05 CONTEMPORARY ETHICAL ISSUES IN ACCOUNTING AND
BUSINESS PART 3

Sustainable- both a worldview and a business model

Issue 1: Sustainable Development and Growth

Background Clamor for sustainable growth for business and governments alike due to
environmental and social concerns on top of economic motivations
- we are facing the consequences of climate change - erratic
weather pattern, melting polar caps -> if that will continue there
would be a rise in water level for low lying countries

Issue Are organizations able to promote a (e.g., triple-bottom line) balanced

growth or not? Can organizations promote a balanced triple bottom line
growth or not?
- we are coming from that big pure capitalistic motivation that the
only job of corporation is be profitable
- we are now shifting to a more equitable and more sustainable
corporate development and corporate growth model to include all
aspects triple-bottom line such as people and planet
- we have to accept that corporations are structured in a way
reminiscence of that original corporate view which is the
capitalistic view of organization
- when we compare side by side how corporations are structured,
is that particular structure align with the triple bottom line
framework or a sustainable development model
- Some will argue that cooperatives are aligned with sustainable
development growth
- With the structural limitations that the organizations and
corporations have right now, can we really foster sustainable
growth by looking at the organization?
- Two issues: (1) positive — what is happening right now? (2)
normative — can it really happen?

Example Plastics sachets are the preferred packages for developing countries

- Environmental part
- if you look at the volume of solid waste that was collected
in our rivers most of them are plastic sachets
- you cannot separate this issue from poverty
- poverty is a systematic issue that needs
systematic solution
- Reflection of phenomena more embedded in the system
(poverty and development)
- People/Social
- Contractualization
- Living wage vs. minimum wage

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Issue 2: Ethics of Digital Finance
Background Disruptions in digital finance have created several opportunities and
threats in the context of the global economy. Trends such as
cryptocurrencies and cashless payments are seen to shape how we do
business and accounting in the future.

Issue How should digital transactions be regulated (e.g., taxed) to ensure that
they serve legitimate purposes?
- cryptocurrency is a double edge
- some will argue that it is an investment facility
- means to facilitate illegal transactions/illegal trade set
because of the anonymity afforded by cryptocurrency
such as bitcoins
- the question is anchored to a larger question ensuring the trends
in digital finance would serve the legitimate needs of human
beings

Example Bitcoin being used for money laundering and other illegal transactions
- trends like technological trends, technological updates and
upgrades are actually amoral but it depends how people would
use these trends

Issue 3: Self versus Public Interest

Background Across accounting, business, and public governance, conflicts of interest
(COI) are a paramount concern. COI can manifest in many ways
including multiple competing stakes of the same public and business
leaders.
- specific issue not just in accounting
- dilemma between the self and public interest
- can be taken individually and collectively
- for the collective version of the self vs. public interest, let
look at the self as a reference group (profession) -> the
profession interest vs. the public interest
- unintended (oligopoly?) -> do we break the big
accounting firms or do we let them stand?

Issue What mechanisms must be put in place in order to assure that public
interest is protected?
- when we become professionals, business leaders, or public
servants -> we are subjecting our self interest secondarily to the
interest of the general public
- when you become a professional, you already chosen to subject
your personal happiness to the common good -> prioritize
common good

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 - This issue is structural, other issue here is something
personal/subjective -> what do we do?
- birds theory of moral development -> transformative stage
- Why are we selecting government leaders and business leaders
who are prone to prioritizing their self interest towards public
interest?

Example Exposure draft for Public Accountants related to the non-provision of

NAS to PIE audit clients.
- public accountants should not provide non-assurance services to
their public interest entity audit clients -> to safeguard the public
interest

Issue 4: Bright (Rules-Based) versus Gray (Principles-Based Lines)

Background Previously, accounting standards are said to be anchored on a
rule-based system. However, the current version of the IFRS is
considered principles-based which is meant to capture the economic
substance of business transactions. However, principles-based
regulations result to gray lines as opposed to bright lines.
- rule-based system: the rules are very clear -> when this happen,
you have to this (algorithm)
- not very compatible with a free market
- principles-based: the regulations or the rules of how we apply
accounting became gray

Issue How can accountants ensure that principles-based standards effectively

capture the economic substance of the transaction? What are the
mechanisms that should be in place to prevent the abuse of gray-line
regulations?

