UNIT I.

THE ROLE OF BUSINESS IN SOCIAL AND ECONOMIC DEVELOPMENT

Lesson 1. The Nature and Forms of Business Organization
Case Study
Abakada Company
Abakada Company began as a small enterprise buying and selling various food
products. After, a few years of successful operations, it added apparel and footwear to it
waves. During this initial stage, Abakada managed to work on the basis of its
proprietor’s capital, borrowing from its bank from time to time needed.
After more years of operation, Abakada found that it needed to draw larger amounts of
funds through bank borrowing, as well as to hire more personnel for the growing
marketing needs and services, apart from administrative functions like accounting;
among others. The proprietor carefully weighed his options: “Shall I incorporate my
business so that I can have a greater and easier access to funds, especially larger
loans from banks? If I hire more people as my company goes bigger, will I be able to
manage and control well the personnel working for me? If I begin offering ownership
shares to other people outside my family, will serious disagreements arise among us in
terms of products and services to offer in the future as well as manageable style?”
These and other questions occurred to the proprietor of Abakada Company. He has
approached you for advice.

Guide Questions: Based on the situation above, give the owner of Abakada Company
appropriate advice regarding whether or not to incorporate his business. You might wish
to categorize the pros and cons into the following:
1. business size issues
2. issues related to mission and objectives
3. procedures for incorporation
4. personnel issues
5. control issues
6. funding sources issues
7. legal and taxation issues.

Lesson 2. The Social Function of Business

 Rags2Riches
In 2009, the Rag2Riches project won the Business in Development Global Competition.
Rags2Riches evolved out of the efforts of the simbahang Lingkod ng Bayan, a Jesuit
social apostolate organization. From the very start, those who conceptualized
Rgs2Riches project wanted to help the women in Payatas (one of the biggest dumpsites
in the Philippines) to earn more and live more dignified lives. The women would weave
scraps into multi-coloured doormats, rags, and rugs that would be used in Filipino
homes. Rag2Riches entered the competition to be able to direct the women of Payatas
to the market who could buy their waves. Its products were mainly made from up cycled
cloths and discarded scraps from factories.
When the business was growing big, the proprietors considered expanding globally and
building Rags2Riches as a brand featuring renowned designers. For example, through
the ideas of a famous fashion designer, there rugs and rags could be developed into
bags and accessories. The initial venture had become a huge success; in 2010,
Rags2Riches’ capital grew by almost 400 percent.
The Rags2Riches team ensured that its product were 100 percent consistent with their
values. All the materials were up cycled and thus, “eco-friendly” (e.g. organic materials
that did not use harmful dyes or chemicals). Also, expansion resulted in engaging the
other nearby communities. Clearly, the women and other communities as well as had
become empowered and enriched.
Essentially, this social business enterprise sought to improve livelihood outcomes of the
poor. Apart from ensuring attainment of the 3Ps- people, planet and profits-
Rags2Riches sought to exert positive influence on the market, on the communities it
works with, and eventually on the world. This case highlights the good effects that can
be achieved by the mere desire to serve people and communities.

Guide Questions;
1. What is the main vision and mission of Rags2Riches?
What did it seek to achieve?
2. What method did the business employ in order to help in poverty alleviation?
3. It is possible for a business enterprise to fulfil a social function (such as help
reduce poverty) and at the same time earn profit? Explain your answer on the
business based on the business model of Rags2Riches.
4. Do you know of any other enterprise in the Philippines that has achieved what
Rags2Riches has achieved, i.e., serve a social function and, at the same time,
make money? If so describe that nature or operations of that enterprise?

