Tuguegarao Archdiocesan Schools System

LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

NAME OF TEACHER: AMY LIBERTY P. CASIBANG, LPT / 0915-953-8600

MODULE NUMBER: 4 (1 WEEK)
MODULE TITLE: Common Practices in Business Organizations

Lesson 1.4 Common Practices in Business Organizations

In this lesson, you should be able to do the following:

● Identify the common practices in business organizations.
● Share examples of ethical practices in the workplace.
● Evaluate the importance of code of ethics in business organizations.

In the previous lesson, you learned that fairness, accountability, and transparency are the core principles of business
operations. It promotes the stewardship of profit, people, and the planet as essential business resources. The core
principles and stewardship guide businesses while achieving their goal and competing against each other.
Business organizations tend to have different practices influenced by their culture, vision, mission, and others. The
intense competition in an industry also affects their culture and practices. Ethics in business, or the precise determination
of right and wrong based on human morality and specific contexts, ensures that businesses promote trust within the
company, its employees, and its consumers.

Common Practices Guided by Ethics

Common business practices are connected to a vast array of ethical perspectives. The customers, the government, the
society’s moral principles and values may determine these acceptable business behaviors. Social movements advocating
for social, economic, and cultural rights also strongly influence the changing ethical standards in society.

Generally speaking, ethics governs business behavior and practices in terms of decorum, protocols, policies,
bookkeeping, marketing, and reportorial documentation.

Decorum
Decorum, otherwise known as business etiquette, is the set of behaviors and manners considered appropriate in a
corporate setting or in the professional world. It involves various rules that people observe to interact in a polite and
respectful manner. Some of the basic business etiquette that most organizations observe are dressing appropriately,
punctuality, and showing respect and sensitivity to other people’s needs.

Globalization and the technological revolution have increased the diversity in the workplace and changed the dynamics
of businesses worldwide. It has become essential to understand the basics of business etiquette especially when
interacting with people from different cultures and backgrounds. For instance, the custom of bowing one’s head is part
of the everyday culture of the Japanese people. It has become part of their decorum in business. Other cultures have
other ways of greeting and showing respect.

The restrictions caused by the COVID-19 pandemic has made virtual meetings an essential part of business operations,
paving the way for the development of a decorum or etiquette in online meetings. Dressing appropriately, cleaning up
the surroundings, muting the microphone when not speaking, and speaking up are some of the ways business
professionals show propriety and respect towards each other.

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 Tuguegarao Archdiocesan Schools System
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
Protocols
Protocols consist of a collection of both social and formal norms adopted by the company to govern the conduct of its
employees. These rules aim to develop a habitual practice in the internal and external behavior of the company and its
employees. Protocols may also highly influence the company’s culture, identity, and image.

Some examples of protocols developed by companies are concerned with customer service, social media, security, and
privacy among others. To ensure the overall standard behavior within the business organization, companies often
conduct company protocol training for their employees.

Company protocols may be different in every company based on political, social, and cultural norms. For instance, some
companies have a standard protocol for answering phone calls. Some companies implement a “three-rings” protocol
wherein a company employee is expected to wait for the phone to ring three times before answering the call to allow
both parties to prepare for the conversation. Generally, employees are also expected to greet the caller politely, listen to
their concerns, avoid interrupting them, and confirm if their concerns had been addressed before ending the conversation.
In some instances, companies also have a standard way of responding to specific queries and concerns from clients.

Company protocols may also include rules on determining which matters should be resolved or elevated in the company
organization. In the Philippines, employees are generally expected to raise their issues and concerns to their immediate
supervisor.

Policies
Policies are standards that guide the company on its conduct, legal responsibilities, accountability, and employee
relations. Company policies are often anchored on its mission and vision and abide by state laws and regulations.

Employees are required to follow company policies lest they face legal consequences. Company policies should be
uniformly applied to all employees, regardless of rank, to foster a fair, just, and accommodating working environment.
Additionally, policies should tap into every individual’s diverse perspectives and life experiences in the workplace.
Some examples of these are the anti-discrimination policy and equal opportunity policy. These policies prohibit any
action that would judge, outcast, or marginalize anyone based on their gender, race and ethnic origin, age, religious
beliefs, and socio-economic background.

Marketing
Marketing includes the advertising, promotion, distribution, and selling of products or services. The marketing
department is often responsible for interacting with customers or clients. With this, the marketing department has its
own code of ethics to follow, generally to gain customers' trust and not mislead them. Marketing ethics refers to the
moral constraints and values expected when companies promote their products or services to consumers.

Issues in marketing ethics involve questions on honesty and transparency in ads and the data they provide. For instance,
sustainability marketing advertises products as environmentally friendly; it is unethical to do so when the company's
production, process, usage, and wastes are actually harmful to the environment. Moreover, companies that conduct
promotional gimmicks that directly or indirectly promote social injustices are also frowned upon. In recent years, some
companies have been criticized in social media for getting celebrity endorsers who had been involved in anti-social and
predatory activities.

