Big Picture A

Week 1-2: Unit Learning Outcomes (ULO): At the end of the unit, you are expected
to:

a) Examine philosophy in the context of business.

b) Discuss the importance of moral and ethical standards in business.

Big Picture in Focus: ULOa. Examine philosophy in the context of

business.

Metalanguage

To establish a common frame of understanding, the following essential terms are

operationally defined. You will encounter these terms as we go through the first ULO.
Please refer to these definitions in case you will encounter difficulty in understanding
the concepts.

1. Philosophy. This refers to the study of the fundamental nature of knowledge,

reality, and existence, especially when considered as an academic discipline.

2. Business. This pertains to the organized efforts and activities of individuals to

produce and sell goods and services for profit.

Essential Knowledge

Philosophy of Business

Philosophy, in accordance with the definition stated in the Webster’s Dictionary, is a

system of fundamental or motivating principles, the basis of action or belief.

How then, can we connect or make relevant this characterization of philosophy in

relation to business?

Having a comprehensive and sensible business philosophy is the foundation of a

winning business. We will discover the answer to this as we make progress and this
will be discussed thoroughly in the succeeding topics/chapters.

But first, let us distinguish some phrases that might be confusing for many.

a. Philosophy of Business or
b. Business Philosophy
Philosophy of Business – considers the essential principles that inspire the creation
and operation of a business activity and the moral obligations that pertain to it to
include its role in society.

Business Philosophy – intended to represent a mode of doing business or a

business viewpoint which is profit-centered. It depicts how a specific business wishes
to operate itself instead of concepts and methods.

We can draw easily the distinction between the two. Let us further elaborate and focus
on philosophy of business as the cornerstone of a triumphant business. The practice
of comprehending, appreciating, and improving a business philosophy could be the
foundation that would bind the organization as it hurdles risks, challenges, and crisis.

Business Philosophy on the other hand, has the following scope and coverage:

1. A set of beliefs and principles that the organization endeavors and strongly
holds. This often referred to as the mission/vision statement. In the grand
scheme of things, this is actually the “Operational Blueprint.”

2. The goals, objectives, and purpose of doing business.

3. The silhouettes of the values that are deemed important as its mirrors what kind
of management or leaders the business has.
Once the business philosophy has been established, it must be conveyed and practice
by every member of the organization. Otherwise, it would just be a worthless
declaration.

The Real Objective of Philosophy of Business

More than ever, there is a clamor for businesses not just to focus on generating more
profits. In fact, it should never be the only goal of any industry. Research and
numerous studies have proven that businesses tend to prosper and withstand the test
of time, including competitors, as long as they exhibit and practice interest and
responsibility towards the general public. This, however, is easier said than done
especially if you are operating on a model-less and standard-less environment.

In today’s generation, many of us is familiar with Global Positioning System, commonly

known as GPS. Modernization and technology are responsible for this state-of-the art
mechanism which allows people to navigate with ease and precision.

Similarly, the same analogy may be applied in business philosophy. Without the
mission/vision statement, goals, objectives, purpose, and other related parameters,
one could easily get lost amidst the surge of pressures, challenges, setbacks, and
other business-related problems. This philosophy of business on the other hand, is
like GPS – it guides us in the right direction. It tells us where we are, where we are
going, and the right direction to get there.
 Mission
Business purpose
Vision
Role in society
Goals
Moral obligations
BUSINESS
PHILOSOPHY OF BUSINESS
PHILOSOPHY

Looking at another angle, you may view it as the “commandments” that are expected
to be religiously respected, followed, and adhered to all times. Going against such
principle is non-conforming and may lead to problems such as damaged reputation,
loss of trust, broken relationships between and among management, subordinates,
and/or consumers in general.

The Philosophy of business, therefore is like heart and conscience of the firm. By
setting up a mission, and formulating its vision, many untoward incidences may be
avoided and, in the process, generating a harmonious working environment.

A well-thought and deliberated philosophy of business summarizes the overview of

the firm’s values, beliefs, morals, and guiding principles. These are not easy to fathom.
It takes time, attentiveness, and meticulousness before one can come up with a sound
business philosophy.

In doing philosophical composition one must bear in mind and answer the following
questions:

1. What is the nature of my intended business?

2. What principle and concepts underlie its commercial activity?
3. In what kind of image do I wish my business to project?
4. Will my values adhere to my intended business?
5. How do we reconcile a business mission with conflicting interests in the market
place and society?

Truthfully answered, these could be the grounds or basis of a virtuous philosophy of

business.

Of course, it does not end with the generation of philosophy alone. Once it was agreed
upon and established, its implementation is another important feature. But prior to its
execution and realization, it must first and foremost be conveyed accordingly to its
intended recipients. So, who are these people? The message should be relayed to all
of its employees – from top rank management down to the rank-and-file. All must
strictly observe the standards set forth by the firm.

