GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY

GOOD GOVERNANCE
AND SOCIAL
RESPONSIBILITY
Prepared by: Angelica Cestina
ETHICS AND
BUSINESS
CHAPTER 1
 Ethics refer to rules provided by an external
Ethics vs. source, e.g., codes of conduct in workplaces or
Morals principles in religions.
 Morals refer to an individual’s own principles
regarding right and wrong.
https://www.diffen.com/difference/Ethics_vs_Morals
Comparison ETHICS MORAL
Criteria
What are they? The rules of conduct recognized in respect to a Principles or habits with respect to right or wrong
particular class of human actions or a particular conduct. While morals also prescribe dos and don'ts,
group or culture. morality is ultimately a personal compass of right and
wrong.
Where do they Social system - External Individual - Internal

come from?
Comparison
Why we do it? Because society says it is the right thing to do Because we believe in something being right or wrong.
chart
Flexibility Ethics are dependent on others for definition.
They tend to be consistent within a certain
Usually consistent, although can change if an
individual’s beliefs change.
context, but can vary between contexts.
The "Gray" A person strictly following Ethical Principles may A Moral Person although perhaps bound by a higher
not have any Morals at all. Likewise, one could covenant, may choose to follow a code of ethics as it
violate Ethical Principles within a given system of would apply to a system. "Make it fit"
rules in order to maintain Moral integrity.
Origin Greek word "ethos" meaning "character" Latin word "mos" meaning "custom"
Acceptability Ethics are governed by professional and legal Morality transcends cultural norms
guidelines within a particular time and place
https://www.diffen.com/difference/Ethics_vs_Morals
 What type of products and services are sold by a
company
What is  The industry in which the company operations
Nature of  Its overall mission and purpose
Business?  Other distinctive characteristics of the business
 “Nature” can be classified into different categories:
The nature of business is  By product or service
a phrase referring to the  By organizational setup
overall purpose and  By organizational structure
existence of a company  By business type
within a market sector or
industry
https://incorporated.zone/nature-of-business/#:~:text=The%20nature%20of%20business%20is%20a
%20statement%20about%20a%20company's,its%20nature%20to%20earn%20profits.
Nature of business types Organization Type
 Government sector
 Military sector
Nature of  International sector  A corporation
Business  Private sector  A partnership
Categories  Technology sector  A sole proprietorship
 Merchandising sector  A limited liability company
 Service sector  A limited liability partnership
 Manufacturing sector
 Non-profit sector
 Public sector
 Business ethics is the system of moral and
ethical beliefs that directs the behaviors and
Business operations of an organization and its
Ethics personnel.
 Business ethics inform a company’s values and
goals, as well as how it runs its day-to-day
operations.
https://online.maryville.edu/online-masters-degrees/management-and-
leadership/careers/importance-of-business-ethics/
 Public Perception - good reputation in the
marketplace, attracts and retains a strong customer
base.
 to maintain a positive reputation, both with the
public and employees.
Why Business
 Employee Perception - To attract and keep talented
Ethics Are individuals, companies should maintain an atmosphere
Important? of fairness and openness.
 To avoid legal and regulatory problems
https://incorporated.zone/nature-of-business/
Ethics should be involved in the business in he very beginning
when the goals and intentions are being put together.
What Is the
Relationship Ethics in the business is especially important in the
Between relationship of employer and employees, between the
business and whatever partner it may have, and its customers
Business and
Ethics?
Good business practices starts with management setting
standards of what's expected, and they should lead by
example. The establishment of higher levels of ethical
behavior within a business benefits the company in many
ways.
morality of
profit 1. Profit is the reward for putting capital at risk
Profit is a deeply moral 2. Profit proves that the economy is not a zero-sum
concept, since without profit game
we will suffer, not from
exploitation, but from a 3. Profit shows that entrepreneurs are welcome
misallocation of resources, a
failure to provide the goods
4. Profit generates investment and employment
and services that the 5. Profit provides the means for social
economy needs, the loss of
tax revenue, a reduction in
transformation in society
employment and the inability
to provide for social need
whether through the private
sector or the public sector.
DIFFERENT
NORMATIVE ETHICAL
THEORIES
Chapter 2
 Lawrence Kohlberg (1958)
Kohlberg's agreed with
Piaget's (1932) theory of mor
Theory of al development
in principle but wanted to
 The three levels of moral
reasoning include
Moral develop his ideas further. preconventional,
conventional, and
Development  Kohlberg's theory proposes
that there are three levels of
postconventional.
moral development, with
each level split into two
stages.
https://youtu.be/GTzBrjxKHLg
https://www.simplypsychology.org/kohlberg.html
 Preconventional morality is the first stage of moral development,
and lasts until approximately age 9.
 At the preconventional level children don’t have a personal code
of morality, and instead moral decisions are shaped by the
Level 1 - standards of adults and the consequences of following or breaking
their rules.
Preconvention
al morality
 Conventional morality is characterized by an acceptance of social
rules concerning right and wrong.
 At the conventional level (most adolescents and adults), we begin
to internalize the moral standards of valued adult role models.
 Authority is internalized but not questioned, and reasoning is
Level 2 - based on the norms of the group to which the person belongs.
Conventional
morality
 Postconventional morality is the third stage of moral
development, and is characterized by an individuals’
understanding of universal ethical principles. These are abstract
and ill-defined, but might include: the preservation of life at all
costs, and the importance of human dignity.
 Only 10-15% are capable of the kind of abstract thinking necessary
Level 3 - for stage 5 or 6 (post-conventional morality).
Postconventio
nal morality
The
Machiavellian
Principles
https://www.slideshare.net/jessieroces/machiavellian-concepts
Guiding
Principles of
Machiavellian
nism
Machiavellianism
in Organizations
 ETHICAL JUDGMENTS
 Ethical philosophy differs
from the sciences because it
UTILITARIANISN is normative or prescriptive,
Theories of Jeremy rather than descriptive.
Bentham and John  In other words, ethics tells us
how we ought to act or what
Stuart Mill we should do, while the
sciences are more likely to
observe how things are in
nature or society.
https://www.slideshare.net/sayansarkar2010/utilitarianism
 Utilitarianism says that the Result or the Consequence
of an Act is the real measure of whether it is good or
Making Ethical bad.
Judgments in  This theory emphasizes Ends over Means
Utilitarianism  Theories, like this one, that emphasize the results or
consequences are called teleological or
consequentialist.
Jeremy Bentham
 Man is under two great

