What is business?

-enterprise, agency or firm, is an entity involved in the provision of goods and/or services to consumers

-prevalent in capitalist economies

-businesses can also be non-profit social enterprises or state-owned public enterprises

-sole proprietorship, partnership or corporation

Business can be entire market example “the music business “

Goal is for sales to be more than expenditures resulting in a profit

Lesson 1 Nature of business

Economy is defined as place or country where resources are managed by a government to bring about a
maximum benefits for the entire society.

Barter is the exchange of goods or services for other goods and services

Problems in barter system

1. A common measure of value does not exist

2. A double coincidence of wants may not exist

Business enterprises are legal entities operating in an economy to provide goods and services at a profit.

Profit are the excess of earnings/revenue over the costs

Profits are incentives for businesses to continue operating

Economic activities

1. Production
2. Consumption
3. Exchange

Firms produce commodities/goods and services that satisfy needs and wants for its market

Government manages the economy. They set the laws that govern households and businesses. They
provide public goods, such as roads, bridges, hospitals, etc. Households and businesses must in turn pay
taxes.

Households are known as consumers

Specialization is defined as the division of labor.

The advantage of specialization include improved quality of output and shorter production time,
because of repletion of a single task.

Instruments of exchange

Money is anything that is acceptable for the purchase of goods and services.

Characteristics of money

1. Acceptable
2. Convertible
3. Divisible
4. Durable
5. Homogeneous
6. Scarce
7. Portable

Functions of money

1. Measure of value
2. It is medium of exchange
3. Standard for deferred payments
4. Store of value

Types of money

1. Near money
2. Notes and coins
3. Bank drafts
4. Bill of exchange
5. Cheques
6. Credit cards/debit cards

Ecommerce

Electronic transfer

Internet banking

Money order

Tele-banking

Lesson 2” Reasons Businesses are Established

Reasons for starting a business

 1. Being your own boss
2. Financial independence
3. Self-actualization/fulfillment
4. To create employment for others
5. To use your skills and knowledge for yourself

Forms of business organization

1. Conglomerates
2. Cooperatives
3. Franchise
4. Government Departments
5. Local and Municipal authorities
6. Multinationals
7. Nationalized industries
8. Partnership
a. Limited liability partnership
b. Unlimited liability partnership
9. Sole trader/sole proprietorship

Types of partners

1. Ordinary/general partner
2. Sleeping partners
3. Limited liability partners
4. Private and public sector

Benefits of operating alone

1. All profits go to proprietor

2. Consultation are not necessary

Private and public liability company

Limited liability companies

There are 2 type of limited liability companies

1. Private limited liability company

2. Public limited liability company

Companies act

1. Memorandum of association
2. The articles of association
3. Statutory declaration
4. Certificate of incorporation
 5. Certificate of trading

Lesson 3: Core Principles

1. Consumer responsibility
2. Efficiency and economy
3. Openness and disclosure
4. Proportionality
5. Recognizing the difference in the businesses carried on by different regulated persons
6. Senior management responsibility
7. Sustainable growth
8. Transparency

The principle of businesses

1. Integrity
2. Skill, care and diligence
3. Management and control
4. Financial prudence
5. Market conduct
6. Customer’s interest
7. Communications with clients
8. Conflict of interest
9. Customers relationship of trust
10. Clients’ assets
11. Relations with regulators

Core principle of good corporate governance

1. Fairness
2. Accountability
3. Responsibility
4. Transparency

Corporate governance is the system by which businesses are directed and controlled

Good corporate governance is a key factor in underpinning the integrity and efficiency of a company

Lesson 4: Common practices in business

Manual of operation – written policies of the corporation

Legislative requirement -for example occupational health and safety laws require an employer to put in
place rehabilitation policy outlining the responsibility of the employer,
Codes of Conduct – many companies have policies relating to matters that are not regulated by law, but
which are based on standards set by the employer in an effort to ensure a high standard of behavior in
the workplace.

Conditions included in policies

1. Attendance
2. Absenteeism
3. Punctuality
4. Transfer
5. Training
6. Promotion
7. Probation
8. Performance review
9. Discipline
10. Abandonment of employment
11. Exit interviews
12. Termination of employment

Employee Entitlements

1. Redundancy pay
2. Annual leave
3. Long service leave
4. Compassionate leave
5. Parental leave
6. Personal/ careers leave
7. Jury service
8. Special leave
9. Overtime
10. Shift work etc