Example Goodwill in the current IFRS is not amortized but tested for impairment
annually compared to the previous rules where Goodwill is amortized.
- Previously, goodwill was amortized. Goodwill is an intangible
asset with indefinite useful life.
- However when we shifted to principles-based accounting
standards -> the rule of amortization was change
- substance: the asset is for indefinite useful life so, why do
we have to amortize this for 10 years? What tells us that
10 years is the appropriate year?
- not amortize goodwill but test for impairment -> testing
goodwill for impairment will have some gray lines
- Bright lines: the regulations are very clear and very strict
- Gray lines: it opens the application of some regulations to certain
interpretations
- How do we prevent some accountants and even some auditors
in abusing gray lines

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Issue 5: Governance Mechanism Reforms
Background With the changes brought about by 1,2,3, & 4, regulators and
governance mechanisms must be updated in order to address these
issues. For example, a similar (hard) regulation to the US
Sarbanes-Oxley Act of 2002 is yet to be passed in the country.
- The US Sarbanes-Oxley Act is a resulting legal regulation
because of the ENRON scandal. It solidifies what we mean by
good corporate governance (what are the mechanisms that we
have to put in place to ensure good corporate governance)
- We don’t have hard regulation related to corporate governance in
the Philippines. We only have soft regulation.
- soft regulation: it is a issuance by the SEC

Issue What are the governance reforms that must be put in place in order to
respond to the other issues?

Example GME stock issue in the US.

- GME stock - a stock with very low fundamentals already -> profit
are so small, the growth potential is very low, but some traders
(particularly traders in a reddit form) pump the GME stock price
- Question: Do we need to regulate those types of activities?
- There is very little regulation that has been done to address the
GME issue because corporations in America are leaning towards
individualism.
- Why do we need to regulate that particular activity when in fact
it’s actually a result of consenting contractual parties?

- Do we have enough governance mechanisms to answer this issue?

- Those are the five issues that are shaping, have been shaping, and definitely shape how
we do business and accounting in an ethical way in the future.

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 M1 LEC06 REFLECTIVE PRACTICE AND ROLFE’S MODEL

Module 1.1 and 1.2

- being an ethical accountants starts from being an ethical person
- not all good human beings can be good accountants but good accountants first and
foremost good human beings

Reflective Practice
● Reflective practice is anchored on educational philosophy called progressivism

What is the theoretical underpinning?

● Progressivism
○ Progressivism is the educational philosophy of a larger philosophy which is
pragmatism.
○ Progressivism - progress of human being particularly a progress centered on
experience
○ It came about because of empiricism, the belief that we can also acquire
knowledge from sense experience rather than pure idealism or rationalism that
we can approach reality through our senses

● Centrality of experience
○ part of progressivism is the centrality of experience and the utility of any
educational activity
○ we say that in this particular philosophy, it is inductive
■ How do we learn from our experience?
■ How do we make sense of the experience?
○ Progressivism: very practical philosophy because we put in the center our
experiences as a vehicle for us to progress as human beings
● Learning because of, from and on experience
○ Learning because of experience — we learn because certain life experiences
create this juncture that will call for more learnings
○ We learn from our experiences as we are deployed on the job, as we experience
things we learn from them
○ Learn on experience - is learning right there and then. As you experience the
phenomenon you learn from it.

Why do we need to be reflective practitioners?

● Wicked problems - complex multifaceted situations (they entail different level of analysis)
○ How do I deal with a problematic client?
○ Ethical problems
○ How do I address intimidation from my team members?
● Tame problems - can be solved by technical knowledge

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 ○ How do we account for cash and cash equivalents? (solved by accounting
standards)

- We need to be reflective practitioners because most of the problems we will face in the
future are not tame or technical problems but wicked problems that necessitate reflection
because these are so complex, so multifaceted that no standard solution from the
textbook will enlighten you. It requires more reflection, an iterative reflection.

How do we apply these?

- Borton theory: The Rolfe and colleagues and Borton’s Model of Critical Reflection - also
borrowed from the health allied fields

Three Levels of Reflective of Practice

● Descriptive level - What?
○ Describe the artifact (e.g., experience, text) in appropriate detail.
- reflecting on experience -> reflection on actually; something is happening
right now and you are reflecting about it as you experience this
- not past oriented
- explain in appropriate level: what, when, where and why
- when you are asked to reflect on an ethical experience/ethical moral issue
-> you have to defend if the issue is really ethical issue
- the issue will result to guilt or shame when a certain standard is
violated
● Analytical level - So what?
○ Align the experience with theory (e.g., course content)
- state the theory or the course contents that you want to apply, for
example:
- apply virtue ethics
- compare and contrast your experience (virtue ethics, deontology
and utilitarianism)
- discuss your experience/artifact with theories
● Reflexive level - Now what?
○ How will this learning inform your decision-making (current and future)?
- How will these (analysis, description) things affect your decision making?

Application of the Reflection Practice Model

● What?
○ My experience when I was first bullied into giving my answers to my classmates
during an exam. (4W, 1H)
- personal experience
- need to discuss the 4W and 1H
- defend why this is really an ethical moral issue

● So what?

