Week 10-11

WEEK 10-11
ETHICAL ISSUES AND PROBLEMS IN

BUSINESS AND THE CORPORATE WORLD
SPI101 – SOCIAL PROFESSIONAL ISSUES

• Discuss the pros and cons of corporate social
responsibility.
• Explain the history and development of corporate
social responsibility.
• Describe the ethical issues and problems in the
business and corporate world.
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WEEK 10 -11 ETHICAL ISSUES AND PROBLEMS IN BUSINESS AND THE
CORPORATE WORLD
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CORPORATE WORLD
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CORPORATE WORLD
Wage VS Salary
BASIS FOR
WAGE SALARY
COMPARISON
Meaning A fixed pay that an individual draws A variable pay that an individual
for the work done by him on an draws on the basis of hours spent
annual basis in completing the certain amount of
work.
Skills Skilled personnel Semi-skilled or unskilled
Type of Cost Fixed Variable
Rate of Payment Fixed rate Wage rate
Payment Cycle Monthly Daily
Basis of Payment Performance basis Hourly basis
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CORPORATE WORLD
What is Wage?
∙ “The legitimate fruit of
labor"
∙ The exchange of labor in
which is enough to support
the wage earner in
reasonable and frugal
comfort.
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CORPORATE WORLD
Types of Wages
• Real Wages - measured in terms of actual purchasing power (inflation).
• Nominal Wages - measured in terms of money paid, not in purchasing
power.
• Family Wage - the amount of money that the worker needs to provide for the
needs of the family.
• Living Wages - minimum hourly wage necessary for a person to achieve
some specific standard of living.
• Minimum Wage - minimum rate of a worker can legally be paid as set by the
statute or government.
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CORPORATE WORLD
Factors to Consider in the Formulation of Fair

Wages
External Market Factors
Laws and Regulations
Cost of Living
Prevailing Industry Rate
Organizational Factors
Job Factors
Individual Performances
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CORPORATE WORLD
Common Issues on Wages
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CORPORATE WORLD
What is Gift Giving?

• It is merely an act of extending goodwill
to an individual in an effort to share
something particular to other
Reason engaging in Gift Giving :
o To show appreciation
o To effectively establish goodwill with business
partners;
o To advertise
o To compete effectively against competitors.
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CORPORATE WORLD
What is Bribery?
• It is defined as a practice of giving reward or performance of an act
that is inconsistent with the work contract o the nature of the work
one has been hired to perform.
Reason why it is obviously Unethical :
1.It is generally used as an instrument to gain personal or corporate
advantage
2. It corrupts concept of justice and equality.
3. Bribery produces cynicism and a general distrust of Institution.
4. It destroys people’s trust in the integrity of professional services. Of
government and the courts, of law enforcement. Religion and anything
it touches.
5. It treats people as commodities whose honor Can be bought and
sold. It thus tends to degrade the respect we owe to other human
beings.
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CORPORATE WORLD
Factors in Determining the Morality

Of Gift-Giving
Value of the Gift
Purpose of the Gift
Circumstances under which the gift was given or
received
Position between or relationship of the giver and
receiver
Acceptable business practices in the industry Not all examples of gift-giving
Company Policy and accepting gifts are qualified
as “Bribery”
Laws and Regulations
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CORPORATE WORLD
The Morality of Advertising
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CORPORATE WORLD
Why “ethical” Advertising?

Not to hurt Sentiments of
the Society
Maintain a Code of
Conduct
Avoid Misinterpretation.
Adhere with Social Norms
Social Acceptance
Helps in Image Build
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CORPORATE WORLD
Economic Impact of Society
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CORPORATE WORLD
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The Role of Advertising In the Economy
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CORPORATE WORLD
Trade Secret
• is the legal term for confidential business information. That piece
of information allows the company to complete effectively.
• Information, including a formula, pattern, compilation, program
device, method, technique, or process, that:
• Derives independent economic value, actual or potential, from no being
generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its
disclosure or use
• Is subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
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WEEK 10 -11 - ETHICAL ISSUES AND PROBLEMS IN BUSINESS AND THE
CORPORATE WORLD
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CORPORATE WORLD
Corporations normally justify the keeping of trade

secrets by the following arguments:
• The information must not be "generally known or readily
ascertainable" through proper means.
• The information must have "independent economic value due to
its secrecy."
• The trade secret holder must use "reasonable measures under the
circumstances to protect" the secrecy of the information.
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CORPORATE WORLD
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CORPORATE WORLD
Ways to Protect Trade Secrets

