Ethical Issues and Problems in Business and the Corporate World
is a productive human activity that brings beneficial contribution to both people and society. produces employment, fair deals, creativity, advancement of technology, customer satisfaction, among others. is also an activity that provides an opportunity for some unscrupulous people to take advantage of others:
Ironically, however, business
e.g. the abuse of fiduciary relationship between employers and employees and between the buyers and the sellers
1. Sexual Harassment
What is Sexual Harassment?
is an issue in the corporate world that must be looked into because it can create a hostile and unhealthy workplace for the employees. the Congress of the Philippines enacted the Anti-Sexual Act of 1995
Declaring sexual harassment unlawful in the employment. this reason. and other purposes. education or training environment.
all forms of sexual harassment in the employment. enhance the development of its human resources. students or those undergoing training. instruction or education.”
. employees. guarantee full respect for human rights. this end.Anti-Sexual Act of 1995
State shall value the dignity of every individual. education or training environment are hereby declared unlawful. applicants for employment. and uphold the dignity of workers.
and other verbal or physical conduct of a sexual nature constitutes sexual harassment when submission to or rejection of this conduct explicitly or implicitly affects an individual’s employment.The Civil Right Act of 1964 of United States of America
is where our law was patterned defines sexual harassment as:
”Unwelcome sexual advances. unreasonably interferes with an individual’s work performance or creates an intimidating. hostile or offensive work environment.”
. requests for sexual favors.
trainor or any other person who.Republic Act No. requests or otherwise requires any sexual favor from the other. employee. request or requirement for submission is accepted by the object of said act. 7877
sexual harassment as:
Employer. teacher. instructor.”
. influence or moral ascendancy over another in a work or training or education environment demands. professor. having authority. manager. coach. regardless of whether the demand. supervisor. agent of the employer.
. harassment has always occurred but there used to be no label for such behavior.Why Sexual Harassment Occurs?
harassment occurs due to power struggle between men and women as a response to a real or imagined loss of power or as an expression of retaliation or a flexing of the new power. also happens because some organizations and managers allow it to happen.
the past decades. The
industrial revolution brought about changes in the traditional function of men and women which greatly increased gender specialization and formed a new kind of workplace in the western world. things continue to change. More and more women joined the workforce.
. They moved into jobs that were traditionally held by men. responsibility of men and women became more specialized.
Sexual harassment is one of the effect of this shift. it may be a response to real or imagined loss of power. As
a result of these changes. harassment is committed by a male against a female. it may be an expression of retaliation or flexing of the new power.
. the balance is shifting. committed by a woman towards a man.
Two Types of Sexual Harassment
Quid Pro Quo harassment Harassment that creates a hostile environment
.1. “go to bed with me and you will get that promotion you want. Quid Pro Quo harassment
This means “this for that” (something for something) This is defined as requiring a sexual favor or interaction as a condition of employment or in exchange for an employment benefit (such as promotion. A manager uses his authority to grant pay increases and promotions as a means to extort sexual favors from an employee. pay raise).
veteran status. religion. or disability. sexual orientation. sex. physical and visual conduct that creates an intimidating. Harassment that creates a hostile environment
the hostile environment type of harassment. or hostile environment in the workplace that interferes with work performance. offensive. national origin.
.2. marital status. type of harassment may be based on race. age. abuses include verbal.
Some examples of a hostile environment
Unwanted touching, patting, and pinching against a person Comments about your body, leering, wolf whistling, insults of a sexual nature, persistently pestering for a date. Displaying or circulating pornographic pictures with the intention of harassing someone / Posting of explicitly sexual materials Workplace blackmail- i.e. suggestion that sexual favors may further your career (or refusal may hinder it)
5. Green jokes 6. Obscene letters 7. Sexual propositions 8. Suggestive looks
The profiles of the Victim and the Harasser:
The victim as well as the harasser may be a woman or a man. The victim does not have to be of the opposite sex. The harasser can be the victim’s supervisor, an agent of the employer, a supervisor in another area, a co-worker, or a non-employee. The victim does not have to be the person harassed but could be anyone affected by the offensive conduct. The harasser’s conduct must be unwelcome.
It is helpful for the victim to directly inform the harasser that the conduct is unwelcome and must stop. more frequently the victim is in a position of lesser power than the accused. Harassment also occurs between customer/client and providers.
. Although the victim of sexual harassment and the person accused of sexual harassment may be peers. The victim should use any employer complaint mechanism or grievance system available. The most common example is the boss-subordinate situation.
The study also showed that used of words. and gestures were the type of harassment which created a hostile environment or offensive work environment. The result revealed that 80%of the persons interviewed believed they have been sexually harassed.How Sexual Harassment Affects the Workplace
the study made by Rexbook Magazine in 1981:
140.000 men and women were interviewed pertaining to sexual harassment.
. who may be innocent. managers and co-workers. It can also affect the bottom line of the employer. and affect the entire life of an organization and its members.
It affected the individuals harassed and the person accused. unfavorable publicity or the invasion of privacy. such case can generate costly lawsuits.
example for policy development are:
.How to Prevent Sexual Harassment in the Workplace
significant step an organization can take in preventing sexual harassment in the workplace is through creating a safe. positive work environment by putting into practice a strong sexual harassment policy. secure.
