UNIT 2

FOUNDATIONS OF THE PRINCIPLES OF BUSINESS ETHICS

LESSON 1 – The Classical Philosophies and their Implications on Business

INTRODUCTION

Business Ethics is as old as trade itself.

The Code of Hammurabi (1700s B.C.) which prescribes prices and tariffs and lays
down both rules of commerce and harsh penalties for noncompliance, is the earliest evidence of
man's attempts to establish the moral contours of commercial activity.

Aristotle's politics (300s B.C.), where one finds the Talmud (200 A.D.) and the Ten
Commandments (Exodus 20:2-17; Deuteronomy 5:6-21), includes moral rules applicable to
commercial conduct.

The philosophy of business considers the fundamental principles that underlie the
formation and operation of a business enterprise; the nature and purpose of a business, and the
moral obligations that pertain to it. The subject is important to business and management and is
closely related to business ethics and political economy. It is influenced significantly by
philosophy, ethics, and economic theory.

The "philosophy of business" is different from "business philosophy". Business

philosophy denotes a way of doing business or a business outlook, instead of the more academic
philosophical meaning of philosophy business outlook, instead of the more academic
philosophical meaning of philosophy of business.

OBJECTIVES

At the end of the lesson, you are expected to:

1. Identify the classical philosophies and their implication for business principles and
practices.
2. Compare and contrast classical philosophies as they relate to the business setting.

What is PHILOSOPHY and how is it related with business ethics?

 PHILOSOPHY is the study of the fundamental nature of knowledge, reality, and
existence, especially when considered as an academic discipline.

The term philosophy comes from the Ancient Greek word ‘philosophia’ which literally
means “love of wisdom”. In broader sense, philosophy is an activity people undertake when they
seek to understand fundamental truths about themselves, the world in which they live, and their
relationships to the world and to each other.

Why Philosophy important in Business/Business Ethics?

The philosophy of business considers the fundamental principles that underlie the
formation of a business enterprise – the nature and purpose of a business, and the business’s
moral obligations.

Since business ethics is a moral philosophy, this means that applying moral judgments or
the value that is placed on decisions about what is right and wrong, good or bad, just and unjust,
is creating a culture of honesty and ethical business practices that organizations use to shape its
workers and leaders.

Different Classical Philosophies with Implications on Business

I. SOCRATES

Socratic Method

- is a way of thinking that allows individuals to define their own purpose for learning and
explore this purpose through open-minded questioning of what they hold to be true.

Dare to Disagree

Socrates insisted on our right to think for ourselves. Too often, humans sleepwalk
through simply going along the crowd. Stand up to authority and engage in meaningful debate
and do not go against your conscience and moral principles.

Entrepreneurial Learning from Socrates

Entrepreneurs can find value in Socratic Method because they, too, are bombarded
by assumptions based on what others and they themselves believe to be the best plan of
action for pursuing a business idea. Entrepreneurial Learning or the acquisition of knowledge
necessary for creating a business venture is built around the constant questioning and testing of
these assumptions theories about what we hold to be true for

This answers the questions:

1. “Why are we here? Why do we exist as an organization?”

2. “Does the business create opportunities for good people to blow the whistle on bad
behavior? Do they encourage independent thinkers to follow their conscience?”

II. PLATO

Rejecting Ethical Relativism

What is Ethical Relativism?

Ethical relativism is the theory that holds that morality is relative to the norms of one's
culture. That is, whether an action is right or wrong depends on the moral norms of the society in
which it is practiced. The same action may be morally right in one society but be morally wrong
in another. For the ethical relativist, there are no universal moral standards

Why is it rejected by Plato?

Plato criticized ethical relativism because of its implications for individual moral beliefs.
He asserted that if the rightness or wrongness of an action depends on a society's norms, then it
follows that one must obey the norms of one's society and to diverge from those norms is to act
immorally.

The Theory of Forms

Plato's Theory of Forms asserts that the physical world is not really the 'real' world;
instead, ultimate reality exists beyond our physical world.

The Theory of Forms represents Plato’s attempt to cultivate our capacity for abstract
thought. Like philosophy, art and mythology do so by appealing to our emotions and desires
however, philosophy also appeals to the intellect. The Theory of Forms differentiates the abstract
world of thought from the world of the senses, where art and mythology operate. Plato argued
that abstract thought is superior to the world of the senses. By investigating the world of
Forms, Plato hopes to attain greater knowledge.