There are numerous avenues as to how such information may be disseminated across
all boarders concerned. It may be during the hiring process, websites, company
periodicals, posters, framed and wall-mounted displays. The objective of which is to
remind one and all of the philosophy of business.

MORAL AND ETHICAL BASIS OF BUSINESS

We all know that ethics is an established set of rubrics or guidelines that identify
conduct and define what is right and wrong demeanor.

Ethics, however, is not limited on a personal level. Even business espouse ethics.
They, too, have moral obligations to fulfill.

Though ethics in business is not in all instances written in black and white, common
sense would tell us that such unwritten codes of values and principles govern our
decision-making within the realms of the industry. Standards are usually grounded on
the organization’s culture and this sets apart in terms of behavior as to what is
acceptable or otherwise.

Amoral
Moral Immoral

3 Models of Management Ethics

1. Moral – conforms to high standards of ethical behavior

2. Amoral – a. Intentional: does not consider ethical factors
b. Unintentional: casual or careless about ethical considerations in
business.
3. Immoral – a style lacking ethical principles and dynamic antagonism to what is
ethical.
Why do people behave ethically?

Most of us behave ethically…

1. To evade punishment
2. To get some “reward” for being “good”

Many of us behave ethically…

1. To be agreeable and acceptable to family,

friends, and superiors
2. To be a “good citizen”

Few of us behave ethically…

1. To do what is right

There are times, of course, when we doubt our decisions or actions. After all, values
and morals are personal. What is considered proper for some does not equate to be
the same for all. It all depends on the following:

a. The person
b. The perspective
c. The recipient – as to how one would have view and accept the said conduct
First, let us name the different personalities involved in doing business as well as their
differences in terms of perspectives. Evaluating both angles would help us understand
the necessity and depth of such demeanor. Management should tailor fit their
philosophy of business and take into consideration all involved, as well as all those
who will be affected by the said endeavor.

A SHAREHOLDER owns part of a company through shares of stock, making them

stockholders.

A STAKEHOLDER has an interest and/or concern in the operation as well as the

performance of company.
 Shareholder Stakeholder

§ Owners § Employees
§ Members of the § Suppliers
corporation § Customers
§ Stockholders § Various agencies including government
§ Competitors
§ Community
§ Media
§ General public
§ Others

Stakeholders are divided into two:

a. Internal Stakeholder
b. External Stakeholder

INTERNAL EXTERNAL STAKEHOLDERS

STAKEHOLDERS

Creditors
Owners Customers

Public
Managers
Company
Society

Employees
Suppliers
Government
Both shareholder and stakeholder have different perspectives at looking at business.
Shareholders focus on making decisions that would benefit the best interest of the
owners of the firm. Of course, these are grounded on the motive to maximize profit
and its return of investment.

However, shareholders can’t just put profit as the only emphasis for the business
survival. The success or failure of any enterprise depends largely on the stakeholders’
perception, acceptance, and respect for the said business. The philosophy of
business, therefore, as well as all decisions that the firm may formulate should work
for the good of the entire populace concerned.

Philosophy of Business as Part of Applied Philosophy

What is applied philosophy in the first place? How does it differ from plain and simple
philosophy?

While Philosophy, in its very essence, is the study of the basic and fundamental nature
of understanding, truth, and existence, particularly when pondered as an academic
discipline, Applied Philosophy, as the term suggests, is the application of those
principles and concepts stemmed from and based on philosophy to a study of our
practical affairs and activities.

Philosophy in Business

Business is an activity rather than a philosophy. However, there are loads of diverse
and distinctive philosophies that can be applied to the activities of business. The
philosophy applied is vital not only to the commercial and monetary feat of the
business, but more so to the consequential influence and effect of business
undertakings on the community. Such effect may go whichever way possible. It may
be constructive or destructive.

The Three (3) Major Components of the Philosophy of Business are:

1. The essential ideologies that inspire the realization and management of a

business venture.
2. The nature and purpose of the said business
3. The moral obligations that relate to it.
Additionally, deliberation about the disposition and function of ethical principles need
not contradict a role for moral judgement.

