BESR  Managers must keep their word and
3Q L2 always ensure these promises are not
“Ethical and Unethical Behavior”
Business Ethics
 It provides the ethical standards in the
workplace.
 Having high ethical standards establish
credibility and the good image of the
organization.
 It also attracts customers and applicants.
 Employees are proud to be part of an
organization with good reputation, thus,
remain loyal in the company.
12 Core Principles of Business Ethics
Honesty
 The company should also be honest about
the quality of products/services offered to
the customers.
 When management makes important
decisions, the employees can sense
truthfulness and sincerity. Employees take
their managers' words and customers are
happy to do business with a company
whose employees are honest in their
dealings. They never hold back the truth
and customers are happy to transact with
people whom they can trust.
 The company sells the products/services
without any misrepresentation or
exaggeration of features.
Integrity
 Having a high level of integrity means
that the company has earned the trust of
its stakeholders because it has been
consistent in all of its actions, decisions,
and character.
 There are no pretensions.
 The company can be bold and firm in its
decisions if management believes that it is
doing the right thing.
 Management also has the courage and the
strength to admit mistakes.
 Managers who have a high level of
integrity have a code of ethics which they
believe in and are willing to fight for what
is right and true.
Respect
Keeping Promises
broken.
 There are times when managers find it
hard to fulfill their commitments but they
have to.
 They cannot just get out of a situation and
a commitment.
Loyalty
 Managers should be loyal to the company
by not putting their self-interests above
anything that will jeopardize the
company's position.
 There should never be any conflict of
interests.
 Employees who decide to leave the
company should give a grace period to
allow the company to find their
replacement.
 It is also important to keep company
information confidential once they leave
the company.
 Loyalty begets respect from the people
whom they previously worked with.
Fairness
 Managers should act with impartiality in
all their transactions.
 They should not exercise their power for
their own personal advantage and they
should never take advantage of other
people's weaknesses,
 Managers should also be open-minded
and value the advice and suggestions of
others.
 They should observe what is right and
recognize the fact that they do not have a
monopoly of knowledge and skills.
Caring
 This is the exercise of compassion and
sincere concern for others.
 The company should create a caring
environment for its employees which will
eventually bring about a chain reaction
among customers and other stakeholders.
 Management should strive to reach the
company's goals which will would benefit
the greatest number of people without
inflicting harm or stepping on anyone's
shoes.
 It is said that respect is not imposed but
earned.
  Being respectful means being courteous at
all times in all dealings, regardless of
rank.
 Each person deserves to be treated with
respect without prejudice on gender,
religion, or status in life.
Obeying the law
 All employees should obey the rules.
 Management, too, must never break the
rules.
 Managers should set an example in
following company policies, rules, and
regulations.
 No one is above the law. Management
who made the rules should not be law
breakers.
Excellence
 Being ethical also means that employees
should strive to achieve excellence in all
their tasks.
 The company in return deliver the highest
quality products and services and ensure
efficient delivery of services.
 There is continuous improvement in all its
processes.
Being a leader
 This entails leadership by example.
 Managers should be role models to
establish their integrity and credibility
among their employees and customers as
well.
 Decisions should be firm yet flexible
based on the situation. Yet, leadership
should be guided by ethical principles and
standards.
Morale
 Managers who act ethically enhance the
company's image.
 Being ethical also boost employees'
morale.
 An ethical environment gives the
company a good reputation and
recognition from other companies.
 This enhanced image of the company
greatly helps in the company's business
dealings.
Accountable
 Being accountable means being
responsible for one's actions.
 Whatever it is there should be acceptance
of the consequences of any decision
made.
 Managers should stand firm on these
decisions.
 There should be no turning back or
blaming others whenever a wrong
decision is made.
Unethical Business Practices
- There are unethical behaviors that should be
avoided because such destroy the company's
reputation and result in bad business.
- Managers who get involved in unscrupulous
practices end up in jail or are ostracized by the
business community.
Accounting Manipulations
 Accounting books can be manipulated and
financial statements can be manipulated to
show a more favorable result of
accounting transactions.
 A company may hide its true status and
present a better picture of its financial
statements to investors. Contrary to what
is true, the assets are ballooned to the
highest level and the debts and liabilities
are hidden.
Overbilling
 Some service providers are guilty of
charging more than the actual price for the
services given.
 Overpricing for a service destroys the
reputation of a service provider and may
result in lower sales for the company.
Misleading Advertisements
 There are advertisements which mislead
consumers by making promises which the
product cannot really deliver.
 They may temporarily increase sales but
once the consumers figure out the truth
they end up dissatisfied, thus resulting in
lower sales.
 Dermatological services with exaggerated
advertisements end up with lawsuits
because of excessive claims on their
beauty products and services.
 Companies should stand by their claims in
their advertisements.
Making False Claims
 Some managers tend to take credit for
something like charity works which they
actually are not a part of.
 Some vendors, suppliers or sellers use
dangerous chemicals to increase the
quantity of the product being
manufactured or perhaps cut short the
production to reduce expenses.
 These unethical practices are not good for
a business.
Customer Service Failures
 Poor customer service is also considered
unethical.
 Failure to replace a damaged product or
not being able to serve a warranty is
considered unethical.
 Failure to refund a complaining customer
is also another example, as well as being
rude.
 Credit collection agencies who antagonize
and threaten credit card customers for
non-payment of debt damage the
reputation of credit card companies and
the banks issuing the credit cards.
Layoff and High Executive
Compensation
- Some companies are guilty of laying off
workers allegedly because they are losing
profit, when in reality, they are just giving
higher salaries to their executives.
Whatever are saved from laying off
workers are given to senior management
perks.
Poor-quality Materials
