CODE OF ETHICS

for Business Ethics and Social Responsibility

Senior High School (ABM)
Quarter 1 / Week 4

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 FOREWORD

This Self-Learning Kit for Business Ethics and Social Responsibility is

designed specifically for ABM students in the Senior High School for
them to have a better understanding about what is code of ethics,
what is its importance and how to create a code of ethics based on
analysis.
It will also serve as an aid as you will know what are the practices
that should be avoided in a business organization and integrate the
best practices based on proper decorum particularly used in a
business organization.
What happened?
This section contains pre-activities like review of the prior
knowledge and a pretest on what the learners have learned in their
previous lessons.
What I Need to know? (Discussion)
This section contains definition and discussion about what is
code of ethics, and its importance. It also includes examples of code
of ethics and instructions as well on how to craft code of ethics which
are based on your core values and principles of a business
organization.
What I have learned? (Evaluation/Post Test)
The exercises contained in this section are designed to identify
their knowledge about code of ethics, its importance, and how to
prepare one. It should also evaluate the student’s knowledge of what
are the proper policies to apply and practices to avoid in business
organizations.

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 OBJECTIVES:
K. Define what is code of ethics
S. Craft a “code of ethics” that reflect core principles
underlying fairness, accountability and transparency in a business
operation
A. Appreciate behaviors and best practices on proper
decorum and common protocols particularly used in office work.

LEARNING COMPETENCY:
Formulating a “code of ethics” that reflect core principles
derived from analyses (ABM_ESR12-IIIa-d-1.6)

I. What Happened

PRE-ACTIVITIES/PRETEST:
Think about this!
True or false. Write True if the statement is true and write False if the statement
is false.
______1. Code of ethics are adopted by organizations to assist members
in understanding the difference between 'right' and 'wrong' and in applying
that understanding to their decisions.
______2. Code of ethics are intended for employees alone.
______3. In making a code of ethics it is necessary to review your
corporate governance in order to create a coded ethics in accordance with
the company’s principles.
II. What ______4.
You Code
Needoftoconduct
Know usually sets out restrictions on behavior of
employees.
______5. To avoid conflict of interest is a good ethical behavior to be
INTRODUCTION
applied in the code of ethics
Now that you already know all about the core principles and values which
______6. Code of ethics and code of conduct can be combined.
underlies the important principles in establishing fairness, accountability and
______7. Public disclosure is important in code of ethics to provide outside
transparency and also stewardship of others, we will now try to apply these
parties the necessary information to learn about the company.
principles in making our own code of ethics.
______8. Receiving gifts from customer is a good ethical practice for
government employees.
DISCUSSION______9. Corruption is a big misconduct to government employee.
______10. Code of ethics clarifies what is ethically acceptable or
unacceptable behaviour. 3
WHAT IS CODE OF ETHICS OR ETHICAL CODES?
● collection of principles and practices that a business believes in and aims
to live by (Spiro 2010)
● adopted by organizations to assist members in understanding the
difference between 'right' and 'wrong' and in applying that
understanding to their decisions.

DISTINCTION BETWEEN ETHICAL CODE AND CODE OF CONDUCT

Code of Ethics
- publicly available and addressed to anyone with an interest in the
company's activities and the way it does business.
- include details of how the company plans to implement its values and
vision, as well as guidance to staff on ethical standards and how to
achieve them.

Code of Conduct
- generally addressed to and intended for employees alone.
- sets out restrictions on behavior, and will be far more compliance or rules
focused than value or principle focused.

CAN A CODE OF CONDUCT AND CODE OF ETHICS BE COMBINED

In most cases businesses will combine both of these documents into one as
there is significant overlap between them. It is rare to find businesses that have
two separate policies. While they are technically different documents, employees
will have less difficulty recalling important points around conduct and ethics if
they have a single document to refer to (Better team 2020).

WHY DEVELOP AND ADOPT A CODE OF ETHICS?

According to Landman (n.d.), developing a code sets in motion a process

that raises ethical consciousness among internal stakeholders. A code clarifies
what is ethically acceptable or unacceptable behaviour, thus making
expectations more concrete. Also, the process of developing a code should
guide ethical decision-making.