Lesson 3. Core Principles of Fairness, Accountability and Transparency

 People’s Recovery, Empowerment, and Development Assistance (PREDA)
People’s Recovery, Empowerment, and Development Assistance (PREDA) Fair Trade
was a not-for-profit organization working at the national and international levels for the
protection of human rights, especially women’s and children’s rights. It was founded in
1974 and a year later it started to engage in fair trade. “Fair Trade”, in general, refers to
objectives such as: creating opportunities for economically disadvantage producers;
increasing farming market access, both domestic and export, for these businesses’, and
ensuring transparency and accountability among others. Organizations in the
Philippines started to engage heavily in fair trade in the 1980’s, especially due to the
sugar and coffee crises when prices fell sharply, causing unemployment among
thousands of Filipinos. In response to the situation, organizations started to implement
structures that alleviated poverty and lessened dependency on sugar and code exports.
PREDA works hand with the Philippine Chapter of the World Fair Trade Organization
(WFTO) which works for the development of progressive and responsible fair trade
stakeholders in the country, as well as ensures that all member organizations are
engaged in their commitment to the principles and standards of fair trade, such as:
providing income and food security to disadvantage, communities, empowering
community-based producers: and promoting a quality and market-driven image of fair
trade products.
Guide Questions:
1. What is by fairness?
2. How can trade and commerce be fair?
3. To what extent is the lesson about fairness related to PREDA’s work of promoting
fair trade?
4. In what ways is PREDA promoting fairness?

Lesson 4. Code of Ethics and Business Conduct

Case Study
Gordon Gekko and “Greed is good”

In 2012, the US Federal Bureau of Investigation (FBI) used Michael Douglas. In a

Public Service Announcement (PSA) to encourage viewers to report securities
fraud and insider trading to the agency. Douglas says in PSA: “Our economy is
increasingly dependent on the success and integrity of the financial market “.
Douglas won an Oscar for his portrayal of Gordon Gekko in 1987’s Wall Street.
The movie Wall Street tells the story of Bud Fox an ambitious young stockbroker
played by Charlie Sheen, who is seduced into joining a bug-insider-trading
operation. But the film’s most memorable character by far is the high-powered
corporate raider he goes to work for, a man named Gordon Gaeko. As conceived
by director, Oliver Stone, Gekko is a slimy embodiment of all that was wrong:
with American capitalism. When we first meet him, he is pacing around his glitzy
Manhattan Office, barking orders and juggling phone calls. He is a lion of the
business world, an alpha male famous for his cunning and financial acumen.
Gecko is also a major-league crook who trades in insider information and
manipulates markets as easily as other people make conversation. “Greed is
good”, he pronounces to one shareholders’ meeting.” Greed is right. Greed
works, greed clarifies and captures the evolutionary spirit.”

Gekko’s Greed is good; greed is right” mantia hovered over the 2008 global
financial crisis. In the meltdown’s immediate aftermath, executive compensation
amounts on Wall Street and elsewhere seemed to mock the damage done by ta
focus on short-term profits. Greed’s toxic power in a work culture can start out as
an aphrodisiac, motivating people to work harder to succeed. All too quickly it
takes on a narcissistic drive that leaves customers, colleagues, and codes of
conduct thrown to the side of the road or under the wheels. Rationalizations,
wilful blindness, and betrayal are the outcomes. Reputation is severely damaged.
Trust and confidence lost.
But the first thing to note about Gekko’s speech is how little of it is actually about
greed- roughly the last third of the speech. The first two thirds is a critique of the
complacency of overpaid corporate executives. Gekko is advising Teldar’s
shareholders that the people responsible for protecting their interests-Teldar’s
executives and Boards to operate inefficiently, rather than using what little power
they have to improve their hot, then they are grossly inefficient themselves and
are doing a very bad job.

Guide Questions:
1. Who is responsible for an ethical culture in a business organization?
2. What are some examples of unethical business behaviour exemplified in the
movie Wall Street?
3. How can a corporate code of ethics help a company to be ethical?
4. Is it possible for a company to collapse due to the unethical practices despite
having a code of ethics? If so, give an example or explain further.
5. What can the practice of virtue, on the part of the individuals in the
organization, do to ensure ethical behaviour and successful company
operations?
UNIT II. FOUNDATIONS OF THE PRINCIPLES OF BUSINESS ETHICS
Lesson 5: Classical Ethical Philosophies: An Introduction
Case Study
Mang Eugenio Ventura
The story of Mang Eugenio Ventura, an extraordinary cab driver, went viral in the social
media when a passenger spread the good word about him not rejecting passengers
(despite heavy traffic in Metro Manila) and declining tips. Apart from being honest, he is
the jolly type- he just laughs off the congestion on the main roads of the city. He got
featured in an episode of the TV Program “Mission Possible”.
Guide Questions:
1. What do you think has moulded the honest and cheerful behaviour of Mang
Eugenio?
2. What lesson can you learn from the good example of Mang Eugenio?
3. What can be done in our schools in order to teach and train students in honest
and ethical behaviour?