Employment benefits

Breach of company policy

Policies a term of contract of employment

To make sure your company is free of rude behavior

1. Encourage good manners

2. Stamping out bad manners

May include these items

1. Email and internet expectations

 2. Where people eat
3. What people wear
4. Meeting routines and etiquette
5. Physical state of individual work stations
6. Working in close quarters
7. Communication style, tone manner and language
8. Use of supplies and equipment
9. Telephone manners
10. Demonstrate all appropriate behaviors in your own actions whatever your place in the
corporate hierarchy
11. Until things improve consider adding manners heading to the agenda of your regular team
meeting
12. Recognize people for demonstrating polite behavior
13. Until things improve consider adding a manners cathegory to your performance review process

Office protocol specialist

Preventing conflict

Pleasant productive workplace

Decorum

Marketing management

Bookkeeping

Reportorial requirement and documentation

1. Know the purpose and scope of your document

2. Tell readers early on how they will benefit from reading your document
3. Identify your audience
4. As you write, do be careful of technical and other jargon, acronyms and abbreviations
5. Understand the needs of your readers
6. Organize your document
7. For longer documents start with outline and work from there
8. In your introduction, tell the reader the purpose of your document and what you want him or
her to do.
9. For longer works , also use headings and subheadings to indicate the sections of your document
10. In your conclusion, restate the main purpose of your document, and tell the reader what you
want her or him to do with the information you are providing whether that be to buy a product
or service, change or adopt a company policy, give you a promotion, etc.
11. Identify the benefits to the reader
12. Be concise
13. Substantiate your claim
14. Proofread

II Foundations of the principle of business ethics

Objectives

Classical philosophies specifically, virtue ethics (Socrates, Plato, Aristotle, Confucius etc)

The impact of belief systems (Buddhism, Islam, Christianity, etc)

The Filipino value system (Utang na loob, Filial Peity, PAdrino Suki, Bahala na – Manana, Amor Propio,
Filipino Family Values)

Foundation Principles of Business Ethics

1. Exercise due care

2. Confidentiality
3. Fidelity to special responsibilities
4. Avoidance of the appearance of conflict of interest
5. Willing compliance of the law
6. Acting in good faith of negotiations
7. Respect for human well-being
8. Respect for the liberty and constitutional rights of others

Lesson 5: Classical Philosophies

Virtue Ethics

Socrates as represented in Plato’s early dialogues held the virtue is a sort of knowledge (the knowledge
of good and evil) that is required to reach the ultimate good or eudaimonia, which is what all humans
desires and actions aim to achieve.

Four cardinal virtues ( prudence, justice, fortitude and temperance)

The rational part of the soul or mind must govern the spirited, emotional and appetitive parts in order to
lead all desires and actions to eudaimonia, the principal constituent of which is virtue.

Lesson 6: Impact of Belief System

Christianity, Islam, Judaism, Buddhism, Confucianism, Shintoism and Business

Some points examined in this paper include

1. Honesty in the market

2. Fair pricing
3. Business relations

Lesson 7: The Filipino Value System

Some examples are:

1. Sensitivity to personal affront

2. Euphemism
3. Cleanliness
4. Propensity for gambling
5. Extravagance
 6. Hospitality
7. Respect for elders
8. Fatalism
9. Loyalty to friend or benefactor
10. Tendency to be indolent
11. Individualism or kanya-kanya syndrome
12. Lack of initiative
13. Regionalism
14. Warm, friendly and intimate people
15. Caring and sharing people
16. Family centered people
17. Highly spiritual people
18. Amor-propio
19. Pakikisama
20. Pagsasarili
21. Sensitivity to personal affront
22. Euphemism
23. Cleanliness
24. Propensity for gambling
25. Extravagance
26. Hospitality
27. Respect for elders
28. Fatalism
29. Loyalty to a friend or benefactor
30. Tendency to be indolent
31. Lack of initiative
32. Regionalism

Models of Filipino values

Elements and composition of filipino values

Other notable key elements or motivations are:

1. optimism about the future

2. Pessimism with regards to present situations and events
3. The concern and care for other people, the existence of friendship and friendliness
4. The habit of being hospitable
5. Respectable to self and others
6. Respect to the female members of society
7. The fear of God, and
8. Abhorrence of acts of cheating and thievery

The values of Filipinos specifically upholds the following items

1. Solidarity of family unit

2. Security of the Philippine economy
 3. Orientation of small groups
4. Personlism
5. The concept of Loob or kalooban

Group into clusters

1. The relationship cluster

2. The social cluster
3. The livelihood cluster
4. The inwardness cluster
5. The optimism cluster

Pakikipagkapwa tao

Family orientation

Hospitality

Joy and humour

Flexibility, adaptability, creativity

Faith and religiosity

Ability to survive

Gender-specific values

Lesson 8: Code of Ethics

Ethics

1. Moral principles that govern a person’s or group’s behavior

2. “Judeo-Christian ethics”
3. Moral code, morals, morality, values, rights and wrongs, principles, ideals, standards of
behavior, value system, virtue, dictates of conscience
4. The moral correctness of specified conduct especially ones relating to or affirming a specified
group, field or form of conduct
5. Lat middle English (denoting ethics or moral philosophy; also used attributively); from Old
French ethique, from latin ethice, from Greek ethike, the science of morals based on the ethos

