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Ethics and Philosophy

Philosophy came from two Greek words “philos” – love and “sophia” – wisdom = “love of wisdom”
- It is a science that seeks to explain the ultimate cause of everything by the use of human reason alone.

2 Types of Philosophy
 Theoretical or Speculative Philosophy – studies the truth to be known.
o Cosmology
o Ontology
o Metaphysics
o Psychology
o Theodicy
o Epistemology
 Practical Philosophy – studies truths to be acted upon.
o Semantics
o Axiology
o Aesthetics
o Logic
o Ethics – is a science that studies the morality of human acts with reference to right and wrong.

3 Categories of General Ethics:


 Descriptive Ethics – consists of studying and describing the morality of people, culture, or society.
 Normative Ethics – involves moral judgment based on ethical norm or theory which is right or wrong and moral or immoral.
 Metaethics – concerned with analysis of the meaning of words and the logic of moral reasoning.

2 Ethical Systems
 Atheistic Ethics – assumes that only matter exists and man is responsible only to himself since there is no God who creates
and rules the universe.
 Theistic Ethics – assumes that God is the Supreme Law giver. Man is accountable for his actions and deserves either a
reward or punishment in this life or the next.

Traditional Ethics – believes that man has a natural insight to morality, a gift of the Creator who gave man a “moral sense”. Man,
therefore, is a moral being. The basic knowledge of right and wrong is what differentiates man from animals.

3 theories that attempt to explain the fundamental question of how people develop their concept of morality.

 The Synderesis of Man According to St. Thomas Aquinas


o The moral sense in man is manifested in 3 different ways:
 Man is able to distinguish or to know what is good and what is bad.
 Man is always obligated to do good and avoid evil.
 Man knows that he is accountable for his actions – good or bad.
 Freud’s Theory of the Id, Ego, and Super Ego
o The approach is to understand human behavior which views men and women as constantly torn between internal
unconsciousness and external social forces.
 Super Ego – basically reflects social rules and values of the society that govern our behavior.
 Ego – is the rational self or the conscious self. It is also known as the “reality-principle”.
 Id – is the irrational part in us or the unconscious instincts, also known as the “pleasure-principle” in each
of us.
 Kohlberg’s Theory of Moral Development
o Kohlberg believe that people progressed in their moral reasoning through a series of stages:
 Level 1 “Pre-conventional” – this behavior is generally found in young children and the older children.
 Stage 1 “reaction to punishment” – explains the concept of being good by following commands
and authority by avoiding being punished.
 Stage 2 “individual instrumental purpose and exchange” – is characterized by a view that right
behavior means acting in ones’ own best interests.
 Level 2 “Conventional” – generally found in an ideal civilized society.
 Stage 3 “Stage of mutual interpersonal expectations, relationships and conformity” – this is
characterized by an attitude which seeks to do what will gain the approval of others, also known as
the good boy and good girl orientation stage.
 Stage 4 “Stage of Social System and Conscience Maintenance” – where in one is oriented to
abiding by the law and responding to the obligations of duty. It emphasizes only obedience to the
laws, respect to authority and performing to one’s duties so that social order is maintained.
 Level 3 “Post-Conventional” – third level of moral thinking is the one Kohlberg felt is not reached by the
majority of adults.
 Stage 5 “Stage of Prior Rights and Social Contract or Utility” – it is the stage of understanding of
rights and values.
 Stage 6 “Stage of Universal Ethical Principles” – is based on respect for universal principle and the
demands of individual conscience.

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ETHICAL ISSUES AND PROBLEMS IN BUSINESS AND THE CORPORATE WORLD

1. Sexual Harassment – this occurs due to the power struggle between men and women as a response to a real or imagined
loss of power.
Anti-sexual Act of 1995 or RA 7877 – declared sexual harassment unlawful in the employment, education or
training environment, and other purposes.

2 types of Harassment:
 Quid Pro Quo Harassment
 Harassment that creates a hostile environment

Legal Penalties of RA 7877


 Imprisonment of not less than 1 month but not more than 6 months
 Fine not less than 10K but not more than 20K

2. Just Wage
Work is said to be the purpose of obtaining economic gain for the laborer. Being compensated for a work
done or services rendered is part of the essence of ‘work’.

“That the workers are entitled to a living wage.” – 1987 Philippine Constitution rights of workers letter Article XIII, Sec. 3, letter “g”

Factors to consider in Formulation of Fair Wages: external market factors, laws and regulation, cost of living, prevailing industry
rate, organizational factors, job factors, and individual performance.

