Philippine Women’s University

Taft Avenue, Manila

JOSE ABAD SANTOS MEMORIAL SCHOOL
Senior High School
DATE: February 22,2019
GRADE LEVEL/SUBJECT: Grade 12 Business Ethics and Social Responsibility
LESSON: Chapter 2 Foundations of the Principles of Business Ethics
MATERIALS: Whiteboard Marker
REFERENCES: Business Ethics and Corporate Social Responsibility by Ong & Serrano
LESSON OBJECTIVES:
 To compare and Contrast classical philosophies as they relate to business settings
 To give examples of how beliefs, systems affects business practices
 To analyze simple busines situations as they are affected by the filipino value system
 To distinguish what is good versus what is morally acceptable among the given Filipino values

VALUE FOCUS: Able to form Judgement

LESSON DEVELOPMENT:
Introductory Activities:
a. Checking of attendance.
b. Reinforcement of proper grooming and cleanliness
c. Review / Checking of understanding/Prior Knowledge
i. Questions:
1. What do you consider when you make decisions?
2. What factors affects your decision making?
3. Does your principles and beliefs affect the way you reflect and decide on
situations?
d. Motivation
a. The students are asked to list down in a sheet of paper the situations that they consider they made
the hardest decision and what factors did they consider in order to come up with a solution that is
appropriate with the situation. After the discussion of the lesson the claa will eveluate if their
decisions are being embodied by an ethical standards and/ or if they consider ethics being an
important part of their decisions.

Lesson Proper:
A. Discussion
 Classical Philosophy used in Business
i. Socrates
ii. Plato
iii. Aristotle
iv. Confucius
v. Plutarch
vi. Epictetus
vii. Musonius
viii. Epicurus
 Belief System
i. What are Belief System
ii. Animism
iii. Shinto
iv. Hinduism
v. Judaism
vi. Buddhism
vii. Confucianism
viii. Taoism
ix. Christianity
x. Islam
 Philippine Women’s University
Taft Avenue, Manila
JOSE ABAD SANTOS MEMORIAL SCHOOL
Senior High School
 Filipino Value Systems in Business
i. Bahala na
ii. Utang na Loob
iii. Ningas Cogon
iv. Padrino system
v. Manana Habit
vi. Amor Propio/ self- respect
vii. Delicadeza
viii. Hiya
ix. Pakikisama/ pakikipag kapwa –tao
x. Family orientation
xi. Hospitality
xii. Joy and Humor
xiii. Flexibility, Adaptability, Creativity
xiv. Faith and Religiosity
xv. Ability to survive
xvi. Hardwork and industry
xvii. Filipino time

b. Collaborative / Individual Activity

 A case study entitled “Rajat Gupta and Insider Trading” by Pratik Patel will be given to the learners.
Rajat Gupta and Insider Trading
By: Pratik Patel
Source: https://sevenpillarsinstitute.org/applying-virtue-ethics-the-rajat-gupta-case/
Rajat Gupta is an Indian American businessman who was the managing director of management
consultancy McKinsey & Company and a business leader in India and the United States. Rajat Gupta also
served as corporate chairman, board director or strategic advisor to Goldman Sachs, Procter and Gamble
and American Airlines, and non-profits organizations, The Gates Foundation, The Global Fund and the
International Chamber of Commerce.
Rajat Gupta was convicted in June 2012 on insider trading charges. He was sentenced in October
2012 to two years in prison, an additional year on supervised release and ordered to pay $5 million in fines.
His trial began on May 22, 2012. On June 15, 2012, Gupta was found guilty on three counts of securities
fraud and one count of conspiracy.
The primary parties are affected are Rajat Gupta, McKinsley & Company, Goldman Sachs, Raj
Rajaratnam, Galleon Group, Warren Buffet, and the U.S. equity markets. Other parties indirectly affected are
family and friends of Rajat Gupta, employees at McKinsley & Company and Galleon Group, investors in
Goldman Sachs and its creditors, and government and officials involved with the case.
In September 2008 Warren Buffet agrees to pay $5 billion to Goldman Sachs in exchange for
preferred shares in the company. This news is likely to raise the share price of Goldman Sachs. The news is
not supposed to be announced and made public until the end of day. Less than a minute after the board
approved the Buffet purchase, Rajat Gupta calls his longtime friend Raj Rajaratnam, a hedge fund manager
and billionaire founder of Galleon Group. Once Rajaratnam gets this information, he immediately buys
shares of Goldman Sachs. Next day when the stock market opens, Raj Rajaratnam makes nearly $1.2
million in profits as Goldman Sachs shares rose. The SEC estimates the tip leaked by Rajat Gupta
generates profits and avoids losses of more than $23 million.
Gupta was commended by people who knew him as a person who helped others. He was very
active in providing medical and humanitarian relief to the developing countries. Born to humble
circumstances, he became a pillar of the consulting community and a trusted advisor to the world’s leading
companies and organizations. A word that was used repeatedly in media coverage for Rajat Gupta during
his trial was “respected.” In the past, much less so now, we assume people in leadership positions are
virtuous. However, instances like the Rajat Gupta insider trading case and other financial scandals remind
us that the assumption is not well-founded

After reading the case study the students are asked to answer the following questions:
 Philippine Women’s University
Taft Avenue, Manila
JOSE ABAD SANTOS MEMORIAL SCHOOL
Senior High School
i. Is the case Rjat Gapta showed a failure of character? Explain your answer.
ii. According to Aristotle “ The virtue of man also will be the state of character which makes a
man good and which makes him do his own woek well”. How will you relate this to the
story of Rajat Gupta? Discuss.
iii. Do you agree that business schools must provide future financial managers with proper
ethical education for moral decision making? Defend you answer.
SYNTHESIS:
Process Question(s):
 Who are the Classical Philosophy used in Business?
 What are the different belief system?
 What are the Filipino Value Systems in Business?