Lesson 6: Major Ethical Philosophers

Case Study
 The Case of Socrates
Socrates was an Athenian philosopher whose questions and opinions clashes with the
current course of the Athenian politics and society. Socrates works to critically examine
the foundational beliefs that were common in Greece during his time, and encouraged
other citizens to do so as well. Because of this, he was not well liked by many
politicians. He was put to death after the trial that found him guilty of corrupting the
youth. This is based on works on Socrates written by Plato and Xenophon.
Based on this account, Socrates’ life was ended as the result of capital punishment. He
was accused of corrupting the young and disbelieving in the gods of the city. At the trial
he was found guilty, and then in jail he accepted the execution even though he had a
chance to escape. This is how his life was ended. Furthermore, at the trial, Socrates did
not behave like an ordinary defendant who is supposed to be eager to be acquitted and
to proclaim his innocence as persuasively as possible. Indeed, Socrates’ conduct made
the trial extremely confusing and puzzling: he failed to prove his innocence, and
moreover, by presenting himself provocatively he even seemed to have been found
guilty intentionally. The case of Socrates is then not simply an incident in which he was
convicted b his fellow citizens, but also a stage on which he intentionally offered a public
demonstration of himself in a strange manner.
Guide Questions:
1. How it is possible that a basically good person who preached a set of values and
beliefs about truth, wisdom and good governance was accused and put to death?
2. Is it possible that politics plays a role in how the good and truth are ultimate
defined and lived?
3. Define the notion of “virtue”. Which are important virtues?
4. Describe “moral relativism”.
5. Formulate resolutions regarding knowing the truth, doing what is good, and
avoiding evil.

Lesson 7: Implication of Ethical Tradition for Business Agriecor, Inc.

Agriecor Inc. is a newly incorporated business of retail and distribution of Agricultural
products. It is engage in helping backyard livestock farmers and small market players in
terms of financing their livelihood and marketing their products. Agriecor came about as
the result of Alquiza family’s efforts- through a suggestion made by its proprietor Kaye
Zita Alquiza – at the helping out the relief operations in Marabut, Samar, one of the
communities heavily affected by typhoon Haiyan (which hit the country in November
2013). Out of these efforts, Gugma (Visayan for “heart”) Project was created. The
Gugma project was initially formed as the family’s effort to fool the resources of relatives
and friends to help the family in Haiyan-affected areas. After helping the households
through those tough times, the Alquiza family decided to carry own with their mission by
establishing and providing sustainable programs/projects to identified individuals and
other communities in Northern Luzon, and support them through proper implementation,
monitoring, and values formation. All of these are aimed at inclusive and sustainable
development of each family and eventually, benefiting their communities as well. These
values and principles are now the main platform of Agriecor, whose belief is that
business doing well can go hand in hand. However, having this set of values driving the
business does not make it any less challenging every day. There is the challenge as
having to train, encourage and inspire people to do the same to others, whether they
are fellow employees, suppliers or costumers.

Guide Questions:
1. Have you been involved previously in any relief operating to aid victims of a
natural disaster, for example, typhoon or earthquake?
2. The Philippines is very much in need of beefing up its Disaster Risk Reduction
and Management capabilities, especially in the face of strong damaging
typhoons. Relief operation are but temporary help. How can the assistance to the
victims become more long-term and sustainable?