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 ○ Looking back, I may have approached the matter using a virtue ethics frame.
○ Virtue ethics state…..
○ Its aspects that I applied in this situation are….
- analyze the experience
- state what you are applying
- state what are these theories (in a gist what is virtue ethics?)
- How would these apply to your experience?
- Example: I was able to resolve by being a firm, not giving in to
peer pressure because I believe that honesty is the virtue that I
have to work for.
● Now what?
○ This learning will help me in approaching intimidation issues as I become an
accountant.
○ For example…
○ Virtue ethics has taught me that….which will allow me to approach the issue
in….because

- give examples (discuss the particular issue)

- discuss how will your learning from the description and analysis will help you resolve that
particular issue

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Module 2 LEC01 Kohlberg’s Stages of Moral Development 2
Kohlberg’s Cognitive Moral Development 2
Kolberg’s Theory of Moral Development (Levels) 2
Level 1: Stage 1 3
Level 1: Stage 2 3
Level 2: Stage 3 3
Level 2: Stage 4 4
Level 3: Stage 5 4
Level 3: Stage 6 4

M2 LEC02 Gilligan’s Ethics of Care 6

M2 LEC03 REST’S FOUR COMPONENT OF MODEL OF ETHICAL DECISION MAKING 9

Moral Sensitivity (Recognition) 9
Moral Judgment 10
Moral Focus (Motivation) 11
Moral Commitment 11

M2 LEC04 VOCATION OF A BUSINESS LEADER PART 1 13

Who wrote the VOCATION OF THE BUSINESS LEADER (VBL)? 13
Role of Businesses and Governments in Promoting the Common Good 13
Social justice has several components: 13
The Business Stakeholders 14
Practical Ethical Principles for Business 14
Three interdependent activities which businesses should take up: 14
GOOD GOODS 14
GOOD WORK 14
GOOD WEALTH (VBL par. 51, 52, 53) 15

M2 LEC05 VOCATION OF A BUSINESS LEADER PART 2 16

Obstacle of the Christian Business Leader 16
Faith based servant leadership: Balancing Act Follows 3 Stages 16
Is faith-based leadership practicable? 17

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 Module 2 LEC01 Kohlberg’s Stages of Moral Development

Kohlberg’s Cognitive Moral Development

- Pertains to moral reasoning
- Human beings will progress from one stage to another stage as he goes throughout his
development as a human being
- The stages and levels are sequential and hierarchical (Because it’s developmental it gives stages
and levels)
- Stages about what? About moral reasoning
- The focus of the model is not what decision to make but how decisions are made
- Normally called as descriptive ethics
- What decisions to make? -> Normative theories
- The focus of this model is not the what but the how
- But those hows they are also linked to the normative theories
- It's a development theory about moral reasoning that an individual will have to undergo to achieve
a decision. The final end is the decision.
- The moral agent arrives at a decision and the reasons why the moral agent arrive at that decision
- Kohlberg argued that higher order reasoning is not available to those persons in the lower level
- the reasoning of a person in the level 3 is not available to the person in level 1

Summary
- it is a developmental theory
- the brain -> it’s about moral reasoning
- two paths -> choose a decision
- it’s a developmental theory about moral reasoning in arriving at a decision
- focus on how the decisions are made and not on what decisions are to be made
- descriptive and normative

Kohlberg’s Theory of Moral Development (Levels)

- Convention - many people inside the conference
- Point of reference: ability to reason ethically based on convention
1. Preconventional
- to associate one thing about this level: imagine your selfie
- the focus of the decision is the self (yourself)
- the self: the pain that you will receive, the benefit that you will receive to satisfy
your own need
- reason: how to decide -> refer to yourself
- What's convenient for you?
- What makes you happy?
- What satisfies your needs?
- What removes you from a very dangerous situation?
2. Conventional
- From self interest to others’ interest
- Focus on others
- This is where you factor in the needs of the society and the existing loss and your need to
belong
- Moral reasoning is anchored on large number of people

3. Postconventional

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 - most advance
- beyond convention/ beyond people
- normally called principled morality
- focus on principles
- deontological
- virtue ethics
- rule utilitarian
- ability to decide based on principles that would normally transcends self interest and the
need of the society at large
- very few people will transcend to postconventional especially stage 6

- 2 stages per level

- at the higher stage you are morally level
- stage 5-7 -> you are able to exercise justice and rights theory

Summary:
- convention: moral reasoning is attached to other people to the society at large
- selfie: before/pre - the self
- solar system: focus is something beyond our self, our time tested principles

Level 1: Stage 1
- focus is the self when you decide
● Obedience to rules
● Avoidance of punishment
- focus is the immediate self
- short run
● Peter Pettigrew is a good example of someone in L1S1. His decisions are motivated by fear of
punishment from Tom Riddle.