WHAT TO INCLUDE IN YOUR CODE OF ETHICS AND CODE OF CONDUCT

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 In preparing your Business ethics and code of conduct make sure that these
are in accordance with the mission and vision, the values and principles of
Fairness, Accountability and Transparency stated by your business organization.
A. COMPLIANCE

In this code we must adhere and comply with all the legal terms, laws and
regulations given by the government in which all organizations must fairly comply.
B. COMPETITION AND FAIR DEALING

This is where the principles of fairness is applied wherein, we must avoid

taking unfair advantage of anyone through manipulations, concealment, abuse
of privileged information, misrepresentation of material facts, or any unfair
dealing practices in doing business transactions.
C. CONFIDENTIALITY OF INFORMATION

This is where the principles of accountability is applied wherein business

organizations, the managers, and the employees should practice to be
accountable in safeguarding the confidentiality of information (under the AMLA)
entrusted by the company, affiliates, customers, business partners and others
parties which the company have a relationship with, except when disclosure is
authorized or legally mandated.
D. CONFLICTS OF INTEREST
The principle of accountability is also applied in this code which is to avoid
any actual conflicts of interest between your private interest, or either your family
member and the interest of the company.

E. DISCLOSURE
In this code, principles of transparency are applied in which we publicly
disclose all material information including earning results (financial reports),
corporate strategy, related party and off-balance sheet transactions, as may be
necessary under applicable laws, rules and regulations.
F. Other topics can also be included in your code of ethics like risk management,
Relations with shareholders and investors, etc.

EXAMPLE FOR CODE OF ETHICS FOR GOVERNMENT EMPLOYEES IN THE

PHILIPPINES
Republic Act No. 6713, otherwise known as the “Code of Conduct
and Ethical Standards for Public Officials and Employees” (Lawphil, 1989)
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Section 4. Norms of Conduct of Public Officials and Employees. - (A) Every
public official and employee shall observe the following as standards of
personal conduct in the discharge and execution of official duties:
EXAMPLE OF CODE OF ETHICS OF A PRIVATE COMPANY

ABC COMMUNICATIONS, INCORPORATED

Code of Business Conduct and Ethics

This code of ethics contains the commitments of the Company, its

directors, officers and employees in their behavior and various business
dealings.

WHAT WILL HAPPEN IF THE CODE OF ETHICS AND CODE OF CONDUCT ARE
VIOLATED

VIOLATION OF THE CODE OF ethics AND CODE of conduct may lead to

failure in fieldwork assessment if a placement student breaches the Code,
when evidence for the malpractice is upheld, his/her fieldwork will be given a
failure or zero mark for performance or either a sanction of termination
depending on the severity of the malpractice done by the employee.

HOW TO WRITE A CODE OF ETHICS AND CODE OF CONDUCT

1. Review your mission statement and core values.

The goal of a code of ethics is to help employees make decisions that are
in line with what the company or organization values. This should be
distilled into your mission statement and core values, so it's a good place
to start.
2. Talk to stakeholders.

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 What do management, employees, and clients think are the most
important values of the company to uphold? Get input from everyone
involved to be sure your code reflects what the company stands for. You
can have them all look at a code of conduct template to get ideas for
how their own might look like.
3. Review past ethical issues.
Where has your company faltered with ethics in the past? Where has it
shined? Call attention to problem areas and reinforce the strengths you
already have.
4. See where other companies have faltered.
Have other companies in your industry had recent ethical failures? Avoid
the same pitfalls by covering these issues in your code.
5. Create a draft code for input and discussion.
Give everyone a chance to help decide on the contents of the code of
ethics by inviting them to discuss and give input on a draft.
6. Create a final draft and share it.
Once you've got a final draft approved, share it throughout the
organization. Also, make sure that a copy of it is added to your employee
handbook.

ACTIVITY
Preparation of Code of Ethics.

EXAMPLE: XYZ Electronics is a new company planned to be built this year 2020
by the owner Mr. Juan Dela Cruz. As a business entrepreneur it is of utmost
importance to create his own code of ethics to be applied and followed by
the members of the business organization that he plans to build.
His mission in this company is to provide quality and affordable electronic
products to the rural areas to help in transformation and industrialization of the
rural communities in their area.
The following core principles have been created to be the basis of his
own code of ethics.
A. Accountability – We shall take full responsibility for all our business decisions,
actions/inactions, and conduct, and shall perform our duties and functions with
utmost responsibility, integrity, honesty, loyalty and efficiency. We are
accountable to the Company and its stakeholders (employees, customers,
shareholders and business partners) all of whom we vow to serve to the best of
our ability.

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B. Fairness – We shall uphold the value of justice and fair play amongst everyone
we deal with, both internally and externally, striving always to look for a win-win
situation.
C. Transparency – We shall uphold the value of truthfulness in everything we do
coupled with the quality of being open to scrutiny as we provide and disclose
accurate material information in a timely manner.
Notes:

1. The owner values utmost honesty with regards to dealing business with
customers and other business partners and suppliers.
2. As he reviewed the most ethical issues that have been evident in other
merchandising companies and also based on his experience in business,
“compliance” to rules and the law is of utmost importance.