Lesson 8: The Filipino Value System and Business Ethics Challenges

Case Study
 Grace to Be Born Maternity Home and Nursery.
Grace to Be Born nursery was established in 2008 by Bo Sanchez, Rey Ortega and
Betty Roxas-Chua. The couple Basti and Betty renovated their Pasig building and lent it
rent-free to Grace to Be Born.
The place serves as a temporary shelter for unwed pregnant mothers and an
orphanage for the children born there. With no question asked no deposit required for a
board and lodging and no social standing asked for. Grace To Be Born has become a
place where their mothers have a chance for emotional and spiritual rebirth.
Vision:
A Catholic Community upholding the sanctity of human life through defending,
protecting, and nurturing the unborn babies from the moment of conception until their
birth.
Mission:
Our mission is to express the infinite compassion of God, the Author of life, by bringing
girls and women in crisis pregnancy to experience a taste of God’s loving care by
providing them with the confidential and holistic services to be able to bring their unborn
babies to birth successfully, joyfully and lovingly.

Guide Questions:
1. Through some research, describe briefly the situation of unwed pregnant
mothers in the Philippines.
2. What do you think made Mr. Rey Ortega, founder and director of Grace To Be
Born; create and sustain the initiative?
3. Which Filipino values are at play in the continued operations of Grace To Be
Born?
4. Mr. Rey Ortega’s Foundations continued to appeal for help, in this way. The
homes need your love and utmost support to continue their service. If these
homes back knock at the door of your heart, what service can and will you offer?

UNIT III: THE SOCIAL RESPONSIBILITY OF BUSINESS

Lesson 9: The concept of Corporate Social Responsibility
 APEC Schools
Ayala Corporation (AC) is one of the top companies in the Philippines. It has the
principal business interest in real estate and hotels; financial services and insurance;
telecommunication; water distribution and waste water services; electronics;
automotive; business process outsourcing’ investment in international or overseas
projects and ventures; power generation; transport infrastructure; and recently in
education. AC invest heavily in corporate social responsibility (CSR). Through its Ayala
Education Inc., Ac is committed to helping improve the quality education in the country,
particularly in the public sector.
APEC schools is a joint venture between Ayala Corporation and UK’s Pearson, through
the Pearson Affordable Learning Fund.
APEC schools operates a chain of private high schools offering Grade 7 through 12.
The schools follow the Department of Education’s K to 12 Curriculum, and all the
branches have permits to operate.
These progressive teaching method encourage active and collaborative learning. For
applicants of Grade 7, entrance tests are not implemented, only diagnostic assessment
to determine the specific development needs of each student.
The vision of APEC schools is to transform thousands of Filipino lives by providing high-
quality private education that everyone can afford.

Guide Questions:
1. How important is education for the economic development of a country?
2. Why do you think is Ayala Corporation engaged in CSR investments in
education?
3. What benefits do companies desire from engaging in CSR projects?
4. Do you think CSR is profitable for companies?

Lesson 10: History and Perspective on Corporate Social Responsibility

Case Study
“Alalay sa Pamilya at Bayan (APB) Foundation, Incorporated”. APB was launched on
June 16, 2010 and has reached more than 20,000 public school students as of the end
of 2014.It envisions the revival of the high moral and cultural values of the Filipino for
the common good by assisting schools and communities through its project called
CACHET (Campaign for Character Education Tenacity). APB empowers public school
communities, youth, parents, and teachers through character formation, teachingthem
to become God-fearing, productive, responsible and self-reliant.
APB volunteers undergo on intensive formation to equip them to teach character
education and give catechism classes. Volunteers usually come from different
profession- teachers, engineers, architect, accountants and even housewives. The plan
of formation for volunteers is well-rounded – encompassing ethical formation, values
and religious formation and professional formation (they undergo classes on preparation
of lesson plans, actual teaching, and psychology). Each volunteer is mentored by a
more seasoned volunteers – who in turn conduct the class and mentor the student.
Mentoring entails talking with a student on a one-on-one basis in order to follow-up the
students personal struggle to live the lessons given in class.
APB believes that character education is key to helping see what is true, good and
beautiful in life despite hardships at home, in school and elsewhere. Volunteers share
their time and talent, skills and experience to teach children the basis of Christian living.
APB, along with three other NGO’s are founded wholly or in cooperation with their
friends by the couple Mr. Waiter Brown and Mrs. Annabelle Pizarro – Brown.

