GOOD GOVERNANCE AND SOCIAL POLICY - Guide for action

RESPONSIBILITY
EXAMPLE OF ORGANIZATIONAL STRUCTURE:
- knowing what is right
BOD

GOVERNANCE - establishment of policies and TOP MANAGEMENT

monitoring and proper implementation by the
members of governing body of an organization. MIDDLE
MANAGEMENT
- it includes the mechanism required to balance
the power of the members ( w/ appreciated RANK & FILE
responsibility ) and their primary duty of
enchacing the:
 Prosperity RANK & FILE - The one who implement the
 Viability of the organization policies.

CORPORATE GOVERNANCE - The framework of OXYMORON - Bringing together of 2

rules and practices by w/c the board of directors contradictory concepts
ensures:
 Accountability
 Fairness GOOD BUSINESS ETHICS- is a pre-requisite for
 Transparency in the company’s good strategic management.
relationship with:
- All stakeholders/financiers BUSINESS ETHICS - the study of business
- Customers situation and decisions where
- Management issues of right and wrong are
- Employees adressed.
- Government
- Community ETHICAL VALUES- shared beliefs about right
and wrong, good and bad.
TYPES OF PARTNERSHIP:
ETHICAL ISSUES- Problem or dilemmas which
SOLE PROPRIETORSHIP - one owner only present a conflict values.
* pay a ‘livingwage’ or personal financial
PARTNERSHIP - 2 or more gain.
CORPORATION - thousand ETHICAL CHOICES - Decisions about which
option to take in response to a
problem.
BOARD OF DIRECTOR(BOD) - is not an employee,
they are selected
by the
stockholders
- Policy making body
- range: 5-15 (odd numbers)
to avoidthe tie in making decision.
SOME BUSINESS PRACTICES ALWAYS TYPES OF SOCIAL RESPONSIBILITY:
CONSIDERED UNETHICAL AND OFTEN ILLEGAL:
SOCIETY - Carrying on business with moral &
 Misleading advertising ethical standard
 Misleading labeling - Prevention of environmental
 Poor Product or service safety pollution.
 Harming the environment
 Insider trading GOVERNMENT - Obey rules and regulations.
 Padding expense accounts - Regular payment of taxes.
 Dumping flawed products on foreign
markets SHAREHOLDERS - To remain transparent and
accountable
- To build reputation and
BUSINESS ETHICS… goodwill of the company.

EMPLOYEES - To grant regular and fair wages.

- To provide a healthy working
environment.
LAW ETHICS FREE
CHOICE CONSUMERS - Fair competition
- Provide after sales survices
- adopt fair pricing.
LEGAL STANDARD SOCIAL STANDARD PERSONAL STANDARD

ETHICAL PROBLEM IN PROVIDING SERVICES

CRITERIA FOR ETHICAL DECISION MAKING:
TO THE CUSTOMERS
UTILITARIAN APPROACH- Moral behavior
MAJOR AREAS OF ETHICAL PROBLEMS:
produces the greatest for the greatest number.
- While providing service to customer
INDIVIDUALISM APPROACH- They promote the
- While members of a business organization
individual’s best long-term interests.
fulfull their duties and responsibilities
- Manner by which competitors treat each other
MORAL RIGHTS APPROACH- Best maintain the
- In providing a price fair to the manufacturer,
rights of those affected, including free consent,
Seller and buyer.
life and safety

