SRGG MIDTERM REVIEWER to profit; as such, pyramid schemes are

unsustainable and often illegal.

W7: MLM vs PYRAMIDING;
WHISTLEBLOWING & MONEY
LAUNDERING

MULTI-LEVEL MARKETING (MLM)

Difference between MLM & Pyramiding?

➢ Is a controversial marketing strategy in MLM PYRAMID

which the sales force is compensated not SCHEME
only for sales they generate, but also for the
sales of the other salespeople that they What is it? Marketing Fraudulent
strategy Scheme
recruit. This recruited sales force is referred
to as the participant's "downline", and can Setup Commision Enrollees
provide multiple levels of compensation. is paid to are asked to
Other terms used for MLM include pyramid distributors pay money
selling, network marketing, and referral at multiple upfront in
marketing. levels when order to
product is enroll.
sold Participants
in a
pyramid
scheme
make
money
primarily
from
enrollment
fees rather
than by
selling
PYRAMID SCHEME products.

➢ Is a business model that recruits Legitimacy Legal Illegal

members via a promise of payments or Product Usually No product
services for enrolling others into the used as a except a
scheme, rather than supplying investments channel for fake
or sale of products or services. As recruiting selling investment
multiplies, recruiting becomes quickly tangible
impossible, and most members are unable products.
 sold to the consumed
DIFFERENCE BETWEEN MLM & consuming internally within
PYRAMIDING public. organization.

10. Bonuses based Bonus entitlements

MLM PYRAMIDING on sales to final are based in goods
users; not absorbed by
1. Legal Illegal members of members within
scheme structure.
2. Income Income generated
generated on in the process of
product sales. recruiting others MONEY LAUNDERING
into the pyramid. ➢ The term “money laundering” is said to
originate from Mafia ownership of
3. Provides No training
training program. Laundromats in the United States.
program. Gangsters there were earning huge sums in
cash from extortion, prostitution, gambling
4. Consumable, Few retail sales and bootleg liquor. Is the process of making
reasonably and high cost, illegally-gained proceeds appear legal.
priced quality slower moving
products. products.
THE PLACEMENT STAGE
5. Legitimate No legitimate Generally, this stage serves two purposes:
economic economic function; a) it relieves the criminal of holding and
function; no economic guarding large amounts of bulky of cash;
channel of benefits, transfer of and
distribution for money from one
small or new person to another b) it places the money into the legitimate
companies with w/out legitimate financial system. It is during the placement
excellent business. stage that money launderers are the most
products. vulnerable to being caught.

6. Sponsoring Recruiting THE LAYERING STAGE

participants participants gets
earn benefits from ➢ The layering stage is the most complex
nothing by mere recruitment. and often entails the international
sponsoring. movement of the funds. The primary
recruitment is purpose of this stage is to separate the illicit
optional. money from its source.
7. Earnings tied to Earrings are tied to
product the act of THE INTEGRATION STAGE
consumption of recruitment. ➢ It is at the integration stage where the
end-users. money is returned to the criminal from what
seem to be legitimate sources. Having been
8. Enormous Little/no effort to placed initially as cash and layered through
efforts to sell sell to the public.
a number of financial transactions, the
exerted.
criminal proceeds are now fully integrated
9. Products are Products are into the financial system and can be used
for any purpose.
 “CSR is which relates primarily to achieving
outcomes from organizational decisions
concerning specific issues or problems
which have beneficial rather than adverse
effects upon pertinent corporate
stakeholders. the normative correctness of
the results of corporate action and has been
the focus of CSR.”

PROFESSOR KEITH DAVIS OF ARIZONA

STATE UNIVERSITY
“the response of the corporation to issues
W8-9: CONCEPTS & HISTORICAL
beyond its narrow economic, technical and
PERSPECTIVE OF CORPORATE SOCIAL
legal requirements. It is the obligation of the
RESPONSIBILITY
corporation to evaluate the effects of its
decisions on the external social system.”