The Theory of Tripartite Soul

 Plato describes the soul as divided into three parts: appetitive, spirited and rational. This
division partly as a way of explaining our psychological complexity and partly to provide a
justification for philosophy as the highest of all pursuits, because it corresponds to the highest
part of the soul – which is the rational.

The Three Souls:

Appetites, which includes all our myriad desires for various pleasures, comforts, physical
satisfactions, and bodily ease.

Spirited is the part that gets angry when it perceives (for example) an injustice being done. This
is the part of us that loves to face and overcome great challenges, the part that can steel itself to
adversity, and that loves victory, winning, challenge, and honor.

Rational is our conscious awareness. This is the part of us that thinks, analyzes, looks ahead,
rationally weighs options, and tries to gauge what is best and truest overall.

Entrepreneurial Learning from Plato

• Moral or ethical practices in business must not differ to other organizations. There should
be a universal moral standard that businesses must adhere to, which practically are the
laws and policies set by the state and other governing agencies.
• The Theory of Forms helps us to think infinitely or without limit. We must always seek
the greater knowledge.
• The Theory of Tripartite Soul helps us how to “operate” ourselves as humans for the
benefit of ourselves as business leaders, our organization and its employees.

III. ARISTOTLE

Virtue Theory of Ethics

• Virtue is a disposition to behave in the right manner.
• Virtue ethics is a philosophy that teaches us to live a life of moral character. This
character-based approach to morality assumes that we acquire virtue through practice. By
practicing being honest, brave, just, generous, and so on, a person develops an honorable
and moral character.

Ethics is not designed to make people good, but rather to explain what is good, why is it
good, and how we might set about building societies and institutions that might inculcate this
goodness.
 In Ethics, there are no general laws or exact formulations in the practical sciences.
Rather, we need to approach matters case by case, informed by inculcated virtue and a fair dose
of practical wisdom.

Happiness

For Aristotle, happiness is the meaning and the purpose of life, the whole aim and end of
human existence.

The word happiness in the Ethics is a translation of the Greek term eudaimonia, which
means success and fulfillment. For Aristotle, this happiness is our highest goal.

However, Aristotle does not say that we should aim at happiness, but rather that we do
aim at happiness. His goal in the Ethics is not to tell us that we ought to live happy and
successful lives, but to tell us what this life consists of.

Entrepreneurial Learning from Aristotle

• Virtue Theory of Ethics helps everyone to act with character and of virtues.
• “Be happy”, in ways that are not world pleasures, but also of cultivating your intellectual
and moral faculties as a human being. Do not engrossed by the pursuit of money, that
money becomes the end in itself. A rational person does not seek money for its own sake,
a rational person uses money so that they can spend their time on good moral works and
developing own’s mind.
• The highest form of happiness is a life of intellectual contemplation.

IV. IMMANUEL KANT

Deontology/Deontological Ethics

The word deontology derives from the Greek words for duty (deon) and science (or
study) of (logos). Deontology is a moral theory that proposes ethical behavior regarding which
choices are morally required, forbidden, or permitted. It guides and assesses our choices of what
we ought to do and not to do.

Deontology advocates that both the actions and outcomes must be ethical. It sports a fair
trial of right and wrong as it depends on a universally accepted morality approach. It also makes
the philosopher study both sides of a situation without compromising the outcomes.
 The Categorical Imperative

Categorical Imperative is an unconditional and absolute moral duty which is universally

binding in all circumstance and is not dependent on any desire or end.

Categorical imperative involves an individual performing a certain action as compulsory

regardless of the end result or away from any personal influence

Immanuel Kant believes that categorical imperative is the basis to determine whether one’s
action is deemed to be ethically correct. In order to see that, three maxims were presented:
1. First Maxim- an action can only be considered as ethically correct if it can be accepted or
made into a universal law
2. Second maxim- a person should be treated as an end and not the means to achieve an end
3. Third maxim- each individual should act as a member of an ideal kingdom where he or
she is both the ruler and subject at the same time

Maxim - a general truth, fundamental principle, or rule of conduct

First maxim- Here Kant asks the person to think clearly and consider honestly whether each
person in this world would do the same act given the same situation and for the same motive.