1. one that addresses non-management employees and one that addresses management
A broad anti-harassment/positive environment policy that includes a statement that specifically addresses sexual harassment A separate sexual harassment policy that covers all organizational members Separate sexual harassment policy.
and ruin of an organization image that took years to establish. dreadful publicity. Sexual
harassment is very costly and causes low morale among employees and decrease in productivity.
. sexual harassment may result in costly lawsuits. scared.
not dealt with. people are incompetent of
male and female. person. Riddance
of sexual harassment will come through the commitment of the organization and employees.
. free from threats and apprehension. want a secure office.
Even if the company already has a well-written policy. it is important to expose it regularly through:
Permanent posting on bulletin board Memos Articles in the organization’s newsletter Meeting and trainings
Training program may come up with various topics to support the anti-harassment programs and to assure each employee of a safe and harassment-free workplace environment
.Communicating the Sexual Harassment Policy
best policy is ineffective if it is not communicated well.
2. The Problem of Just Wage
The duty to preserve one’s life implies the duty to work and that each has a personal duty to take care of himself and not to be a burden to other.
.Work and Compensation
is said to be for the purpose of obtaining economic gain for the laborer.
compensated for a work done or for services rendered is the very essence of ‘work’. Most agreed that work is directed to the promotion of life.
main objective of compensation is to create a system of rewards that is equitable to the employer and employee. It can be in the form of wages.
. in-kind payments and other remunerative fringe benefits. the general concern is that justice should be a substance of compensation. Thus. Compensation
One is willing to work in exchange for remuneration or rewards he will receive from working. harvest or commercial goods. shares on profits. Such remuneration may include both financial and non-financial compensation.
The Question of Just Wage
number of people all over the world commented on its definition and have argued on the appropriate criteria to consider in setting the so-called ‘Just Wage’.”
. just wage is defined as the remuneration which is enough to support the wage-earner is reasonable and frugal comfort. Catholic Church tells us. “a just wage is the legitimate fruit of labor.
.00 P 367.00 P22.DAILY MINIMUM WAGE RATES National Capital Region (NCR) Effective 01 July 2010
P 382.00 P22.00
P 345.00 P 367.00 P22.00 P 367.00
Agriculture (Plantation and Non Plantation)
Hospitals with bed capacity of 100 or less Establishments employing 15 workers or
Establishments regularly employing less than 10 workers
P 345.00 P 404.00 P22.00 P22.00 P 345.00 P 367.
XIII. as indicated in letter “g” Sec 3 of Art.Philippine Constitution
in various parts of the 1987 Philippine Constitution are specific pronouncements and mandates on the protection and promotion of the rights of workers in the public and private sectors. the workers are entitled to a living wage”
considering existing regional disparities in the cost of living and other socio-economic factors. The minimum wage rates shall be adjusted in a fair and equitable manner. 6727
Rationalization Act declared the policy of the State to rationalize the fixing of minimum wages and to promote productivity-improvement and gain-sharing scheme to ensure a decent standard of living for the workers and their families.Republic Act No.
. determination of wages must also be adequate and just.
and Productivity Commission (NWPC) Regional Tripartite Wages and Productivity Boards (RTWPB)
These determine the minimum wage for Filipino workers They handle the minimum wage rates of the workers of each and every region of the country.Government Agencies Involved
should be paid in accordance with laws and regulations issued by the government. It requires that employers pay at least the minimum wage. Laws and Regulations
refers to the supply and demand for labor and the so-called economic conditions and underemployment. External Market Factor
2.Factors to consider in Formulation of Fair Wages
cost of living relates to basic maintenance needs and it must be seriously considered in formulation of wages. A fair wage should be sufficient to meet the increase in cost of living. Prevailing Industry Rate Some claim that paying workers the average of what other companies are paying for the same job result in a fair wage.
.Factors to consider in Formulation of Fair Wages
3. However not all companies have a minimum wage high enough to maintain a decent standard of living. Cost of Living
and the skills requirements of the job are probably the most considerable determinants of fair wage. and the organization’s profitability to justify its ability to provide fair wages to its workers should be considered. Organizational Factors
6. responsibilities. Duties. the size of the company. Job Factor
of what type of industry the organization operates.
nature of the job itself entails the formulation of a just wage.
.Factors to consider in Formulation of Fair Wages
. Individual Performance
trend is that individual performance or productivity ratings affects the determination of wage/salary increases.Factors to consider in Formulation of Fair Wages
Some communities have a higher cost of living than others. and businesses usually conclude that they are legally and morally right when they fulfill their mutual agreement with the employees. difference hinder the formulation of a perfectly common definition of fair wage.
.Some Issues on Just Wage
minimum wage mandated by the government is not a guarantee of a just and fair wage.
indexation to cost of living. where wage is automatically adjusted with the increases of cost of living.
. have different interpretations of the justifiable pay for certain job position. skills. and tasks. the prevailing rate in industry alone could not perfectly establish a just wage. is not usually met by majority of the employers. Thus.
3. Gift Giving and Bribery
New Year. and sometimes even during birthdays. is normally observed during special occasions like Christmas. gift to customers.GIFT-GIVING
merely an act of extending goodwill to an individual in an effort to share something with particular others.