masters, pain and pleasure
 The great good that we
Bentham should seek is happiness ( a
Formulation of hedonistic perspective)
Utilitarianism  These actions whose result
increase happiness or
diminish pain are good. They
have “Utility”.
Jeremy Bentham’s
Hedonistic
Calculus
Jeremy Bentham’s
Hedonistic
Calculus
ACT: RULE:
 An Action is right if and  An action is right if and
only if it produces the only if it conforms to set
greater balance of of rules the general
Two Types of pleasure over pain for acceptance of which
Utilitarianism the greatest number. would produce the
greatest balance of
( Jeremy Bentham) pleasure over pain for
the greatest number.
( John Stuart Mill)
 B.) You attempt to help
 A.) You attempt to help an elderly man across
an elderly man across the street. You stumble
Application of the street. He gets as you go, he is knocked
Utilitarian Theory across safely. into the path of a car
 Conclusion: the Act was and is hurt.
a good act  Conclusion: The Act was
a bad act
Application of
Utilitarian Theory
 Singled out 67 companies out of the Fortune 500 that had at least
Consequences one illegal act – ex: antitrust, product liabilities, discrimination
of Unethical  Performance of the convicted firms were compared to
unconvicted firms (five years after the fraud was committed)
Practices
 Convicted firms experienced significantly lower return on sales
(three year lag)
Baucus & Baucus (2000)  Multiple convictions are more disastrous
 Unethical activities can affect long term performance.

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 Man is under two great

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