Colegio de Dagupan Arellano Street, Dagupan City School of Business and Accountancy

Colegio De Dagupan
School of Business and Accountancy Good Governance and Social Responsibility
COLEGIO DE DAGUPAN
Arellano Street, Dagupan City
School of Business and Accountancy
GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY

COURSE OUTLINE
Course Description:
This course provides understanding in the management of ethical issues and social
responsibility of the organization, and emphasizes the responsibility of the investors,
consumers, employees, competitors, suppliers, government, and general public. It is also
designed to inform and stimulate discussion on issues of ethics and social responsibility
encountered in the business setting. The materials covered are intended to allow students to
recognize and manage ethical and social responsibility issues as they arise, and to help them
formulate their own standards of integrity and professionalism.
General Objectives:
This course aims to understand the importance of having ethics, good governance and
social responsibility in an organization. And use ethical frameworks in a business decisions and
course of actions of the management.
REFERENCES:
TEXTBOOK:
Roa, Floriano. (2011). Business Ethics and Social Resonsibility. Philippines: Rex Book store.
INTERNET SOURCES:
www.philosophybasics.com/branch_virtue_ethics.html
www.bbc.co.uk/ethics/
http://caae.phil.cmu.edu/Cavalier/Forum/meta/background/Rawls.html
http://gjs.appstate.edu/social-justice-and-human-rights/what-social-justice
http://dirp4.pids.gov.ph/ris/dps/pidsdps1239.pdf
Nationwide Association of Consumers in the Philippines. http://naciphil.tripod.com/id9.html
www.bwc.dole.gov.ph/FAQ/ViewDetails.aspx?id=2
AdessaBiancaGNavarro Page 1
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MODULE 1
The Philosophical Framework of Business Ethics
OBJECTIVES:
At the end of the chapter, the students are expected to:
1. Know what Utilitarianism is;

2. Recognize the two version of utilitarian policy; and
3. Challenges to utilitarian ethics.
INTRODUCTION:
This chapter will introduce four ethical frameworks that have proven influential in the
development of business ethics and that have a very practical relevance in evaluating ethical
issues in contemporary business.
1. Utilitarianism is an ethical tradition that directs us to decide based on overall

consequences of our acts.
2. Deontological or duty-based ethics direct us to act on the basis of duties and moral
principles such as respecting human rights. directs us to consider the moral character of
individuals and how various character traits can contribute to, or obstruct a happy and
meaningful human life.
3. Virtue ethics
4. Social justice is the view that everyone deserves equal economic, political
and social rights and opportunities.
 UTILITARIANISM: MAKING DECISIONS BASED ON ETHICAL CONSEQUENCES

 Utilitarianism has its roots in eighteenth and nineteenth century social and political
philosophy, but its core idea is just as relevant in the twenty-first century.
 Utilitarianism’s fundamental insight is that we should decide what to do by

considering the overall consequences of our actions. In this sense, utilitarianism has
been called a consequentialist approach to ethics and social policy: we should act in
ways that produce better consequences than the alternatives we are considering.
 What is meant by “better consequences”? In a business context, a temptation is to

answer in terms of financial consequences: The right decision is one that produces
the best financial returns. But this answer would reduce ethics to economics by
identifying ethically best as economically best. A more cogent answer to this
question can be given in terms of the ethical values described in the previous
chapters. “Better consequences” are those that promote human well-being: the
happiness, health, dignity, integrity, freedom, respect of all the people affected. If
these elements are basic human values, then an action which promotes more of
them than the alternative action does is more reasonable from an ethical point of
view. A decision that promotes the greatest amount of these values for the greatest
number of people is the most reasonable decision from an ethical point of view.
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 Utilitarianism is commonly identified with the rule of producing “the greatest good
for the greatest number.” The ultimate ethical goal, according to utilitarians, is to
produce the best consequences for all parties affected by the decisions. Decisions
that accomplish this goal are the right decisions to make ethically; those that do not
are ethically wrong.
 As business-related example, consider the case of child labor. Utilitarian thinking

would advise us to consider all the likely consequences of a practice of employing
young children in factories. Obviously, there are some harmful consequences:
children suffer physical and psychological harms, they are denied opportunities for
education, their low pay is not enough to escape a life of poverty, and so forth.
Many of the human values previously described are diminished by child labor. But
these consequences must be compared to the consequences of alternative decisions.
What are the consequences if children in poor regions are denied factory jobs?
These children would still be denied opportunities for education; they are in worse
poverty; and they have less money for food and family support. In many cases, the
only alternatives for obtaining any income available to young children who are
prohibited from joining the workforce might include crime, drugs, or prostitution.
 Further, we should consider not only the consequences to the children themselves,
but to the entire society. Child labor can have beneficial results for bringing foreign
investment and money into a poor country. In the opinion of some observers,
allowing children to work for pennies a day under sweatshop conditions produces
better overall consequences than the available alternatives. Thus, one might argue
on utilitarian grounds that such labor practices are ethically permissible because they
produce better overall consequences than the alternatives. This example highlights
several important aspects of utilitarian reasoning.
 Because utilitarians decide on the basis of consequences, and because the