JUSTICE APPROACH - Decisions must be based

PROBLEMS IN PROVIDING SERVICES:
on standard of equiry, fairness and impartiality.
PRODUCTION - Raw materials and
WHY IS BUSINESS ETHICS IMPORTANT?
transformation ( sub-standard, poor quality,
production short cuts, etc. )
- Companies experience ‘Social blowback’ when
- Tranportation and storageof the
stakeholders perceive that they breached their
products.
deal with society
- Rendering Personal, technical
or profesional services to
SOCIAL BLOWBACK- An unforeseen and
people.
unwanted effect, result, or set of repercussions
MARKETING - Making false statement about
quality, content, and usefulness of the product.
- Fanning the customer’s desire to
posses the product.
- Directly persuading him to buy the
product by using emotionlism rather than logic
and actual nee for product.
TYPES OF MISREPRESENTATION:
INTENSIONAL - It is deliberate and willful “Lying”
UNINTENSIONAL - it is not deliberate: the one
making it may not be aware that he is engaging in
misrepresentation or he does, his intetion is to
mislead somebody in order to save a life or to
prevent trouble and unhappiness. “ White lie”
WHY CONSTITUTE LYING?
- Lying is making someone believe what you
yourself do not believe.
TYPES OF LYING:
- Lying through the use of an ambiguous term
- Lying by making a statement from which a false
- Lying through action
- Lying through suppersion of correct
information.
WHY PEOPLE LIE?
- Making a joke at somebody’s expense
- People lie because they ape other people
- they think since others lie, they might as well
have a headstart
- They are entitled to make money out of their
cleverness
PARTNERSHIP IN LYING- Unethical practices
can only be perpetrated with the agreement and
concerted action of several people.
CONSEQUENCES OF LYING
- A discovered lie results to distrust of the liar
- We tend to doubt the honesty of other persons
and we may consider all persons as liars until
the cotraty is prove.
- A person discovered to have lied, tend to lie
again to cover up his original lie.
- The victim of a lie usually becomes bitter.
- Where the acts of people who lied and were
able to get a way with profit become known,
others tend to follow their example.
CLASSIFICATION OF MISREPRESENTATION:
DIRECT MISREPRESENTATION - It is
characterized by actively misrepresentating
something about product or service.
A. DECEPTIVE PACKAGING - Includes placing
the product in container of exaggerated sizes
and misleading shapes to give false impression
of its actual contents.
B. ADULTERATION - is the unethical practice of
debasing a pure or genuine commodity by
imitating or counterfeiting it, by adding
something to increase its bulk or volumn, or
substituting product for a superior one for the
purpose of profit or gain.
INDIRECT MISREPRESENTATION - It is
characterized by omitting adverse information
about the product or service.
A. MISBRANDING OR MISLABELLING - is the
practice of making false statement on the label
of a product
B. SHORTWEIGHING - It mean the mechanics of
the weighing scale is tampered with or
something is unobtrusively attached to it so that
the scale registers more than the actual weight.
C. SHORTMEASURING - It means the
measuring stick or standard is shorter than the
real length or smaller in volume than standard
D. SHORTNUMBERING - the seller gives the
customer less than the number asked for or paid
for.
E. SHORTCHANGING - it is directly from a
situation where the seller gives the customer
less than the change he should get.
F. FALSE OR MISLEADING ADVERTISING
- Advertising serves a useful purpose if it
conveys exaggerated impressions of the
products, reliability or quality.
- Advertisement that are only half-truth and lead
to consumers to think that the product is a good
quality
- Advertisements that are deliberate
misrepresentations.
- Advertisements using fictitious or obsolete
testimonials.
INDIRECT MISREPRESENTATION
1. CAVEAT EMPTOR - It means “let the buyer be
beware”.
2. Deliberately withholding informatiom.
3. BUSINESS IGNORANCE - Businessman
inabilility to provide the customer with complete
info he needs to make a fair decision.
OVERPERSUASION - urging a customer to
satisfy a low priority need for a merchandise.
CORPORATE ETHICS
RESPONSIBILITIES OF CORPORATE
MANAGEMENT
BOARD OF DIRECTORS - the trustees of the
corporation.
- responsible to spend
the money entrusted them wisely and honesty ad
to distribute the profits equitably among the
investors.
- their obligation is to
choose capable and honest men - the officers -