Second maxim- The popular ethical principle "the end does not justify the means" signifies that
even if you have a good intention, if the method for attaining this intention is wrong, then the
whole action can never be morally justified.

Third maxim- It simply means that a set of rules that are made should treat every individual with
respect and dignity. These rules should be accepted by everybody.

Entrepreneurial Learning from Immanuel Kant

• We do what is right not because we expect something in return. We do what is right
because it is the right thing. Acting in conformity with a moral duty has no authentic
moral worth because it is still self-serving and motivated by basic human inclinations
such as pleasure, praise, and others. This moral duty will serve as a tool in making ethical
business decisions and actions.
• Categorical imperative can serve as a guide to managers and professionals on managing
organizations better. Morally motivated actions in the organization will be able to create a
positive working experience.

V. JEREMY BENTHAM JOHN STUART MILL (UTILITARIANISM)

 Utilitarianism

Utilitarianism revolves around the concept of “the end justifies the means”. It is the
brainchild of philosophers John Stuart Mill and Jeremy Bentham.

Utilitarianism believes that outcomes as a result of an action have a greater value

compared to the latter.

Utilitarianism VS Consequentialism

Utilitarianism is a consequentialist moral theory focused on maximizing the overall

good; the good of others as well as the good of one’s self. It looks for the one that has good
consequences or benefits, overall, for the greatest number of affected people.

Consequentialism is an ethical theory that suggests an action is good or bad depending on

its outcome. It judges whether or not something is right by what its consequences are.

The main difference is consequentialism does not specify a desired outcome, while
utilitarianism specifies good as the desired outcome.

Types of Utilitarianism
• Rule Utilitarianism is put in place to benefit the most people by using the fairest methods
possible.
• Act Utilitarianism makes the most ethical actions possible for the benefit of the people.

The key difference between act and rule utilitarianism is that act utilitarians apply the
utilitarian principle directly to the evaluation of individual actions while rule utilitarians apply
the utilitarian principle directly to the evaluation of rules and then evaluate individual actions by
seeing if they obey or disobey those rules whose acceptance will produce the most utility.

Entrepreneurial Learning from Bentham and Mill

• In utilitarianism, organizations create business principles that hold the morally right
course of action in any situation especially the one that produces the greatest balance of
benefits over harms for everyone affected.
• Utilitarianism helps business leaders in creating organizational rules and doing actions
which are morally correct especially when these rules provide more social good.
 LESSON 2 – Belief Systems and Conduct of Business

INTRODUCTION

Why do we have to talk about belief systems or religions in relation to ethics and the
conduct of business? In 1901, the famous German philosopher and sociologist Max Weber
published an article entitled “The Protestant Ethic and Spirit of Capitalism.” Here, he
satisfactorily showed how Protestant ethics has a direct implication to the growth of Capitalism
in the United States. In another study, Weber saw the direct effects of Confucianism in Chinese
economic life. Among other things, Weber’s message is that a better understanding of the
behavior and attitude of people can only happen if we will also attempt to understand the
people’s worldview which necessarily includes their religious beliefs and convictions. It is with
this insight that we attempt to explore the major religions in the world and how their main ethical
teachings are reflected into the business world.

OBJECTIVES

At the end of the lesson, you are expected to;

a. Demonstrate an understanding how major religions affect the conduct of Business.
b. Describe various belief system, and their similarities and differences in relation to the
business setting.
c. Give example of how belief systems affect business practices.

Hinduism

Hinduism is the oldest among the major religions of the world. Scholars speculate that it
started in the Indus Valley (an area found in modern-day Pakistan). “The word ‘Hindu’ is
derived from the name Sindhu, meaning the people of the Indus River region of northern India.”
It is a unique religion because it has neither a single and specific human founder nor a definite
historical beginning. It is not a religion with a unified body of belief systems, ethical codes,
absolute doctrines, religious rituals, and practices. It is one of the most diverse world religions.
One scholar of religion even said that the term “Hinduism” is just a convenient term used by the
English colonialists who invaded India for the purpose of Management and control.