EVALUATION/CLOSURE:
The case study entitled “The McDonald’s ‘Beef Fries’ Controversy”
The McDonald’s ‘Beef Fries’ Controversy
Source: http://www.icmrindia.org/casestudies/catalogue/Business%20Ethics/The%20McDonald%20Beef%20Fries
%20Controversy.htm
In May 2001, a class action lawsuit1 was filed against the world's largest fast-food chain McDonald's, in
Seattle, US. The lawsuit alleged that the company had, for over a decade, duped vegetarian customers into eating
French fries2 that contained beef extracts.The lawsuit followed a spate of media reports detailing how the French
fries served at McDonald's were falsely promoted as being '100% vegetarian.'

Although McDonald's initially declined to comment on the issue, the company issued a 'conditional apology,'
admitting to using beef flavoring in the fries. The furore over the matter seemed to be settling down, when to
McDonald's horror, some of its restaurants in India were vandalized. Activists of Hindu fundamentalist groups - the
Shiv Sena, the Vishwa Hindu Parishad (VHP) and the Bajrang Dal, staged a demonstration in front of the McDonald's
head office in Delhi protesting the alleged use of beef flavouring. They submitted a memorandum to the Prime
Minister, demanding the closure of all McDonald's outlets in the country.
Activists also staged protests in front of McDonald's restaurants in south Mumbai and Thane. Mobs
ransacked the outlet at Thane, broke the glass panes and smeared the McDonald's mascot Ronald with cow dung.
About 30 people were arrested and later let off on bail. Company officials estimated the loss to the outlet at
Rs 2 million. Officials at McDonald's India quickly announced that the vegetarian products served in India did not
have any non-vegetarian content.
However despite this reassurance, the anti McDonald’s were refused to die down. Meanwhile, more cases
were being filed againts McDonald’s this time in California, US and Canada. It seemed certain that the company
would have to shell out millions of dollars to settle the class action lawsuit representing the 1 million US based
Hindus and 15 million other vegetarians.
McDonald's was started as a drive-in restaurant by two brothers, Richard and Maurice McDonald in
California, US in the year 1937. The business, which was generating $ 200,000 per annum in the 1940s, got a further
boost with the emergence of a revolutionary new concept called 'self-service.' The brothers designed their kitchen for
mass production with assembly line procedures. Prices were kept low.
Speed, service and cleanliness became the critical success factors of the business. By mid-1950s, the
restaurant's revenues reached $ 350,000. As word of their success spread, franchisees started showing interest.
However, the franchising system failed because the McDonald brothers observed very transparent business
practices. As a consequence, they encouraged imitators who copied their business practices and emerged as
competitors. The franchisees also did not maintain the same standards for cleanliness, customer service and product
uniformity. At this point, Ray Kroc (Kroc), an exclusive distributor for milkshake machines expressed interest in the
McDonald brothers' business. Kroc finalized a deal with the McDonald brothers in 1954.
 Philippine Women’s University
Taft Avenue, Manila
JOSE ABAD SANTOS MEMORIAL SCHOOL
Senior High School
He established a franchising company, the McDonalds System Inc. and appointed franchisees. In 1961, he
bought out the McDonald brothers’ share for $ 2.7 million, and changed the name of the company the McDonald’s
Corporation. In 1965, McDonald’s wemt public.
By the end of the 1960s, Kric had established over 400 franchising outlets. McDonald’s began leasing/
buying potential store sites and then subleased them to franchisees initially at a 20% markup and later at a 40%
markup. To execute this, Kroc set up the Franchise Realty Corporation . the real estate operations improved
McDonald’s profitability. By the end of the 1970s, McDonald’s had over 5000 restaurants with sales exceeding $3
billion. However, in the early 1990s, McDonald’s was facing problems due to changing customer preferences and
increasing competition. Customers were becoming increasingly health conscious and they wanted to avoid red meat
and fried food. They also preferred to eat other fast food joints that offered discounts.
The courtroom battle had entered the 11th month when McDonald's announced that it would issue a new
apology and pay $ 10 million to vegetarians and religious groups in a proposed settlement of all the lawsuits in March
2002.

After reading the case study the students are asked to answer the following questions:
i. what particular conflict in the belief system did McDonald violate? Explain your answer.
ii. How did the Hindu fundamentalist group react? Enumerate them.
iii. Do you agree with the actions take by McDonald just to win the battle over the Hindu
Belief?

ASSIGNMENT:
 A case study will be given to the students to answer at home. The case study entitled
“Nestle Philippines and Forefront IT Trading Corp.”

Teacher’s Note:

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ASSISTANT PRINCIPAL’S SIGNATURE:_____________________

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PRINCIPAL’S SIGNATURE: _______________________

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