Bus. Ethics 3rd Quarter Reviewer PDF

L1: NATURE AND FORMS OF BUSINESS ORGANIZATIONS ★​ Do you agree that businesses are everywhere? -​ The fruit of business are everywhere. We have entered a maze called business. And it is a maze that is probably inescapable. This is because business has become a necessa...

L1: NATURE AND FORMS OF BUSINESS ORGANIZATIONS ★​ Do you agree that businesses are everywhere? -​ The fruit of business are everywhere. We have entered a maze called business. And it is a maze that is probably inescapable. This is because business has become a necessary facet of modern living. ★​ WHAT IS BUSINESS? -​ The word business has come to be associated with a number of meanings and usage. 2. According to Merriam-Webster Dictionary -​ the word business defined as: (a)The activity of making, buying, or selling goods or providing services in exchange of money. (b)Work that is part of a Job (c)The amount of activity that is done by a store, company, factory etc. ★​ BUSINESS ETHICS -​ Defined as the practice of what is morally and ethically right in the conduct of business in the workplace TOP MANAGEMENT → DOWN THE LINE → Should practice ethical standards that will morally uphold the organization and sustain its credibility and integrity at all times. ★​ LEVELS OF BUSINESS ETHICS To further understand the meaning of business ethics Johnson and Scholes define its three levels, namely macro, corporate, and individual levels ❖​MACRO -​ The macro level of ethics is defined as the area that represents business operations bound by the virtues and norms of the different political and social systems of every society -​ Multinational Company -​ EXAMPLE: Respectful Marketing: A multinational company in the Philippines must adapt its ads to local culture, using local celebrities and language respectfully ❖​ CORPORATE -​ The corporate level of ethics represents how each company interprets the rules and standards of the industry.  Employee Benefits: -​ Company A, in the Philippines decides to give its employees paid sick leave and paternity leave, Bereavement leave even though it's not required by law. -​ This shows how the company interprets industry standards by prioritizing the well-being of its employee ❖​ INDIVIDUAL -​ The individual level of ethics is the employee’s own moral principles that guide his or her life. Reporting Ethical Concerns: -​ Anna, an employee at a restaurant in the Philippines notices that a supplier is providing low-quality ingredients. Despite possible consequences, the employee decides to inform their manager about this issue. -​ This shows the employee's personal commitment to honesty and integrity, guiding their actions even in challenging situations. ★​ BUSINESS ORGANIZATIONS -​ The term “BUSINESS ORGANIZATION” refers to how business is structured. -​ It refers to a commercial or industrial enterprise and the people who constitute it. ★​ FORMS OF BUSINESS ORGANIZATIONS -​ There are three forms of business organizations, namely, sole proprietorship, partnership, and corporation. Each form has its own advantages and disadvantages  ❖​ SINGLE/SOLE PROPRIETORSHIP -​ Defined by the Philippine Statistics Authority as “a business establishment organized, owned, and managed by one person, who alone assumes the risk of the business enterprise. -​ simplest form of business organization in the Philippines. It is not encumbered by the strict regulatory laws and rules imposed upon corporations and partnerships. CHARACTERISTICS: 1.​ Single Ownership - Alone assumes the risk of the business enterprise. Single proprietorship is the easiest to set up that you may already be engaged in one without you knowing. This is called single or proprietorship. -​ Example: Small Sari-sari store, turo-turo, canteen, local grocery, laundry shop. 2.​ No Sharing of Profit and Loss - All profits and business decisions are under the discretion of business owner 3.​ One man’s CAPITAL - Assets are equipment ,cash, office supplies, and raw materials. 4.​ UNLIMITED- The single proprietor has unlimited liability in the sense that creditors of his business may proceed not only against the assets and property of his business but after his own personal assets and property. -​ Unlimited liability of the business which may extend to the personal assets of the proprietors. ​ ADVANTAGES OF SOLE PROPRIETORSHIP: ➔​ Easy formation ➔​ Better control (prompt decision-making and flexibility in operations) ➔​ Subject to fewer regulations ➔​ Not subject to corporate income tax ➔​ Ownership of all profits ​ DISADVANTAGES OF SOLE PROPRIETORSHIP: ➔​ Owner has unlimited liability ➔​ Difficult to raise capital ➔​ Business has a limited life ➔​ Difficult to do business beyond a certain size  ❖​ PARTNERSHIP -​ ARTICLE 1767. By the contract of partnership two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves. -​ Two or more persons may also form a partnership for the exercise of a profession -​ Partnership resembles sole proprietorship, except that there are two or more