Guide Questions:
1. What is values education? What is character formation? How important are these
for Filipino human development and economic progress?

Answer:Values’ education is a term used to name several

things, and there is much academic controversy
surrounding it. Some regard it as all aspects of the
process by which teachers (and other adults) transmit
values to pupils.
2. The actions taken by the Alalay sa Pamilya at Bayan (APB) Foundation Inc.
support areas of corporate social responsibility. What are these?
3. Integral human development has been defined as the “holistic development of
the person, covering all aspect of life: social, economic, political, cultural,
personal and spiritually. It promotes the dignity of the human person equally
between every person and the common good of all the people in the community”.
 How does APB achieve this through its CACHET (Campaign for Character
Education on Tenacity) Program?

Lesson 11: Stakeholder Theory: A Comprehensive Approach to Corporate Social

Responsibility
Case Study
Soleq
Company Overview
Soleq is a builder, operator and the owner of solar power projects focussing on the
Asian largest independent solar power producer. Soleq owns and operates 70% of 10
solar facilities totalling 91MW in Thailand. Soleq is also the Philippines largest solar
power producer with about 93MW investment projects in Ilocos Norte, Negros Oriental
and Bukidnon. Soleq is the solar power arm of Singapore – based Equis Funds Group
Pte Ltd, a leading private equity group focussed on energy and infrastructure in Asia.

Guide Questions:
1. Lesson 10 mentioned the coalition for Environmentally Responsible Economics
as well as Exxon Valdez disaster. Discuss the importance of caring for the
environment and of being aware of climate change realities and issues.
2. Renewable energy is becoming a very important alternative to so-called “fossil
fuels” in the effort to reduce “”greenhouse gas” (GHG) emission which can ruin
the air and environment. Research on the various renewable energy sources in
existence. Discuss each one.
3. Solar power is one of the renewable energy sources that should be taken
advantages of, especially in the Philippines as it is in abundant supply throughout
the year. Why does Soleq invest so much money in infrastructure in solar power
projects? What do you think are the advantages and disadvantages of solar
power? Do you think solar energy business will be profitable for Soleq in the long
run?
UNIT IV: BUSINESS BEYOND PROFIT MOTIVATION
Lesson 12: Toward a New Theory of the Firm: Humanizing the firm and the
Management Profession
Case Study
Jun Cabochan and Pandayan Bookshop
Pandayan Bookshop evolved from the school and office supplies section of CVC
supermarket, a Caloocan City supermarket founded in 1956. On July 5, 1993, the first
Pandayan store began operating as a separate corporation. The main office of
Pandayan Bookshop is at 700 Rizal Avenue Extension, Grace Park, Caloocan City.
Pandayan stores ar found in Metro Manila, Bulacan, Nueva Ecija, Tarlac and Rizal.
As a business experiment, Pandayan is an attempt to show that business can be a
social economic tool to bridge the gap between workers and owners, and thereby
contribute to national development. An innovative compensation program gives
Pandayan associates a greater share of the profits compared to most other business
establishments. Incentives for employees include empowerment and the pursuit of their
dreams.