Level 1: Stage 2
● Satisfy personal needs
● Instrumental-relativist
● Rewards

- focus is the strategic self

- the interest in the long run
- you are motivated by the satisfaction of personal needs
- people also realize that things can be an instrument for the satisfaction of their personal
needs
- the decision is relative is to the satisfaction of personal needs
- not motivated by fear and punishment but motivated by your intrinsic needs

Level 2: Stage 3
- focus: the others especially the immediate circle
● Good boy/nice girl
● Immediate circle
● Fairness to others

- analyzing things by viewing things and yourself as compared to the other

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 - focus of analysis: immediate circle
- you do things because you want to subscribe to the notion of good boy/nice girl
- we are driven by fairness to others
- If you're a student, what does it mean to become a student?
- example: mean girls -> Cady, a person being detached from our normal view of society/
high school environment -> she comes to a particular school -> she realizes that the
easiest way to belong/fit it by looking for role models (her immediate circle)
- follow the rules
- act in that way because you want to belong, you want to subscribe the notion of a
good boy
- you will filed the expenses because you want to be fair to your immediate circle
- you don’t want them to look bad

Level 2: Stage 4
- focus: the others, the society at large
● Morality of law
● Duty to social order
● Larger society

- following the rules because you want to protect the society

- normally called the law and order
- accountants: protects the tax law
- Example: Les Miserables - Javert

Level 3: Stage 5
- focus: values (universal principles)
● Social contract
● Own interpretations of societal values
● Law is respected but subject to exceptions

- focus is the spirit of the law that is anchored on societal values

- we factor in our own interpretation of societal values
- example: hamilton

Level 3: Stage 6
- focus: universal ethical principles
● Universal Ethical Principles
● Justice, Equity, Rights

- your guiding compass is not your self, not the other, not only the law with exception, but
rather universal ethical principles
- there exist these set of principles such as justice, equity, and rights that you will use as
your point of analysis for your decision making
- you can use either deontological ethics (categorical imperative, virtues)
- example: jean valjean
- As he went along the way and develop these particular universal ethical
principles particularly justice, rights and respect for the human person
- One of the pivotal section in Les Miserables is when Bishop Myriel actually gave
Jean Valjean the candlesticks

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- Jean Valjean stole from the bishop so some officers of the law found him with the
stolen items
- Instead of saying that yes he really stole them. The Bishop told the
officers that he gave the items to Jean Valjean and said he actually forgot
another item that he gave to him. Then, he hands him the candelabra

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 M2 LEC02 Gilligan’s Ethics of Care

● Emotion matters, and duties, rights, and obligations are just one way of thinking about ethics
○ It is a family of beliefs about the way values should be manifested in character and in
behavior.
○ Unified my shared concerns and commitments and by the rejection of the traditional
philosophical be that ethics can be adequately represented by rules and principles
○ Kohlberg: Should a man steal an expensive drug to save the life of his wife?

Kohlberg’s Theory of Development

● Pre conventional
○ Obedience and punishment orientation - avoiding the punishment stage
○ Self interest orientation - what is it for me stage
● conventional
○ Interpersonal accord and conformity - good person attitude stage
○ Authority and social order maintaining orientation - law and order morality stage
● postconventional
○ Social contract orientation
○ Universal ethical principles - principle of conscience stage

Heinz dilemma
- Girls approach dilemma in a lower stage
- Kohlberg concluded that boys reason more effectively than girls
- young western boys tend to develop higher and higher moral reasoning from absolute self
interest to realization of rights and justice for everyone equally

Liberalism
● which states that man is rational liberal equal unencumbered autonomous and right sparing
individual
● Her own research suggests that women tend to struggle with moral dilemmas in a different way.
That the little voice that they hear is a different voice than the one men tend to hear.

Carol Gilligan notes that Kohlberg’s results indicate male bias and that there is no reason to assume the
stereotypical male method of reasoning is superior to the stereotypical female method of reasoning

According to Gilligan women tend to:

● value social relationships before individual freedoms
● emphasize connection more than detachment
● consider social responsibility and obligation before individual rights
● emphasize the particular before universal and
● consider lived experience to be a more important guy to future behavior than philosophical
abstractions

Reason through an ethics of care as opposed to an ethic of justice

● socialized morality or the justice view of morality is male centered
● Gilligan‘s claims about the differences between the moral reasoning of women and men do not
stand up to the challenge of more recent data however these claims are not crucial to care ethics

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 ● it is enough to demonstrate the importance of values that belong to the ethics of care by showing
how they play a role in the moral life of individuals and society

