PHILOSOPHIES OF

BUSINESS
PRACTICES
LEARNING COMPETENCIES
Illustrate how these philosophies are
reflected into business practices
(ABM_ESR12-IIIe-h-2.1).
OBJECTIVES:
◦Identify philosophies in business,
◦Discuss the implications of the philosophies in
business to business principles and practices,
and
◦Appreciate the application of classical
philosophies as they relate in today’s business
setting
 THE CLASSICAL
PHILOSOPHIES AND
THEIR IMPLICATION
ON BUSINESS
A. The Golden Rule
by Confucius
“Life is really simple, but
we insist on making it
complicated”-Confucius
◦Confucius (551 BC–479 BC) was a
Chinese philosopher and politician of the
Spring and Autumn period.
◦The philosophy of Confucius, also known
as Confucianism, emphasized personal
and governmental morality, correctness of
social relationships, justice, kindness, and
sincerity.
◦ His followers competed successfully with many other
schools during the Hundred Schools of Thought era
only to be suppressed in favor of the Legalists during
the Qin dynasty.
◦ Following the victory of Han over Chu after the
collapse of Qin, Confucius's thoughts received official
sanction in the new government and were further
developed into a system known in the West as Neo-
Confucianism, and later New Confucianism (Modern
Neo-Confucianism).
◦ Confucius's principles have commonality with Chinese
tradition and belief.
◦ He championed strong family loyalty, ancestor
veneration, and respect of elders by their children
and of husbands by their wives, recommending
family as a basis for ideal government.
◦ He espoused the well-known principle "Do not do unto
others what you do not want done to yourself", the
Golden Rule.
◦ He is also a traditional deity in Daoism
◦ Confucius is widely considered as one of the most important
and influential individuals in human history.
◦ His teaching and philosophy greatly impacted people around the
world and remain influential today.
◦ To Confucius, the ideal person is a scholar bureaucrat, not a
successful entrepreneur.
◦ His (or her) priority should be on serving society at large, not
on making personal gains and profit.
◦ Does this suggest that Confucian values are completely
irrelevant to modern entrepreneurial development?
◦It has been argued that Confucian values
such as obedience, respect for authority
and emotional control are not naturally
compatible components of a common
entrepreneurial standard, however
(1) These and other Confucian values can play a
positive role in entrepreneurial prosperity for
China and the rest of the world if applied
correctly. Confucian entrepreneurs can be
defined as those who apply traditional Chinese
cultural values in respect to maintaining the
moral beliefs of Confucianism in all aspects of
business practice.
Though sometimes Confucianism is viewed
as hostile to entrepreneurship, it has played
a vital role in the study of Confucian
entrepreneurs “as it initially meant
intellectuals and has served as a set of
political ideas practiced within a hierarchy
of ethical obligations to family and
community.”
◦(2) Confucian values were applicable to
positive interpersonal relations in business
practice and in the workplace, in regards to
successful human resource management in
particular. These values included:
trustworthiness, Ren (compassion,
humanness), Li (ritual, etiquette), harmony and
tolerance of others. These values of
interpersonal relations can generate a more
◦Business philosophy can be guided
by Confucian values of long term
orientation, resistance to corruption,
and nurturing of guanxi
(relationships), which can be utilized
for improvement of networking and
developing positive business
◦ Confucian values can aid in the creation of
entrepreneurs who are true leaders of society, and who
hold a sense of righteousness and de (moral power).
◦ Confucius believed that leaders were expected to rule in
a way that is just and moral.
◦ This view of practice could have the potential to create
entrepreneurs who perform ethical business practice.
Under Confucian values, if businesses are governed
righteously, they will succeed.
 B. The Gad-fly at the
Marketplace by Socrates

“The unexamined
life is not worth
living” – Socrates
◦Socrates (469-399 B.C.E.) is one of the few
individuals whom one could say has shaped the
cultural and intellectual development of the world
that, without him, history would be profoundly
different.
◦He is best known for the Socratic method of
question and answer, his claim that he was
ignorant, and his claim that unexamined life is not
worth living, for human beings.
◦He was the inspiration for Plato, the
thinker widely helps to be the founder of
the Western philosophical tradition.
◦Plato, in turn, served as the teacher of
Aristotle, thus establishing the famous
triad of ancient philosophers: Socrates,
Plato, and Aristotle.