At the center of Hindu teachings are the Vedas. Veda is a Sanskrit word which literally
means “Knowledge.” The Vedas are collections of the religious writings of ancient Hindu
spiritual masters. The Rig Veda is the oldest among the Hindu sacred scriptures. But the most
popular for Hindus and non-Hindus alike are the Upanishads that consist of the insights of the
enlightened Hindu mystics and sages. The Upanishad (which literally means “to sit close by
devotedly”) is also the most influential in the formation of Hindu Philosophy.

Scholars agree that it is very difficult to extract codes of ethics for economic life in the
Hindu Tradition. Brammer and Zinkin said that “since it has a wide variety of cults, sects, and
philosophies, has no unified doctrine or philosophy from which prescriptions about economic
issues can be clearly established.” Despite the difficulty, scholars were able to come up with
some main principles that guide the Hindu businessperson in the conduct of business.

First, the Hindus have a positive outlook towards the business institution. According to
Robert Solomon, “Hinduism has never expressed shame about the desire for wealth.” Brammer
and Zinkin asserted that the Hindu tradition is not just concerned with spiritual liberation but also
with earthly welfare. “For a Hindu, the goals of life concern not only moksha, or spiritual
freedom, but also artha, or material well-being.

Second, the Hindu businessperson must treat the business’ stakeholders with honesty and
fairness. There are at least two reasons for this. First, if you hurt others, then you are,
ultimately, hurting yourself. Second, you cannot escape the law of karma. Your soul cannot
attain liberation until you use your free will to choose rightly and perform good acts.

Third, Hinduism’s belief in and tolerance of the Caste System may shape the conduct of
business. Caste System pertains to the social hierarchy in the Hindu Society which also
institutionalizes social roles and jobs by caste rather than by merit or talent. The major castes or
classes of people are the following: Brahmins or Brahmanas (priests and scholars who exercise
spiritual powers), Kshatriyas (the administrators and the military who exercise secular powers),
Vaisyas (businesspeople and farmers whose role is to produce the material needs of the society),
Sudras (The peasants and workers who are supposed to serve the higher castes), and the
Untouchables (the lowest members of the society designated to do the dirtiest and most menial
works). According to Karishma Vaswani, the caste may become an opportunity for those in
positions of power to exploit millions of lower caste Hindus who were brainwashed into thinking
that escaping from their station in life was impossible.” The caste system was already abolished
through an Indian Law in 1976. However, Vaswani observed that it has continued to become a
source of discrimination in the workplace.

Buddhism

This also originated from India. In fact, it can also be understood as a reaction against
the complex rituals and caste system of Hinduism. Also like Hinduism, Buddhists believe in the
law of Karma, in reincarnation, and in the ultimate goal of attaining liberation and nirvana.
Today, Buddhism is the dominant religion in China.

The founder of Buddhism is Siddhara Gautama (566-486 BCE), a rich and young prince
who renounced his royal inheritance in order to search for the true meaning of life. After days of
deep meditation under a Bodhi Tree, Gautama became enlightened. This event marked the
beginning of Buddhism. Siddharata Gautama became Buddha which means “the enlightened
one.” Buddha did not write anything. For approximately 400 years, his teachings were
transmitted through oral tradition.

Four Noble Truths

1. No one can deny that suffering is the condition of all existence.
2. Suffering and general dissatisfaction come to human beings because they are possessive,
greedy, and above all self-centered.
3. Egocentrism, possessiveness, and greed can, however, be understood, overcome, rooted
out.
4. This rooting out, this vanquishing, can be brought about by following an Eightfold Path
of behavior in thought, word, and deed. Change of viewpoint will manifest itself in a
new outlook and new patterns of behavior.

Just like Hinduism, Buddhism firmly believes in the interconnectedness and

interdependence of all things in the universe. Business policies and decisions will surely affect
the various stakeholders of the business organization. Thus, “because businesses are integral
parts of the community, decision making cannot be reduced to profits without considering the
impact on the people and the environment”

Meanwhile, the Eightfold Path consists of the following: Right View, Right Intention,
Right Speech, Right Action, Right Livelihood, Right Effort, Right Mindfulness, and Right
Concentration.