. clients and business partners is a common practice in the business community.
Reasons why business usually engage in gift-giving
4. To advertise To compete effectively against competitors
To show appreciation for a favor received To effectively establish goodwill with business partners.
The following are the common forms of Gift-Giving
Samples Raffle Patronage
coupons / certificates Rebates / cash refund Padding expense accounts Premiums Prizes
(rewards) Tie-up promotions Allowance Free goods Tips
end up in big trouble. clear point is that those who cross that line. and knowing where to draw the line. is not always easy. intentionally or not. between what is right and wrong.
.Is Gift-Giving Ethical or Unethical?
gift of clients and business associates can raise conflict of interest problems. is indeed difficult to determine the morality of giving gift.
agree that accepting and receiving bribe is a violation of professional ethics. all examples of giving and accepting gift and amenities qualify as bribery. but we may not always find it easy to determine what is and is not a bribe.
. just as not all cases of taking another’s property should be considered theft.
3.Factors in Determining the Morality of Gift-Giving
1. 6. 7.
Value of the gift Purpose of the gift Circumstances under which the gift was given or received Position between or relationship of the giver and receiver Acceptable business practice in the industry Company policy Laws and Regulations
. 4. 2. 5.
is intended to induce people inside the business or other organizations to make decisions that would be justifiable according to normal business or other criteria. was the identified to be a form of corruption and is generally immoral and for most is illegal.
is defined as a practice of giving renumeration for performance of an act that is inconsistent with the work contract or the nature of the work one has been hired to perform.
as bribes, can be in a form of money, gift, entertainment, or preferential treatment. of bribery:
A motorist offered a certain amount of money to a police officer in order not to be issued a ticket for speeding. A construction company shared percentage of its income to a civil servant in order to win a contract. A narcotics smuggler bribed a judge to lessen criminal penalties.
Bribery is obviously unethical because of the following reasons:
is generally used as an instrument to gain personal or corporate advantage. corrupts the concept of justice and equality
produces cynicism and a general distrust of institution
destroys people’s trust in the integrity of professional services, of government and the courts, of law enforcement, religion, and anything it touches. treats people as commodities whose honor can be bought and sold. It thus tends to degrade the respect we owe to other human beings.
4. The Morality of Advertising
. the mere presence of advertising can sell a product due to consumer perception that a heavily advertised product is a product of “good value”. the consumers would not be aware of the presence of diverse products and services available in the market. advertising. Advertising
plays a very significant role in marketing goods and services.
goods.famous marketing guru .
Philip Kotler . or services by an identified sponsor”
Wells and Burnett likewise defined advertising as:
“paid non-personal communication from an identified sponsor using mass media to persuade or influence and audience”
The primary purpose of advertising is to inform potential buyers of the availability of a certain product by providing relevant information on its uses.
. benefits and how it might serve the needs and wants of individuals.defines advertising as:
“any paid form of non-personal presentation and promotion of ideas.
use of advertising today has not been serving its intended purpose since very little information is conveyed to consumers and more often the information is not even useful. in the attempt to persuade consumers. only becomes immoral when. and manipulative. misleading. the point of morality. However. advertising in itself is not bad or immoral since it helps achieve the goals of both the seller and buyer. the advertisements become deceptive.
then it is said to be immoral. advertisement that conveys truthful information is morally permissible. If an advertisement contains false statement and “lies”. are also shortcomings to this approach since the truth in advertising can be contrasted with either falsehood or lying. and that is “truth”.
. Lying is immoral while falsehood is not necessarily immoral. There
is only one criterion in evaluating the morality of advertising.
or which represents the product without making any statement. This may not occur not only through sentences but also through pictures.Some Issues in Advertising
Deceptive Advertising These are those which either make a false statement and therefore.
. lie. individual words. in this case. or objects that can deceive our eye and mind. the picture is said to be deceptive.
example of this is one where pictures from the box of the product do not look the same as the contents of the product.
. can be. up to. help prevent.Use of Weasel Words
use of weasel words is often complementary to ambiguity in advertising. are used to imply what cannot be said. as much as. We are usually accustomed to ads that contain phases like: help. help stop Like. Weasel words are used to avoid from a direct or straightforward statement. One example of a commonly used weasel word is “Help”
means to aid or assist. fight.
For example.” that it “upsets the stomach less frequently” or is “superior to any other nonprescription painkiller on the market” contradict evidence that all analgesics are effective to the same degree.
. This occurs when advertisements tend to make false claims of the benefits of the goods or services which is actually unsupported by valid evidences. claims that a pain reliever provides “extra pain relief” or is “50 percent stronger than aspirin.Exaggeration
might also be misled through exaggeration.
Psychological Appeals There are some advertisements that are directed at arousing human emotional needs rather than reason. imitation. self-esteem and the most pervasive of all are sexual pitches. and often should not have to be effective. acceptance. It influences by implying that doing what is suggested will satisfy a subconscious desire. masculinity. Richard F. Some psychological appeals that advisers use to motivate people to buy products are: power. prestige. Taflinger defines psychological appeal as a visual or aural influence on subconscious mind and emotions. personal enjoyment.
Psychological appeal does not have to make sense. femininity. curiosity. approval.
Children generally remember what they see.