What can entrepreneurs learn from
Socrates?
◦ The 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.
◦ 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 validity.
◦These assumptions can range from beliefs about
what the market wants, where opportunities lie,
to the effectiveness of a new product feature.
 Dare to disagree.
◦ Socrates insisted on our right to think for ourselves.
◦ Too often, he warned, humans sleep walkthrough life,
simply going along with the crowd.
◦ This is dangerous in questions of morality, and
particularly in corporate governance.
◦ When corruption is uncovered, too often people say
“everyone else was doing it.” But our characters are our
responsibility.
 Dare to disagree.
◦Socrates was prepared to die rather than go against
his conscience.
◦Does your organization encourage independent
thinkers and people who follow their conscience?
◦Does it allow people to give critical feedback to
managers?
◦Does it create opportunities for good people to
blow the whistle on bad behavior?
C. The Theory of Forms by
Plato
“Good people do not need
laws to tell them to act
responsibly, while bad
people will find a way
around the laws” – Plato
◦Plato (427-347 B.C.E.) is one of the world’s best-
known and most widely read and studied
philosophers.
◦He was the student of Socrates and the teacher of
Aristotle, and he wrote in the middle of the fourth
century B.C.E. in ancient Greece.
◦Though influenced primarily by Socrates, to the
extent that Socrates is usually the main character in
many of Plato’s writings, he was also influenced by
Heraclitus, Parmenides, and the Pythagoreans
 The Theory of Forms
◦ The Theory of Forms represents Plato’s attempt to
cultivate our capacity for abstract thought.
◦ Philosophy was relatively new in Plato’s day, and it
completed with mythology, tragedy, and epic poetry as the
primary means by which people could make sense of their
place in the world.
◦ Like philosophy, art and mythology do so by appealing to
our emotions and desires.
 The Theory of Forms
◦ The Theory of Forms differentiates the abstract
world of thought from the world of the senses,
where art and mythology operate.
◦ Plato also argued that abstract thought is superior to
the world of the senses.
◦ By investigating the world of Forms, Plato hopes to
attain a greater knowledge.
 Education for the Health of the State
◦ In both the Republic and the Laws, Plato identifies
education as one of the most important aspects of a
healthy state.
◦ He lays out detailed education programs that start with
exercises pregnant women should perform to ensure the
health of the fetus, and he goes on to explain not only
what children should study but also what values they
should be exposed to and what kinds of art and physical
exercise they should engage in.
 Education for the Health of the State
◦ Plato apparently considered most of his fellow Athenians to be
hopelessly corrupt, easily inflamed by hollow rhetoric and
seduced by easy pleasures.
◦ One can achieve only so much by arguing with a corrupt soul
that a virtuous life and to seek wisdom.
◦ Plato thinks that a child’s education is the last thing that
should be left to chance or parental whim since the young
mind is so easily molded.
 D. Aristotle: All or
nothing
“Happiness is the meaning
and the purpose of life, the
whole aim and end of
human existence” –
Aristotle
◦Aristotle (384-322 B.C.E.) is a towering figure in
ancient Greek philosophy, making contributions to
logic, metaphysics, mathematics, physics, biology,
botany, ethics, politics, agriculture, medicine, dance,
and theater.
◦He was a student of Plato who in turn studied under
Socrates.
◦He was more empirically-minded than Plato or
Socrates and is famous for rejecting Plato’s theory of
forms
 Virtue and Happiness
◦The word happiness in the Ethics is a
translation of the Greek term
eudaimonia, which carries
connotations of success and
fulfilment.
◦For Aristotle, this happiness is our
 Virtue and Happiness
◦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, successful
lives, but to tell us what this life consists
of.
 Moral Education
◦A question of high importance in any
investigation of ethics is how we can teach
people to be good.
◦Aristotle is quite clear that he does not
think virtue can be thought in a classroom
or by means of argument.
 Moral Education
◦ His ethics, then, is not designed to make people good,
but rather to explain what is good, why it is good, and
how we might set about building societies and
institutions that might Implications to Business-
◦ “The rational person doesn’t seek money for its own
sake. The rational person uses money so that they can
spend their time on good moral works and developing
their mind.”-
◦ Aristotle concludes that the role of the leader is to
create the environment in which all members of an
organization can realize their own potential.