Gilligan’s Reinterpretation
● Women have traditionally been taught a different kind of moral outlook for emphasizes solidarity,
community, and caring about one special relationships
● The “care view” of morality has been ignored or trivialize because women were traditionally in
positions of limited power and influence
● It would instead say that we can and should put the interest of those who are close to us above
the interest of complete strangers.
● Ethics of care contrasts with more well-known ethical views, such as utilitarianism and deontology
or Kantian ethics. The traditional outlook is what feminist critics calls a “justice view” mc of
morality

- A morality of care rests on the understanding of relationships as a response to another in their

terms

care ethics can be seen as a part of the traditional enterprise of philosophical ethics
● act so as to promote the good of others if this is so then care ethics is a part of the enterprise of
ethics it is not necessarily an alternative to a moral theory

Ethic of care versus ethic of justice

● Gilligan does not consider this a perfect correlation between the genders
● Ideally, moral agent should employ both approaches in moral decision making
● There is room and a need for both and Gilligan recognize this

So what does this mean it means that rules are inappropriate and unnecessary where certain human
relationships are concerned the abstract principles can capture everything relevant to making moral
decisions we can’t just slap the rule onto every situation instead have an understanding of the
complexities of the particular situation in which a moral problem has occurred and we need a deep and
detailed understanding of the people their interests and feelings and only with this is it possible to
sensitively respond to their problem and

Intelligence and Empathy

In considering both care and justice intelligence and empathy is required
● Intelligence to grasp relationships and details about the people circumstances and the problem
● Empathy to understand the concerns and feelings of the people involved (must identify them)
○ we must realize what they consider to be at stake ascertain that worries and concerns to
find out who is wrong and right but I find a way out of the conflict with the concerns and
feelings of all those involved

Is ethic of care of feminist ethics?

● The ethics of care was developed as part of a feminist movement
● Some modern feminist have criticized care-based ethics for reinforcing traditional stereotypes of a
good woman
● nevertheless the ethics of care illustrates that there may be gender differences in moral reasoning
● The ethics of case meshes with our belief that different rules of conduct apply in our personal and
public lives

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Summary:
● Kohlberg suggested that women simply could not engage in moral reasoning, because in his
experiments, they were attentive to what he believed to be irrelevant factors like context in
relationships, and did not frequently cite relevant principles.
● While Gilligan reinterpreted these results in light of gender studies and feminist ethics and
concluded that women typically do reason in a morally acceptable manner, simply that they find
different kinds of factors to be relevant.

● The ethics of care is an ethics promoted by Gilligan and Nel Noddings, who believe that we
behave morally and inasmuch as we care for those with whom we have personal relationships.
● They assert that emotive factors are relevant factors. Making the emotive admissible to moral
deliberation interferes with our desire to be objective but satisfies our understanding that we have
different moral rules concerning people close to us.
● Ethics of care is further criticized by contemporary feminist on the grounds that it reinforces
stereotypical female roles.
○ traditional values placed emphasis on disinterested, detachment, and dispassionate
objective judging
○ Gilligan says this is inappropriate and mistaken. Why? because it excludes the very
values that are most relevant to a moral situation and most important to the people
involved
○ this means we must make an effort to develop individuals who respond appropriately to
moral situation or recognize importance of personal relationships respect others and
accept responsibility

A moral reasoning quote to live by would be

● we exist
● we’re connected
● we’re obligated
● we ought to care

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 M2 LEC03 REST’S FOUR COMPONENT OF MODEL OF ETHICAL DECISION MAKING

The four component model of morality was developed by James Rest in 1983 and further developed and
applied by ________ in 1995 and by Muriel Bebeau in 2006.

It addresses the ways that moral behavior occurs, and allows for conceptualization of successful moral
functioning and the capacities it requires.
● To other models of moral function the four component model of morality as soon as co
occurrence in all areas of moral functioning of cognition and affect yes moral behavior is not the
result of separate processes rather each of the four components involves both affective and
cognitive processes Ethical

Ethical Decision Making:

A Dual Process Approach
● Ethical thinking activates both cognitive and emotional areas of the brain.
● The dual process perspective is based on the premise that both logic and emotion are essential
to making good ethical choices.
● As neuroscientist have discovered we can’t make good ethical choices without employing our
feelings

Business ethics educators Charles Powers and David Vogel identified six factors or elements that
underline moral reasoning and behavior that are particularly relevant in organizational settings these
factors include
● moral imagination
● moral identification and ordering
● moral evaluation
● tolerating moral disagreement and ambiguity
● integrate managerial competence with moral competence
● moral obligation

