CHAPTER 2: Ethics and

Business
By: Lailanie S. Arciaga

Nature of Business
“Business is any enterprise which makes, distributes or
provides any service which other members of the community
need and are willing to pay for it”- Urwick and Hunt

3 Categories of Economic Activities

● Profession
- is an occupation carried on by professional people like
doctors, lawyers, engineers, teachers and others.
● Employment
- is a type of occupation under which one person provides
his services, physical or mental to someone else in return for
whom he gets salary or wage.
● Business
- concerned with production and distribution of goods and
services with the aim of earning profit.
Features and Characteristics of Business as an Economic
Activity
● Production or Acquisition of Goods
● Generates Employment
● Continuous Process
● Profit is the Basic Motive
● Risk or uncertainty of Future
● Creative and Dynamic
● Customer Satisfaction
● Social Activity
● Government Control
● Optimum Utilization of Resources

Importance of Ethics in Business

1. Satisfying Basic Needs
2. Building Credibility
3. Connecting Leaders and Employees
4. Enhancing Decision Making
5. Continuing Gains
6. Protecting the Society
Relationship Between Ethics and Business
 Ethics should actually start from the time the goals and
intentions are being framed at thew beginning of the
venture.
 There must always be the motive to contribute some
social benefits despite the primary objective of a
business to produce profit.
 Trust and confidence coming from consumers can
serve a lot of benefits to the business/ company.
 The best way to promote success on all levels is
integrating ethics within the business operations.

Morality of Profits
● Intellectual Profits- gains of knowledge
● Physiological Profits- gain in health and fitness
● Social Profits- Gain valuable relationship
● Monetary Profits- gain of money

What makes Profits Unethical?

● Employees
- Reducing or not providing the required benefits due to
employees.
 ● Marketing
- Sexy advertisement to attract male customers
particularly in liquor and wine.
● Environment
- Air Pollution
- Water Pollution
- Noise Pollution
- Soil Pollution
● Quality
- Trimming down the quality of goods by using
substandard materials but still selling at the same price
to gain more profits.

Ethics and Morality in Business

1. Code of Conduct- it tells what to do and what not to do
for the welfare of the society.
2. Based on Moral and social Values- it contain moral and
social principles of conduct for businessmen.
3. Give protection to Social Groups- includes consumers,
employees, small groups.
4. Provides basic Framework- suggest what is good and
bad in business.
5. Voluntary acceptance for enforcement- it should come
from within the businessmen.
6. Requires Education and Guidance- Trade and
Association and Chambers of commerce must play an
active role in this matter.
7. Relative Term- changes from one business to another.
8. Not against profit making- it is against profiteering by
cheating and exploiting consumers, employees or
investors.