BUSINESS ETHICS AND

ETHICAL
DECISION- MAKING
LEARNING

COMPETENCIES
-be oriented on the Ethical Dimension of

business
-know the significant implication of having

business ethics
-how ethical behavior affects one's

business
-know the factors influencing business

ethics
-identify ethical issues for entrepreneurs
ETHICS

a branch of philosophy that

prescribes and
guides acceptable human
conduct. It is the study of
morality (examines what is
morally right or wrong)
BUSINESS ETHICS
a study of ethics with a particular

focus: business. It looks at the moral

standards applied to business

organizations and behavior

It’s about implementing appropriate business

policies and best practices in many areas, such as

social responsibility, corporate governance, sexual

harassment, employee relations, supply chain

management, and corruption.
WHY IS BUSINESS

ETHICS IMPORTANT?
It is essential because they have lasting
implications on several levels. A company's
reputation is at stake with increased investor
awareness of environmental, social, and
governance issues. For instance, if a company
partakes in unethical practices, such as poor
customer privacy procedures and protections,
it could result in a data breach. This may lead
to a significant loss of customers, erosion of
trust, less competitive hires, and share price
declines.
THREE KINDS OF
ETHICAL ISSUES
(Velasquez, 2011) Systematic
1 Issues such as the culture of corruption
in government institutions.

Corporate
2 Pertains to issues that can and should

be solved within the company.

Individual
3 Issues that need to be resolved through

individual decision-making and

behavioral change.
RIGHT
A right is a person’s entitlement to
something, such as legal, social, or
freedom. Rights are considered
normative rules about what a person is
allowed to possess. A moral right (human
right) is an entitlement that every
human being anywhere in this world
possesses, such as the right to public
assembly, right to work, freedom of
expression, and others.
RIGHT
A positive right is the duty of others

to follow another person to do

whatever he or she needs to follow or

perform freely.

A negative right is a duty from others

to not interfere with an individual’s

activities who possess that right.

Immanuel Kant’s basis of moral rights on a categorical
imperative

Kant gave two ways of prescribing the moral principle.

a person should not do something unless you are

willing to have everyone do the same, and
a person should not use others as a means for
advancing his or her interests; a person must also
respect and develop other people’s ability to choose
and decide for themselves freely.

A legal right is a right given upon by law to find

resolutions or remedies to a conflict. In business, this
right is often used to empower a company to act in a
manner that others will have to follow or act in a
certain way.
MORAL RESPONSIBILITY
Moral responsibility is often referred to as one’s a
moral duty or moral obligation. But being morally
responsible will also mean a reactive attitude of praise
or blame for having acted upon something.

Three conditions may hold a person morally

responsible for a wrong act (Velasquez, 2011; Fischer &
Ravizza, 2000): the person causes or fails to prevent
an avoidable wrong; the person must know what he
or she is doing; and the person must act on his own
free will and not coerced.

However, there are also factors that can lessen an

individual’s moral responsibility depending on the
seriousness of the wrong act.
THESE ARE THE FOLLOWING TRAITS

MANIFESTED THROUGH ITS HRM PROCESSES

TO BUILD ETHICAL DECISION-MAKING

CAPABILITIES:

Be an ethical HR leader.
Support training and

development
Acknowledge the importance

of diversity in the workplace.

Manage conflict on interest

(COI)
Keeping things confidential
Know and follow the law.
CODE OF
ETHICS
The code of ethics is an aspirational

document that describes the values

and beliefs of the company that guides

the conduct of its members.

It is a set of principles designed to guide

every member of the company to carry

out their respective business activities

with integrity.
CODE OF
DISCIPLINE
The Code of Discipline is a
document that signifies the
practices and behavior of an
employee that is required of them
so that they can remain in the
company.
This document sets out the rules
and regulations that the individual
must follow, and serves as a guide
for employees in varying
circumstances.
ETHICAL
DECISION- MAKING
In the course of daily work in the office and
doing business transactions, you are
bound, one way or another, to see and
experience situations wherein you will need
to make decisions.

Decisions that are sometimes difficult to

arrive but are necessary.

These are some of the issues to contend

with:
ETHICAL ISSUES

1 2
Conflict of interest (COI). Commercial bribery and extortion.
This occurs when a person in a When consideration is given or
position has an “interest” that may offered by one party outside the
motivate them to do the job in a way company (supplier) to the employee
that may not be in the best interest of (buyer) when he or she transacts
the company. COI may come in favorably with the employee’s
many forms of relationships, such as company
financial and power (influence).
ETHICAL ISSUES

3 4
Gifts The employee theft
The decision to accept tokens or gifts This happens when employees
depends on a person’s ethical values, appropriate additional benefits or
combined with existing company make use of company’s resources for
policy and considering industry private use (e.g., office supplies for
practice home use, misuse of representation
expense).
ETHICAL ISSUES

5 6
Computer Theft Trade secrets
Unauthorized use of computer This is about a company’s activities
information or programs constitutes or assets that would significantly
computer theft, considering the affect a company’s competitive
nature Of the property, which Advantage (e.g., secret food recipes,
consists of a bundle of rights scientific formulations, major
attached to company’s assets. campaigns) if made known to a
Competitor.
ETHICAL ISSUES
7
Insider Trading
“Inside” information is proprietary information about a
company that is not available to the public, and if
Made known to the public, will have a significant
impact on the price (increase or decrease) of the
stock And will also affect the current shareholders not
privy to the information.
EFFECTIVE INTERNAL AND

EXTERNAL REPORTING

SYSTEM
An organization can create a reporting system
through its HR department or division
complementary to the codes, which may be used
as another mechanism.
Accountability and transparency must go hand
in hand in building an ethical organization but a
line must sometimes be drawn between
transparency and confidentiality for employee
protection.
Whistleblowing is an action taken by an
employee or former employee to disclose
wrongdoing by the company. It’s internal when it
is done within the company and considered
external when outside the parties like media,
government, and outside institutions are involved.
EFFECTIVE INTERNAL AND

EXTERNAL REPORTING

SYSTEM
Employees should be encouraged,
engaged, and empowered through
ethical behavior and ethical leadership
through their managers and leaders
within the organization.

Empowering them through work ethics

(customer service quality goals, team
building, and others) gives them
ownership and creates an ethical
culture.
THE ETHICAL
INDIVIDUAL
Citizens of the world today have become more
socially conscious (environment, social,
governance) as a result of global failures in
governance, both from the public and private
sectors.

Being an ethical individual requires personal

responsibility and accountability, more so
when things go wrong.
THE ETHICAL
INDIVIDUAL
In research that spanned for five years, honesty
and integrity were the key variables influencing
ethical decision-making. Ethical behavior and
ethical decisions will define who we are as
individuals and the kind of moral standards we
possess. At the end of the day, it will be a matter
of how well you would like to sleep at night and
how your conscience guides you on the
decisions you make, decisions that should not
cause any harm to your fellow human being.