James Rest of the University of Minnesota used model of moral behavior

● he started with the end product the moral action and then determine the steps that produce such
behavior
● he concluded that ethical action is the result of four psychological sub processes which includes
○ moral sensitivity (recognition)
○ moral judgment
○ moral focus (motivation)
○ moral commitment
● This model is not a linear, time down sequence. There may be complicated interactions between
the various components for example a persons
○ For example a persons way of defining what is morally right components to make affect
the person's interpretation of the situation component one model should be thought of as
depicting a logical order for the development of a moral behavior to occur to better
understand us let us take a look deeper on each of the components moral sensitivity

Moral Sensitivity (Recognition)

Focuses on the ability to identify and discern problematic situations with ethical dimensions
● It is the first step in ethical decision making because we can’t solve the moral problem unless we
first know that one exists

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 ● Empathy and perspectives skills are essential to this component of moral action
○ paying attention to our emotions can be an important clue that we are faced with an
ethical dilemma
○ sympathy and compassion or other suffering emotions
○ gratitude and elevation or other praising or positive emotions that open us up to new
opportunities and relationships
● We may even deceive ourselves into thinking that we are acting morally when we are clearly not,
a process called ethical fading.
○ anger, disgust and contempt or other condemning emotions
○ shame, embarrassment, and guilt or self-conscious emotions that encourage us to obey
the rules and uphold the social order
● we can take steps to enhance our ethical sensitivity

In interpreting moral situations individuals should answer three questions

● What courses of actions are possible?
● Who (including yourself) would be affected by each course of action?
● How would the involved parties regard such effects on the welfare and interests?

Moral Judgment
The next component, moral judgment, requires the person to move beyond recognizing the ethical
dimensions present in a given situation to explore which line of action is morally justified.
● Moral judgment has generated more research than the other components of Rest’s model.
○ Harvard psychologist, Lawrence Kohlberg argued that individuals progress through a
series of moral stages just as they do physical ones
○ kohlberg identified three levels of moral development each divided in 2 stages which was
discussed in the earlier video
● Rest developed the defining issues test (DIT) to measure moral development.
○ hundreds of studies using the DIT revealed at moral reasoning generally increases with
age and education
● Principled leaders can boost the moral judgment of a group by encouraging members to adopt
more sophisticated ethical schemas.
○ the purpose of this component is deciding which one of these courses of action is morally
right

The question to pose at this point is:

● How do people define what is right and wrong?
○ the work of Kohlberg, Gilligan and _____ can assist in answering this question
● models of cognitive development provide important insights into the process of ethical decision
making.

1. contextual variables play an important role in shaping ethical behavior

2. education fosters moral reasoning and
3. A broader perspective is better. Consider the needs and viewpoints of others outside your
immediate group or organization.

Ethical blind spots of moral judgment includes

1. overestimating our ethicality
2. forgiving our own unethical behavior
3. In-group favoritism

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 4. implicit prejudice
5. judging based on outcomes not the process

- taking moral judgment seem to come naturally to people it almost seems that humans are either
genetically built to make moral judgments or a quickly conditioned by social experience to make
them

People’s intuitions are drastically different regarding what is right and wrong and individuals have great
certainty about their moral convictions
- sometimes individuals want to do the right thing but their integrity can be overpowered
- others never intend to follow an ethical course of action but engage in moral hypocrisy instead

Moral Focus (Motivation)

● Psychologists report that self interest and hypocrisy undermine moral motivation
○ both self interest and hypocrisy encourage leaders to set their moral principles aside
○ People are more likely to give ethical values top priority when rewards through raises,
promotions, public recognition, and other means for doing so.
● emotions also play a part in moral motivation
○ sympathy, disgust, guilt and other moral emotions prompt us to take action
○ positive emotion such as joy and happiness make people more optimistic and more likely
to live out their moral choices and to help others
○ moral values are not the only values that people have
○ people value advancement in a career, money, power and many things beside fairness
and morality
○ these other values can conflict with moral values, it is not unusual for non-moral values to
be so strong and attractive that a person will choose a course of action that preempts or
compromises the moral ideal
● The difference between what individuals think ought to be done and what they actually do can be
significant.
○ Given that two person are aware of various possible courses of action in a situation each
leading to a different kind of outcome or goal, why would one ever choose the moral
alternative especially if it involves sacrificing some personal value or suffering some
hardship?