3. Using the RUBRICS provided below, evaluate if the crafted Code of Ethics
above meet the desired criteria

RUBRICS:

Level of General Approach Comprehension

Achievement
Exemplary •Addresses the required task. •Demonstrates an accurate
(5 pts •States a relevant, justifiable and complete understanding
quizzes) code of ethics. of the task.
•Is clear and logically •Backs conclusions with data.
organized.
Adequate •Does not address the task •Demonstrates accurate but
(3 pts explicitly, although does so only adequate
quizzes) tangentially. understanding of the task
•States a relevant and because it does not back
justifiable coded ethics. conclusions with data.
•Logically organized. •Uses only one idea to
support the coded ethics.
Needs •Does not address the •Does not demonstrate
Improvement required task. accurate understanding of
(2 pts •States no relevant code of the task.
quizzes) ethics. •Does not provide evidence
•Indicates misconceptions. to support their code of
•Is not clear, and not logically ethics.
organized.
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No answer (0
pts)

III. What Have I Learned

“Code of ethics” also called the “ethical codes” are adopted by
organizations to assist members in understanding the difference between 'right'
and 'wrong' and in applying that understanding to their decisions.
A code of ethics is a collection of principles and practices that a business
believes in and aims to live by. A code of business ethics usually doesn't stand
alone, it works in conjunction with a company's mission statement and more
specific policies about conduct to give employees, partners, vendors, and
outsiders an idea of what the company stands for and how it's members should
conduct themselves.
Code of Ethics is very important to a business organization because a
code sets in motion a process that raises ethical consciousness among internal
stakeholders. A code clarifies what is ethically acceptable or unacceptable
behaviour, thus making expectations more concrete and guides the members
of the organization to be of relevance to the company’s core principles, its
mission and vision.

EVALUATION/POST TEST:
Test I. Multiple choice. Choose the letter of the correct answer.

1. Mr. Salcedo obediently follows proper rules and regulations required by the
law in creating his own business. What part of the code of ethics does he follow?
A. Compliance B. Confidentiality
C. Fairness D. Conflict of interest

2. The owner of XYZ Electronics practices the avoidance of unfair advantage of

anyone particularly the customers. What part of the code of ethics does the
owner follow?
A. Conflict of interest B. Competition and fair dealing
C. Fairness D. None of these are correct

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3. Why is the code of ethics important in a business organization?
A. To raise ethical consciousness among the members of the organization
B. To help in identifying what are morally acceptable and unacceptable
behaviors within the business organization
C. To guide the members of the organization with ethical decision making.
D. All of the above
4. It is a written instruction generally addressed to and intended for employees
alone which usually sets out restrictions on behavior, and will be far more
compliant with the proper ethics to be applied inside the business organization.
A. Code of ethics B. Code of conduct
C. Ethical codes D. None of these are correct

5. What are morally acceptable behaviors within a business organization in

accordance with the code of ethics?
A. Avoid customers that are hard to deal with
B. Provide service to customers without unfair discrimination and
regardless of party affiliation or preference.
C. Sharing information to outside parties particularly to a family member
to gain personal extra income
D. Posting financial reports for public disclosure which does not
accurately reflect the company’s income.

Test II: As the manager, you are tasked by Mr. Dela Cruz to prepare at least 4
codes of ethics for “XYZ Electronics” based on the given core principles. This
shall be announced and will be publicly available and addressed to anyone
with an interest in the company's activities. (20 points)
Use the following Format below:
XYZ ELECTRONICS
CODE OF ETHICS
1. COMPLIANCE -

2. COMPETITION AND FAIR DEALING -

3. CONFIDENTIALITY OF INFORMATION -
4. DISCLOSURE -

Rubrics:

Criterion Exceptional Average Below Poor

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 (4) (3) Average (1)
(2)
Content and -Content is -Content is -Content is not -Content is
Development comprehensive accurate comprehensive incomplete
, accurate, -Major points -Major points -Major points are
Make sense of and persuasive are stated are addressed, not clear and/or
what you are -Major points -content and but not well missing
trying to discuss are stated purpose of the supported -Questions were not
clearly and are writing are -Content is adequately
well supported clear inconsistent answered
with regard to
purpose and
clarity of
thought

Organization & -Structure of -Structure is -Structure of -Organization and

Structure the code is mostly easy to the code is not structure detract
clear and easy follow. easy to follow from the message.
Keep focused to follow -Outlines 5 -Principles are -Principles are not
but stay on -clearly outlines principles but not clearly clear or unrealistic
topic all 5 principles lacking clarity defined -Unable to
for code of or rationale for -Unable to rationalize why
ethics choice rationalize why principle chosen
principles
chosen

