BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

CODE OF ETHICS
QUARTER 3 MODULE 3

Business and Ethics are always interrelated. Ethics guides us that

we are doing the right thing. In the conduct of our business, we need to
follow ethical standards of the company.

But first, let us define what is Ethics?

Ethics is derived from the Greek word “ethikos” which means “having to do with
character. The Latin word for ethos is “mos” (or “mores”). That is why we known Ethics as
the Moral Science or Moral Philosophy. It refers to the theory of morality of right conduct.

Definitions of Business Ethics

1. Business Ethics is the study of what is right and wrong on human behavior and
conduct in business.

2. Business Ethics is the study of perceptions of people about morality, moral norms,
moral rules, and ethical principles as they apply to peoples and institutions in
business.

3. Business Ethics is the study, evaluation, analysis and questioning of ethical

standards, policies, moral norms, and ethical theories that managers and decision
makers use in resolving moral issues and ethical dilemmas affecting business.

But how can business be considered as an ethical organization? Previously, you learned
about the core principles of good governance in business namely accountability, fairness,
transparency, and stewardship

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 Ethical organizations are based on these core principles. A business with good practice
of accountability makes sure that all the financial obligations from its debtors are paid on time.
Accountability of a company can also be shown in proper planning, hiring, and keeping
employees, and budget management and reporting. An ethical organization also based on the
principles of fairness. Employees who feel secured, because there is no impartiality, often stays
with the company organization build. Meanwhile, transparency and stewardship also are
known characteristics of good governance in an organization. Transparency in business builds
the trust of the employees to the company, and the stakeholders such as the suppliers,
investors, and of course the customers. Whereas stewardship is an ethical practice of managing
the resources of the company well.

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To ensure that all those principles are practiced by all employees in the organization,
Code of Ethics, or Code of Conduct are crafted to be the guiding light of the business in
ensuring good ethical practice. What is Code of Ethics?

ETHICAL CODE OR CODE OF ETHICS are principles adopted by an organization to assist

those in the organization called upon to decide; it is about understanding the difference
between “right” and “wrong” and to apply this understanding to their decision. In addition,
Code of ethics is a written set of guidelines issued by an organization to its workers and
management to help them conduct their actions in accordance with its primary values and
ethical standards.
o CODE OF CONDUCT: it is a document designed to influence the behavior of employees.
They set out the procedures to be used in specific ethical situations and delineate
whether a violation of the code of ethics occurred and, if so, remedies should be
imposed.

CODE OF PRACTICE: it is adopted by a profession or by a governmental or non-governmental

organization to regulate that profession. It may be styled as a code of professional
responsibility, which will discuss diff
issues, difficult decisions that will often need to be made, and provide a clear account of
what behavior is considered “ethical” or “correct” or “right” in the circumstances.

o CODE OF ETHICS is not written solely for the purpose of doing ethical
business practice. It can also be applied and practiced in school, government,
and even professional groups.

There is code of ethics for teachers, accountants, engineers, lawyers, doctors,

nurses, and all other professionals to ensure that they are following the same ethical
standards in their professional practice.