owners of the business. -​ Eachowner called a partner. -​ Partnerships are often formed to bring together various talents and knowledge. -​ Partnerships provide a means of obtaining more equity capital than a single individual can obtain and allow the sharing of risks for rapidly growing business. -​ A profession is a calling in the preparation for or practice of which academic learning is required and which has for its prime purpose the rendering of public service. Thus, it has been defined as “ a group of men pursuing a learned art as a common calling in the spirit of public service”. -​ The exercise of profession, is not a business or an enterprise for profit but the law allows two or more persons to act as partners in the practice of their profession. Example: practice of law , public accounting, medicine and other professions (General professional partnerships) ​ ADVANTAGES OF PARTNERSHIP: ➔​ Easy formation ➔​ Larger resources ➔​ Sharing of risk ➔​ Better management and flexibility of Operation ➔​ No corporate income tax ➔​ Subject to fewer regulations as compared to companies ​ DISADVANTAGES OF PARTNERSHIP: ➔​ unlimited liability ➔​ Limited life ➔​ Difficult to raise capital ➔​ Chances of dispute  ❖​ CORPORATION -​ A corporation has a distinct personality separate from its owners. It enjoys certain rights and privileges just like an ordinary individual. -​ It can enter contracts, loan and borrow money, sue and be sued, hire employees , and pay taxes. -​ A corporation has a minimum of five members called shareholders. -​ It has a life of its own and does not dissolve upon the death or withdrawal of a shareholder -​ Have limited liability CHARACTERISTICS: 1.​ Artificial Being -​ A corporation is an artificial being with a personality separate and apart from its individual shareholders or members. 2.​ Created by Operation of Law -​ It cannot come into existence by mere agreement of the parties as in the case of a business partnership. -​ Corporations require special authority or grant from the State, either by a special incorporation law that directly creates the corporation or by means of a general corporation law (i.e., The Corporation Code of the Philippines). 3.​ Enjoys the Right of Succession -​ A corporation has the capacity for continued existence subject to the period stated in the Articles of Incorporation. -​ The death, withdrawal, insolvency, or incapacity of individual shareholders or members will not dissolve the corporation. -​ The transfer of ownership of shares of stock does not dissolve the corporation. 4.​ Powers, Attributes, and Properties -​ It has the powers, attributes, and properties expressly authorized by law or incidental to its existence. ADVANTAGES OF A CORPORATION: ➔​ The corporation has the legal capacity to act as a legal entity. ➔​ Shareholders have limited liability. ➔​ It has continuity of existence. ➔​ Shares of stock can be transferred without the consent of other shareholders. ➔​ Its management is centralized in the board of directors. ➔​ Shareholders are not general agents of the business. ➔​ Greater ability to acquire funds. DISADVANTAGES OF A CORPORATION: ➔​ A corporation is relatively complicated in formation and management ➔​ There is a greater degree of government control and supervision. ➔​ It requires a relatively high cost of formation and operation. ➔​ It is subject to heavier taxation than other forms of business organizations. ➔​ Minority shareholders are subservient to the wishes of the majority. ➔​ In large corporations, management and control have been separated from ownership. ➔​ Transferability of shares permits the uniting of incompatible and conflicting elements in one. ★​ The Role of Business in Society -​ The main purpose of business is to create wealth. -​ Innovate and deliver products and services and use resources in the most efficient manner. -​ A business always strives to become profitable and gain financial reward. It is primarily motivated by the monetary return from its operations. -​ Meet the needs of the people -​ Businesspeople are responsible for meeting the needs of society in the form of TAXES, which are spent for paying national debts and for building hospitals, schools, and roads, among other facilities. -​ They should ensure a safe and peaceful environment where their business operates. L2: Ethical and Unethical Behavior ★​ BUSINESS ETHICS ​ Provide the ethical standards in the workplace. ​ Having high ethical standards helps establish credibility and a good image of the organization. CORE PRINCIPLES OF BUSINESS ETHICS 1.​ HONESTY ○​ There is nothing like having honest employees in words and actions. ○​ The company should also be honest about the quality of products or services offered to customers. 2.​ INTEGRITY ○​ Having a high level of integrity means that the company has earned the trust of its stakeholders because it has been consistent in all of its actions, decisions, and character. There are no pretensions. 3.