consequences of our actions will depend on the specific facts of each situation, no
act is ever absolutely right or wrong in all cases in every situation; it will always
depend on the consequences. For example, lying is neither right nor wrong in itself,
according to utilitarians. There might be situations in which lying will produce
greater overall good than telling the truth. In such a situation, it would be ethically
justified to tell a lie.
 In general, the utilitarian position is that happiness is the ultimate good, the only
thing that is and can be valued for its own sake. Happiness is the best and most
reasonable interpretation of human well-being. The goal of ethics, both individually
and as a matter of public policy, should be to maximize the overall happiness.
Two versions of utilitarian policy
Issue: Regulation of unsafe or risky products.
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1. “Administrative” utilitarianism - One side argues that questions of safety and risk should
be determined by experts who then establish standards that business is required to
meet. Government regulators are then charged with enforcing safety standards in the
marketplace.
2. “Market” utilitarianism - The other side argues that the best judges of acceptable risk
and safety are consumers themselves. A free and competitive consumer market will
insure that people will get the level of safety that they want. Individuals calculate for
themselves what risks they wish to take and what trade-off s they are willing to make in
order to attain safety. Consumers willing to take risks likely will pay less for their
products than consumers who demand safer and less risky products. The very basic
economic concept of efficiency can be understood as a placeholder for the utilitarian
goal of maximum overall happiness. Thus, market-based solutions will prove best at
optimally satisfying these various and competing interests and will thereby serve the
overall good.
Challenges to Utilitarian Ethics
1. A first set of problems concerns the need for utilitarian reasoning to count, measure,
compare, and quantify consequences. If utilitarianism advises that we make decisions by
comparing the consequences of alternative actions, then we must have a method for
making such comparisons. In practice, however, some comparisons and measurements
are very difficult. For example, in principle, utilitarianism tells us that the interests of all
stakeholders who will be affected by a decision ought to be included in calculating the
consequences of a decision. But there simply is no consensus among utilitarians on how
to measure and determine the overall good. Many business ethics issues highlight how
difficult this could be. Consider the consequences of using non renewable energy
sources and burning fossil fuels for energy. Imagine trying to calculate the
consequences of a decision to invest in construction of a nuclear power plant whose
wastes remain toxic for tens of thousands of years.
2. A second challenge goes directly to the core of utilitarianism. The essence of

utilitarianism is its reliance on consequences. Ethical and unethical acts are determined
by their consequences. In short, the end justifies the means. But this seems to deny one
of the earliest ethical principles that many of us have learned: the end does not always
justify the means. This challenge can be explained in terms of ethical principles. When
we say that the ends do not justify the means what we are saying is that there are
certain decisions we should make or certain rules we should follow no matter what the
consequences. Put another way, we have certain duties or responsibilities that we ought
to obey even when doing so does not produce a net increase in overall happiness.
Examples of such duties are those required by such principles as justice, loyalty, and respect, as
well as the responsibilities which flow from our roles as a parent, spouse, friend, citizen, or
professional.
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Several examples can be used to explain why this is a serious criticism of utilitarian reasoning.
Because utilitarianism focuses on the overall consequences, utilitarianism seems willing to
sacrifice the good of individuals for the greater overall good. So, for example, it might turn out
that the overall happiness could be increased if children were held as slave labor. Utilitarians
would object to child labor, not as a matter of principle, but only if and to the degree that it
detracts from the overall good. If it turns out that slavery and child labor increases the net
overall happiness, utilitarianism would have to support these practices. In the judgment of
many people, such a decision would violate fundamental ethical principles of justice, equality,
and respect.
 DUTY-BASED OR DEONTOLOGICAL ETHICS
 Deontological (duty-based) ethics are concerned with what people do, not with the
consequences of their actions.
 Under this form of ethics you can't justify an action by showing that it produced good
consequences, which is why it's sometimes called 'non-Consequentialist'.
 The word 'deontological' comes from the Greek word deon, which means 'duty'.
 Duty-based ethics are usually what people are talking about when they refer to 'the
principle of the thing'.
 Duty-based ethics teaches that some acts are right or wrong because of the sorts of
things they are, and people have a duty to act accordingly, regardless of the good or
bad consequences that may be produced. Some kinds of action are wrong or right in
themselves, regardless of the consequences. Deontologists live in a universe of moral
rules, such as:
 It is wrong to kill innocent people
 It is wrong to steal
 It is wrong to tell lies
 It is right to keep promises
 Someone who follows Duty-based ethics should do the right thing, even if that produces
more harm (or less good) than doing the wrong thing. People have a duty to do the
right thing, even if it produces a bad result.
 Good points of duty-based ethics

- Emphasizes the value of every human being. Duty-based ethical systems tend to focus
on giving equal respect to all human beings. This provides a basis for human rights - it
forces due regard to be given to the interests of a single person even when those are at
odds with the interests of a larger group.
 Bad points of duty-based ethics