Also, philosophy is more on pursuing queries, reservations, and uncertainties. In order

words, it can be likened to the phrase “questioning minds.” As such, philosophy, in
philosophical perspective, is not much on answering our questions but to further
question the given answers.
Self-Help: You can also refer to the sources below to help you
further understand the lesson:

*Meyer, D. (2017, Feb 05). New business philosophy: The consumer is the enemy.
Capital Retrieved from https://search.proquest.com/newspapers/new-
business-philosophy-consumer-is-enemy/docview/1865254380/se-
2?accountid=31259

*Vageesh, N. S. (2016, Oct 24). Our core business philosophy rests on

‘transparency, full disclosure’. Business line Retrieved from
https://search.proquest.com/newspapers/our-core-business-philosophy-
rests-on/docview/1831583504/se-2?accountid=31259
 Big Picture in Focus: ULOb. Discuss the importance of moral and
ethical standards in business.

Metalanguage

Below are the essential terms that are operationally defined for you to better
understand this section of the course.

1. Ethics. This pertains to the moral principles that govern a person's behavior or the
conducting of an activity.

2. Business Ethics. This refers to a form of applied ethics or professional ethics, that
examines ethical principles and moral or ethical problems that can arise in a business
environment.

Essential Knowledge

There are times when conflict of interest would arise in certain situations. As such, we
tend to face a thin line between what should or should not.
The Four-Fold Test in Decision-making Evaluation

1. Truthfulness – How honest and accurate is my decision?

2. Fairness – Am I being just and reasonable to everyone concerned?
3. Goodwill – Will it build goodwill and positive image to the organization?
4. Beneficial – Will it be favorable to all parties who have a vested interest in the
outcome?
Ethics in Organization: Who Conceives? And Who is Responsible?
The firm’s leaders are responsible for setting the tone that should be adhered to by
every member of the firm. These are standards that are acceptable as conduct for
everyone concerned. The managers have a duty to set an example for all to look up
to. Obediently following ethical manners should be rewarded accordingly as this would
motivate people to do what is supposed to be right. Now, imagine if management’s
focus is solely on generating profit. Chances are, all of its subordinates are led to
direction as well. The leaders will direct its people.

Principles of Commendable Business Ethics

Community
Trustworthiness Transparency
Involvement

Be Responsible Accounting Respectfulness

Control
For the business to be a success, one must work diligently. Just like a game, there
should be a strategy in order to win. Planning ahead is just one step. Business
endeavors must be rallied both legally and ethically.

Ethics is the foundation of a civilized society. This includes business and the people
in it. Without ethical principles, chaos would transpire and all else is certain to collapse
eventually.

Steps to Ethical Decision Making

What are the consequences of your

decision?

How can the option be implemented?

Decide which option is most ethical

Consider options

Think through dilemma; Identify all components as objectively as possible

Ethical Decision Models

Utilitarian Justice

Moral Rights
 v Utilitarian Model

§ An ethical decision is one that produces the greatest good for the greatest
number of people.

v Moral Right

§ An ethical decision is one that best maintains and protects the fundamental
rights and privileges of the people affected by it.

v Justice model

§ An ethical decision is one that distributes benefits and costs among

individuals in a fair, equitable, or impartial way.

Behavior or act that has Compared Prevailing norms of

been committed acceptability
with

Value judgements and

perceptions of the
observer

Rules and Underlying Principles of Business

The underlying principles of business are the fundamental norms, rules, or values that
represent what is desirable and positive for a person, group, organization, or
community, and help in determining the rightfulness or wrongfulness of its actions.
Principles are more basic than policy and objectives and are meant to govern both.

Basic Principles of Business Rules

1. Rules are subject to change.

Everything is subject to change, including business rules. Policies can be
changed in relation to responsiveness to management practices. A corporate
rule must make sense and good judgment for all participants including:
 a. Investors
b. Business undertakings, and
c. Active business affairs and aftermaths within scope.
Rules are not supposed to be between management and employees alone but
takes into account the community and all those involved in the said business.

2. There is no such thing as absolute business rule in any business model.

Business rule should be tailored-fit to the purpose, demands, and goals of the
business.

3. There are no business rules ‘til you say there are.

Never assume that people know. There is oftentimes a necessity for a
structured (sometimes formal) business vocabulary – a fact model.

Do’s and Don’ts are critical in the day-to-day operation of any business
enterprise. It can make or break any endeavor. A core business rule will define
what is acceptable or otherwise.

4. A business rule should always be feasible.

What’s the use of a business rule if it is not:

a. Realistic
b. Workable
c. Attainable
d. Achievable
e. Practical

The standard for business strategy – the Business Motivation Model – compares a
business policy to a business rules as follows:

a. Less structured
b. Less discreate
c. Less atomic
d. Less compliant with standard business vocabulary, and
e. Less formally articulated.
There are, of course, numerous business philosophies that you can apply on your
respective undertakings. The above-mentioned are just the basics to give you an idea.
In deciding to come up with such business philosophy, just bear in mind the following:

a. Follow what works for you

b. Do what is legally right
 c. Do what is morally right
Business rules offer a powerful tool. But rules are just rules. It should be acted upon.
Stay focused with the right techniques, it is just a matter of time before the business
would take off.