​ KEEPING PROMISES ○​ Managers must keep their word and always ensure these promises are not broken. ○​ Even when commitments are difficult to fulfill, managers must uphold them. 4.​ LOYALTY ○​ Managers should be loyal to the company by not putting their self-interests above anything that will jeopardize the company’s position. 5.​ FAIRNESS ○​ Managers should act with impartiality in all their transactions. 6.​ CARING ○​ This is the exercise of compassion and sincere concern for others. ○​ The company should create a caring environment for employees, leading to a positive chain reaction among customers and stakeholders. 7.​ RESPECT ○​ Being respectful means being courteous at all times in all dealings, regardless of rank. 8.​ OBEDIENCE TO THE LAW ○​ All employees should obey company policies, rules, and regulations. ○​ Management must set an example in following rules and never break them. 9.​ EXCELLENCE ○​ Employees should strive to achieve excellence in all their tasks.  ○​ The company should deliver the highest quality products and ensure efficient services. 10.​ BEING A LEADER ​ Leadership by example is crucial. ​ Managers should be role models, making firm yet flexible decisions based on ethical principles. 11.​ MORALE ​ Ethical behavior enhances the company’s image and boosts employee morale. ​ An ethical environment builds a strong reputation and recognition. 12.​ ACCOUNTABILITY ​ Being accountable means taking responsibility for one’s actions. ​ Managers should accept the consequences of their decisions without blaming others. ★​ UNETHICAL BUSINESS PRACTICES -​ There are unethical behaviors that should be avoided because they destroy the company’s reputation and result in bad business. -​ Managers who get involved in unscrupulous practices end up in jail or are ostracized by the business community. 1.​ ACCOUNTING MANIPULATIONS ​ Financial statements can be manipulated to present a more favorable view of a company’s financial status. ​ Companies may inflate assets and hide liabilities to mislead investors. 2.​ OVERBILLING ​ Some service providers charge more than the actual price for services, which damages their reputation and results in lower sales. 3.​ MISLEADING ADVERTISEMENTS ​ Some advertisements make exaggerated claims that mislead consumers. ​ Companies must ensure their claims are truthful to avoid lawsuits and loss of consumer trust. 4.​ MAKING FALSE CLAIMS ​ Some managers take undue credit for charity work they were not involved in. ​ Vendors and suppliers may use harmful chemicals or shortcuts in production to cut costs, which is unethical. 5.​ CUSTOMER SERVICE FAILURES ​ Poor customer service, failure to honor warranties, and refusing refunds are unethical. ​ Credit collection agencies that use threats damage the reputation of financial institutions. 6.​ LAYOFFS AND HIGH EXECUTIVE COMPENSATION ​ Some companies lay off workers under the pretense of financial losses while increasing executive salaries. 7.​ POOR-QUALITY MATERIALS ​ Using low-quality raw materials to cut costs results in defective products. ​ Consumers affected by faulty products may take legal action against dishonest manufacturers. ★​ Good Policies and Ethical Practices in Business Organizations 1.​ Compliance with Reportorial Requirements: -​ Legal Registrations: Business owners must register their businesses with the appropriate government bodies. Sole proprietors should register with the Department of Trade and Industry (DTI), while partnerships and corporations must register with the Securities and Exchange Commission (SEC). -​ Clearances and Other Registrations: Additional documentation such as barangay and municipal clearances should be secured. Business owners must also register with the Bureau of Internal Revenue (BIR), Social Security System (SSS), PhilHealth, and the Home Development Mutual Fund (Pag-Ibig). -​ Ongoing Compliance: Regular remittances and adherence to monthly, quarterly, and yearly requirements of these government bodies are necessary for continued legal compliance. 2.​ Practice Proper Office Decorum: -​ Employee Conduct: Employees are expected to maintain professionalism in their interactions. Conversations should be kept at a respectful volume and should remain professional. Personal calls should be minimized, and employees must be cautious about sharing sensitive information that may contribute to gossip or rumors. -​ Workplace Cleanliness: The work environment should be kept clean and organized. Employees should properly dispose of food containers and maintain cleanliness in shared spaces like restrooms and pantries. -​ Sensitivity to Scents: Employees should be mindful of their personal hygiene and any scents that might cause discomfort to others. 3.​ Use of Company Property: -​ Safeguarding Assets: Company property, including computers, office equipment, phones, and software, should be used only for business purposes. Employees must take responsibility for preventing theft, misuse, or loss of these assets. 4.