Code of Ethics

A code of ethics issued by a business is a particular kind of a policy statement. A properly framed code is
in effect a form of legislation within the company binding on its employees, with specific sanctions for
violation of the code. If such sanctions are absent, the code is just a list of pieties. The most severe
sanction is usually dismissal -unless a crime has been committed.
Business ethics- obeying the law is the maximum level of ethical conduct enforced in society; ethical
behavior includes more than simply legal behavior. It is unethical to lie, for instance, but lying is against
the law only under certain limited circumstances – lying under oath is perjury.

Codes typically divide into three distinct elements

1. An introduction or preamble
2. A statement of purposes and values
3. Specific rules of conduct which may be subdivided in various ways
4. Implementation of the code which will define administrative processes, reporting and sanctions

III Social Responsibility of Enterpreneurs

Criticisms of Virtue Ethics

Lesson 9: The Responsibilities and Accountability of Entrepreneurs

Responsibility versus accountability- responsibility can be shared but accountability can not be shared

Leaders need to be accountable employees need to be accountable. We must do everything possible to

ensure accountability at all levels of the organization

Organization needs to build a culture of ownership

Accountability versus ownership- accountability is something assigned or given, Ownership is not

assigned or given. Ownership is taken. I cannot appoint ownership. It happens when an employee comes
forward and says “Im going to make this happen. Here’s what I will do. Here’s what I will accomplish.
And here’s how I will measure progress

Supercharging a business

Outstanding leaders create broad standards and guidelines and then challenge their employees by
giving them the authonomy and independence to work the way they work best.

Lesson 10: Accountability of Entrepreneurs toward the Employees

1. Charity always begins at home

2. Sit with your employee from time to time and try to find out whether they are happy with their
job or not and if they are facing any problem in the system.
3. Crisis can come anytime.
4. Stand by each other not only during happy times but also during sad moments
 5. Encourage employees to praise and appreciate each other.

Laws that govern employees rights

- Labor code of the Philippines is the current law governing employment practices and labor
relations in the Philippines.

Pre-employment policies

-minimum age for employment is 15 yrs old and above. Persons of age 15-18 can be employed given
they work in non-hazardous environment

As for overseas employment of Filipinos, foreign employers are not allowed to directly hire Philippine
nationals except through board and entities authorized by the Secretary of Labor.

Regulations on Conditions of Employments

-Minimum wage rate

Normal hours of work

Meal periods

All employees have the right to have 24 consecutive hours of rest day after 6 days of work

Accountability can have positive results

- Accountability means being held answerable for accomplishing a goal or assignment.

Positive results of accountability

1. Improved performance
2. More employee participate and involvement
3. Increased feelings of competency
4. Increase employee commitment to work
5. More creativity and innovation
6. Higher employee morale and satisfaction with the work

Implementing accountability for positive results

1. Involve employees in setting clear, challenging yet attainable goals and objectives and give them
the authority to accomplish those goals
2. Coach employees when they request help, and support employees in all aspects of the job
3. Monitor progress towards goals, and provide feed-back that includes credible, useful
performance measures
4. Provide the training and resources employees need to do the work
5. Recognize employees for good performance, both formally and informally
Lesson 11: Business Dilemmas

Ethical Dilemmas

Health and safety

Technology

Transparency

Fair working condition

Fraud

1. Gain unlawful or unfair advantage

2. Induce another to part with some valuable item or surrender a legal right
3. Inflict injury in some manner

Willful fraud

Unfair competition

Unfair communication

Non-respect of agreement

Environmental degradation

Lesson 12 Practice of sound business

Practice of sound business

1. Integrity and transparency

2. Leadership
3. Responsible procurement

Standards of sound business

Standard 1 -corporate governance

1. Leadership oversight
2. oversight

Standard 2 – Strategic Management

1. corporate mission and business objectives

2. Strategic plan

Standard 3 – Risk management

1. Human resource risk

 2. Credit risk
3. Asset/liability structure risk
4. Foreign exchange risk
5. Capital management risk
6. Liquidity management risk
7. Outsourcing risk
8. Information technology risk
9. Fiduciary risk

Standard internal control structure

1. Internal control environment and internal controls

2. Audit function

BUSINESS BEYOND PROFIT MOTIVATION

Social Responsibility

Lesson 13: Business Beyond Profit Motivation

The introduction to the notion of social enterprise