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Chapter 3- CORE PRINCIPLES IN BUSINESS OPERATIONS

 A. CORE PRINCIPLES IN BUSINESS OPERATIONS


1. FAIRNESS
2. ACCOUNTABILITY
3. TRANSPARENCY
4. STEWARDSHIP

FAIRNESS- refers to the level of even-handedness in dispensing justice whereby claims are recognized in
the order of their legal and contractual priority.

JUSTICE- giving each person what he or she deserves or, in more traditional terms, giving each person
his or her due.

PRINCIPLES OF JUSTICE- “ equals should be treated equally and unequals unequally”

 KINDS OF JUSTICE
1. DISTRIBUTIVE JUSTICE- refers to the extent to which society’s institutions ensure that benefits
and burdens are distributed among society’s members in ways that are fair and just.
2. RETRIBUTIVE OR CORRECTIVE JUSTICE- refers to the extent to which punishments are fair and
just.
3. COMPENSATORY JUSTICE- refers to the extent to which people are fairly compensated for their
injuries by those who have injured them.

ACCOUNTABILITY- is the obligation of an individual or organization to account for its activities, accept
responsibility for them, and to disclose the results in a transparent manner.

CORPORATE ACCOUNTABILITY- refers to the act of being accountable to the stakeholders of an


organization.

TRANPARENCY- refers to the lack of hidden agendas and conditions, accompanied by the availability of
full information required for collaboration, cooperation, and collective decision making.

STEWARDSHIP- is an ethic that embodies the responsible planning and management of resources.

- generally, recognized as the acceptance or assignments of responsibility to shepherd and


safeguard the valuables of others.

 BENEFITS IN DESIGNING AND IMPLEMENTING BUSINESS ETHICS:


1. Enhanced reputations and good will 5. Expanded access to capital, credit and
2. Reduces risks and costs foreign investment
3. Protections from their own employees 6. Increased profits
and agents 7. Sustained long-term growth
4. Stronger competitive positions 8. International respect for enterprises
and emerging markets

Ethical behavior in business according to Micahel Josephson “people have built-in sense of what is right
or wrong.”

B. Mission statement

Mission statement- ingrained principle and fabric that guide employee behavior and company decisions
and cations.

Chapter 4- COMMON PRACTICE IN BUSINESS ORGANIZATIONS.

 BUSINESS POLICIES/ PRACTICES IN BUSINESS ORGANIZATIONS:


1. DECORUM 5. MARKETING
2. PROTOCOL 6. BOOKKEEPING
3. POLICIES 7. REPORTORIAL REQUIREMENTS
4. ADVERTISING 8. DOCUMENTATION

1. DECORUM
 Business etiquette:
1. On time and promptness 2. On preparation
3. On agenda 13. On cell phones and laptops
4. On attire and appearance 14. On business or visiting cards
5. On decorum 15. On breaks
6. On basic courtesy and respect 16. On appropriate communication
7. On greetings 17. On bargaining
8. On handshakes 18. On bringing in guests
9. On body language 19. On building relationships
10. On formal and informal address 20. On business meals and recreation
11. On speaking in meetings 21. On gift-giving
12. On listening

2. PROTOCOL
-unwritten rules or guidelines that are peculiar to every culture or organization, and are
supposed to be observed by all parties in the conduct of business, entertaining, negotiating,
politics, etc.

1. The basic of protocol

“Encourage all employees in a company to act in a uniform manner.”

2. Benefits of protocol

“Helps present a uniform, professional face to the public, to partners and to donors.”

3. International business protocol


 Greetings and introductions  Verbal communication
 Names and titles  Non-verbal communication
 Organizing meetings  Business meals
 Punctuality and time  Gift giving
 Business cards  Tipping tips
 Preliminary conversations  Business attire

4. Examples of protocols in Philippine Business

1. Filipino family-modeled business


2. Business is personal
3. Status-consciousness
4. Politeness and ambiguity

3. POLICIES

Business policy- scope or spheres within which decisions can be taken by the subordinates in an
organization.

 Features of business policy


1. Specific 5. Simple
2. Clear 6. Inclusive/ comprehensive
3. Reliable/ uniform 7. Flexible
4. Appropriate 8. Stable

Policy vs. strategy

Policy is what is, or what is not done, while strategy is a methodology used to achieve a target as
prescribed by a policy.

4. ADVERTISING – is how a company encourages people to buy their products, services, or ideas.
 Advertising tactics:

1. Newspaper 5. Directories
2. Magazine 6. Outdoor and transit
3. Radio 7. Direct mail, catalogs, and leaflets
4. Television 8. Online
5. MARKETING
5. MARKETING- refers to the process of product development as well as sales, promotion and
distribution.

6. BOOKKEEPING-
Accounting- this applies to an individual’s personal finances as well as a huge firm’s accounting
book.
Bookkeeping- the process of recording all financial transactions to keep track of the cash flow.
Auditing – entails the careful examination of an individual or firm’s financial records for the
purpose of determining its validity and reliability.