​ Communication Infrastructure: -​ Appropriate Use: Communication tools such as email, telephone, and the internet should be used professionally. Employees should ensure that their communication maintains confidentiality and integrity. 5.​ Best Interests of the Employer: -​ Avoiding Conflicts of Interest: Employees should always act in the best interest of the company and avoid situations where personal interests might conflict with company goals. Personal gain should never interfere with the business’s interests.  6.​ Confidentiality: -​ Protecting Sensitive Information: Confidential company information, such as trade secrets, business strategies, client and supplier lists, compensation details, and financial records, should not be disclosed to unauthorized individuals. 7.​ Accurate Financial Reporting: -​ Integrity of Financial Records: Financial and accounting records must be accurate, truthful, and reliable. There should be no misrepresentation of funds or assets, and all transactions should be backed by proper documentation. Business practices should ensure that financial records comply with relevant laws and regulations. Components of a Code of Ethics The Code of Ethics is an essential framework for guiding behavior and maintaining integrity within an organization. The following are the key components of a Code of Ethics: 1. VALUES ​ A company’s values guide the organization’s internal conduct and its relationship with stakeholders. ​ These values emanate from its corporate culture as displayed by its stakeholders. 2. PRINCIPLES ​ To support the values of the organization, there are credos that employees should live with during their stay in the company. ​ Business principles such as customer satisfaction, business profitability, and continuous improvement are just some of the principles that stakeholders live by. ​ Corporate social responsibility is also another principle found in the Code of Ethics. 3. MANAGEMENT SUPPORT ​ This means that management is serious in considering the code as the bible of the employees in terms of ethics. ​ To show support, management allows the display of this Code of Ethics in prominent and strategic places in the work area. 4. PERSONAL RESPONSIBILITY ​ Any member of the organization should uphold and preserve the Code of Ethics because any violation of the code may involve legal and moral consequences. ​ Each employee should be guided by the code and must report anyone who violates it. 5. COMPLIANCE ​ All legal requirements of the code should be met. ​ Any licensing requirements, including but not limited to reporting of financial statements, should be met. L3: CLASSICAL PHILOSOPHIES -​ the philosophical foundations laid by ancient Greek philosophers such as Socrates, Plato, and Aristotle, and their influence on ethics in business organizations. ★​Socrates ​ Socrates was a color figure in ancient Greece. ​ He did not build any school or any philosophical system. However, he had influence on Plato, his student. ​ Socratic Method: This technique focuses on giving the students questions rather than answers. It is a continuous probing into a subject with questions. Socrates believed that self-knowledge is sufficient to achieve a good life. ​ An individual should seek knowledge because it means ethical action. ​ For Socrates, knowledge is the propagation of what is good, a virtue, or excellence; whereas ignorance is the focus on what is bad, evil, and not useful. ​ Moral Responsibility: Do not go with the flow. Just because everybody is doing it, does not mean that you will go with the flow. ​ To be morally upright is one’s responsibility. Socrates was willing to die rather than go against his conscience. ​ Relevance to Organizations: Similarly, organizations have no room for corruption. Any trace of corruption should be uncovered, and good people should report any bad behavior. ★​Plato ​ City-State Classes: Plato believed in three classes in a city-state: ○​ RULERS: Those who emerge from the population as the most intelligent members of the state. ○​ GUARDIANS: Those who implement peace and order. ○​ WORKERS: Those who perform tasks to ensure that the city-state runs smoothly. ​ These three groups should work in harmony so that all members of the city-state will achieve happiness and fulfillment. ★​Aristotle ​ He was a Greek philosopher and scientist who developed the scientific method. ​ He joined “Plato’s Academy” and remained there for 20 years. ​ Aristotle also founded a philosophical school named the Lyceum, located near a shrine of Apollo Lyceus. ​ Writings: Influenced by Plato and the Academy, Aristotle’s earliest writings were also in the form of dialogues such as Rhetoric, Eudemus (On the Soul), On Philosophy, On Prayer, and On Education. His other writings include The Topics and The Analytics, which dealt with logic, a study of reasoning, and dialectic, which is a method of argument. ​ Philosophy & Business: A biologist and philosopher, Aristotle teaches: Keep people motivated. ​ According to Aristotle, it is natural for humans to be rational, sociable, and