- Absolutist. Duty-based ethics sets absolute rules. The only way of dealing with cases
that don't seem to fit is to build a list of exceptions to the rule. Allows acts that make
the world a less good place. Because duty-based ethics is not interested in the results it
can lead to courses of action that produce a reduction in the overall happiness of the
world.
- Hard to reconcile conflicting duties. Duty-based ethics doesn't deal well with the cases
where duties are in conflict.
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Kantian duty-based ethics
Immanuel Kant (1724-1804) was arguably one of the greatest philosophers of all time. Kant
thought that it was possible to develop a consistent moral system by using reason.
Kant's Categorical Imperative
Kant's version of duty-based ethics was based on something that he called 'the categorical
imperative' which he intended to be the basis of all other rules (a 'categorical imperative' is a
rule that is true in all circumstances.)
 Moral rules are universal. Always act in such a way that you would be willing for it to
become a general law that everyone else should do the same in the same situation.
 Moral rules must respect human beings. Kant thought that all human beings should be
treated as free and equal members of a shared moral community, and the second
version of the categorical imperative reflects this by emphasising the importance of
treating people properly. It also acknowledges the relevance of intention in morality.
 Act so that you treat humanity, both in your own person and in that of another, always
as an end and never merely as a means. Every rational being exists as an end in himself
and not merely as a means to be arbitrarily used by this or that will. In all his actions,
whether they are directed to himself or to other rational beings, he must always be
regarded at the same time as an end. Kant is saying that people should always be
treated as valuable - as an end in themselves - and should not just be used in order to
achieve something else. They should not be tricked or manipulated into doing things.
 The importance of duty:

- Do the right thing for the right reason, because it is the right thing to do.
- Kant thought that the only good reason for doing the right thing was because of duty -
if you had some other reason (perhaps you didn't commit murder because you were too
scared, not because it was your duty not to) then that you would not have acted in a
morally good way.
But having another reason as well as duty doesn't stop an action from being right, so
long as duty was the ‘operational reason’ for our action. If we do something because we
know it's our duty, and if duty is the key element in our decision to act, then we have
acted rightly, even if we wanted to do the act or were too scared not to do it, or
whatever.
 VIRTUE ETHICS (OR VIRTUE THEORY)
 Virtue ethics is an approach to ethics that emphasizes an individual's character as the

key element of ethical thinking, rather than rules about the acts themselves
(Deontology) or their consequences (Consequentialism or Utilitarianism).
 A right act is the action a virtuous person would do in the same circumstances. Virtue
ethics is person rather than action based: it looks at the virtue or moral character of
the person carrying out an action, rather than at ethical duties and rules, or the
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consequences of particular actions. In that way, virtue ethics is concerned with the
whole of a person's life, rather than particular episodes or actions.
 A good person is someone who lives virtuously - who possesses and lives the virtues.
It's a useful theory since human beings are often more interested in assessing the
character of another person than they are in assessing the goodness or badness of a
particular action. This suggests that the way to build a good society is to help its
members to be good people, rather than to use laws and punishments to prevent or
deter bad actions.
 The three questions

The modern philosopher Alasdair MacIntyre proposed three questions as being at the
heart of moral thinking:
1. Who am I?
2. Who ought I to become?
3. How ought I to get there?
 Lists of the virtues

Most virtue theorists say that there is a common set of virtues that all human beings would
benefit from, rather than different sets for different sorts of people, and that these virtues are
natural to mature human beings - even if they are hard to acquire. The modern theologian
James F Keenan suggests:
- Justice. Justice requires us to treat all human beings equally and impartially.
- Fidelity. Fidelity requires that we treat people closer to us with special care.
- Self-care. We each have a unique responsibility to care for ourselves, affectively,
mentally, physically, and spiritually.
- Prudence. The prudent person must always consider Justice, Fidelity and Self-care. The
prudent person must always look for opportunities to acquire more of the other three
virtues
 Good points of virtue ethics
- It centres ethics on the person and what it means to be human
- It includes the whole of a person's life
 Bad points of virtue ethics

- It doesn't provide clear guidance on what to do in moral dilemmas .although it does
provide general guidance on how to be a good person.
- Presumably a totally virtuous person would know what to do and we could consider
them a suitable role model to guide us. There is no general agreement on what the
virtues are.
- It may be that any list of virtues will be relative to the culture in which it is being drawn
up.
 SOCIAL JUSTICE
 Social justice is the view that everyone deserves equal economic, political
and social rights and opportunities. Social justice aims to open the doors of access
and opportunity for everyone, particularly those in greatest need.
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 John Rawls posits a theory of social justice commonly referred to as "justice as

fairness."
To Rawls, social justice is about assuring the protection of equal access to

liberties, rights, and opportunities, as well as taking care of the least advantaged
members of society. Thus, whether something is just or unjust depends on whether it
promotes or hinders equality of access to civil liberties, human rights, opportunities for
healthy and fulfilling lives, as well as whether it allocates a fair share of benefits to the
least advantaged members of society.
Rawls' conception of social justice is developed around the idea of a social

contract, whereby people freely enter into an agreement to follow certain rules for the
betterment of everyone, without considering the implications of these rules for their own
selfish gain. Rawls posits that rational, free people will agree to play by the rules under
fair conditions and that this agreement is necessary to assure social justice because
public support is critical to the acceptance of the rules of the game.
A key problem for Rawls is to show how such principles would be universally
adopted, and here the work borders on general ethical issues. He introduces a
theoretical "veil of ignorance" in which all the "players" in the social game would be
placed in a situation which is called the "original position." Having only a general
knowledge about the facts of "life and society," each player is to make a "rationally
prudential choice" concerning the kind of social institution they would enter into contract
with. By denying the players any specific information about themselves it forces them to
adopt a generalized point of view that bears a strong resemblance to the moral point of
view. "Moral conclusions can be reached without abandoning the prudential standpoint
and positing a moral outlook merely by pursuing one's own prudential reasoning under
certain procedural bargaining and knowledge constraints."
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Module Exercises
Let’s do This!
Identification:
1. is an ethical tradition that directs us to decide based on overall consequences of our