Guide Questions:
In the lesson, we learned about humanistic management and how this approach can be
better for the company. Since it gives priority to the people in the organization, and to
their growth and human development. Do you think Pandayan Bookshop manifest
characteristic of humanistic management? If so why? Discuss. Explain.
Lesson 13: Socially Responsible Investment (SRI) and Sustainability
Case Study
“Gawad Kalinga (GK) Enchanted Farm”
The GK Enchanted Farm is a Gawad Kalinga’s platform to raise social entrepreneurs,
help local fairness and create wealth in the countryside. As we learned that the road out
of poverty is a continuing journey and therefore, providing homes is merely the
beginning, we also realized that our country is abundant with resources (land included)
that we can harness for every Filipino to continuously lead a life with dignity.
What Filipino entrepreneurs need today, especially young and rising ones, is an
environment that will help bring their ideas to life and challenge them to aspire for the
greatest social impact. This means keeping connected to community and gaining
access to good mentioning, value – added networking, and basic facilities and
resources. As a village university, classrooms are connected to communities, making it
an ideal site for any university student. Here, students will be exposed to how to start
social enterprises and communities.
Currently the following Social Enterprises can be found on the GK Enchanted Farm:
 First harvest (Peanut Spread)
 Golden Ducks (Golden Eggs/ Duck Burger)
 Herb Planting
 Kara & Beaus (Ice Cream)
 Mushroom Magic
 Plush and Play (Stuff Toys)
 Theo and Philo Artisan Chocolate

Guide Questions:
1. Is a social enterprise the same as an ethical business?
2. Do you think the GK social enterprises above are successful? Why or why not?
3. Do you think the GK social enterprises above are sustainable? Why or why not?
4. How would you define sustainability?
5. Do you think the GK social enterprises helps in poverty alleviation or reduction?
Lesson 14: Principle for Responsible Management Education (PRME)
Case Study
“Eco Schools Certification in Elementary and Secondary Schools in Canada”
Ontario Eco Schools is an environmental education program building on student
success in academics and environmentally responsible actions to save energy,
minimize waste and green school grounds. The certification component of the program
gives schools a means to establish environmental performance. To become certified, a
school must complete an application and provide supporting documents that
demonstrate achievement in at least four key areas: ecological literacy, energy
conservation, waste minimization and school ground greening. Schools apply for
certification annually. Schools successfully complete a certification application. Both
elementary and secondary schools may become certified Ecoschools.

Guide Questions:
1. Is your school capable of becoming an “Ecoschool”? If so, in which of the
following areas are you contributing?
a. Ecological Literacy
b. Energy Conservation
c. Waste Minimization
d. School Ground Greening
2. If your answer to number one (1) above is “no”, how do you think you can move
toward being an “Ecoschool” in the future? Make resolutions in at least one of the
areas mentioned above.
Chapter 14
“Green Heights Agricultural Corp.”
Green Heights Agricultural Corporation (GHAC) has been the leading producer of
Japanese rice in the Philippines for almost three decades. A family corporation, it has
continuously invested in rice production at all stages of development, from seed
propagation to final packaging. Its postharvest facilities follow precise guidelines to
ensure the production of consistently excellence Japanese rice.
GHAC constantly invest in the latest production and postharvest technologies and
processes to make sure that quality is maintained at every step of the way. From the
application of organic fertilizers to the use of non – petroleum – based grain dyers to the
photoelectric sorting of grain, we take great pains to make sure that the rice you buy is
consistently at its best. We also follow Integrated Pest Management principle such as
the use of natural predators to control population of rice pests. This help the preserve
the environment and the productivity of the soil, enabling sustainable farming.
GHAC conducts a six month agricultural training course to youths who completed high
school and passed the company’s application process. The course is focused on rice
farming and follows an interdisciplinary approach that includes classroom sessions and
practical application, with additional instruction in the use of equipment, the manufacture
of vermicompost and vegetable growing, fertilizers, and pesticides, as well as basic
computer use Nihonggo language institution. The trainees are also made to complete a
full rice crop, from the land preparation up to harvest.

Guide Questions:
1. Unit 1, Lesson 2 mentioned that agriculture – based economics such as the
Philippines are in need of solutions like countryside and rural infrastructure, as
well as food security and addressing constraints to agricultural finance in order to
boost food productivity. Comment on the agricultural situation in the country,
especially in the province where you came from,
2. Green Heights Agricultural Corporation (GHAC) is engaged not only in rice
production but in the education of current and prospective fairness in farming and
agriculture production. What is the effect of this education given to the farmers on
the business of GHAC as well as on the economic development of the
Philippines?
3. If you were to find your calling in the farming and agricultural sector: (a) what
challenges would you likely to face?