2 methods of Bookkeeping
 Single-entry bookkeeping
 Double-entry bookkeeping
7. REPORTORIAL REQUIREMENTS
Business reporting or enterprise reporting – is the public reporting of operating and financial
data by a business enterprise.

common kinds of Business report:


1. Annual report- is a comprehensive report on a company’s activities throughout the
preceding year.
Annual report includes:  Notes to the financial
 General corporate statements
information  Chairperson’s statements
 Accounting policies  Director’s report
 Balance sheet  Operating and financial
 Cash flow statement review
 Non-audited information  Auditors report
 Profit and loss account
2. Financial report/ statement- is a formal record of activities and position of a business,
person, or other entity.
Financial report/ statement includes:
 Balance sheet
 Income statement
 Equity statement
 Cash flow statement

 DTI- Department of trade and industry


 SEC- Securities and exchange commission
 Barangay and municipal clearance
 BIR- Bureau of internal revenue
 SSS- Social security system
 Philhealth
 HDMF- Home development mutual fund (PAG-IBIG)

8. DOCUMENTATION- refers to the processes and items which serves as evidence for the validity
or truth of a certain claim or statement.

Code of ethics- outline the mission and values of the business or organization, how professional
are supposed to approach problems, the ethical principles based on the organizations core
values and the standards to which professional is held.

CHAPTER 5- THE CLASSICAL PHILOSOPHIES AND THEIR IMPLICATIONS ON BUSINESS

THE CLASSICAL PHILOSOPHIES AND THEIR IMPLICATIONS ON BUSINESS:


1. SOCRATES: THE GAD-FLY AT THE MARKETPLACE
2. PLATO: THE PHILOSOPHER-KING
3. ARISTOTLE: ALL OR NOTHING
4. IMMANUEL KANT: DUTY-BASED ETHICS
5. JEREMY BENTHAM AND JOHN STURT MILL: UTILITARIANISM
SOCRATES: THE GAD-FLY AT THE MARKETPLACE

“the unexamined life is not worth living”- Socrates

Socratic method- a systematic process for examining the ideas, questions, and answers that form the
basis of human belief.

PLATO: THE PHILOSOPHER-KING

“good people do not need laws to tell them to act responsibly, while bad people will find a way around
the laws” – Aristotle

Plato describes the soul as:

 Appetitive
 Spirited
 Rational

ARISTOTLE: ALL OR NOTHING

“happiness is the meaning and the purpose of life, the whole aim and end of human existence”-Aristotle

It’s one that involves looking at character and virtues, and so can provide important moral guidelines for
distinguishing right from wrong in the world of business.

IMMANUEL KANT: DUTY-BASED ETHICS

“act only according to that maxim by which you can at the same time will tah it should become a
universal law”- Immanuel Kant

Immanuel Kant- who advanced the theory of deontology or deontological ethics

Deontology- study of duty and obligation.

JEREMY BENTHAM AND JOHN STURT MILL: UTILITARIANISM

Utilitarianism- revolves around the concept “ the end justifies the means.”

2 types of utilitarianism:

1. Rule utilitarianism- put in place to benefit the most people by using the fairest methods
possible.
2. Act utilitarianism- makes the most ethical actions possible for the benefit of the people.

Chapter 6- the impact of belief system in the business setting

8 major religions (view business ethics)

1. Judaism 5. Buddhism
2. Christianity 6. Confucianism
3. Islam 7. Taoism
4. Hinduism 8. Shintoism

Judaism: Jewish Business ethics

 Honesty in business

Christianity: crucial principles

 The golden rule


 Stewardship
 Trust
 Justice
 Generosity

Islam: ethics from the Qur’an

 Honesty
 Truthfulness
 Proficiency

Hinduism: non-violence

5 ethical exercise according to Patanjali

 Ahimsa
 Satya
 Asteya
 Brahmacarya
 Aparigraha

5 elements in the work philosophy:

 Integrity
 Understanding
 Excellence
 Unity
 Responsibility

Buddhism: Maxims for business

Simply a way to rethink and reframe your qualitative skill set, and to maybe find a little Zen at the office.

 Work hard, no excuses  Serve others


 Work hard but rest well  Engage
 Be mindful  Be at present
 Follow the eightfold path  Embrace change
 Discover your world  Take one step at a time

Confucianism: the golden rule

“do not impose to others what you do not wish for yourself”-Confucius

Ethical philosophy of Confucius (5 constants)

1. Benevolence, humaneness
2. Righteousness or justice
3. Proper rite
4. Knowledge
5. Integrity

Taoism: action without action

 The way  Good behavior


 Non action  Non-discriminatory, gender-neutral
 Naturalness  Leadership by example
 Compassion, moderation and humanity

Shintoism: the way of the gods

 The natural order


 Impurity
 Purification
 Everything has a soul
 Superiority of groups
 Four circles of business relationships
 Balancing debt and benefits
 Highly contextual; culture
 Face-saving
 Perception of work
 Concept authority
 Non-verbal behavior
Chapter 7- the Filipino value system and its effects on business

Filipino value system and its effects on business

 Utang na loob
 Filial piety
 Padrino
 Suki
 Bahala na
 Mañana habit
 Amor propio
 Filipino family values
o Hospitality
o Humor, adaptability, and creativity
o Resilience. Resourcefulness and the ability to survive
o Faith and religiosity
o Hard work and industry
 Negative Filipino traits
o Bribery and corruption
o Double standards
o General disregard for rules
o Pagtatakpan
o Gossiping
o Ningas-cogon

Chapter 8- social responsibility of entrepreneurs

RESPONSIBILITY- refers to the duty or obligation to satisfactorily perform or complete a task that one
must fulfill.