acts.
2. direct us to act on the basis of duties and moral principles such as respecting human
rights.
3. directs us to consider the moral character of individuals and how various character traits
can contribute to, or obstruct a happy and meaningful human life.
4. is the view that everyone deserves equal economic, political and social rights and
opportunities.
5. One side argues that questions of safety and risk should be determined by experts who
then establish standards that business is required to meet.
6. The other side argues that the best judges of acceptable risk and safety are consumers
themselves.
7. are concerned with what people do, not with the consequences of their actions.
8. was arguably one of the greatest philosophers of all time. He thought that it was
possible to develop a consistent moral system by using reason.
9. is an approach to ethics that emphasizes an individual's character as the key element
of ethical thinking, rather than rules about the acts themselves.
10. is the view that everyone deserves equal economic, political and social rights and
opportunities.
11. posits a theory of social justice commonly referred to as "justice as fairness."
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MODULE 2
Business Ethics and Social Responsibility in Competition
Objectives:
At the end of this module, the students are expected to:
1. determine their responsibilities in their future endeavour;

2. be able to recognize the essence of business ethics.
INTRODUCTION:
Competition in business is a necessary and inevitable result of the market economy.

However, as competitors try to win the competition, they may sometimes resort to the use
dishonest means to gain an unfair advantage such as making a direct attack against a
competitor or misleading the public to the defame a competitor.
What is unfair competition?
 As a general rule, any act or practice carried out in the course of industrial or
commercial activities contrary to honest practices constitutes an act of unfair
competition; the decisive criterion being “contrary to honest practices”.
 It is not easy to find a clear-cut and worldwide definition of what constitutes an act
contrary to honest practices. Standards of ‘honesty’ and ‘fairness’ may differ from
country to country to reflect the economic, sociological and moral concepts of a given
society.
 A wide interpretation can be given to ‘an act or practice contrary to honest practices’.
For example, an omission to act can also be considered an act of unfair competition
such as failure to give sufficient information concerning the correct operation of a
product or concerning possible side-effects of a product, as an act of unfair competition.
 “In the course of industrial or commercial activities” can be broadly understood as being
activities of organizations providing goods or services – particularly the selling or buying
of such products or services – and activities of professionals such as medical doctors or
legal experts.
 Protection against unfair competition is an ever-evolving notion that has to adapt to the
evolution of trade, and the development of new principles and obligations for
participants in the business market. Originally designed to protect the ‘honest
businessman’, the scope of protection against unfair competition has now been enlarged
to include protection of the customer. Nowadays laws against unfair competition aim to
ensure fair competition in the interests of all concerned.
Acts classified as unfair competition
 Acts causing confusion
- An act or practice, in the course of industrial or commercial activities, that causes, or

is likely to cause, confusion with respect to another’s enterprise or its activities, in
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particular, the products or services offered by such an enterprise constitutes an act

of unfair competition.
- For instance, a trademark, whether registered or not, or a product’s appearance may
lead to confusion. Appearance of a product includes packaging, shape or other non-
functional characteristic features of the product.
“Mars sues Hershey for trademark infringement over MALTESER brand.”

http://www.candyindustry.com/articles/86210-mars-sues-hershey-for-trademark-
infringement-over-malteser-brand
 Acts that are misleading
- A misleading act can create a false impression of a competitor’s product or services

leading to the consumer, acting on false information, suffering financial damage.
- Misleading acts can take the form of a statement giving incorrect indications or
allegations about an enterprise or its products or services.
- For example, misleading statements concerning the manufacturing process of a

product may relate to a product’s safety and create a false impression.
 Acts damaging goodwill or reputation
- reducing the distinctive character, appearance, value or the reputation attached to a

product could damage another’s goodwill or reputation and discrediting another’s
enterprise or its activities.
So, what are your comments on this?
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“Protection Against Unfair Competition” (2012). Retrieved from