virtuous. ​ Business organizations, therefore, should have the mechanisms to let these natural drives emanate among their employees. ​ People should be given tasks that are ethical and meaningful. ​ They should also be given the opportunity to learn and be motivated. ★​ Virtue Ethics ​ Virtue Ethics is a term which is equivalent to the Greek word Arete, which means excellence. ​ Ancient Greek philosophers believed that human excellence primarily involves intellectual virtue. ​ Person-Based Ethics: Virtue Ethics is defined as a person-based ethics, which looks at the moral character of the person carrying out a particular action. It is necessary for virtue ethics to focus on helping people become good members of society. ​ Aristotle’s Influence: Virtue Ethics is rooted in the moral philosophy of the Greek philosopher Aristotle. ○​ Virtue Ethics is more concerned with assessing the moral integrity and character of the person. It focuses not on the act but on the character of the agent. ○​ Instead of focusing too much on the question, “What is the right thing to do?” virtue ethics is more concerned with the question, “What kind of person should I be?” ​ Application in Business: A businessperson is excellent or “virtuous” if he or she lives up to his or her purpose as a businessperson, not just for money but “to serve society’s demands and the public good and be rewarded by doing so.” (EXAMPLE) L4: BELIEF SYSTEM AND ETHICS ★​ Judaism: Core Jewish Values that Form the Basis of Ethics in Judaism 1.​ Honesty- Jews are taught to always be truthful. 2.​ Integrity- It is the consistency in words and actions. 3.​ Brit- It means always keeping one’s word. 4.​ Loyalty- It is developing a trusting relationship with God, parents, friends, and tradition. 5.​ Tzedakah- It means refraining from being judgmental and doing acts of charity for the poor. 6.​ Chesed -It means being kind and merciful to others. 7.​ Respect for Human Dignity- It is respect for human life since all of us are created in the image and likeness of God. 8.​ Respect for Law - It is the practice of good citizenship by abiding by the laws of the community. 9.​ Accountability- It means each individual is held accountable for his or her actions and is therefore answerable to God and to others. 10.​Taking Responsibility- Ethical people take responsibility for their decisions and set an example for others. 11.​Tikkun Olam- We can contribute something to make the world a better place by fighting oppression, corruption, and exploitation. ★​ Jewish Rules in Business Organizations ​ Employers and Employees ○​ Employers and employees follow different sets of rules because of their different positions. ○​ Employers should be aware of the extent of their employees' capacities and should not insult or embarrass them. ○​ Employers are not permitted to withhold salaries because of debt. ○​ Jewish employees should be allowed to go home before sunset during the Sabbath and holidays. ○​ Employees are expected to be productive. ​ Relationships Between Buyers and Sellers, Borrowers and Lenders ○​ Jewish tradition defines the relationship between buyers and sellers, and borrowers and lenders, to prevent exploitation. ○​ Employers are required to pay employees fairly and on time. ○​ Workers should be given privileges such as work breaks and the freedom to rest. ★​ Christianity: Ethical Principles in Christianity ​ Christianity is the world’s largest religion. ​ Within this religion, there are many sects and denominations such as Roman Catholicism, Protestantism, and Eastern Orthodoxy. ​ The Bible is one of the most important sources of guidance for Christians in the conduct of good business. ​ The Catholic Church has its own social doctrine related to business ethics. ​ This doctrine is grounded on the inviolable dignity of the human person. ​ With this, the human person should have dignified working conditions and be justly compensated. ​ Businesses should not prioritize profits over human welfare. ​ ★​ Hinduism: Ethics and Business Conduct ​ Overview of Hinduism 1.​ Hinduism is the oldest among the major religions of the world. The word "Hindu" is derived from "Sindhu," meaning the people of the Indus River region in northern India. 2.​ Hinduism is a unique religion because it does not have a single specific human founder nor a definite historical beginning. 3.​ It is not a religion with a unified body of belief systems, ethical codes, absolute doctrines, religious rituals, and practices. ​ Hindu Assumptions 1.​ The universe has no beginning and will never end. It eternally undergoes cycles of creation and destruction. 2.​ All living things undergo cycles of birth, death, and rebirth until they are liberated from this cosmic journey. 3.​ The practice of asceticism is helpful in the goal of liberation from the cycle of rebirth. ​ Hindu Businessperson in the Conduct of Business 1.​ Hindus have a positive outlook toward the business institution. Hinduism has never expressed shame about the desire for wealth. 2.