It must also be noted that Buddhism puts high value on spiritual liberation over material
well-being. Thus, profit as a purpose of business must be seen in the larger context of being
simply as means rather than an end it itself. “Moreover, given that materialism is not the
ultimate goal in Buddhism but only means to an end, profit cannot be considered in isolation;
they ought to be subservient to the moral path rather than dominate and compromise it.

Lastly, it must be emphasized that one of the central tenets of Buddhism is the
overcoming of human suffering. The conduct of business, therefore, must be seen as an activity
to eliminate human suffering not to increase it. “The goal in Buddhism is to eliminate suffering,
so allowing business to profit while exploiting people and polluting the environment increases
the amount of suffering and is counterproductive to the overall goal.”

Judaism

Judaism is the oldest among the major monotheistic religion. Its ethical precepts are
more than 3,000 years old. Judaism is founded on two main sources; the Jewish Bible (Written
Torah) and the Talmud (Oral Torah). The Jewish Bible tells the story of how God made a
covenant with Abraham and his descendants. It centers in the story of Moses helping liberate the
Jews from the Egyptians through the intervention of Yahweh. More than a record of historical
facts, the Written Torah is a record of the faith-experience of the Jews. It is the story of their
loving relationship with God.

In an article, Moses Pava explored the five prominent themes in Jewish Ethics that are
particularly useful in the conduct of business especially in the modern times, these are: right
action, free choice, balance, covenant, and dialogue. Good intention is imporatn and the study of
Torah is valuable, but Pava said that in Jewish Ethics, there is a “clear preference for appropriate
actions and good deeds.” Jewish Ethics, therefore, exhorts the contemporary businessperson to
show his or her goodness through concrete acts. A good or a right act is certainly more valuable
than the grandest intention. The notion of corporate social responsibility is compatible with the
principle of right action. Pava also stated that Jewish Ethics stresses human freedom, which
pertains to each person’s inherent capability to choose his or her course of action freely. Thus, it
implies that each person is free to engage in business if he or she deems it beneficial for his or
her well-being. Furthermore, it means that he or she is free to own private property as the
expected result of a moral business practice. In addition, Pava asserted that Jewish Ethics
highlights the importance of balance. “In Jewish thought, neither selfless love nor selfish love is
seen as ideal.” Applying this to the conduct of business, the businessperson must strike a
balance between the gaining of profit as a manifestation of love toward the self and his or her
family, and the sharing of profit as a manifestation of love toward the other members of the
society. Thus there is a dynamic interaction between individual freedom and his or her social
obligation.

Christianity

Christianity is the world’s largest religion. Within this religion, there are many sects and
denomination such as Roman Catholicism, Protestantism, Anglicanism, Eastern Orthodox, and
others. Formerly, the Philippines was considered as the only Roman Catholic nation in Asia.
With the gaining of Independence of East Timor a few years ago, the Philippines can only claim
to be the largest Roman Catholic nation in the said continent.

The Bible is one of the most important sources of guidance for the Christians in the
conduct of good business. Just like the Jews, Christians also take the Ten Commandments or the
Decalogue seriously. The ongoing challenge for Christians is to address “the problem of the
‘historical gulf’ between biblical times and our present experiences - that is, the challenge of
historicity of social orders.” In other words, Christian thinkers must be able to interpret the
Biblical Teachings taking into consideration its relevance to the challenges of the contemporary
society. A moral decision inspired by the bible cannot be a product of literal and strict reading of
biblical texts. A narrow interpretation of Biblical Texts will miss the wealth and dynamism both
of the Bible and of Christian Ethics itself.

Three relevant things which Christian possess in the way how business must be handled.
First, the commandment to love one’s neighbor is relevant for the Christian businesspersons.
Both the Old Testament and the New Testament are replete with texts that support the
commandment of loving one another. To love one’s neighbor does not mean to totally neglect
one’s personal interest. It just means that the ruthless, excessive, and greedy pursuit of economic
benefits cannot be a characteristic of a Christian businessperson. Second important biblical
concept that a Christian businessperson must take into consideration is the value of human labor.
The Creation story in the book of Genesis conveys the message that God is an active worker in
his creation. Since man is created in the image and likeness of God, he or she is mandated as
well to be an active worker. It means that if he or she is capable of working, then he or she has
the moral obligation to work. Through his or her active labor, the human person participates in
the work of creation and the building up of God’s kingdom. Third biblical concept that is
relevant of the conduct of business is the notion of private property. Under fair and just social
relationships, the person who labors must enjoy the fruits of his or her labor. Private property is
one of the manifestations of the person’s efforts, perseverance, and industry. Thus, it must be
understood as a blessing from God. However, biblical texts are also clear that God is the owner
of all creation. Thus, “private property must always be understood in relation to God and to
one’s neighbor.