◦ He says that the ethical role of the leader is not to
enhance his or her own power but to create the
conditions under which followers can achieve their
potential.
◦ He did raise a set of ethical questions that are directly
relevant to corporate leaders who wish to behave in
ethical ways.
a. Am I behaving in a virtuous way?
b. How would I want to be treated if I were
a member of this organization?
c. What form of social contract would
allow all our members to develop their full
potential in order that they may each make
their greatest contribution to the good of
the whole?
d. To what extent are there real opportunities
for all employees to develop their talents and
their potential?
e. To what extent do all employees participate
in decisions that affect their work?
f. To what extent do all employees participate
in the financial gain resulting from their own
ideas and efforts?
 E. Duty-Based Ethics
by Immanuel Kant
“Act only according to
that maxim by which you
can at the same time will
that it should become a
universal law.”–
Immanuel Kant
◦Immanuel Kant is one of the most influential
philosophers in the history of Western philosophy.
◦His contributions to metaphysics, epistemology,
ethics, and aesthetics have had a profound impact on
almost every philosophical movement that followed
him.
◦He was a German philosopher who advances the
theory of deontology or deontological ethics the
theory of duty and obligation.
◦ Deontology proposes that ethical behavior is simply
doing God’s will.
◦ Since most of us believe that is good, then goodwill and
loving other human beings as God loves us is the
universal principle on which all moral behavior must be
based.
◦ The Categorical Imperative – Along with the concept of
goodwill goes a concept of duty to keep one’s promises
which are known as Kant’s categorical imperative an
absolute and universally binding moral law.
◦Kant believes in always telling the truth
because if we cannot believe what others
will tell us, then agreements and even
conversations with people are not possible.
◦Kant believes that categorical imperative
is the basis to determine whether one’s
action is deemed to be ethically correct.
◦There are three maxims: The first maxim: an
action can only be considered as ethically correct if
it can be accepted or made into a universal law.
◦The second maxim: that a person should be
treated as an end and not the means to achieve an
end.
◦The third maxim: everyone should as a member of
an ideal kingdom where he or she is both the ruler
and subject at the same time.
 F. Utilitarianism by Jeremy
Bentham and John Stuart Mill

“The said truth is that

it is the greatest
happiness of the
greatest number that is
the measure and
wrong” – Jeremy
◦Jeremy Bentham (1748-1832) was an
English philosopher and political
radical.
◦He is primarily known today for his
moral philosophy, especially his
principle of utilitarianism, which
evaluates actions based upon their
◦The relevant consequences, in particular, are the
overall happiness created for everyone affected
by the action.
◦He famously held a hedonistic account of both
motivation and value according to which what
is fundamentally valuable and what ultimately
motivates us is pleasure and pain.
◦Happiness, according to Bentham, is thus a
matter of experiencing pleasure and lack of
 John Stuart Mill
“A person may cause evil to others not
only by his actions but by his inaction,
and in either case; he is justly
accountable to them for the injury.”–
John Stuart Mill
◦John Stuart Mill (1806-1873) profoundly
influenced the shape of nineteenth-century
British thought and political discourse.
◦His substantial corpus of works includes texts
in logic, epistemology, economics, social and
political philosophy, ethics, metaphysics,
religion and current affairs.
◦Utilitarianism - revolves around the concept of
“the end justifies the means.”
◦It is the brain child of philosophers John Stuart Mill
and Jeremy Bentham.
◦It believes that outcomes as a result of an action
have a greater value compared to the latter.
◦It also states that the most ethical thing to do is to
take advantage of happiness for the good of the
society.
◦ In utilitarianism, the business principle holds the morally right
course of action in any situation is the one that produces the
greatest balance of benefits over harms for everyone affected.
◦ So long as a course of action produces maximum benefits for
everyone, utilitarianism does not care whether the benefits are
produced by lies, manipulation, or coercion.
◦ Business responsibility usually defined as the net benefits that
accrue to those parties affected by the choice.
◦ Thus, most utilitarians hold the position that business choices
must be evaluated by calculating the net benefits of each
available alternative action
 Types of Utilitarianism
1. Rule utilitarianism – is put in place to
benefit the most people by using the
fairest methods possible.