http://www.esa.int/About_Us/Law_at_ESA/Intellectual_Property_Rights/Protection_against_unf
air_competition on September 26, 2015
The Price Act or Republic Act No. 7851 (1992) – a significant law dealing with unfair trade
practices. The said Act defines and identifies illegal acts of price manipulation such as,
1. Hoarding - is the undue accumulation by a person or combination of persons of any
basic commodity beyond his or their normal inventory levels or the unreasonable
limitation or refusal to dispose of, sell or distribute the stocks of any basic necessity of
prime commodity to the general public or the unjustified taking out of any basic
necessity or prime commodity from the channels of reproduction, trade, commerce and
industry.
2. Profiteering, which is the sale or offering for sale of any basic necessity or prime
commodity at a price grossly in excess of its true worth.
3. Cartel - any combination of or agreement between two (2) or more persons engaged in
the production, manufacture, processing, storage, supply, distribution, marketing, sale
or disposition of any basic necessity or prime commodity designed to artificially and
unreasonably increase or manipulate its price.
Pricing: More Ethics than Legality
There is a general consensus that marketing strategies must not infringe on values like honesty,
transparency, and autonomy. As such, the main crux of pricing ethics concerns the
establishment of a balance of power (through information) between the producer and the
consumer This potentially leads to unethical practices (using cheap or harmful materials, lying
about benefits, etc.), which are deemed harmful for society as a whole.
Ethical Issues in Pricing
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 Predatory pricing means pricing extremely low to drive competitors out the market.
 Price fixing: Collusion at its worse
Price fixing involves an agreement between a group of people on the same side of a market
to buy or sell a good or service at a fixed price. Typically, competition between these
participants for consumers drives down prices for goods. Yet, imagine a world where every
ice cream shop vowed that all single scoops were now ₱150. Consumers would be lost out,
because they would find alternatives or shell out an exorbitant amount of cash, as they
couldn’t go to another neighborhood joint to battle the high prices/low quality offering of
another.
The bottom line: Look at your competitors to understand the market, but don’t get in a
room with them and try to take advantage of consumers.
 Bid rigging: Favoritism
Rigging involves promising a commercial contract to one group, even though you make it
look like multiple parties had the opportunity to submit a bid. This practice hurts
consumers considerably, because the best producer doesn’t receive the work necessarily.
The bottom line: Even if “you know a guy” keep the bidding process honest on both
sides. Everyone will end up better off.
 Price discrimination
Price discrimination is the strategy of selling the same product at different prices to
different groups of consumers, usually based on the maximum they are willing to pay. The
practice also surfaces in hiding lower priced items from customers who have a higher
willingness to pay.
The bottom line: Charge different types of customers differently through product
differentiation, bundling, and the like, but be exceptionally careful about communicating
differences in price.
 Price skimming: Discriminating through time
Price skimming is when the price for a product is first sold at a very high price and then
gradually lowered. The goal here is obvious, producers want to capture each step on the
demand curve; consumers who are willing to pay more buy the product first, and then a
new group’s purchases are triggered with each decrease in price.
This strategy is most commonly seen in the tech industry, as some consumers are willing
to pay a premium price for the newest gadgets. Apple is a prime example, as prices drop
within months of a release and new iterations happen within six to 12 months. Like price
discrimination, this practice isn’t illegal, but if too obvious and not tested enough, it can
trigger an unfortunate PR backlash. Apple received a lot of flak for cutting their production
cycle on the latest iPad, instantly lowering the prices of the older models.
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 Supra competitive pricing: Monopoly gouging
Sometimes the value that consumers place on a good is much greater than the cost of
producing that good. In such cases, there is controversy about whether the corporation is
justified in charging a much higher price and matches the perceived value. This situation
can take place during a shortage, such as the price of food or fresh water after a
hurricane, or when a certain product is the only one of its kind available. Pharmaceuticals
and the patents that surround them are a great example.
Producers in these instances can charge an exorbitant amount of money, but should they?
I think we’d agree that setting skyrocketing prices for food or generators following a
hurricane is wrong (and some states have laws against it), but most software costs are
relatively cheap compared to the value provided to a customer. Very different contexts, but
more generally, some consider taking advantage of consumers' needs unethical, while
others feel like it's an inevitable result of a free market and a just reward for innovation.
The bottom line: Ask yourself if the pricing change hinders an individual’s necessities.
Source: Vivian Guo (2012). 5 Must Know Pricing Strategy Ethics Issues. Retrieved
from http://www.priceintelligently.com/blog/bid/164830/5-Must-Know-Pricing-Strategy-
Ethics-Issues
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Name ________________________________________
To summarize, briefly state the social responsibility of businesses in competition.

__________________________________________________________________________
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Module Exercise
Let’s do this!
True or False
1. Competition in business is a necessary and inevitable result of the market economy.

2. As a general rule, any act or practice carried out in the course of industrial or
commercial activities contrary to honest practices constitutes an act of fair competition;
3. Protection against unfair competition is an ever-evolving notion that has to adapt to the
evolution of trade, and the development of new principles and obligations for
participants in the business market.
4. Misleading acts can take the form of a statement giving incorrect indications or
allegations about an enterprise or its products or services.
5. Sometimes the value that consumers place on a good is much less than the cost of
producing that good.
6. Price discrimination is the strategy of selling the same product at different prices to
different groups of consumers, usually based on the minimum they are willing to pay.
7. There is a general consensus that marketing strategies must infringe on values like
honesty, transparency, and autonomy.
8. .In a completely free market, producers often have the upper hand because they are in
control of their products and processes.
9. Profiteering, is the sale or offering for sale of any basic necessity or prime commodity at
a price grossly in excess of its true worth.
10. Hoarding is any combination of or agreement between two (2) or more persons engaged
in the production, manufacture, processing, storage, supply, distribution, marketing,
sale or disposition of any basic necessity or prime commodity designed to artificially and
unreasonably increase or manipulate its price.
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MODULE 3
Social Responsibility of Businesses to the Consumers

Consumer Rights & Responsibilities
OBJECTIVES:
1. Understand the eight basic consumer rights as well as the five consumer
responsibilities.
THE EIGHT (8) BASIC CONSUMER RIGHTS
1. THE RIGHT TO BASIC NEEDS

- guarantee survival, adequate food, clothing, shelter, health care, education
and sanitation.
 You may look forward to:

the availability of basic and prime commodities to consumers at affordable prices
and of good quality.
2. THE RIGHT TO SAFETY

- The right to be protected against the marketing of goods or the provision of
services that are hazardous to health and life.