​ Hindu businesspersons must treat stakeholders with honesty and fairness. ​ Reason: 1.​ If you hurt others, then you are ultimately hurting yourself. 2.​ You cannot escape the law of karma; your soul cannot attain liberation until you use your free will to choose rightly and perform good acts. ★​ Buddhism: Business Ethics and Conduct ​ Overview ○​ Buddhism, similar to Hinduism, originated from India. ○​ Buddhists believe in the law of karma, reincarnation, and the ultimate goal of attaining liberation and nirvana. ○​ Siddharta Gautama (566-486 BCE), a rich young prince, renounced his royal inheritance to search for the truth. ​ Buddhist Business Ethics ○​ Buddhists do not acknowledge companies that do not give importance to the environment and animals. ○​ They believe that the world has become materialistic and that people should not be attached to worldly possessions. ○​ People can engage in business activities and may become wealthy, but money, status, and power should not conquer them. ○​ ★​Islam: Business Ethics and Practices ​ Overview ○​ The history of Islam started with Muhammad. Upon his death, the majority of the Arab countries adopted Islam. ○​ Muslims believe that Muhammad is God’s last prophet. ○​ Islam laid the foundation for moral standards that determine what is morally good and bad. It emphasizes love for God and man. ○​ The holy book of Islam teaches that Allah is the Almighty God and the creator of the universe. Allah is the source of good and evil, and whatever happens to humans is His will. ​ Islamic Ethics in Business ○​ Islam's ethics are governed by freedom, responsibility, and honesty. ○​ Gambling is restricted among Muslims. ○​ Muslims are not allowed to invest in the stock market because it is considered a form of gambling. ○​ However, they are not restricted from engaging in business activities or making a profit. ★​ Confucianism: Business Ethics and Social Harmony ​ Overview ○​ Confucianism is the philosophy propagated by Confucius in China in the 5th century BC. Confucianists are found in China and Korea. ○​ The teachings of Confucius advocate stability by organizing society and placing more emphasis on the common good and the welfare of all through interdependence. ​ Confucian Business Ethics ○​ Profit should be acquired with righteousness. ○​ A business organization should attend to the needs of its stakeholders, as the most important core value in Chinese business is harmony. ★​ Taoism: Harmony and Business Ethics ​ Overview ○​ Taoism was based on the Tao Te Ching by Lao Tzu. ○​ Taoism promotes inner peace within an individual and harmony with the surroundings. ○​ Tao means the path or the way. Tao is considered the cause of everything. If one follows the Tao, there is harmony; if not, there is chaos. ★​ Shintoism: Ethics and Group Effort ​ Overview ○​ Shintoism is the ethnic religion of Japan, which started around the 7th century AD. ○​ Shinto comes from the Chinese word Shen, meaning divine being, and Tao, meaning the way of spirits. ○​ The Japanese consider Shinto not as a belief but more as a way of life due to its focus on rituals and Japanese practices. ○​ Shinto has no God and no commandments. Practitioners of Shinto worship sacred spirits called kami, which are found in nature, such as wind, rain, mountains, trees, and other geographic forms. ​ Shinto Ethics ○​ Shintoism teaches that all human beings are basically good, and the world is good as well. ○​ Shintoism encourages group effort while recognizing individuals within a group. This is reflected in the idea of treating employees like family. L5: FILIPINO VALUE SYSTEM ★​ FILIPINO VALUES SYSTEM -​ The Filipino value system, or Filipino values, refers to the set of values or the value system that a majority of Filipinos have historically held important in their lives. -​ Value can be translated into Filipino as “kahalagahan” and “pamantayan.” -​ A value is a “standard we use as the basis for making decisions, choices, and preferences.” ★​ THE FILIPINO VALUE SYSTEM AND ITS EFFECT ON BUSINESS a. Utang na Loob ​ Utang na loob or debt of gratitude means that one does not forget the good deeds others may have done, especially in times of great need. ​ Debts of gratitude, big or small, cannot really be paid at all, as shown in the Tagalog saying: ➔​ “Ang utang na loob, napakaliit man, utang at utang pa din, kahit mabayaran.” ➔​ “Utang na loob” is a distinct Filipino value system primarily rooted in alliance systems based on obligation. ❖​ Utang na Loob in Business -​ Utang na loob may be good or bad for business depending on many considerations, but it definitely affects how business is conducted, especially when the businessperson is confronted with ethical issues. b. Filial Piety ​ Filial Piety is a virtue of respect for one’s parents, elders, and ancestors. ​ Filipinos are family-centered. They recognize their family as an important social structure that one must take care of. They give importance to the safety and unity of one’s family. ​ Filipinos