- In manufacturing processes, poor
products may be the result of low-quality
raw materials used to lower the total cost
of production. Victims of these poor or
faulty products may file legal action
against dishonest manufacturers.
Good Policies and Ethical Practices in
Business Organizations
Business organizations should comply
with reportorial requirements as
mandated by government agencies for
ethical practices.
- The sole proprietor should register with
the Department of Trade and Industry
while partnerships and corporations
should register with the Securities and
Exchange Commission. Business owners
should also secure barangay and
municipal clearances and register with the
Bureau of Internal Revenue, Social
Security System, Philhealth, and Home
Development Mutual Fund (Pag-Ibig).
They must remit and comply with the
monthly, quarterly, and yearly
requirements of these government bodies.
Practice proper office decorum.
- Employees must observe good manners
such as ensuring that conversations are
not too loud which may distract other
employees. Conversations in the
workplace must be kept on a professional
level as much as possible and making
personal calls must be avoided. Everyone
must be mindful of confidential
conversation and should not divulge any
information that may be the subject of
gossips and rumors.
Be sensitive to smells and scents which
may be unpleasant to the employees.
- Management should maintain cleanliness
in the workspace at all times. Empty food
containers should be properly disposed of.
Use the restrooms, pantry, and other
office areas properly. Keep them clean
and orderly.
Company property or assets are for
business purposes and not for personal
use.
- It is the responsibility of every employee
to safeguard company property against
loss, theft, and misuse. Some examples of
these assets are computers, laptops,
equipment, forklifts, office supplies,
calculators, printers, cellphones,
telephones, photocopiers, and other
equipment. Also included are softwares
and programs, books, compact discs,
technology, list of customers, suppliers,
distributors, and other records.
Employees should use communication
infrastructure properly and
appropriately.
- The use of email, internet, intranet,
telephone, and other forms of
communication greatly helps employees
in the conduct of their duties. However,
these forms of communication should be
used appropriately and employees should
help in maintaining their confidentiality
and integrity at all times.
Employees should always act in the best
interest of their employer.
- They should avoid conflicts of interest
and any personal gain or interest should
never interfere with company interest.
There are confidential information that
are protected and which should not be
divulged to anyone outside the company
without proper authorization.
- The following are some examples of
confidential information which should be
safeguarded by the employees: trade
secrets, business plans, pricing schemes,
client lists and suppliers' contracts, test
questions, compensation schemes,
software and computer programs, brand
formulations, market share, new product
development, and major and strategic
plans.
- Employees should exercise care in
discussing confidential information
especially in public places where
conversations may be overheard. These
information must be protected and should
not be easily retrievable by anyone
through any mechanism or inadvertently
disclosed to others.
- Human resource staff who hold employee
information such as addresses, telephone
numbers, identification numbers, test
results, and medical data should protect
the privacy of the employees in the same
manner that they themselves would like
similar information about them to be
protected.
All financial and accounting records
should be accurate, reliable, and
truthful.
 These reports should project the
credibility and integrity of company.
There should be no off-the-record funds
or undisclosed assets. There should be no
distorted or false documents related to
particular transactions. All transactions
should be properly accounted for and
supported by documents. Financial
records should be in compliance with
applicable laws.
Components of a Code of Ethics
Values
 A company's values guide the
organization's internal conduct and its
relationship with stakeholders. They
emanate from its corporate culture as
displayed by its stakeholders. The values
of the company should be expressed with
honesty and fairness. The values sum up
the company's reputation wherein all
interactions are treated with respect
regardless of position and circumstances.
Principles
 To support the values of the organization,
there are credos that employees should
live with during their stay in the company.
Business principles such as customer
satisfaction, business profitability, and
continuous improvement are just some of
the principles that stakeholders live by.
Corporate social responsibility is also
another principle found in the code of
ethics.
Management Support
 This means that management is serious in
considering the code as the bible of the
employees in terms of ethics. To show
support, management allows the display
of this code of ethics in prominent and
strategic places in the work area.
Personal Responsibily
 Any member of the organisation should
uphold and preserve the eory because any
violation of the code may involve legal
and moral consequences. Each wple
should be guided by the code and must
report anyone who violates it
Compliance
 All legal requirements of the code should
be met. Any licensing requirements,
including but not limited to reporting of
financial stateinents, should be met.
Examples of Contents of a Code of Ethics
Ayala Corporation's Code of Ethics
All directors, officers, and employees shall
1. conduct business in accordance with Philippine
laws and regulations
2 personally and firmly adhere to the standards and
restrictions imposed by laws and regulations as
well as the corporation's policies, rules, and
procedures; and
3. ensure compliance with all disclosure
requirements, making sure that all disclosures of
material information are full, fair, accurate, clear,
and timely..
Unilever Code of Ethics:
Unilever employees must
1. respect the dignity and human rights of
colleagues and all others they come into contact
with as part of their jobs; and
2. treat everyone fairly and equally, without
discrimination on the grounds of race, age, role,
gender, gender identity, color, religion, country of
origin, sexual orientation, marital status,
dependents, disability, social class or political
views. This includes consideration for recruitment,
redundancy, promotion, reward and benefits,
training or retirement which must be based on
merit.

The Nestlé Corporate Business Principles

Some of the basic Nestlé values and principles are:

1. favoring long-term development over short-term
profit;
2. long term commitments and relationships;
3. respect for and integration with diverse cultures;
4. proper conduct and ethical values as basic
requirements for our management and employees;
5. recognition that consumers deserve information
about the products they buy and the company
behind the brand.