Manufacturers of consumer products to undertake extensive safety and
performance testing before selling their products in the market.
Labels which contain the proper information as regards the product, its use
and how to operate it, if the need arises, and also precautions or warning
signs.
3. THE RIGHT TO INFORMATION

- The right to be protected against fraudulent/dishonest or misleading
advertising/labelling/promotion and the right to be given the facts and
information needed to make an informed choice.

Complete information about the product to be purchased, including its use,
ingredients/chemical contents, precautions, if any, limitations and expiry
date.
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4. THE RIGHT TO CHOOSE

- The right to choose products at competitive prices with an assurance of
satisfactory quality.

A wide array of goods and services which are offered in the market with
diverse brands, sizes, shapes and colors with differences in the price, quality
and use.
5. THE RIGHT TO REPRESENTATION

- The right to express consumer interests in the making and execution of
government policies.

Legislators should propose laws that would ensure that consumers have the
chance to live a better life by getting the best value for their hard-earned
peso.
6. THE RIGHT TO REDRESS

- The right to be compensated for misrepresentation, shoddy goods or
unsatisfactory services.

Manufacturers/storeowners would replace defective goods pursuant to the
provision "No Return, No Exchange" provided in the DTI's Implementing
Rules and Regulations of Republic Act 7394, otherwise known as the
Consumer Act of the Philippines.
7. THE RIGHT TO CONSUMER EDUCATION

- The right to acquire the knowledge and skills necessary to be an informed
consumer.

The three sectors of society: business, government and consumer would
embark on an information campaign through tri-media on consumer related
issues.
A series of seminars, conferences, fora, training, and public hearings for the
welfare of the consumers.
Consumer education being integrated in the school curriculum from

elementary to secondary levels as mandated by R.A. 7394 also known as the
Consumer Act of the Philippines.
8. THE RIGHT TO A HEALTHY ENVIRONMENT

- The right to live and work in an environment which is neither threatening nor
dangerous, and which permits a life of dignity and well-being.
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The government exerting an iron hand regarding the alarming increase in
the degradation of the environment, especially forests, dying wildlife,
depleted land fill space and environmental contamination to prevent further
damage.
Constant monitoring of our seas, coral reefs, forest, and waste disposal
practices of factories to check if there is a violation of the laws on
environmental protection.
THE FIVE (5) CONSUMER RESPONSIBILITIES
1. CRITICAL AWARENESS
The responsibility to be more alert and questioning about the use and the price
and quality of goods and services we use.
2. ACTION
The responsibility to assert ourselves and act to ensure that we get a fair deal.
Remember that as long as we remain passive consumers, we will continue to be
exploited.
3. SOCIAL CONCERN
The responsibility to be aware of the impact of our consumption on other
citizens, especially the poor, exploited, disadvantaged or powerless groups,
whether in the local, national or international community.
4. ENVIRONMENTAL AWARENESS
The responsibility to understand the environmental consequences of our
consumption. We should recognize our individual and social responsibility to
conserve natural resources and protect the earth for future generations.
5. SOLIDARITY
The responsibility to organize together as consumers to develop the strength and
influence to promote and protect our interests.
Module Exercises
1. Enumerate the eight basic consumer right and explain each.

2. Why is it important to know the consumer responsibilities?
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MODULE 4
Social Responsibility of Business towards its Employees

The Workers’ Basic Rights
Objectives
1) Be disciplined enough to know the importance of considering the workers business