Price marketing involves the appropriate and accurate pricing of products according to their perceived value in society
while considering its production cost and supporting its demand. Consumer groups consider overpriced products and
services as unethical. On the other hand, undervaluing a product and giving it a meager price is considered
counterproductive to its goals of gaining profit.

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 Tuguegarao Archdiocesan Schools System
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
Accounting
The finance, accounting, and auditing department of a company performs ethical and legal obligations. Their
departmental functions are expected to follow established standards according to generally accepted accounting
principles. They are also expected to abide by the legal requirements set forth by the law.

Bookkeeping involves the constant recording of the company’s financial data and transactions. Through bookkeeping,
companies can track the economic information necessary in making tactical and strategic decisions.

Accounting professionals are expected to uphold the utmost integrity, accuracy, transparency, and objectivity in
preparing and communicating financial information. Their function is to preserve their client’s interests while adhering
to laws and regulations in the industry and the society.

Reportorial Requirements and Documentation

Reportorial requirements are various types of documentation required by regulatory bodies governing an industry or
a territory. Companies submit the necessary documentation to demonstrate their compliance with rules and regulations.
Businesses often encounter reportorial requirements upon registration, renewal, and transacting with other institutions.
Also, the Bureau of Internal Revenue mandates companies to annually submit tax declarations. The Securities and
Exchange Commission also requires organizations to submit documents, such as organizational structure, financial
statements, and declaration of assets, to examine compliance with the law.

CLOSER LOOK
Workplaces as “safe spaces”
As calls to intensify the protection of individuals against sexual harassment, the Philippine government
legislated Republic Act No. 11313, otherwise known as the “Safe Spaces Act”. The said law provided a
broader definition of sexual harassment in physical places and cyberspace. The law identified employers and
business organizations as the duty bearers in protecting employees from experiencing violence and
harassment in the workplace. It mandated companies to establish a committee against sexual harassment
which could receive complaints, investigate, and recommend appropriate action. Creating a safe space in the
workplace encompasses the company's decorum, protocols, policies, marketing, and other aspects of
business operations.

Standardizing Ethical Practices

People in the corporate world often come from diverse backgrounds. These differences can stem from varied cultural,
educational, and social norms. To standardize behaviors in the workplace, companies establish an organizational ethical
framework known as the code of ethics.

Code of Ethics
Code of ethics, also known as the code of conduct, pertains to the formalized rules that convey what the company
expects from its employees. Its primary purpose is to operationalize the compliance to the core principles, legal, and
ethical obligations. It also serves to lessen the risk that employees or organizations may face.

Companies have different ways of creating and establishing their code of ethics. However, it is common to involve
executives, directors, legal staff, and employee representatives in creating the company’s code of ethics.

The company’s code of ethics reflects the organizational goals, values, and principles that support and promote an ethical
environment. Corporate ethics are connected with six values: trustworthiness, respect, responsibility, fairness, caring,

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 Tuguegarao Archdiocesan Schools System
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
and citizenship. These values have become more effective with the company management providing training and support
to better the employees and corporate culture.

The Importance of Code of Ethics

A company’s code of ethics serves as a day-to-day guide for the business, regardless of its size. Aside from providing
employees with a roadmap to an exemplary appropriate behavior, it is also vital in three aspects of business operations:
compliance, marketing, and risk mitigation and monitoring.
● Compliance
Code of ethics sets the foundation for how employees and other members of the organization behave and act to
benefit a civil and peaceful workplace. With a central guiding principle for the organization’s members, it safeguards
the welfare of all employees and stakeholders regardless of their cultural background.
● Marketing
A company’s code of ethics for marketing serves as the backbone of its reputation to the public. It also
emphasizes the company’s ability to commit and adhere to ethical standards, building trust and confidence within the
organization and its external stakeholders.
● Risk Mitigation and Monitoring
The organization’s code of ethics ensures the alleviation of unethical practices or no tolerance for unethical
behaviors within the organization. It holds the employees and its stakeholders accountable for any wrongdoing, building
protection, fairness, and the commitment to prevent illegal actions.

CLOSER LOOK

A Utility Company’s Code of Ethics

A utility company published its Code of Business Conduct and Ethics on its website to inform its employees
and the public of the company's acceptable and unacceptable conduct and practices in internal and
external dealings. Its Code of Conduct includes policies on Honesty and Fair Dealing, Conflict of Interest,
Corporate Entertainment and Gifts, Insider Trading, Disclosure, Creditor Rights, Anti-Corruption, and Anti-
Sexual Harassment. It declares that any officer and employee who violates the Code would be subjected to
disciplinary action regardless of rank.