get strength from their family, and a child may have several godparents to ensure his future in case his parents will not be there for him. They also do not let their elders live too far away from them. ​ Filial Piety is rooted primarily in personal alliance systems based on kinship. ❖​ Filial Piety in Business -​ Filial Piety may be good or bad for business depending on many considerations, but it affects how business is conducted, especially when the businessperson is confronted with ethical issues. c. Padrino System ​ Padrino System, or patronage in Filipino culture, business, and politics, is the value system where one gains favor, promotion, or political appointment through family affiliation or friendship, as opposed to merit. ​ Example: In order to get a high rank or office, one must have at least known or befriended a high-ranking official to be promoted. This also happens in private businesses. ❖​ Padrino System in Business -​ The Padrino System is rooted primarily in personal alliance systems based on kinship and obligation. -​ It is definitely bad for business, especially when confronted with ethical issues. The Padrino System cannot be made the basis for ethical decisions in business. -​ d. Suki ​ The word suki is a Filipino term meaning “loyal customer.” This “market exchange partnership” can develop into an agreement where one can be a regular customer and supplier. ​ Suki is a distinct Filipino value system rooted primarily in personal alliance systems based on commercial relationships. ❖​ Suki in Business -​ Suki may be good or bad for business depending on many considerations, but it affects how business is conducted, especially when the businessperson is confronted with ethical issues. -​ While there are pragmatic benefits in Suki, the same cannot be made as a basis for ethical decisions in business e. Bahala Na ​ Bahala Na has been loosely translated as “come what may.” It refers to Filipino fatalism, leaving everything in the hands of fate. ​ Bahala Na actually comes from the word Bathala Na, which means God. Hence, the expression means, “Let God take charge of the affairs” or “I have done my part, let God take charge of the rest.” ❖​ Bahala Na in Business -​ The attitude of just letting things happen instead of doing something to make things happen is not a genuine Bahala Na value. -​ Spending more time in computer games and gimmicks, instead of studying for exams while leaving the chance of passing to luck, is laziness and not a genuine Bahala Na attitude.  -​ On the contrary, a true Bahala Na attitude requires courage to face challenges or uncertainties in business endeavors. -​ Bahala Na is a distinct Filipino value system rooted primarily in personal alliance systems based on religion. -​ Bahala Na may be good or bad for business depending on many considerations but affects how business is conducted, especially when the businessperson is confronted with ethical issues -​ f. Mañana Habit ​ Mañana Habit comes from the Spanish word mañana, meaning “tomorrow” or an unspecified future time. Hence, it refers to procrastination or putting off what can be done today. ​ Related to the Mañana Habit is the Filipino’s sense of time. Filipino time is often minutes or even hours late compared to standard time. ​ In business, Mañana Habit and tardiness are definitely bad habits and have no place in the workplace. g. Amor Propio ​ Amor Propio literally means “love of self” or self-love. It refers to a person’s feeling of self-respect and personal worth or an inflated feeling of pride as superior to others. ​ Self-respect and personal worth are important to Filipinos. How Filipinos present themselves and how society accepts them is vital. Filipinos will go to great lengths to avoid shame. Amor Propio ​ Hiya or shame is related to Amor Propio. Hiya significantly influences one’s behavior as they will do everything, even beyond their means, just to preserve their reputation and the family’s. ❖​ Amor Propio in Business -​ Amor Propio may be good or bad for business depending on many considerations, but it definitely affects how business is conducted, especially when the businessperson is confronted with ethical issues. -​ Amor Propio is not favorable, particularly in the service business. ★​ Filipino Family Values 1.​ Hospitality 2.​ Humor, Adaptability, and Creativity 3.​ Resilience, Resourcefulness, and Ability to Survive 4.​ Faith and Religiosity 5.​ Hard Work and Industry  ★​ Negative Filipino Traits 1.​ Bribery and Corruption 2.​ Double Standards 3.​ General Disregard for Rules 4.​ Pagtatakpan 5.​ Gossiping 6.