2. Act utilitarianism – makes the most
ethical actions possible for the benefit of
the people
 DIFFERENT
PHILOSOPHIES
IMPLICATIONS FOR
BUSINESS PRINCIPLES
AND PRACTICES
◦Ethics is a philosophical term derived from the
Greek word ethos meaning character or
custom.
◦Ethics are the principles that will tell us the
right thing to do, or what things are worth
doing.
◦Ethics refers to a set of standards governing
behaviour; it refers to broader- based, value-
◦ Ethics is considered a conduct, as distinguished from
formal sciences such as Mathematics, physical sciences
such as Chemistry and Physics, and empirical sciences
such as Economics and Psychology.
◦ Ethics is a normative science also because it involves a
systematic search for moral principles and norms that are
used to justify our moral judgments.
◦ The formation of a sound moral judgment presupposes a
profound analysis and justification of an ethical principle
or theory (Roa, 2011).
◦Since ethics is universal and the same for
all, companies should obey the same ethical
rules whenever they operate.
◦For instance, they should respect the rights
of workers, should not engage in bribery,
should protect the environment and not
undermine the local culture, and so forth
◦There are generally three levels of analysis
appropriate to business ethics:
(1) that of the system of free enterprise as such;
(2) that of the corporation; and
(3) that of the individual within the corporation. In
any case, the starting points is usually those basic
ethical norms on which all or the overwhelming
majority of people agree.
◦For instance, there are basic norms necessary for
the conduct of business such as keeping promises,
honouring contracts, telling the truth, and
respecting the lives and integrity of those with
whom one engages in business.
◦Even on issues of extortion and gross bribery there
is general consensus that these are wrong, even
though prevalent and tolerated in some countries
(De George, 1994).
◦ To illustrate more specifically how the various ethical
doctrines may affect business practices, let us take example
of Aristotle.
◦ The Aristotelian approach will help us to talk and think about
management practice.
◦ Put differently, as expressed in the familiar maxim, “A way
of seeing is also a way of not seeing”, at the heart of this
current study is a pedagogy to provide management students
with a lens drawn from virtue theory, to use alongside their
lenses of managerial functions, and roles, promises to help
students integrate moral theory into general management
◦Concretely, from Aristotle’s assertion that the
purpose of life is to maximize happiness and
that how we manage our communities should
be of main concern.
◦Whereas for Aristotle ethics culminated in
politics, we are suggesting that today’s ethics
culminates in management, as managers play a
critical role in society (Dyck and Kleysen,
2001).
COMPARING CLASSICAL
PHILOSOPHIES IN
RELATION TO THE
BUSINESS SETTING
◦ A concrete example can be given for how the various
moral philosophers’ views get applied in day-to-day
business situations.
◦ Let us take the case of “insider trading” Business A, major
stockholder of a prosperous and fast-raising company, has
access to information than that of a smaller and less
financially sound competitor, Company B, which was
going to be absorbed by a third competitor, Company C.
Businessman A’s source was the son of the major
stockholder of Company B.
◦ This son was a self-confessed hater of his father.
◦ The son gave the information to Businessman A so that
Businessman A could buy shares was sure to go up after
its takeover by a bigger, more financially stable company
was made public.
◦ The son offered to give this piece of information on the
understanding that Businessman A would share with him
the big profit he was bound to make. After the takeover,
Company B would surely wind up (Gomez, 1992).
◦ One’s ethical viewpoint will definitely “color” one’s opinion on whether
the actions described above can be considered ethical or not.
◦ For instance, a Platonist would consider it a deviation, a withdrawal from
the Good, and hence, would consider it unethical.
◦ If one takes the utilitarian view, one might possibly consider such actions
acceptable, as they provide net benefits to both Businessman A and the
source of the insider information.
◦ A Kantian would say that both parties’ conduct cannot be set up as a
universal law are thus immoral.
◦ An Aristotelian or virtue of ethicist would definitely consider both actions
as unconscionable, as many important virtues-such as loyalty, fairness,
temperance, justice –are clearly lacking or absent.
◦This and other examples can be offered.
◦What is important is that in any situation, the
decision maker take on a comprehensive ethical
framework, one that minimizes the gaps or
incompatibilities among the various ethical
viewpoints, one that hopefully leads to the good
of the human persons, to his perfect human
flourishing or eudaimonia.