. Kids are the most pure consumers in that they tend to interpret ads literally. The average child is exposed to more than 40.Ads Directed at Children Most advertisers have recognized that advertising to children is effective and eventually became a big business recently. Children are special group of consumers who do not regard reason. Moreover. movies and television shows are being linked to the selling of toys and other items featured in commercials with character stamped on various products.
The aim of advertisers is for the children to pester their parents to buy things for them.000 TV commercials every year.
Department of Trade and Industry is responsible for enforcing the provisions of the act.Philippine Law on Advertising
CONSUMER ACT OF THE PHILIPPINES
Article 108 of the act declares that “The State shall protect the consumer from misleading advertisements and fraudulent sale promotion practices. devices and hazardous substance. the Department of Health is the agency that oversees these products
. respect to food. cosmetics.
. radio. outdoor advertisement. Deceptive and Misleading Advertisement
108 states that : it shall be unlawful for any person to disseminate or to cause the dissemination of any false. deceptive or misleading advertisement by Philippine mail or in commerce by print. television. or other medium for the purpose of inducing or which is likely to induce directly or indirectly the purchase of consumer product and services.
cosmetic. merit. device or hazardous substance that is false. Drugs. unless the product actually complies with the prescribed standard. Device or Hazardous Substance
1. no person shall advertise any article or substance in a manner that is likely to be mistaken for such product. or safety. drugs.
. quantity. Where a standard has been prescribed for a food. drugs. Cosmetics. value.Special Requirements for Food. cosmetic.
3. misleading. or device. or is likely to create an erroneous impression regarding its character.
2. composition. or deceptive.
No claim in the advertisement should be made that is not contained in the label or approved by DOH It is unlawful to advertise any food.
. Device or Hazardous Substance
4.Special Requirements for Food. Drugs. device. 5. Cosmetics. or hazardous substance may not make use of any reference to any laboratory report of analysis required to be submitted to the Department of Health. No advertisements for any food. unless such laboratory report is duly approved by DOH. cosmetic. or hazardous substance may be allowed unless such product is duly registered and approved by DOH. Advertisement of any food. cosmetic. drugs.
PANA issued a Code of Ethics which includes the following statement of general principles:
. the PANA has been engaged in a continuing campaign to regulate abuses committed by untruthful advertisers.Philippine Association of National Advertisers (PANA)
1958. Since then. advertisers formed the Philippine Association of National Advertisers (PANA).
. it cannot permit those practices that tend to impair this confidence. advertising depends for its success on public confidence. Hence. advertising aims to inform the consumer and help him buy intelligently. Good
advertising recognizes both its economic and social responsibility to help reduce distribution costs and to serve the public interest.
advertising seeks public acceptance on the basis of positive and constructive statements. It is accurate. rather than by the disparagement of competition. advertising conforms not only to the laws but also to the generally accepted standards of good taste and decency and to moral and aesthetic sentiments of the country. Good
advertising tells the truth.
. honest. made on the merits of the product or service advertised. and trustworthy.
advertisement does not allow any activity that involves the exploitation of the goodwill, attached to any other firm, product or service. It does not imitate or stimulate trademarks, firm names, packages, labels and such advertising devices as illustration, copy, layouts, or slogan. advertising helps to dignify the individual and contribute to the building of a civilized society.
5. Office Romance
says that somewhere from 25-33 percent of the employees at a given company have had office romances once in their careers. three-fourths of the people in the survey believe that a romance at the office is acceptable. believe that it is uncalled for and unprofessional to mingle romance with business purposes.
romance is likely to happen as long as men and women work together. romantic relationship.
.What is Office Romance?
is defined as a relationship between two people who are employed by the same organization. is characterized by mutual attraction between the parties and a desire for a personal.
do not want a workplace where employees are uncomfortable to work. management does not want to interfere unduly with their employee’s personal life and their right for privacy. they
.The Company’s Stand
company is trapped in the middle of office romances present in the organization.
Conversely. is why a lot of companies come up with a policy that covers office romances and educate all employees or the guidelines and effects through trainings and seminars.
Employees involved in a love relationship overcome rough times at work because of mutual support and inspiration. Love and companionship in the office give the employees the relief and reason to overcome problems that come along their way. mutual support to each other at work. and other personal experiences. Romance becomes the reason to keep their jobs.Benefits of Office Romance
These benefits include friendship. Employees tend to view work as fun even when pressures begin to pile up.
Disadvantages of Office Romance
co-workers in productivity
the boss affairs
Ethical Issues in Office Romance
Some companies want to restrict their employees to engage in office romance. in order to respect the rights of all members of the organization.
. For example: some companies may allow relations between coworkers with the same rank. but may want to lessen the bad effects. this risks legal encounters.
/ Ethical Considerations
When one or both involved parties are required to leave the company. Policies regarding office romance need to be decided with vigilant thought and prudence. Others are in favor of the positive effects of office romance.
One of the persons involve in a failed romance may seek vengeance. There may be misinterpretation on the part of each party. There are few reasons why this issue may exist. or would want to remove the other person involved. may try to revive.
. while another may consider it offensive and therefore. One may consider flirting acceptable which may eventually lead to a romance. a harassment. Sexual
Sexual harassment may sometimes arise when a bad workplace romance is terminated.