rights.
• Equal Work Opportunities for All
The State shall protect labor, promote full employment, provide equal work opportunity
regardless of gender, race, or creed; and regulate employee-employer relations.
Male and female employees are entitled to equal compensation for work of equal value and to
equal access to promotion and training opportunities. Discrimination against female employees
is unlawful. It is also unlawful for an employer to require a condition of employment that a
woman employee shall not get married, or to stipulate expressly or tacitly that a woman
employee shall be deemed dismissed upon marriage.
The minimum age of employment is 18 years for hazardous jobs, and 15 years for non-
hazardous jobs. But a child below 15 maybe employed by parents or guardians in a non-
hazardous job if the employment does not interfere with the child's schooling.
• Security of Tenure
Every employee shall be assured security of tenure. No employee can be dismissed from
work except for a just or authorized cause, and only after due process.
Just Cause refers to any wrongdoing committed by an employee including:
1. serious misconduct
2. willful disobedience of employers' lawful orders connected with work
3. gross and habitual neglect of duty
4. fraud or willful breach of trust
5. commission of crime or offense against the employer, employer's family member/s or
representative
6. other analogous cases
Authorized Cause refers to an economic circumstance not due to the employee's fault,
including:
1. the introduction of labor-saving devices
2. redundancy
3. retrenchment to prevent losses
4. closure or cessation of business
Due Process in cases of just cause involves:
 notice to employee of intent to dismiss and grounds for dismissal
 opportunity for employee to explain his or her side
 notice of decision to dismiss
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In authorized causes, due process means written notice of dismissal to the employee
specifying the grounds, at least 30 days before the date of termination.
The inability of a probationary employee to meet the employer's prescribed standards of
performance made known to him or her at the time of hiring is also a just cause for dismissal.
• Work Days and Work Hours
Work Day refers to any day during which an employee is regularly required to work. Hours of
Work refer to all the time an employee renders actual work, or is required to be on duty or to
be at a prescribed workplace. The normal hours of work in a day is 8 hours. This includes
breaks or rest period of less than one hour, but excludes meal periods, which shall not be less
than one hour.
An employee must be paid his or her wages for all hours worked. If all or any part of his or
her regular work hours falls between 10:00 p.m. to 6:00 a.m., a covered employee shall be
entitled to a night shift pay in addition to his or her pay for regular work hours. If he or
she works for more than 8 hours in one day, he or she shall be entitled to overtime pay.
• Weekly Rest Day
A day-off of 24 consecutive hours after 6 days of work should be scheduled by the employer
upon consultation with the workers.
• Wage and Wage-Related Benefits
Wage is the amount paid to an employee in exchange for a task, piece of work, or service
rendered to an employer. This includes overtime, night differential, rest day, holiday and 13th
month pay. It also includes the fair and reasonable value of board, lodging and other facilities
customarily furnished by the employer.
Wage may be fixed for a given period, as when it is computed hourly, daily or monthly. It may
also be fixed for a specified task or result. If wage is for a fixed period, the minimum wage for a
regular 8-hour workday shall not be lower than the minimum daily wage applicable to the place
of work as determined by the Regional Tripartite Wage and Productivity Board having
jurisdiction over workplace.
If wage is paid by result, the worker shall receive at least the prescribed minimum wage for 8
hours of work. The amount may be increased or reduced proportionately if work is rendered
for more or less than 8 hours a day.
An employer cannot make any deduction from an employee's wage except for insurance
premiums with the consent of the employee, for union dues, or for withholding taxes, SSS
premiums and other deductions expressly authorized by law.
• Payment of Wages
Wages shall be paid in cash, legal tender at or near the place of work. Payment may be made
through a bank upon written petition of majority of the workers in establishments with 25 or
more employees and within one (1) kilometer radius to a bank. Payment shall be made directly
to the employees.
Wages shall be given not less than once every two (2) weeks or twice within a month at
intervals not exceeding 16 days.
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• Employment of Women
Welfare facilities must be installed at the workplace such as seats, separate toilet rooms,
lavatories, and dressing rooms.
Prohibition against discrimination with respect to pay (i.e. equal pay for work of equal
value), promotion, training opportunities, study and scholarship grants.
• Employment of Children
Minimum employable age is 15 years. A worker below 15 years of age should be directly
under the sole responsibility of parents or guardians; work does not interfere with child's
schooling/normal development.
No person below 18 years of age can be employed in a hazardous or deleterious
undertaking.
• Safe Working Conditions
Employers must provide workers with every kind of on-the-job protection against injury,
sickness or death through safe and healthful working conditions.
Jobs may be hazardous or highly hazardous. Hazardous jobs are those which expose the
employee to dangerous environment elements, including contaminants, radiation, fire,
poisonous substances, biological agents and explosives, or dangerous processes or equipment
including construction, mining, quarrying, blasting, stevedoring, mechanized farming and
operating heavy equipment.
• Right to Self-Organization and Collective Bargaining
The right to self-organization is the right of every worker, free of any interference from
the employer or from government, to form or join any legitimate worker's organization,
association or union of his or her own choice. Except those classified as managerial or
confidential employees, all employees may form or join unions for purposes of collective
bargaining and other legitimate concerted activities. An employee is eligible for membership in
an appropriate union on the first day of his or her employment.
Collective Bargaining involves two parties:
1. the representative of the employer
2. a union duly authorized by the majority of the employees within a bargaining unit called
exclusive bargaining agent.
It is a process where the parties agree:
 to fix and administer terms and conditions of employment which must not be below the
minimum standards fixed by law
 to set a mechanism for resolving their grievances
The result of collective bargaining is a contract called collective bargaining agreement
(CBA). A CBA generally has a term of five years. The provisions of a CBA may be classified as
political or economic. Political provisions refer to those which define the coverage of the CBA
and recognize the collective bargaining agent as the exclusive representative of the employees
for the term of the CBA. Economic provisions refer to all terms and conditions of employment
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with a monetary value. Economic provisions have a term of five years but may be renegotiated
before the end of the third year of effectivity for the CBA.
• EC Benefits for Work-Related Contingencies

]
The Employees' Compensation Program is the tax-exempt compensation program for
employees and their dependents created under Presidential Decree No. 626 which was
implemented in March 1975. The benefits include:
 Medical benefits for sickness/injuries
 Disability benefits
 Rehabilitation benefits
 Death and funeral benefits
 Pension benefits
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MODULE EXERCISES
Fill out the blanks with the correct word or phrase.