Islam

Islam literally means “submission” and it pertains to “submission to God.” Islam’s

followers are called Muslims. Muslim means “one who submits or surrenders.” Islam is the
world’s second largest religion next to Christianity. In fact, it has been claimed that there are
more Muslims that these Roman Catholics (the largest Christian denomination) in the world.

Islam was founded in the year 610 when Muhammad, Islam’s Holy Prophet, was
believed to have received revelations from Allah (God). The Quran, Islam’s Holy Book,
contains the records of Allah’s revelations to Muhammad. Muhammad is the first Muslim, the
first who submits to Allah. Unlike Christians who claim that Jesus Christ is God, Muslims
believe that Muhammad is just a holy Prophet. “He was an ordinary human being who listened
carefully to - and then orally transmitted - the divine message.”

Islam has important things to say about the conduct of business. First, it does not just
uphold the values of business and trade. It even encourages the Muslims to participate in
business activities that are not against the Islamic law. Muhammad himself was a tradesman and
his wife Khadijah was also a merchant. Many of his first followers engaged in big and
successful businesses. Second, the concepts of halal and haram are very important
considerations for the businesspersons. Halal means lawful and haram means unlawful. The
lawfulness and unlawfulness derive from the clear guidelines and principles found in the Shariah.
“The rationale behind all of these tents of business practices in Islamic economic system is
bound by the fact that everything that is good and beneficial for the society is lawful and
permissible and anything that causes harm or menace to the society is unlawful and prohibited.

The following are some business practices and conduct that are considered as haram: all
forms of interest (riba); business activities involving prohibited items such as forms of meat,
statues, and alcoholic beverages; the sale of Al-Gharar (risk, speculation) such as insurance and
other financial derivatives; indiscriminate price fixing; hoarding of basic necessities such as
food; exploitation of one’s ignorance of market conditions; and fraud and trickery in business
dealings.
The Interfaith Declaration in Relation to the Other Major Religions

Hinduism: This is the sum of duty: do not do to others what would pain if done to you. -
Mahabharata 5:1517

Buddhism: Hurt not others in ways that yourself would find hurtful - Udana-Varga 5:18

Confucianism: Do not do to others what you do not want them to do to you. - Analects 15:23

Judaism: What is hateful to you, do not to your fellow man. This is the law: all the rest is
commentary - Talmud, Shabbat 31a

Christianity: There all things whatsoever ye would that men should to do to you, do ye even so
to them: for this is the law and the prophets - Matthew 7:12, KJV

Islam: None of you (truly) believes until he wishes for his brother what he wishes for himself. -
Number 13 of Imam “Al-Nawawi’s Forty Hadiths.”

Thus, whatever your religious affiliation, you should not feel guilty whether you decide
to engage yourself in the many intricacies of the business world. In fact, you should feel
privileged that you are probably called to a lifelong commitment of being in a position to
improve the society. However it seems that every major belief system is also unanimous in their
claim that the singular pursuit of profit and the undue disregard for the others and the
environment will always come into conflict with the major convictions and essential teachings of
the world’s major religions.

Filipino Value System and Its Effect on Business

The Filipino value system or Filipino values refer to the set of values or the value system
that a majority of the Filipino have historically held important in their lives. This Philippine
value system includes our own unique assemblage of consistent ideologies, moral codes, ethical
practices, etiquette, and cultural and personal values that are promoted by our society. As with
any society, though, the values that an individual holds sacred can differ on the basis of religion,
upbringing, and other factors.

As a general description, the distinct value system of Filipinos is rooted primarily in

personal alliance systems, especially those based on kinship, obligation, friendship, religion-
particularly Christianity, and commercial relationships.