Moral Commitment
Moral character and competence acknowledges that sensitivity, judgment, and prioritization of moral
values must lead to moral character and competence or moral behavior will fail

According to Nucci and Narvaez, a nervous moral character and competence is

● “Having the strength of your convictions, having courage, persisting, overcoming, distractions and
obstacles, having implementing skills and having ego strength”
○ executing the plan of action takes character
○ executing and implementing a plan of action involves determining a sequence of concrete
actions
■ working around obstacles and unexpected difficulties
■ overcoming fatigue and frustration
■ resisting distractions and allurements and
■ keeping side of the eventual goal it has also been found

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 ● It has also been found that having a positive affective state any focusing on the expectation of
success can determine the amount of effort that will be expended and how long it will be
sustained in the face of adversity
○ assertiveness, perseverance, resoluteness, competence, courage, and character are
attributes that lead to success
○ the positive character traits include courage, prudence, integrity, humility, reverence,
optimism, and compassion
● in addition to virtues other personal characteristics contribute to moral action
○ those with a strong will or internal locus of control and lastly
● Successful implementation also requires competence

The interaction among the four components can have a decided impact on morals behavior
● first if an overlap exist between two potentially moral situation
○ being concerned about one moral situation can cause insensitivity to another one which
begins before the first is completed
○ sometimes the attention and effort needed to carry out one task are so great that the
subject can attend to little else
○ as the cost of moral action comes to be recognized a person made a store to feelings of
obligation, denying personal responsibility or reappraising the situation, so as to make
alternative actions more appropriate as people realize the implications of component 2
and 3 processes, they may defensively re-appraise their interpretation of the situation so
they can still feel honorable but at less cost to themselves

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 M2 LEC04 VOCATION OF A BUSINESS LEADER PART 1

Who wrote the VOCATION OF THE BUSINESS LEADER (VBL)?

● This was written by the Pontifical Council for Justice and Peace in coordination or in partnership
with John A. Ryan Institute for Catholic Social Thought of the Center for Catholic Studies of the
University of St. Thomas.

The VBL is a product of a series of reflection

● Done by church leaders, business executives and academicians

What made them come together? the market failures is the very context

VBL: Context of the series of reflections in an attempt to help address the global challenges that have
adversely affected people and communities
● In paragraph one of the VBL, it says
“Unfortunately, this century has also brought business scandals and serious economic
disturbances and an erosion of trust in business organizations and in free market institutions. For
business leaders this is a time that calls for witness of faith, the confidence of hope and the
practice of love.”

The document emphasizes the crucial role of businesses and governments in promoting social justice
and the common good

Role of Businesses and Governments in Promoting the Common Good

● In paragraph 2 it says
“When businesses and markets as a whole are functioning properly and are regulated in an
effective manner by governments, they make an irreplaceable contributions to the material and
even the spiritual well-being of humankind. When business activity is carried out justly and
effectively, customers receive goods and services at fair prices, employees engage in good work
and earn a livelihood for themselves and their families, and investors earn a reasonable return on
their investment. Communities will see their common resources put to good use and the overall
common good is increased.
● Common good essentially requires social justice

Social justice has several components:

1. Commutative justice - this is a justice that happens at the level of the individual exchanges. For
example, the just wage for services rendered or a fair price for products and services
2. Legal justice - this pertains to the payment of proper taxes as our contributions to finance, basic
social services. So, tax evasion kills or destroys legal justice
3. Distributive justice - pertains to the crucial role of government in flowing back our tax contributions
to society in the form of social services (housing, basic education, health care, food security,
infrastructure peace and order, and other basic social services). Meaning to say that corruption in
government is killing distributive justice
4. Ecological justice - which consists in caring for the natural environment, and recognizing its
limitations to support our developmental undertakings. Destruction of the environment kills
ecological justice.

- All of these four components make social justice so, social justice happens only
when all four components are present in societies and communities

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 - The absence of just one component would mean the obliteration or annihilation
or destruction of social justice
- common good is never possible without social justice

The Business Stakeholders

● The conduct of businesses greatly affects the well-being of people and their families and
communities. Hence, responsible business is very crucial in bringing about social justice as well
as the common good.

Practical Ethical Principles for Business

“Respect for human dignity and the common good are foundational principles which should inform the
way we organize labor and capital employed and the processes of innovation, in a market system.” (VBL
par. 38)

Because enterprises affect persons and persons are in communities, the VBL emphasizes respect for human dignity
and the common good as the foundational principles which should inform the way we organize labor and capital
employed as well as the processes of innovation in a market system.

VBL par 38
“The deep and abiding purposes of individual businesses and commercial systems is to address real
human needs.”

Three interdependent activities which businesses should take up:

1. Businesses should address genuine human needs through the creation, development and
production of goods and services (GOOD GOODS)
2. Businesses should organize good and productive work (GOOD WORK)
3. Businesses should reuse resources to create and to share wealth and prosperity in sustainable
ways (GOOD WEALTH)

GOOD GOODS
● Businesses should produce goods and services that should meet authentic human needs such as
life-saving medical services, education, health care, affordable housing, but also goods and
services that genuinely contribute to human development and fulfillment. Good entrepreneur
gives first thought to service then second to gain second
● Meet the needs of the vulnerable members in society such as the poor, the elderly, the
handicapped and life.
○ Developments in the field of the bottom of the pyramid products and services such as
micro enterprises, micro credit, social enterprises, and social investment funds will help
lift people from extreme poverty and this could spark their own creativity and
entrepreneurship, contributing to their own development.