Business as Social Institution – New Perspective and Paradigm Shift

At some point in time, we kind of believe that society exists to “support” business. Such
support can be manifested through patronage. But have you ever stopped to consider
it to be the other way around? Remember, aside from products and/or services,
businesses are made up of people. It is the people who make us the business running.
The earnings of these people make it possible for them to provide for the needs of
their respective families, send their children (if any) to school, and support the
community in general.

Of course, this is just one way of looking at business as social institution. Try to
visualize business as a vessel for the “shared experience”. It is literally a place where
adults mingle, converge and connect in the involvement of labor. It is where one can
expand social connections and discover opportunities that could be part of his career
development. His professional journey begins through this social institution.

Beyond Economics: Business as a Social Institution

Typical Business Goal: Make More Money. It is obviously the desire of most
businesses. And there is nothing wrong with it – as long as it is pursued with
mindfulness to business as a social institution. However, when greed enters the
picture and conflict of interest are not resolved, the principle of mutual benefits is no
longer applicable and exploitation is not far behind. It is thus very important that
business culture and its qualities as a social institution should be in synchronization.

New Perspective and Paradigm Shift

Imagine yourself eating your favorite fruit – apple. You love the fruit so much that you
eat it regularly. As you grow, you come to realize that there is more to apple than just
being a fruit. The same fruit can be apple pie, an apple smoothie, and apple tart, an
apple muffin, as part of ingredients for salads, and it can also be combined with other
fruits to produce delicious desserts. When your taste buds discover all these apple
delicacies, you would now have choices and smoke sort of transformational
preferences. Same is true in business.

A paradigm is a model composing of cluster of ideas about how things should be done,
made, or thought about.

In short, a paradigm is…

a. Your perspective
b. Your point of view
 c. Your beliefs about what’s true

Can we say that your paradigm will remain the same all your life? Of Course NOT!
There is what we call a Paradigm Shift. This happens every time there’s a significant
change in the way an individual or group perceives something. The long-standing
paradigm is now replaced by a new set of beliefs or way of thinking. This is very
natural. We each have our own personal paradigms or lenses through which we vision
the world. Exposure to new information and experiences can change our perspective
or outlook in life.

Personal Paradigm Shift can also be viewed between two individuals in a

relationship. And since no two people are exactly alike, compromises and adjustments
have to be made for the connection to have a chance to succeed. In such cases, both
parties must agree to make it work by being more understanding and make sacrifices
along the way whenever necessary. It will definitely never work if only one would be
willing to make the shift and the other is not reciprocating.

If there is such thing as personal paradigms, there is also its counterpart in business.
Organizations have Corporate Paradigms with respect to the ways and means by
which they suppose their objectives and targets will be best accomplished. Similarly,
societies have Cultural Paradigms that consists of sets of beliefs, norms, and
practices – all of which are subject to change.
Corporate paradigm shifts may be:

a. Internally-driven
b. Externally-driven
Business enterprise, regardless of size, experience paradigm shifts. This may occur
usually due to changes in management. Whenever a firm decides to make
adjustments to suit the new controlling administration, expect some transformations
and adjustments. New sets of executives, directors, and managers may come from
the merging of two corporations. There may be instances wherein one company may
be acquired by another firm mostly due to financial reasons. As such, new policies
may be introduced.

Common examples of such changes are the implementation or abolition of flexible

work-time schedules. One firm may find it more sensible to allow its employees to
report to work on their preferred time as this would minimize tardiness. Others are very
strict when it comes to time management. All must report on the standard 8 to 5 work
time frames. Another is dress code. Some doesn’t mind the use of casual clothes to
work as long as its decent enough. Others prefer the more uniformed corporate look
as this gives the impression of being more professional.

When organizations merge, expect new policies as it undergoes internally-driven

corporate paradigm shift. As an employee, of course, you have the option to accept
such changes and blend in or get out of the new merged corporation and seek a new
job elsewhere. The choice is yours to make.
Self-Help: You can also refer to the sources below to help you
further understand the lesson:

*Business - business ethics; findings in business ethics reported from university of

nottingham ('alternative hedonism': Exploring the role of pleasure in moral
markets). (2020, Oct 02). Ecology, Environment & Conservation Retrieved
from https://search.proquest.com/wire-feeds/business-ethics-findings-
reported-university/docview/2447348080/se-2?accountid=31259

*Varma, S. (2019). Why learn business ethics?—Students’ conceptions of the use

and exchange value of applied business ethics. Asian Journal of Business
Ethics, 8(1), 107-125. doi:http://dx.doi.org/10.1007/s13520-019-00090-7