Accountability- refers to the obligation of an individual or organization to account for its activities,
accept responsibility for them and to disclose the results in a transparent manner.

RESPONSIBILITIES AND ACCOUNTABILITIES OF ENTREPRENEURS:

 TO THE EMPLOYEES

 TO THE GOVERNMENT

 TO THE CREDITORS

 TO THE SUPPLIERS

 TO THE CONSUMERS

 TO THE GENERAL PUBLIC

 TO THE ENVIRONMENT
Chapter 9- major ethical issues in entrepreneurship

Ethical issue- is a problem or situation that requires a person or organization to choose between
alternatives that must be evaluated as right (ethical) or wrong (unethical).

Most fundamental or essential ethical issues that face by business organizations:


 Integrity
 Trust

Major ethical issues in entrepreneurship:

 Basic fairness
o Partners
o Gross negligence
 Personnel and customer relations
o Mistreating employees o Employee behavior
o Discrimination and harassment o Employee working conditions
in the workplace o Side deals and sub-standard
o Family-run business
 Distribution dilemmas
o Pricing strategy ethics
o Product placement ethics
o Ethics and promotions
 Fraud
It can be in the form of financial misconduct or misrepresentation
 Unfair competition
o Antitrust law or competition o Tying
law o Resale price maintenance
o Trademark infringement o Religious/ minority group
o Misappropriation of trade doctrine
secrets o Absorption of a competitor or
o Trade libel competing technology
o Tortious interference o Subsidies from the government
o Anti-competitive practices o Regulations
o Dumping o Protections, tariffs, and quotas
o Exclusive dealing o Patent misuse and copyright
o Price fixing misuse
o Refusal to deal o Digital rights management
o Dividing territories o Enhancing the addictiveness
o Limit pricing
 Unfair communication
 Non-respect of agreements
Non-respect of agreements or breach of contract- is a legal cause of action in which a binding
agreement or bargained for exchange is not honored by one or more of the parties to the
contract by non-performance or interference with the other party’s performance.
 Environmental degradation
Environmental degradation- is the deterioration of the environment through depletion of
resources such as air, water, and soil; the destruction of ecosystems and the extinction of
wildlife.
 Contractualization
Contractualization or labor Contractualization- is the replacing of the regular workers with
temporary workers who receive lower wages with no or less benefits.
 International ethical issues
Chapter 10- models and frameworks of social responsibility in the practice of sound business.

Companies with the Top 10 corporate social responsibility reputations globally (2015)
1. Google 6. LEGO
2. BMW 7. Apple
3. The Walt Disney company 8. Intel
4. Microsoft 9. Rolls-Royce Aerospace
5. Daimler 10. Rolex

total corporate social responsibility framework can be divided into 4 criteria

1. Economic responsibilities
2. Legal responsibilities
3. Ethical responsibilities
4. Discretionary responsibilities

Criteria for ethical decision making

Approach to describe for guiding ethical decision making

1. Utilitarian approach
2. Individualism approach
3. Moral- rights approach
Six moral rights should be considered during the decision making:
o The right of free consent
o The right to privacy
o The right of freedom of conscience
o The right of free speech
o The right of due process
o The right to life and safety
4. Justice approach

Chapter 11- the importance of doing business beyond profit motivation

Social responsibility- is the obligation of organization’s management to make a decision and take
actions that enhance the welfare and interest of society as a whole.

Reasons to do business beyond profit:

1. Profit is an output, not a purpose


2. Companies with a purpose beyond profit tend to make more money
3. Business needs purpose than profit to make it through
4. What is the purpose of doing business if it is not being profitable?
o Discovery
o Excellence
o Altruism
o Heroism
5. Profit doesn’t motivate the salaried staff who make success happen
6. Business with strong sense of purpose are more successful

Chapter 12- the notion of social enterprise

Social enterprise- business whose primary purpose is the common good.


-A business that trades for social or environmental purpose.
Empowerment first, profit second

3 useful tips that are the backbone of the company

1. Educate yourself
2. If your employees are happy, your business is happy
3. Be a conscious capitalist
What is social entrepreneur?

Social entrepreneur- are individuals with innovative solutions to society’s most pressing social
problems.

Historical examples of leading social entrepreneur:

1. Susan B. Anthony
2. Vinoba Bhave
3. Dr. Maria Montessori
4. Florence Nightingale
5. John Muir
6. Jean Monnet

Social responsibility means that individuals and companies have a duty to act in the best
interests of their environments and society as a whole. Social responsibility, as it applies to
business, is known as corporate social responsibility (CSR).