GOOD WORK
● Good and effective, efficient and engaging
○ it means that the enterprise must organize work in order for business processes to be
effective, efficient and engaging
● Autonomous
○ In organizing work, a certain autonomy must also be given to the workers or an
enterprises employees

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 ○ the people should be given at appropriate levels, a certain level of autonomy to be able to
participate in the creative process and contribute to the mission of the organization
● Collaborative
○ work must also be organized in a way that it becomes a venue for collaboration because
essentially work would bring people together
● Fosters dignified work
○ Lastly, work must foster human dignity. Work is central to a person's calling to
development and dignity of labor is very important. Work has multiple dimensions and the
most obvious is the economic dimension of work because it is through work that the
person earns and is able to provide for his and his family's needs

GOOD WEALTH (VBL par. 51, 52, 53)

● Good stewardship
○ Good stewards are creative and productive with the resources placed in their care. They
do not merely take from the creation's abundance. They use their talents and skills to
produce more from what has been given to them.
● Sustainable: Company. Natural Environment
○ The enterprise must make profit to sustain the business but not at the expense of the
common good. It should not create poverty for other members of society and it should not
destroy the environment
● Justly distributed third is the creation of good wealth
○ A profitable enterprise by creating wealth and promoting shared prosperity through
wages, fair exchange with suppliers, fair price of goods and services to customers and
paying the right taxes. This promotes the common good and helps individuals excel

Hence, from this standpoint an enterprise that practices the ethical principles of business produces good
goods, organizes good work and creates good wealth.

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 M2 LEC05 VOCATION OF A BUSINESS LEADER PART 2
In paragraph 59 of the vocation of the business leader
● Ethical social principles, illumined for Christians by the Gospel, provide direction for good
business but the navigation (of the business) falls to the seasoned and intelligent judgments of
virtuous business leaders who can wisely manage the complexity and tensions arising in
particular cases.”

To attain or achieve the delivery of good goods, the organization of good work and the creation of good
wealth
● is the vocation of the business leader

Obstacle of the Christian Business Leader

● divided life: Faith vs. daily life (VBL par. 10)
○ trying to respond to the call to holiness in one's life as a christian is completely separated
from one's life as a professional or a businessman because at the workplace different
rules apply
○ the second vatican council saw this split as one of the more serious errors of our age
○ this split between faith and the daily business practice can lead to imbalances and
misplaced devotion to worldly success
○ the many pressures business leaders face lead them to forget the gospel call in their
daily professional activities, it may seduce them to believe that their professional lives are
incompatible with their spiritual lives
○ it places excessive confidence in material resources and or worldly success and when
this happens, business leaders risk valuing status and fame, over lasting
accomplishment, and consequently, risk losing good judgment
○ business leaders may even be tempted whether from self-centeredness, pride, greed or
anxiety to reduce the purpose of this business solely to profit maximization or growing
market share or any other solely economic good
■ this is in paragraph 12 of the VBL
● The alternative path: faith-based “servant leadership”
○ this provides business leaders with a larger perspective and helps them to balance the
demands of the business world with those of ethical social principles and be a good
christian or a good muslim or a good buddhist in all facets of life whether personal, family,
spiritual, including professional and business life

Faith based servant leadership: Balancing Act Follows 3 Stages

under the faith-based servant leadership the exploration of situations and alternatives
are explored under three stages
● to see
○ It means to see the challenges and opportunities and study and gather factual
information
● to judge
○ in the light of the social principles of human dignity and the common good where
businesses should produce and deliver good goods, organize good work, and create
good wealth
○ one should evaluate the challenges and opportunities and make a judgment
● to act

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 ○ business leaders can put their aspirations into practice when they pursue their vocation
motivated by much more than financial success
○ when they integrate the gifts of spiritual life, the virtues and ethical principles into their life
and work they may overcome the divided life and receive the grace to foster the integral
development of all business stakeholders
○ the church calls upon the business leader to receive and to give entering into communion
with others to make the world a better place

Is faith-based leadership practicable?

● Mr. Frank

An enterprise that delivers good goods, organizes good work and creates good wealth becomes our
medium for the promotion of the common good. It likewise serves as our organized way of caring for our
social body or our communities and because when enterprises heed the call of the principles of ethical
business, they won't overlook responding to the needs of the less privileged in society it can also very
well become our organized exercise of the option for the poor. All institutions, business enterprises,
governments, universities, even non-profit organizations, have the potential to become our medium for
love of neighbor.

Maria Camel Luzara