6. The Problem of Fair Pricing
One should assess the factors on which the price is based and the processes that determine it.
. though some factors are considered such as: a) The cost of material b) Operating and marketing expenses c) A reasonable profit margin
These factors constitute to set price fairly though it is not enough to provide a precise answer on what a fair price is. In
general. a fair price is one that man has not yet resolved.
Ethical Issues in Fair Price
True cost of the product is concealed Suggested retail price Use of electronic scanners Promotional pricing Follow the leader pricing Price gouging Price fixing The “Suki” system of the Filipino business compromises the fair price of a regular customer from the new ones. E. B. G. C. F.
Trade Secrets and Corporate Disclosure
employee data. and other competitively valuable information. company finances. marketing strategies. product pricing. production cost or sales data. These includes essentially any confidential business information such as customer lists. financial information. manufacturing processes.TRADE SECRET
A trade secret is the legal term for confidential business information. Examples of trade secret include customers identities and preferences. That piece of information allows the company to compete effectively. vendors. and documents memorializing important negotiations
example. A wrongful taking can occur in a variety of manners.Trade Secret Act
Secret Act prevents wrongful taking of confidential or secret information. wrongful taking. breach of fiduciary obligation.
. of trade secret information. the taking of information would be wrongful when the taking is a breach of contract. and other illegal matters. secret law prevents misappropriation. theft.
Each person has the right to the information he needs to enter into a transaction fairly.
The first basis speaks of information required for a fair transaction.CORPORATE DISCLOSURE
to De George:
The moral basis for corporate disclosure rests primarily on the following arguments:
1. A transaction is considered fair if the person has the appropriate information needed for the transaction
it is clear that a person is not morally permitted to harm others.
. As stated in the law.
The second basis speaks of the moral responsibility of the person. Each person has the right to those actions of others that will seriously and adversely affect him or her.2. But a person is permitted to do something that “might” cause others harm.
Misrepresentation is observed when there is a transformation of information to misinformation. It is a situation where the person involved believes that it is the right and acceptable things to do. commonly known as lying. Unintentional misrepresentation – a scenario whereby the person is not aware and does not deliberately act on misrepresenting things.
. Intentional Misrepresentation – a scenario whereby the person is fully aware or deliberately misrepresents things. 2.
There are two types of misrepresentation: 1. It is commonly called as white lie.
do not believe in.
.Definition of Lying
can be defined as the act of making others believe something that they. Augustine
defines lying as:
A speech that is contrary to what the person is thinking with the intention to deceive. A lie therefore. It happens when somebody tries to convince others with untrue statements. takes place when the person’s action are not in congruence with his thoughts with the intention to deceive others.
Statement like: I was at the office around 8:00 a. This is often observed in advertising a product to be the “best-seller” brand.m.
is the act of making a statement from which false conclusions may be drawn eventually misleading others.
.Types of Lying
Use of ambiguous terms
Use of false statements
is the act of deliberately using vague terms or open-ended statements that can have several meanings to mislead people that one is telling the truth.
This act is sometimes observed in some crime scenes wherein a witness conceals he truth for the sake of his own security.
.Type of Lying
Suppression of correct information
is a type of lying where the person gets caught in the act of wrongdoing. Example: when someone is caught red-handed of stealing and still denies the accusation
is an intentional or unintentional act of hiding the correct information which eventually mislead others.
. Direct misrepresentation
It is characterized by actively misrepresenting something about the product or service.Business Practices Involving Misrepresentation and Lying
Other Type of Misrepresentation 1.
2. But it still contributes to the impression that businessmen are liars and are out to make quick moey. It is passive deception and not as obvious compared to direct misrepresentation. It gives the business a bad name because deception and lying are used in the process of selling the product to the customers. It is characterized by omitting adverse information about the product or service.
Some examples of misrepresentation
packaging Adulteration Misbranding or mislabeling Short weighing Short-changing Short measuring Short numbering Misleading advertisement
Emptor (let the buyer beware) Deliberately withholding information Business ignorance
9. The Morality of Labor Strike
an ordinary usage. is a tactic often employed by labor unions during collective bargaining with an employer.
. regardless of the origin of the dispute. the term strike is often used to describe all work stoppages.Strike Action or Strike
describe collective action undertaken by groups of workers in the form of a refusal to perform work.
hours.Workers go on strike for different reasons:
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 employment include wages. and several other circumstances that affect the work of the workers.
. sanitation. and safety.
.What are the Basic Rights of Employees?
CODE OF THE PHILIPPINES
is an act to strengthen the constitutional rights of workers to self-organization and free collective bargaining and to penalize unfair labor practices.
It may include preventing transports from entering or living in an institution or a company. but refuse to work.TYPES OF STRIKE
is a strike in which workers show up to work.
is a strike affecting all areas of a labor force across many industries. typically throughout an entire country or a large section thereof.
refers to a concerted refusal to work undertaken by a union to assert its members’ right to particular job assignments and to protest the assignment of disputed work to members of another union or to unorganized workers.TYPES OF STRIKE
is a strike initiated by workers in one industry and supported by workers in a separate but related industry.
is against the will of the leadership of the union.TYPES OF STRIKE
is based on a demand for better wages or benefits than the employer wants to provide.