Ethical -List is -Principles are -Principles are -Principles are not

Principles identifiable not identifiable not clear understandable
and realistic or clear -Difficult to -No connection to
Identified 4 -Clear and -Somewhat understand principle and
principle easy to difficult to principle chose business/personal
understand identify or -Difficult to life
-Relatable to understand relate -Incomprehensible
business/perso -Somewhat business/perso
nal life related to nal life
business/perso
nal life

https://www.rcampus.com/rubricshowc.cfm?code=JX828A5&sp=yes&

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 DEPARTMENT OF EDUCATION
SCHOOLS DIVISION OF NEGROS ORIENTAL

SENEN PRISCILLO P. PAULIN, CESO V

Schools Division Superintendent

JOELYZA M. ARCILLA, EdD

Assistant Schools Division Superintendent

MARCELO K. PALISPIS, EdD

Assistant Schools Division Superintendent

NILITA L. RAGAY, EdD

OIC - Assistant Schools Division Superintendent
CID Chief

ROSELA R. ABIERA
Education Program Supervisor – (LRMS)

ELISA L. BAGUIO, EdD

Division Education Program Supervisor – MATHEMATICS

MARICEL S. RASID
Librarian II (LRMDS)

ELMAR L. CABRERA
PDO II (LRMDS)

SALVADOR G. AGUILAR JR
Writer

LITTIE BETH S. BERNADEZ

Lay-out Artist
_________________________________

ALPHA QA TEAM
LITTIE BETH S. BERNADEZ
MERCYDITHA D. ENOLPE
RONALD TOLENTINO
DIDITH T. YAP

BETA QA TEAM
ELIZABETH A. ALAP-AP
EPIFANIA Q. CUEVAS
NIDA BARBARA S. SUASIN
VRENDIE P. SYGACO
MELBA S. TUMARONG
HANNAHLY I. UMALI

DISCLAIMER

The information, activities and assessments used in this material are designed to provide accessible learning modality to the teachers
and learners of the Division of Negros Oriental. The contents of this module are carefully researched, chosen, and evaluated to comply with the set
learning competencies. The writers and evaluator were clearly instructed to give credits to information and illustrations used to substantiate this
material. All content is subject to copyright and may not be reproduced in any form without expressed written consent from th e division.

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 SYNOPSIS AND ABOUT THE AUTHOR

This (Self-Learning Kit) SLK ANSWERS KEY

is about code of ethics, its
importance and tips on how to
create a code of ethics based
on analysis.
Illustrative example of
code of ethics is specifically
designed for ABM students for
them to have a clear idea as to
how code of ethics should look
like which can be used in
government and private
organizations. This SLK provides
students with knowledge of
what are the proper policies to
apply and practices to avoid in
business organizations.

AUTHOR

Salvador G. Aguilar Jr graduated from Villaflores

College with a Bachelor of Science in Commerce
Major in Management Accounting and also taken
Bachelor of Science in Secondary Education degree
major in Social Science as his secondary course. His 8
years of experience working in a private financial
institution and his experience in accounting where he
passed NC III bookkeeping assessment helped him
teach ABM subjects competently within his 2 years of
teaching at Manjuyod National High School – Senior
High.

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 REFERENCES

Spiro, J. (2010). How to Write a Code of Ethics for Business. Retrieved from:
https://www.inc.com/guides/how-to-write-a-code-of-ethics.html. [Accessed:
August 9, 2020]
En.wikipedia.org (n.d.) Code of ethics.
https://en.wikipedia.org/wiki/Ethical_code[Accessed: August 11, 2020]
Better team (2020) Code of Ethics and Professional Conduct. Retrieved from:
https://www.betterteam.com/code-of-ethics-and-professional-conduct.
[Accessed on: August 12, 2020]
Landman, W.A. (n.d.). Developing a code of ethics. The Ethics Institute.
https://www.tei.org.za/index.php/resources/articles/business-ethics/2224-
developing-a-code-of-ethics. [Accessed on: August 12, 2020]
Smart Communications Inc. (2005) Standards of Business Conduct and Ethics.
Retrieved from: https://smart.com.ph/About/docs/corporate-
governance/smartcodeofbusinessconductethics.pdf. [Accessed on: August 12,
2020]

Lawphil.net (1989) Code of Conduct and Ethical Standards for Public Officials
and Employees. Retrieved from:
https://lawphil.net/statutes/repacts/ra1989/ra_6713_1989.html. [Accessed on:
August 12, 2020]

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