1. Under Philippine labor laws, the minimum age of employment is _______ years for
hazardous jobs and ________ years for non-hazardous jobs.
2. But a child below 15 maybe employed by parents or guardians in a _____________ job

if the employment does not interfere with the child's schooling.
3. Under the principle of ____________________________, the State shall protect labor

by providing equal work opportunity regardless of gender, race, or creed.
4. It is unlawful for an employer to require as a condition of employment that a woman

employee shall not get married. Allowing such condition is considered as ____________
against women employees.
5. The worker’s right to _____________________________ means that he or she cannot

be dismissed from work except for a just or authorized cause, and only after due
process.
6. ____________ causes for termination refer to any wrongdoing committed by an

employee.
7. _____________ causes for termination refer to an business’ economic circumstance and

not due to the employee's fault.
8. Commission of crime or offense against the employer, employer's family member/s or

representative is a/an ______________________ cause for termination of an employee.
9. Introduction of labor-saving device is a/an _____________________ cause for the

termination of employee.
10. An employee may be validly terminated for wilful disobedience of employers'

_____________ orders connected with work.
11. ______________________ as a requirement of lawful dismissal of employee means that

the employee is notified of the intent to dismiss and grounds for dismissal and is given
opportunity for employee to explain his or her side.
12. In authorized causes, due process means a ______________ notice of dismissal to the
employee specifying the grounds, at least _____________ days before the date of
termination.
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13. The normal hours of work in a workday shall not exceed ______________ hours.
14. Hours of work ______________ breaks or rest period of less than one hour, but
_______________ meal periods, which shall not be less than one hour.
(exclude/include)
15. Work rendered between 10:00 p.m. to 6:00 a.m. the following day is considered as
_________________________ and a covered employee shall be entitled to additional
payment called _______________________.
16. A weekly rest day of 24 consecutive hours after ________ days of work should be
scheduled by the employer upon consultation with the workers.
17. ________________ is the amount paid to an employee in exchange for a task, piece of
work, or service rendered to an employer.
18. Wages shall be paid in __________, _____________ at or near the ______________.
19. Payment of wages may be made through a bank upon ___________________ of

majority of the workers in establishments with 25 or more employees and within
____________ kilometer radius to a bank.
20. Wages shall be given not less than once every two (2) weeks or twice within a month at
intervals not exceeding ____________ days.
21. Employers must provide workers with every kind of on-the-job protection against injury,
sickness or death. This pertains to the right of every worker to
_______________________________.
22. The ____________________________ is the right of every worker, free of any

interference from the employer or from government, to form or join any legitimate
worker's organization, association or union of his or her own choice.
23. All employees may form or join unions for purposes of collective bargaining and other
legitimate concerted activities except those who are considered as _________________
employees and ________________ employees.
24. Collective Bargaining involves two parties: the ______________________ and the
_____________________________.
25. The result of collective bargaining is a contract called ________________________.

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Colegio De Dagupan

School of Business and Accountancy Good Governance and Social Responsibility

GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY

At the end of the chapter, the students are expected to:

1. Know what Utilitarianism is;

1. Utilitarianism is an ethical tradition that directs us to decide based on overall

 UTILITARIANISM: MAKING DECISIONS BASED ON ETHICAL CONSEQUENCES

 Utilitarianism’s fundamental insight is that we should decide what to do by

 What is meant by “better consequences”? In a business context, a temptation is to

 As business-related example, consider the case of child labor. Utilitarian thinking

 Because utilitarians decide on the basis of consequences, and because the

Two versions of utilitarian policy

Issue: Regulation of unsafe or risky products.

Challenges to Utilitarian Ethics

2. A second challenge goes directly to the core of utilitarianism. The essence of

 DUTY-BASED OR DEONTOLOGICAL ETHICS

 Good points of duty-based ethics

 Bad points of duty-based ethics

Kantian duty-based ethics

 The importance of duty:

 VIRTUE ETHICS (OR VIRTUE THEORY)

 Virtue ethics is an approach to ethics that emphasizes an individual's character as the

 The three questions

 Lists of the virtues

 Bad points of virtue ethics

 John Rawls posits a theory of social justice commonly referred to as "justice as

To Rawls, social justice is about assuring the protection of equal access to

Rawls' conception of social justice is developed around the idea of a social

1. is an ethical tradition that directs us to decide based on overall consequences of our

At the end of this module, the students are expected to:

1. determine their responsibilities in their future endeavour;

Competition in business is a necessary and inevitable result of the market economy.

What is unfair competition?

Acts classified as unfair competition

 Acts causing confusion

- An act or practice, in the course of industrial or commercial activities, that causes, or

particular, the products or services offered by such an enterprise constitutes an act

“Mars sues Hershey for trademark infringement over MALTESER brand.”

 Acts that are misleading

- A misleading act can create a false impression of a competitor’s product or services

- For example, misleading statements concerning the manufacturing process of a

 Acts damaging goodwill or reputation

- reducing the distinctive character, appearance, value or the reputation attached to a

So, what are your comments on this?

“Protection Against Unfair Competition” (2012). Retrieved from

Pricing: More Ethics than Legality

Ethical Issues in Pricing

 Price fixing: Collusion at its worse

 Bid rigging: Favoritism

 Price skimming: Discriminating through time

 Supra competitive pricing: Monopoly gouging

To summarize, briefly state the social responsibility of businesses in competition.

1. Competition in business is a necessary and inevitable result of the market economy.

Social Responsibility of Businesses to the Consumers

At the end of this module, the students are expected to:

THE EIGHT (8) BASIC CONSUMER RIGHTS

1. THE RIGHT TO BASIC NEEDS

 You may look forward to:

2. THE RIGHT TO SAFETY

 You may look forward to:

3. THE RIGHT TO INFORMATION

 You may look forward to:

4. THE RIGHT TO CHOOSE

18. Wages shall be paid in ____, _ at or near the ________.