to run the business subject to their general
guidance and direction.
PRACTICES OF CORPORATE MANAGEMENT
- Practices of corporate management that
involve ethical considerations may be classified
into two: PRACTICES OF THE BOARD OF
DIRECTORS and PRACTICES OF EXECUTIVE
OFFICERS.
PRACTICES OF BOARD OF DIRECTORS - Due to
their influential as the responsibility entrusted
to them by the stockholders, the board of
directors can act with little or no control
provided by stockholders
Some of these practices are:
PLAIN GRAFT - members of the board of
directors help themselves to earnings that
otherwise would go to other stockholders.
DISLOYAL SELLING - is a corporate practice
that involves conflict of interest.
INSIDER TRADING - occurs when a broker or
another person with access to confidential
information to trade in stocks and securities,
thus giving him an unfair advantage over the
general public which has not had access to that
information.
ROUTING PURCHASE THROUGH DIRECTOR’S
POCKETS - In this practices, the board of
directors of company A creates a separate
coporation ( company B ) where they are the
controlling stockholders. Company B sells the
supplies and materisls that Company A needs.
NEGLIGENCE OF DUTY - A failure of the
members of the board of directors more
common than breach of trust is neglect of duties
they have been elected for, that is to attend
board meetings regularly.
PRACTICES OF EXECUTIVE OFFICERS -
Practices that are more common to executive
officers and lesser managers are:
CLAIMING A VACATION TRIP TO BE A BUSINESS
TRIP - The president or a Vice President reports
his vacation in Europe or in the United States as a
business so he can get reimbursement for his
expenses.
HAVING EMPLOYEES DO WORK UNRELATED TO
THE BUSINESS - Excutive officers and lesser
managers ask company employees to do
personal things for them on company time such
as having janitors water and mow their lawns,
having the maintanance men do house or
appliance repairs for them.
LOOSE OR INEFFECTIVE CONTROLS - Managers
do not provide adequate controls to remove
temptation and to prevent or discourage from
engaging in unethical practices.
UNFAIR LABOR PRACTICES - the labor code lists
following as unfair labor practices committed by
an employer on employees or a group of
employees who have organized themselves into
a union.
MAKING FALSE CLAIMS ABOUT LOSSES TO
FREE THEMSELVES FROM PAYING THE
COMPENSATION AND BENEFITS PROVIDED BY
LAW. - there are employers who claim
non-existent losses so they can be exempted
from paying the minimum wage and
emergency-cost-of-living allowances required
by law.
MAKING EMPLOYEES SIGN DOCUMENTS
SHOWING THAT THEY ARE RECEIVING FULLY
WHAT THEY ARE ENTITLED TO UNDER THE LAW
WHEN IN FACT THEY ARE ONLY RECEIVING A
FRACTION OF WHAT THEY ARE SUPPOSED TO
GET - the most common example of this
unethical practice is making employees sign a
payroll which shows that they are receiving the
minimum wage and all the
emergency-cost-of-living allowances if they do
not.
PRACTICES OF EMPLOYEES - when a person is
employed by a company or an individual, he is
under obligation to do affair day’s work, to
conduct business transactions so that the rights
of his employer to make a legitmate profit and to
help his employer use his asstes economically
and wisely, making sure that supplies,
materials, equipment, facilities and money are
used for the purpose for which they were
indeed.
Unfortunetely, there are some employees who
are not mindful of their moral obligations to
their employers. They take advantage of their
position and the trust of their employers by
committing unethical practices harmful to their
employers’ interest. These unethical practices
may be classified into “CONFLICTS OF
INTEREST” and DISHONESTY.
CONFLICTS OF INTEREST
Some common examples of conflicts interest
are:
- an employees who hold a significant interest
or shares of stock of a competitors, suppliers,
customer or a dealer favors this party to the
prejudice of his employer.
- the employee accepts cash, a gift or a lavish
entertainment or loan from a supplier,
customer or competitor or contractor.
DISHONESTY - one of example of dishonesty is
punching another employee’s time card to make
it appear that the employee arrived early or is
not absent is a practice that is done by mutual
arrangement between employees.
SEXUAL HARASSMENT - in recent years, the
media has reposted a growing number of cases
of sexual harassment, particularly in the united
states of America, the UK, the Europe.