. or without a unon.
is a kind of strike forcing employers to recognize and deal with them.
.TYPES OF STRIKE
Slow down Strike
is a form of work stoppage in which employees deliberately reduce their individual production.
employee has a right to withhold his labor services from an employer if he does not like the pay and benefits the employer offers.
. who are willing to work for a strike and the employer who wishes to hire them have a legitimate right to do so.Is There a Right to Strike?
right to strike is integral to the process of wage bargaining in an industrial economy.
and who decides to speak out publicly about it.
. be it of the employer or his fellow employees.
This is someone in an organization who witnesses behavior by members that is either contrary to the mission of the organization. fraud. or other illegal or unethical conduct connected with the workplace.Whistle-Blowing
is the disclosure by an employee of confidential information which relates to some danger. or threatening to the public interest.
Run counter to the defined purpose of the institution or organization. and Informs the public of this facts.
is a person. employee. or officer of any institution who believes that he has been ordered to perform some act or he obtained knowledge that the institution is engaged in activities which:
a) b) c) d)
Are believed to cause unnecessary harm to third parties. Are in violation of human rights.
It is revealing illegal and immoral activities within the organization to outside individuals or groups such as media men. It is going “over the head of immediate supervisors to inform higher management of the wrongdoing. or non-government organization.
occurs outside the organization.Types of Whistle-Blowing
occurs within the organization. regulatory body. public interest groups.
Current – those who blow the whistle on present employers.
D.Kinds of External Whistle-blowing
C. Alumni – those who blow the whistle on former employers. Open – whistle-blower discloses his identity Anonymous – whistle-blower who does not disclose his identity.
whistle-blowers experience each of the following forms of retaliation:
their job or were forced to retire Received negative job performance evaluations Had work more closely monitored by supervisors Were criticized or avoided by co-workers Were blacklisted from getting another job in their field
whistle-blowing produces less retaliation but also experience severe emotional effects of their whistle blowing activity:
depression on anxiety Feeling of isolation or powerless Distrust of others Declining physical health Severe financial decline Problems with family relations
Multi-level Marketing (MLM) and Pyramiding
is a system of selling through many levels of distributors.
. This is also known as direct selling companies. recruit others to help them. and they in turn.Multi-Level Marketing
marketing is a system of selling in which one signs up other people to assist him. thus the word “multi-level Marketing” gets a percentage on the price of the product being sold.
companies of this type are:
Avon Cosmetics Triumph International Sara Lee Direct Selling Tupperware Phils.
became successful because the main focus of their activities is the product sale.
participants attempt to make money solely by recruiting new participants into the program.
the classic “pyramid” scheme. hallmark of these schemes is the promise of skyhigh returns in a short period of time for doing nothing other than handling over your money and getting others to do the same.
the heart of each pyramid is typically a representation that new participants can recoup their original investments by inducing others to make the same investments. person you bring to your pyramid is promised future monetary rewards or bonuses based on your advancement up the structure.
schemes focus on the exchange of money and recruitment.
At some point the schemes get too big. lose their money.
The fraudsters behind the pyramid scheme may go to great lengths to make the program look like a legitimate Multi-level marketing program. But eventually the pyramid will collapse. the promoter cannot raise enough money from new investors to pay earlier investors. and many people except those at the very top of the pyramid. Many losers pay for a new winners.
. But despite their claims to have legitimate products or services to sell. these fraudsters simply use money coming in from new recruits to pay off early stage investors.
operates on recruitment.
starts with one person that encourages six participants to join. the 13th level they need to have 13 billion new recruits which is impossible to sustain the pyramid. The 6 recruits will again get six to join making the number involved 36 and will recruit and recruit till they reach 1296 participants in the pyramid.
. The pyramid will collapse when no new participants can be recruited.
The Difference between Multi-Level Marketing and Pyramid
MULTI-LEVEL MARKETING (MLM)
Legal 2. 4.
1. slower moving products. Consumable. Services legitimate economic function such as a channel of distribution for relatively small or new companies with excellent products.
Illegal Income is generated solely on the process of recruiting others into the pyramid. but a mere transfer of money from one person to another without legitimate business. 5.
3. Income generated only on product sales. Few retail sales and high cost.
5. 4. Provides training program. reasonably priced quality products. No training program. No legitimate economic function such as no economic benefits. 2.
Sponsoring participants earn nothing by mere sponsoring.
. Enormous efforts to sell are exerted.Bonus entitlements are based on goods absorbed by members within the structure. 8. 7. 9. products are sold to the consuming public. Recruitment is optional. 8. Little effort or no effort is being made to sell to the public. 10. Largely.
6. Earnings are ultimately tied to product consumption of end users. 7. 9. 10. Products are consumed internally within the organization. Recruiting participants get benefits from recruitment. Bonuses are based on sales to final users who are not members of the scheme.MULTI-LEVEL MARKETING (MLM)
PYRAMID 6. Earning are tied to the act of recruitment.
. to them.You might just be a victim of a pyramiding scam. then beware. The
Direct Selling Association of the Philippines or DSAP presented the final 8-point test to determine a pyramiding company. if the answer to any of these statements is no.