• Restrict access to the information (lock it away in a secure place, such
as a bank vault)
• Limit the number of people who know the information
• Have the people who know the trade secret agree in writing not to
disclose the information (sign non-disclosure agreements)
• Have anyone that comes in contact with the trade secret, directly or
indirectly, sign non-disclosure agreements
• Mark any written material pertaining to the trade secret as
proprietary
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CORPORATE WORLD
Advantages of Trade Secret Protection

• Unlimited duration -trade secrets could potentially last longer than
patents (20 years) and copyrights
• Your protection is theoretically worldwide
• No application required
• No registration costs
• No public disclosure or registration with government agency
• Effective immediately
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CORPORATE WORLD
According to De George, the moral basis for

corporate disclosure rests primarily on the following
arguments:
• Each person has the right to the information he needs
to enter into a transaction fairly.
• Each person has the right to those actions of others
that will seriously and adversely affect him or her.
According to De George, there are three guide

questions prepared to clearly explain the ideas of
corporate disclosure:
• To whom must disclosures be made available?
Corporate Disclosure is the information that a
• What must be morally disclosed?
corporation is morally obliged to disclose coincides with
• in wnat roan should disclosures have to take?
much that is legally required, though pressures for
increased disclosure are based, for the most part, on
moral arguments.
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CORPORATE WORLD
Product Misrepresentation and Caveat Emptor
Misrepresentation is observed when there is a transformation of

information to misinformation.
Two types of misrepresentation:
1. Intentional misrepresentation — a scenario whereby the person is
fully aware of deliberately misrepresents things, commonly known as
lying.
2. Unintentional misrepresentation — a scenario whereby the person is
not aware and does not deliberately act on misrepresenting things.
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CORPORATE WORLD
Lying is defined as the act of making others believe something that

themselves, do not believe in.
Types of Lying:
1. Use of ambiguous terms:
• Is the act of deliberately using vague terms or open-ended statements that can have several meanings
to mislead people that one is telling the truth.
2. Use of false statements:
Is the act of making a statement from which false conclusions may be drawn, eventually misleading others.
3. Lying through action:
Is a type of lying where the person gets caught in the act of wrongdoing.
4. Suppression of correct information:
Is an intentional or unintentional act of hiding the correct information which eventually misleads others.
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CORPORATE WORLD
According to Catholic moral theology, lying becomes sinful only when:

1. It leads the neighbor to error;
2. It breaches a promise; and
3. It violates the nature of speech.
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CORPORATE WORLD
Business Practices Involving Misrepresentation and Lying Classified into

other types:
1. Direct misrepresentation is characterized by actively
misrepresenting something about the product or service.
a. Deceptive packaging - In deceptive packaging the product is so packed
that it misleads the customer on various fronts (in terms of quantity, size,
shapes, content etc.).
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CORPORATE WORLD
b. Adulteration — is the unethical practice of corrupting a genuine

commodity by imitating or by adding something to increase its bulk or
volume, or even by substituting an inferior product for superior one for
the purpose of profit or gain.
c. Misbranding or Mislabeling — Is the act of copying a product's design

to the closest possible way giving an impression that it is the same with
the leading brand.
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CORPORATE WORLD
d. Short Weighing —It can be candy spotted in wet and dry markets. It is
practiced in selling products by different quantities.
e. Shortchanging—Is taken directly from a situation where the seller
gives the customer less than the change he should get. It covers all
situations from quality to quantity of goods the buyer should get in
exchange for money.
f . Short Measuring- Is a =ethical practice observed in products that
depend on length and/or volume. g. Short Numbering —The seller gives
the consumer the quantity by piece of the product lees than the number
he has paid for. It is often practiced when the product Id comes or is
packed in a manner that would make counting difficult or consume.
h. Misleading Advertising - Materially false or misleading
representations concerning a product or service. Any representation or
symbol that would cause significant number of the general or relevant
public to misunderstand regardless of whether such representation or
symbol is consistent with facts.
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CORPORATE WORLD
2. Indirect misrepresentation — is characterized by omitting adverse

information about the product or service. It is passive deception and not
as obvious compared to direct misrepresentation.
The following are the common practices involved in indirect misrepresentation:
a. Caveat Emplor means "let the buyer beware". Based on this

concept, it is the responsibility of the consumer to determine for himself
the defects of negative features of the product. Therefore, it is not the
responsibility of the seller to reveal any defect of the product he is
selling, thus, the costumer cannot expect the seller to voluntarily provide
that kind of information.
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CORPORATE WORLD
b. Deliberately withholding information in any business transaction

is also an unethical practice. All parties involved in all business
transactions must know exactly what they are giving away or receiving
in return, in order to be fair.
c. Business Ignorance is a form of passive deception because the
businessman is unable to provide the customer with the complete
information he needs to make a fair decision. Ignorance of costs — the
cost of manufacture, the cost to sell, and the attendant administrative
costs, is another form of business ignorance which is just as harmful
and inexcusable as ygnorance of the product one is selling.
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CORPORATE WORLD
THE MORALITY OF LABOR STRIKES