3. Gift-giving and Bribery


Gift-giving – is merely an act of extending goodwill to an individual in an effort to share something with them.
Bribery – is defined as a practice of giving remuneration for performance of an act that is inconsistent with the
work contract or nature of the work one has been hired to perform. It is unethical due to the following reasons:
 Generally used as an instrument to gain personal advantage.
 Corrupts the concept of justice and equality
 Produces cynicism and general mistrust of institutions.
 Destroys people’s trust in the integrity of professional services
 Treats people as commodities whose honor can be bought and sold.

4. The Morality of Advertising


Advertising is not bad or immoral since it helps achieve the goals of both seller and the buyer. It only becomes
unethical or immoral when advertising becomes misleading, deceptive, and manipulative or coercive.

RA 7394, Article 108 declares that “The State shall protect the consumer from misleading advertisements and
fraudulent sales promotion practices.”

5. Workplace Romance
It is defined as a romantic relationship between two people who are employed by the same organization.
Disadvantages: damaged professional reputations, disturbed co-workers, changes in productivity, dating the boss,
extramarital affairs.

6. The Problem of Fair Pricing


Price is a measure of value in exchange, it may be expressed in monetary terms or in non-monetary terms, barter.
Factors to consider in Fair Pricing: cost of materials, operating and marketing expenses, and reasonable profit margin.
Unfair price results when a buyer or seller does not receive exactly what he deserves.

7. Trade Secrets and Corporate Disclosure


Trade Secrets - is the legal term for confidential business information.

8. Product Misrepresentation and Caveat Emptor


Misinterpretation is observes when there is a transformation of information to misinformation. There are 2 types:
 Intentional Misinterpretation – a person is fully aware of deliberately misrepresents things, known as lying.
 Unintentional Misinterpretation – the person is not aware and does not deliberately act on misinterpreting
things. The person involves believes that it is the right and acceptable thing to do, known as white lie.
Business Practices Involving Misinterpretation and Lying:
1. Direct misinterpretation – is characterized by actively misrepresenting something about the product or service.
Examples: Deceptive packaging, Adulteration, Misbranding or Mislabeling, Short weighing, Shortchanging, Short
Measuring, Short Numbering, Misleading Advertisements.
2. Indirect misinterpretation – is characterized by omitting adverse information about the product or service.
Examples: Caveat Emptor (let the buyer beware), Deliberately withholding information, Business ignorance

9. The Morality of Labor Strikes


Strike describes the collective action undertaken by groups of workers in the form of a refusal to perform work.

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Workers go on strike for different reasons: for higher compensation, to improve the workplace, for shorter working
days, to stop their wages from going down, for more benefits, & because they think their company has been unfair.

For a strike to be moral the following must conditions must be present:


 There is a sufficient and just reason for it.
 The intended good results must be proportionate to the evil effects.
 The means employed are lawful.

10. Whistleblowing
It is the disclosure by an employee of confidential information which relate to some danger , fraud, or other illegal
or unethical conduct connected with the workplace, be it the employer or of his fellow employee.

11. Multilevel Marketing (MLM) & Pyramiding


Multilevel marketing is a system of selling through many levels of distributors, each gets a percentage on the price
of the products being sold.
Pyramiding focus on the exchange of money and recruitment, participants attempt to make money solely by
recruiting new participants into the program.
Moral issues in pyramiding: too much materialism & greed, they con the public by making them believe
that they are a legitimate MLM, the intentions are bad.

12. Unfair Competition


Competition is healthy and can be a motivation for firms to produce better products or offer better services.
Without competition, firms will just relax and quality will suffer.

Fair competition is doing business under ethical rules of conduct, behavior and judgment, attaining success in
business through the merits of its products and services.
Unfair competition consists of:
 Deceptive trade practices
 Business interference to competitors
 Anti-competitive market practices
 Defamation of a competitor
 Caveat emptor
 Violation of intellectual property right

13. Tax Evasion and Tax Avoidance


Tax evasion is an intentional negligence of the obligation to pay correct taxes to the government. Three elements
of tax evasion are: the intention to cheat, knowledge that tax evasion is wrong, and fraudulent means.
Tax avoidance is when taxpayers exploit legally permissible alternative methods of assessing taxable property or
income in order to avoid or reduce tax liability.

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