Is there a product return policy? 6. Is there a compelling reason to buy the products being offered? 5. Will you receive commission on the joining fees of your prospects? 7. Is there a correlation between recruiting and distributor’s commissions? 8. Is there and intent to sell the products? 3. will participants still make money?
there legitimate products? 2. Do the products have fair market value? 4.1. If recruitment is to be stopped today.
Market saturation: An inherent problem in a pyramid. who in turn will attempt to recruit more salespeople. time and entrepreneurial energy of the wellmeaning who joined to supplement their income. the only money that may be made isn’t from the product or service but from the losses of people down the organization
. It is unstoppable. Out of control by design. a human “churning” machine with no “off button”. and so on until the market is saturated.
design can saturate the market with no one noticing. When the inevitable destiny occurs. its gears will grind up the money. It is designed to recruit so many salespeople.
much materialism and greed. making them believe that they are a legitimate MLM. They
con the public.
2. intentions are bad.Moral issues in pyramiding
3883 or Business Name Law
empowers DTI to cancel license of any business which does not conform with the registered business name or style.
of RA 7394 (the Consumer Act of the Philippines)
that chain distribution plans or plans or pyramid sales shall not be employed in the sale of consumer products.Legal Issues of Pyramiding
Department of Trade and Industry or DTI can take action under two existing laws.
of plan that claim to sell miracle products or promise enormous earnings.
. Just because a promoter of a plan makes a claim doesn’t mean it is true. Ask the promoter of the plan to substantiate claims with hard evidence especially when the claims abut the product or your potential earnings seem to good to be true.Tips to consider when you make your decision before joining a plan:
the 8 point test presented in this chapter.
3. Do not pay or sign any contract in an “opportunity meeting” or any other high-pressure situation. doesn’t create new wealth. The only wealth gained by any participant is a loss by another participant. Insist on taking your time to think over a decision to join.
. 4. Remember that no amount of personal testimonial and affirmation that there is money to gain in pyramiding will dispute the fact that pyramiding.
12. Unfair Competition
Thus. practices include under cost selling or selling their products below cost just to get rid of their competitors.
. firm can just relax and quality will
suffer.Is competition good or bad?
is healthy and can be a motivation for firms to produce better products or offer better services. competition. competition
becomes bad only when it eliminates a competitor like in cutthroat competition.
since it is in all the members interest to maintain a stable market and profitable prices. It is a type of imperfect competition where they can not dictate price like a monopoly can but the members of an oligopoly often turn into friendly competitors. It is and extreme type of imperfect competition characterized by an lack of competition and a lack of viable substitute goods.
as a market situation where there is only one provider of a kind of product or service.Different Kinds of Competition
Oligopoly A situation where there are few sellers for a product or service.
the prices go up and when the demand goes down. the prices will go the same way
.Different Kinds of Competition
Perfect Competition It is a situation in which no firm or consumer is large enough to dictate prices. The prices are dictated by the law of supply and demand which states that when the supply is scare.
In a business competition. competition is a rivalry to serve the customer
. two contenders fighting hurl directly at each other.Difference Between a War and Competition
a war. two or more parties are vying for the opportunity to provide the customer’s needs whether it’s a product or service.
Difference between Fair and Unfair Competition
competition is doing business under ethical rules of conduct. behavior and judgment. Doing business with the goal of profit without regard to others.
competition is unethical business practice.
. Attaining success in business through the merits of its products or services.
Anti-competitive market practices such as under cost selling to kill the competitor. Caveat emptor or indirect misinterpretation by withholding information from the buyer. Business interference to prevent competitor from continuing with it’s business process or business contract. patents. Violation of intellectual property right such as copyrights. unfair competition consists of:
trade practices such as misinterpretation and false advertising.In general. trademarks and service marks.
. Defamation of a competitor or badmouthing a competitor to a consumer.
It aims to provide an intellectual property and industrial property system which will enhance the development of domestic and creative activity. attract foreign investments. facilitate transfer of technology.A.
. and ensure market access for our products.Government Measures:
The Intellectual Property Code of the Philippines (R.
service marks. has property right in the goodwill of the said goods identified. his business from those of others. Article
168 of R. 8293
is specifically about unfair competition on the use of trademarks. and will protected as any other property rights.
. and trade names.A. whether or not a registered mark is employed. This article states that a person who has identified in the mind of the public the good he manufacturers or deals in.
Any person who is selling his goods and gives the general appearance of the goods of another.The following shall be deemed guilty of unfair competition:
A. which would likely influence buyers to believe that the products being offered are those of a manufacturer or dealer other than the actual manufacturer. either in the goods themselves or in the wrapping of the packages.
. services. induces the false belief that such person is offering the services of another who has identified such services in the mind of the public. by any artifice. Any person who shall make false statement in the course of trade or shall commit any other act in bad faith to discredit the goods. or device. or business of another.B.
Any person who.
drug trafficking. Money laundering occurs in connection with a wide variety of crimes. fraud. robbery. racketeering. and terrorism. including illegal arms sales.
.What is Money Laundering?
Money Laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities. The principal objective of money laundering is to convert cash to some other form of asset to conceal the illegal sources or origin of cash income.
needed to show a legitimate source for these monies. The Term
"money laundering” is said to originate from Mafia ownership of Laundromats in the United States. gambling.
