The Social Function of

Business
Ethics
 Moral principles that guide the
conduct of individuals
Why act
Ethically?
 Legal Reasons
 Public Image Reasons
 Moral Reasons
Ethical
Sensitiveness
 Businesses play a major role in
keeping the economy alive.
 It is therefore necessary to ensure the
proper ethical governance of the
business.
Reasons:
 Promotion of common good
 Protection of individual’s interest
 Preservation of society in general
 Poverty
Alleviation
 RELATIVE POVERTY:
 Shortage in comparison to the living standards
of others within the same society or culture.
 ABSOLUTE POVERTY:
 Shortage in comparison to a universal measure
of adequate provision.
 Concentration of
 Income:
Poverty
 Measures absolute poverty in terms where a
household’s income falls on the universal
poverty line.
 Expenditures:
 Assesses relative poverty in terms of whether
a household can afford to buy basic goods.
Poverty in Midst of
Economic Growth
1. Economic growth is rarely uniformly
distributed.
 Extreme poverty often continues to
afflict in significant parts of a country
that has experienced an economic
growth.
 Even when average economic growth is
high, parts of a country may be
bypassed.
2. Failure of Government
 It is vital that social expenditures
directed at human capital accumulation
reach the poorest of the poor
3. Cultural
 There are those that experience cultural
discrimination.
Businesses’ Role in
Overcoming the
Poverty Trap
Small and Medium
Enterprises
 Are believed to be important
contributors of economic growth and
a tool to reduce the poverty in
developing countries.
Areas of Business
most in Need of
Ethical Attention
 Countryside and Rural Infrastractures
 Basic Education
 Cash Transfers
 Primary Health Services
 Microcredit and Microenterprise Programs
 Technical Skills Traning
 Social Housing
“ Only social responsibility of the
business is to increase its profits”

-Milton Friedman
Four Levels of Responsibility:
1.Earning a profit
2.Legal responsibility
3.Ethical Responsibility
4.Discretionary Responsibility
-William Sauser
(Journal of Business Ethics)
Corporate Social
“A continuing commitment by business
Responsibility
to behave ethically and contribute to
economic development while improving
the quality of life of the workforce and
their families, the local community, and
society at large.”
- World Business Council for Sustainable Development
 Key CSR Issues: environmental
management, stakeholder
management, labour standards and
working conditions, employee and
community relations, social equity,
gender balance, human rights, good
governance and anti corruption
measures
The Morality of
Advertising
Deceptive Ads:
- Those that make false statement
about or misrepresent the product.
Article 108 of the Consumer Act of the
Philippines (RA No. 7394)

- “ The State shall protect the consumer

from misleading advertisements and
fraudulent sales promotion practices.”
Basic Employee
Rights, Job
Discrimination,
Other Labor
Labor Code of the Philippines
Rights of workers in relation to:
 Wages
 Right to Self-Organization
 Collective Bargaining
 Security of Tenure
 Just and Humane work conditions.
 Collective Bargaining – negotiation between
employers and employees aimed at
agreements to regulate working
salaries/working condition
 self organization – right of workers to for, join
or assist unions, organizations of assocs. For
the purpose of collective bargaining and
negotiation for mutual aid and protection.
Wage Rationalization Act

Mandates the fixing of minimum wages

applicable to different industrial sectors.
“Labor Relations”
Promote and emphasize the primacy of free
collective bargaining and negotiations as modes
of settling labor or industrial disputes
Promote free trade unionism
Foster the free and voluntary organization of a
strong and united labor movement.
Promote the enlightenment of the workers as
union members and as employees
Provide adequate administrative machinery
Ensure a stable but dynamic and just industrial
peace
Ensure the participation of workers in decision
and policy making processes affecting their
rights, duties and welfare.
Insider Trading
Insider Trading:
buying and selling of shares in the stock
market known only to the trader or a few
persons.
In finance, it is reward without risk,
wealth generated - and injury done to others
- by an unfair advantage in information.
 Pollution and
Resource Depletion
Embarking on projects seeking to diminish
or eradicate pollution, and renew natural
resources they tend to use up or deplete.
Whistle Blowing
Employee/Former Employee:
act of disclosing what he believes to
be unethical or illegal behaviour to
higher management or to external
authority or public.