MGT BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
Learning Outcomes
 Recognize the purpose and values of business ethics

 Commit to ethical standards in writing.
 Participate and involve in the community service program
According to Merle, 2017. “Ethics is a set of moral standards for judging whether something is right or
wrong”. Recognizing ethical issues and the reasons behind this issue may affect someone’s cognition
and behavior.
Business Ethics
Business Ethics is recognizing the right or wrong in the workplace, and able to stand to do the right
thing. Walle and Pekel explain that “attention to business ethics is critical during times of fundamental
change.” The CoViD 19 pandemic has brought an ultimate change in the business sector. During the
time of crisis, some values are neglected and some taken for granted.
Ethical Principles and Issues in the Business
1. The Principles of Justice and Fairness

Justice arises when the person is given what he or she deserves. Justice has always been applied
and used concerning a standard of rightness. Fairness has often been applied and used
concerning judging without reference to someone’s feelings or interests (Markulla Center for
Applied Ethics).
In a democratic society “equal pay for equal work”, which means an individual receives his pay
based on the amount of work and time he renders.
Gitman et al. stated that market places have different values. A medical doctor cannot have
equal pay as compared to an office administrator. A person’s compensation is based according
to his/her abilities, level of knowledge, needs, and demands.
2. Principles of Utilitarianism (Considering the best for the majority)
Utilitarianism is a guiding principle of which a decision should be in favor of the majority.
According to Hyat, 2018 “when an action affects the majority unfavorably, then it is morally
wrong.
3. Principles of Deontology (Actions are good or bad according to the set of rules)
This associates with the principle of “obligations and duties”. According to Hyat, 2018. “A
person will follow his/her obligations to another individual or society because upholding one’s
duty is what is considered ethically correct.”
A doctor performs his duties and obligations despite knowing he will have a great chance of
being infected by the virus and may lead to his death in the worst-case scenario.
4. Principles of Individual Rights
As humans we are given the right to govern our lives, pursuit our happiness, and exercise our
freedom regardless of gender, race, age, creed, and color. Denying human rights is considered
unethical and illegal.
Common Unethical Business Practices
 Using or taking someone else’s property or belonging to both physical, and intellectual property.
 Deceitful acts
 False information or exaggeration (fake news, false advertisement, telling the customer the
counterfeit product is original)
 Hiding or divulging information
 Corruption
 Inappropriate behavior
 Exploitation
 Unfair treatment of workers (excessive working hours, demeaning wages)
 Violating rules
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 Ignoring immoral conduct or unethical behavior
Examples of Code of Conduct for Small and Medium Enterprises:
1. Creating a culture of honest, integrity, and fairness.

2. Cultivating equality in terms of recruitment, hiring, work assignment, promotion, wage, salary,
termination. A company that is free of biases concerning color, race, sex, religion, age,
disability, and origin.
3. Committed to a safe and healthy work environment wherein all employees are protected from
any work-related hazards.
4. Prohibiting any act of unfair competition.
5. Zero tolerance for corruption
6. Financial reporting transparency
7. Restricted agreements with third parties, which means there should be no individual engage in
any activities that violate restrictive agreements for the benefit of the third party.
8. Compliance with all applicable laws and regulations set by the government
9. Prohibits from soliciting or accepting any advantage from any person having business dealings
with the company.
10. Conflict of interest – any individual who uses his position for his benefits of favoring his relative
or friends.
11. Penalizing officials who use their position of power for his interests, or favoring relatives.
12. Handling Propriety Information – employees make sure that the company’s sensitive and
confidential documents and information should have sufficient protection.
13. Prohibiting the employees to use the company’s physical properties for personal use or selling
for his gain.
14. Outside employment – employees should seek permission and guidance from the company for
any other work transactions outside the company, and considering that there is no conflict of
interest.
15. Compliance with the code of conduct
16. All individuals who violate the code of conduct will be subject to disciplinary action, or sanctions
under the labor law.
Source: (United Nation Development Programme, 2016)
CORPORATE SOCIAL RESPONSIBILITY (CSR)
CRS is an integral part of business ethics in which a company has obligations and responsibilities to
improve its nearby community in a manner of a monetary donation, scholarship, environmental
improvements.
What is the purpose of CSR?
Businesses exist in society, they survive because of the community. It is an ethical act if they would give
back their good deeds to the community. Thus, this act provides a positive social value and brings more
meaning and worth to the company’s mission statement.
Who Benefits the CSR?
Employees Society Businesses Non-Profit

Organizations
Working for a company A company with strong Taking part in the CSR initiatives help non-
that has a good public CSR helps the community and profit organizations
image boost their community to improve providing a positive through the scholarship
morale. and lightens up the social value creates programs, donations,
burden of the society market loyalty and services.
Source: Doublethedonation.com
Types of CSR:
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1. Philanthropic efforts – companies donate to charitable institutions, relief aids, and building
houses.
2. Volunteerism – companies encourage their employees to render hours of volunteer works to
the community.
3. Environmental leadership – companies take the initiative to take the lead in environmental
sustainability and protection.
4. Ethical labor practices – companies have a strong foundation on the principles of work ethics.
5. Economic responsibility – committed to paying their taxes, paying the employees competitive
wages.
Activity:
1. Research the Corporate Social Responsibility of the following companies. Discuss each CSR core
and how they take action on these social responsibilities.
a. McDonalds
b. San Miguel Corporation
c. Coca Cola

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BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

 Recognize the purpose and values of business ethics

Ethical Principles and Issues in the Business

1. The Principles of Justice and Fairness

Common Unethical Business Practices

Examples of Code of Conduct for Small and Medium Enterprises:

1. Creating a culture of honest, integrity, and fairness.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

What is the purpose of CSR?

Who Benefits the CSR?

Employees Society Businesses Non-Profit

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