. there were earning huge sums in cash from extortion. prostitution. and bootleg liquor.
This is a staggering amount and detrimental by any calculation to the financial systems involved. size of the money laundering problem totals more than $500 billion annually worldwide.
. It is also clear that money laundering extends far beyond hiding drug profits. the problem is enormous. One
of the ways in which they were able to do this was by purchasing outwardly legitimate business and by combining their illicit earnings with the legitimate earnings they received from these businesses.
It is during the placement stage that physical currency enters the financial system and illegal proceeds are most vulnerable to detection.
.Money Laundering Process
laundering is a diverse and often complex process.physically placing bulk cash proceeds. Placement . It basically involves three independent steps that often occur simultaneously:
During the final stage in the laundering process. Integration – providing an apparently legitimate explanation for the illicit proceeds.2. Layering – separating the proceeds from criminal activity from their origins through layers of complex financial transaction. Layering describes an activity intended to obscure the trail which is left by “dirty” money. 3. illicit funds are integrated with monies from legitimate commercial activities as they enter the mainstream economy.
collective ethical standards.Impact of Money Laundering in Society
possible social and political costs of money laundering. or bribes to public officials. acquire control of large sectors of the economy through investments. if left unchecked or dealt with effectively. crime can infiltrate financial institutions. are serious. and ultimately the democratic institutions of society. economic and political influence of criminal organizations can weaken the social fabric.
Laundered funds provide financial support for drug dealers. money laundering has devastating social consequences. and arms dealers and other criminals to operate and expand their criminal empires.
. terrorism. Laundering enables criminal activity to continue. money laundering is inextricably linked to the underlying criminal activity that generated it. Most
The Choke points identified are:
Transfer to and from the financial system Cross-border flows of cash
Entry of cash into the financial system
2.How can the Government prevent it?
The Financial Action Task Force (FATF) on Money Laundering has identified certain “choke” points in money laundering process that the launderer finds difficult to avoid and where he is vulnerable to detection.
financial. And law enforcement experts from its members.
The FATF monitors members progress in implementing anti-money laundering measures.Financial Action Task Force (FATF)
role of Financial Action Task Force (FATF)
is a multiple disciplinary body that brings together the policy-making power of legal. techniques.
. reviews and reports on laundering trends. and counter-measures and promotes the adoption and implementation of FATF anti-money laundering standards globally.
14. Conflict of Interest
Conflict of Interest
This occurs when a person act in a way that is to his advantage at the expense of the employing organization. Applies not only to the personal financial interest of the individual but also to the interest of others with whom the individual has substantial common financial interest if these interests are relevant to the functions to be performed.
. ordinarily financial. It means something more than individual bias. There must be an interest. that could be directly affected by the work of the committee. Applies only to current interests. Does not apply to past and future interests.
Another instance is using your government position to get a summer job for your daughter
is one example. Self. Accepting Benefits
example.Types of Typical Conflict of Interest
1. For example. substantial gifts are another.Dealing
2. you work for the government and use your official position to secure a contract for a private consulting company you own.
. you are the purchasing agent of your department and you accept a case of liquor from a major supplier.
while in the second. Influence Peddling
4. Using your employer’s property for private advantage
professional solicits benefits in exchange for using her influence to unfairly advance the interest of a particular party. using software which is licensed to your employer for private consulting work of your own.
This could be as obvious as stealing office supplies for home use.Types of Typical Conflict of Interest
3. the employer’s permission eliminates the conflict. Or it might be a bit more subtle. say. it does not
. In the first case.
is a risky situation can be one in which a person who resigns from a public or private employment and goes into business in the same area. Post-employment
example would be setting up a business on the side that is in direct competition with your employer.
.Types of Typical Conflict of Interest
5. Outside employment or Moonlighting
. Conflict of interest interferes with professional responsibilities in a special way. say. Often this is a financial interest. by interfering with objective professional judgment. to provide a special advantage to a spouse or child. namely. but it could also be another sort of interest.
There is a private or personal interest.Key Elements:
15. Inside Trading
is being prohibited by the rules and regulations of the Security and Exchange Commission (SEC)
refers to the significant facts that have not yet made public and are likely to affect stock prices.
the issuer a director or officer of.
4. or a person controlling the issuer.
.SEC defines insider as:
1. clearing agency and/or self-regulatory organization who has access to material information about an issuer or a security that is not generally available in public. officer of an exchange. 2. gives or gave him access to material information about the issuer or the security that is not generally available to the public A government employee. A person who learns such information by a communication from any of the foregoing insiders.
(breach of loyalty)
. (conflict of interest) use of information by someone within the firm to secure personal advantage over those not in the firm.
One is that of someone within the firm using information for his own private gain.Moral Arguments
George cites 2 aspects of this particular problem:
1. at the expense of the firm.
Ethical Issues Relating to Insider Trading
violates fiduciary relationships b/w insiders and outside clients.
. renders the transaction b/w two contracting parties as unfair. promotes greed and personal gain at the expense of others.
but many ways of profiting from insider information do not benefit the company at all.
. Indeed. they may seriously damage its interests. which is central to business management. Professor
argues that insider trading is wrong because it undermines the fiduciary relationship. She contends by saying that employees have a duty to act in the interests of the firm and its shareholders.