​ Ningas-Cogon Bribery and Corruption ​ Bribery involves offering something, usually money, to gain an illicit advantage. ​ Corruption is an abuse of a position or trust to gain undue advantage. Double Standards ​ A double standard is the application of different principles to similar situations. ​ An example is men getting paid more than women for the same work. General Disregard for Rules ​ Many Filipinos have a tendency to break rules. ​ The Filipino penchant for law-breaking might be rooted in cultural defiance against colonizers’ perceived discriminatory rules. Pagtatakpan ​ Pagtatakpan refers to covering up the shortcomings or wrongdoings of others to preserve integrity, often justified by pakikisama (group cooperation). ​ This attitude has no place in the workplace. Gossiping ​ Many Filipinos are fond of talking about others' business, which is unethical in business and the workplace. ​ Gossiping inflicts harm and destroys reputations and relationships. Ningas-Cogon ​ Ningas-Cogon refers to initial enthusiasm over a new project or job that quickly fades away. ​ Consistency, persistence, and hard work are desired traits, not Ningas-Cogon. 1.​ It is the employee’s own moral principles that guide his or her life. - INDIVIDUAL LEVEL 2.​ Businesspeople are responsible for meeting the needs of society in the form of TAXES, which are spent for paying national debts and for building hospitals, schools, and roads, among other facilities. - TRUE 3.​ There is nothing like having ______ employees in words and actions. - HONEST 4.​ Partnerships provides a means of obtaining more equity capital than a single individual can obtain and allow the sharing of risks for rapidly growing business. - TRUE 5.​ A business always strives not to become profitable and gain financial reward. It is primarily motivated by the monetary return from its operations. - FALSE 6.​ Having a high level of _______ means that the company has earned the trust of its stakeholders because it has been consistent in all of its actions , decisions, and character. There are no pretensions. - INTEGRITY 7.​ Business is a necessary facet of modern living. - TRUE 8.​ Business ethics is the application of ethical values to business behavior. - TRUE 9.​ Being respectful means being courteous at all times in all dealings, regardless of rank. -RESPECT 10.​ Having high ethical standard helps established credibility and good image of the organization. - TRUE 11.​ The activity of making, buying, or selling goods or providing services in exchange of money. - BUSINESS 12.​ simplest form of business organization in the Philippines. It is not encumbered by the strict regulatory laws and rules imposed upon corporations and partnerships. - SINGLE/ SOLE PROPRIETORSHIP 13.​ It refers to a commercial or industrial enterprise and the people who constitute it. - BUSINESS ORGANIZATION 14.​ ARTICLE 1767 - PARTNERSHIP 15.​ Defined as the area that represents business operations bound by the virtues and norms of the different political and social systems of every society. - MACRO LEVEL 16.​ Managers must keep their word and always ensure these promises are broken. There are times when managers find it hard to fulfill their commitments, but they have to. They cannot just get out of a situation and a commitment. - TRUE 17.​ A corporation has a minimum of five members called shareholders. - TRUE 18.​ The macro level of ethics is defined as the area that represents business operations bound by the virtues and norms of the different political and social systems of every society. - TRUE 19.​ Managers should be ______ to the company by not putting their self-interests above anything that will jeopardize the company's position. - LOYAL 20.​ Defined as the practice of what is morally and ethically right in the conduct of business in the workplace. - BUSINESS ETHICS 21.​ Managers should act with impartiality in all their transactions. - FAIRNESS 22.​ This is the exercise of compassion and sincere concern for others. The company should not create a caring environment for its employees which will eventually bring about a chain reaction among customers and other stakeholders. - FALSE 23.​ Being ______ means being courteous at all times in all dealings, regardless of rank. - RESPECTFUL 24.​ Single proprietorship is defined by the Philippine Statistics Authority as a business establishment organized - TRUE 25.​ All employees should obey the rule. Management, too, must never break the rules. Managers should set an example in following company policies, rules, and regulations. No one is above the law. Managers who craft the rules should not be the law breakers. - OBEYING THE LAW 26.​ A company may hide its true status and present a better picture of its financial statements to investors. Contrary to what is true, the assets are ballooned to the highest level and the debts and liabilities are hidden. - TRUE 27.​ There are advertisements which mislead consumers by making promises which the product cannot really deliver. - TRUE 28.​ Some managers tend to take credit for something like charity works which they actually are not a part of. - TRUE 29.​ Being ethical also means that employees should strive to achieve ______ in all their tasks. - EXCELLENCE 30.​ Managers should be role models to establish their integrity and credibility among their employees and customers as well. Decisions should be firm yet flexible based on the situation. - BE A LEADER