Business Ethics and Social Responsibility
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Module 2: Ethics and Business
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Making Ethical Decisions
➢ Ethics
- Enables a person to discern right from wrong.
- Derived from the Greek word ethos which means
“character”.
- Is a branch of philosophy that involves “systematizing,
defending, and recommending concepts of right and
wrong conduct.”.
- Involves understanding the differences between right
and wrong concepts and actions, and using principled
decision-making to choose actions that do not hurt
others (Weiss 2014).
➢ Corporate Culture
- Created by leaders and managers.
- This is the business environment (i.e., beliefs, values,
attitudes, and behaviors) that characterizes the
members of an organization.
➢ Ethical Business Leadership
- Creates an environment where ethical behavior is
encouraged—good people are able to do good deeds
and decisions, and bad people are prevented from
doing bad deeds and decisions.
➢ Practical side of Ethics
- How we should live our lives.
- Covers how we act, choose, behave, and do things.
➢ Normative side of Ethics
- How we should act.
- Deals with our reasoning on how we are supposed to
act in certain situations.
➢ Ethics being a Normative Discipline
- Deals with the norms or those standards of
appropriate and proper (or “normal”) behavior.
➢ Social Sciences
- Such as psychology and sociology, look at the
descriptive sense of people’s actions, that is, how
and why people act the way they do.
➢ Morality
- The “we” in how we should live may be interpreted in
two ways; “we” as a collective action where individuals
act and decide together as a group, and “we” as
individual actions based on a common understanding
of what is good. This meaning of ethics is based on
one’s own values as defined by his or her moral
systems.
- The aspect of ethics that pertains to personal
integrity.
➢ Social Ethics
- Molding of cultures by society. Ex: Society and social
institutions or organizations are supposed to mold their
cultures in consideration of justice, public policy, law,
civic virtues, organizational structure, and political
philosophy.
Different Types of Values:
1. Financial Values
- Are concerned with money matters.
2. Legal Values
- Uphold the law, and so on.
3. Ethical Values
 - Uphold human well-being. Actions and decisions must
be based on promoting human well-being through
respect, dignity, freedom, and democracy.
Ethics Perspective
- Teaches that no one person’s welfare is worthier that others
and thus ethical acts and choices should be acceptable and
reasonable from all relevant points of view.
Ethics and Law
➢ Laws
- Govern a country, and the citizens are expected to
follow what the law requires, experts, or permits.
- Business organizations have to follow regulations and
rules (e.g., taxation, social security, and health safety
hazards, among others) set by the government and
other governing bodies.
- Provides important legal considerations to ethical
decision-making.
- Legal Norms and Ethical Norms are not equivalent and
the same.
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Module 3: The Ethical Corporate Culture
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Corporate Culture (or Organizational Culture)
- Is the system of share actions
- Organizational Culture that consists of a shared pattern of
beliefs, expectations, and meanings that influences and guides
the thinking and behavior of the members of that
organization.
Functions of Corporate Culture
1. External Adaptation
- Requires the organizational culture to determine how
the company will reach its goals, accomplish its tasks,
use methods to achieve its goals, and place measures
to cope with success or failure.
2. Internal Integration
- Starts with the establishment of an identity that is
uniqie to the business organization.
- Three important aspects of working together:
(1) the members decide who is a member of the group
and who is not; (2) the members develop an informal
understanding of acceptable and unacceptable
behavior; and (3) the members separate “friends”
from “enemies”.
Observable Culture
- Refers to the way this are done in an organization.
- This can be observed in daily activities or specific instances
which include unique stories according to the company’s
history, ceremonies, and corporate rituals.
Shared Values
- Refers to the core values that are meant to be followed by the
members of the organization when acting on behalf of the
organization.
- These describe what the company stands for and guide all of a
company’s actions.
Common Cultural Assumptions
- Include the taken-for-granted truths that the members share
as a result of a collective experience with the organization.
Types of Corporate Culture:
1. Compliance-based Culture (Traditional Approach)
- Focuses on following rules, laws, policies, and
regulations of the primary responsibility of ethics.
- It fosters culture that promotes compliance with the
law such as those in legal and auditing/ accounting
firms.
 2. Values-based Culture (Integrity Based) Ethical Issue
- Reinforces a particular set of values rather than a - Is an identifiable problem or situation that requires a person to
particular set of rules. make an action or decision that must be evaluated as right
- Recognizes that despite the rules set by the compay’s (ethical) or wrong (unethical)
code of conduct, there are situations where rules can - It usually concerns financial matters in a business setting.
be adapted and modified so the organization will have - Some Examples of Common Ethical Issues in Business
to rely on the personal integrity of its workforce when Organizations:
decisions are to be made. 1. Misrepresenting the benefits of a product
Ethical Leaders 2. Misuse of company time and resources
- Practice ethical decision-making. 3. Abusive behavior
- Their goal is not simply to perform the job, but to perform it 4. Conflict of interest
consistently with a set of ethical values and principles set by -
the business organization.
- Do not just care about company profits; they also care about
people (internal and external stakeholders).
- Embody the company’s values and principles in order to
influence the actions of others.
- Some effective leaders who are able to meet their goals may
use coercion or intimidation to direct employee behavior or
action.
- Is able to successfully guide or direct others toward the goals
of the company.achieve their goals by motivating employees
through modeling ethical behavior, gentle persuasion, or
positive reinforcement.
Code of Conduct or Code of Ethics
- Is a list of guidelines and protocols based on the organization’s
values.
- It articulates how an employee should behave and imbibe the
values of the organization at all times, and it also serves as a
reference when certain decisions are to be made.