A. UTANG NA LOOB
 Utang na Loob or debt of gratitude means that one does not forget the good deeds that
others may have done to him or her especially in time of great need. This debt of gratitude is
sometimes abused by those who have done well to others as they may ask favors or things that
may either be unreasonable or beyond the means of the one in debt.

The essence of utang na loob is an obligation to appropriately repay a person who has
done one a favor. The favors which elicit the Filipino's sense of utang na loob are typically those
whose value is impossible to quantify, or, if there is a quantifiable value involved, involves a
deeply personal internal dimension. This internal dimension, loob, differentiates utang na loob
from an ordinary utang or debt, being an internal phenomenon, utang na loob thus goes much
deeper than ordinary debt or even the western concept of owing a favor. Filipino psychology
explains that this is a reflection of the kapwa orientation of shared personhood or shared self,
which is at the core of the Filipino values system.

B. FILIAL PIETY

Filial Piety is a virtue of respect for one's parents, elders, and ancestors. Filipinos are
family-centered. Filipinos recognize their family as an important social structure that one must
take care of. They give importance to the safety and unity of one's family. The Filipino family is
so intact that it is common for members of the same family work for the same company. It is also
common to find the whole clan living in the same area as that the Filipinos are afraid to be too
far from their own family.

Filial Piety is a value system which is rooted primarily in personal alliance systems based
on kinship. This may be good or bad for business depending in a lot of considerations, but it
definitely affects the way business is conducted especially when the business person is
confronted with ethical issues.

C. PADRINO SYSTEM

Padrino system or patronage in the Filipino culture, business, and politics is the value
system where one gains favor, promotion, or political appointment through family affiliations or
friendship, as opposed to one's merit. The Padrino System in the Philippines has been the source
of many controversies and corruption, both in government and in the business sector. Padrino
syste, is a value system which is rooted primarily in personal alliance systems based on kinship
and obligation, which makes this a bad for business especially when the business person is
confronted with ethical issues. The Padrino system cannot be made as a basis for ethical
decisions in business.

D. SUKI
 The word "suki" is a Filipino term which means loyal customer. This so-called "market-
exchange partnership" can be developed into an agreement where one can be a regular customer
and supplier. The suki system is also a system of patronage wherein a customer regularly buys
their merchandise from a certain client. In the merchandising business, Filipinos often buy from
specific suppliers who will provide their customers reduced prices, good quality, and credit as
well. These factors are the usual components of becoming a "suki". The presence of trust and the
development of friendship between the two parties is a vital aspect in the establishment of an
economic exchange relationship. In some instances, regular patrons if restaurants, small
neighborhood retail shops, and tailoring shops receive special treatment in return for their
patronage.

E. BAHALA NA

Bahala Na has been loosely translated as "come what may". Hence, it is referred to as the
Filipino version of fatalism, which is, leaving everything in the hands of fate. But "bahala na"
actually comes from the word "Bathala Na", which means God. Hence, the expression "bahala
na" actually means, "let God take charge of the affairs;" or "I have done my part, let God take
charge of the rest," or "whatever happens, God has willed it."

Hence, "Bahala Na", is not surrender to fate, but surrender to God's will, considering the
fact that Filipinos are very religious. However, others use the Bahala Na concept erroneously to
mean the person's state of helplessness and resignation of one's fate. Sometimes it is used to refer
to the person's ignorance or laziness to do anything at all.

F. MANANA HABIT

Manana Habit comes from the Spanish word "Manana" which literally means
"tomorrow" or "an unspecified future time." Hence, Manana Habit refers to procrastination, or
putting off for tomorrow what can be done today.

This habit is observable is all strata of Philippine society, from government projects
which have been left undone for years to students homework being done at school, just minutes
before the teachers asks the homework to be submitted.

G. AMOR PROPIO

Amor Propio literally means "love of self" or self-love. Amor propio refers to a person's
feeling of self-respect and personal worth, or the quality of being worthy of esteem or respect,
sometimes an inflated feeling of pride as superior to others or sometimes even feelings of
excessive pride.
 Self-respect and personal worth, or that of being worthy of esteem or respect is important
to Filipinos, just as with other human beings. How Filipinos present themselves to others, and
how the society accepts them is very important. That is why, Filipinos would go to great lengths
in order for one bit to be ashamed.