Strike Action
• describes collective action undertaken by groups of workers in the
form of a refusal to perform work.
Reasons why Workers go on strike
• for higher compensation
• improve the workplace
• for shorter working days
• to stop their wages from going down
• for more benefits
• because they think their company has been unfair
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CORPORATE WORLD
Types of Strikes
Sit-dox strike (sit in)
• is a strike in which workers show up to work
General Strike
• is a strike affecting all areas of a labor forces across many industries.
Sympathy strike
• is a strike initiated by workers in one industry and supported by
workers in a separate but related industry.
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CORPORATE WORLD
BASIC RIGHTS OF THE EMPLOYEES

Sec. 1 Article 244 and 247 of Presidential Decree Number 442
• as amended otherwise known as the Labor Code of the Philippines
Article 244 Coverage and Employees
• All persons employed in commercial, industrial and agricultural
enterprises and in religious, charitable, medical or educational
institutions whether operating for profit or not shall have the right to
self-organization and to form, join assist labor organizations of their
own choosing for purposes of collective bargaining.
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CORPORATE WORLD
WHISTLE BLOWING
• Firstly, Whistle Blowing is something that can be done only by a member or
former member of an organization.
• Secondly, It must be an Information that is not available for public.
• Thirdly, It should be an evidence of some significant kind of misconduct on
the part of an organization.
• Fourth, Information must be outside normal channel of communication.
• Fifth, Release of Information must be something that is done voluntarily as
opposed to being legally required.
• Sixth, Whistle Blowing must be undertaken as moral protest. The motive
must be correct some wrong not to seek vigilance or personal advancement.
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CORPORATE WORLD
TYPES OF WHISTLE-BLOWING
• Internal Whistle-Blowing
• When an individual advocates beliefs or revelations
within the organization.
• External Whistle
• Blowing When and individual advocates beliefs or
revelations outside the organization.
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CORPORATE WORLD
CONDITIONS FOR JUSTIFIED WHISTLE BLOWING

Situation of sufficient moral importance:
• If the situation of information is to disclosure people's live at stake.
For example, Side-Effects of drug or medicine if not prescribed in the cover
of medicine and information is released to public by whistle blower.
• Situation when all facts of information are properly understood with their
significance:
—A Whistle Blower must do much documentation and other corrections as
possible because he/she is strong obliged to people
—An Employee should not jump into conclusion without much clarification.
—If significance of information is genuine it could be justified.
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Week 10-11

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WEEK 10-11

ETHICAL ISSUES AND PROBLEMS IN

SPI101 – SOCIAL PROFESSIONAL ISSUES

Skills Skilled personnel Semi-skilled or unskilled

Type of Cost Fixed Variable

Rate of Payment Fixed rate Wage rate

Payment Cycle Monthly Daily

Basis of Payment Performance basis Hourly basis

Factors to Consider in the Formulation of Fair

Common Issues on Wages

What is Gift Giving?

Factors in Determining the Morality

The Morality of Advertising

Why “ethical” Advertising?

Economic Impact of Society

The Role of Advertising In the Economy

Corporations normally justify the keeping of trade

Ways to Protect Trade Secrets

Advantages of Trade Secret Protection

According to De George, the moral basis for

According to De George, there are three guide

Product Misrepresentation and Caveat Emptor

Misrepresentation is observed when there is a transformation of

Lying is defined as the act of making others believe something that

According to Catholic moral theology, lying becomes sinful only when:

Business Practices Involving Misrepresentation and Lying Classified into

b. Adulteration — is the unethical practice of corrupting a genuine

c. Misbranding or Mislabeling — Is the act of copying a product's design

2. Indirect misrepresentation — is characterized by omitting adverse

a. Caveat Emplor means "let the buyer beware". Based on this

b. Deliberately withholding information in any business transaction

THE MORALITY OF LABOR STRIKES

BASIC RIGHTS OF THE EMPLOYEES

CONDITIONS FOR JUSTIFIED WHISTLE BLOWING

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