PETER DRUCKER
“one of the reponsibilities of business to
society is to operate at a profit... Business is
the wealth-creating organ of society. But
what is important is that management
realizes that it must consider the impact of
CORPORATE SOCIAL RESPONSIBILITY
every business policy and business action
on society, It has to consider whether the
BAUER
action is likely to promote the public good,
“Corporate Social Responsibility means
to advance the basic beliefs of society,
seriously considering the impact of the
to contribute to its stability, strength and
company's actions on society.”
harmony... The ultimate responsibility of
management to itself, to our heritage, to our
DAVIS & BLOMSTORM
society and to our way of life.”
“CSR is the obligation of decision makers to
take actions which protect and improve the
CORPORATE SOCIAL RESPONSIBILITY
welfare of the society as a whole along with
FROM A HISTORICAL PERSPECTIVE
their own interests.”

The Ancient Period (5th - 15th Century)

MCGUIRE
Prominent Person: Plato
“The idea of social responsibility supposes
that the corporation has not only economic
and legal obligations, but also certain
responsiblities to society which extend
beyond these obligations.”

EPSTEIN
Description
● People believed that businessmen and Prominent persons: Max Weber & John
wealthy people should do business to the Calvin
community as part of public or social
service;
● The Greeks and Romans treated the
businessmen next to slaves. The Elite of the
society condemned businessmen, criticizing
them for utilizing their money for profit and
not for service to the community;
Description
● Businessmen were pressured by the
● The power of the Catholic Church as
society.
the most influential institution in Europe
diminished at the onset of mercantilism, a
People Involved
politico – economic philosophy;
● PLATO – the Greek Philosopher and
● This period shows several violations of
follower of Socrates – wrote and presented
social responsibilities;
his ideas in the form of dramatic dialogues,
● To European governments, the main
recommended that such activities be
source of power and prestige among
prohibited.
nations is the acquisition of gold and silver
through trade. (Bullionism)
THE MEDIEVAL PERIOD (5th - 15th
● The Harmony of Interest Theory of
Century)
England
Prominent Person: St. Thomas Aquinas

People Involved
● Max Weber – claimed that Protestant
values encouraged thrift, industry, and
materialism, making Protestant
countries more progressive than
Description
Catholic countries.
● Criticisms against the evil of business
● John Calvin – one of the proponents of
came far and wide during the medieval
Protestant Work Ethics, likewise
period when the Catholic Church became
glorified the thrifty and industrious
the most powerful institution in Europe;
businessmen.
● Catholic church did not trust the
business system;
2.3 INDUSTRIAL REVOLUTION
● Profit – motived = anti – Christian
TIME WHEN MACHINES WERE
INTRODUCED
People involved
● to improved production and business
● St. Thomas Aquinas – introduced the
growth.
concept of compensatory justice which
● along with these improvements was
maintains that prices and wages should be
the change in businessman’s
fair.
● attitude and values towards business.

THE MERCANTILISM PERIOD (15th - 18th

➢ Businessmen regarded wealth as a
Century)
symbol of moral excellence
 obligation has now become a business
➢ Absolute free enterprise became an pursuit.
argument ❖ Businesses have started to
● rejecting the concept of social integrate CSR as part of their corporate
responsibility structures and processes.
● promoting the Individualist
Philosophy HISTORICAL PHASES OF CORPORATE
❖ government must not interfere with SOCIAL RESPONSIBILITY
the activities of the businesses.
❖ not surprisingly, businessmen
activities became free, making big
businesses powerful.

➢ Capitalist in England were the ones who

thoroughly enjoyed this prerogative.
CHARACTERICS:
❖ Workers, including children and
aged, were exploited and force to work.
PHASE 1:
❖ Capitalist abused unrestrained
● Individual drive for profit maximization
business activities by cheating and selling
would ultimately create wealth for the
their poor quality products at very high
nation.
prices.
● Business systems as profit maximizers
are used as tools for the elimination of
➢ Karl Marx and Robert Owen, fighting
economic scarcity.
against the capitalist, were both responsible
● Businesses ignored unsafe working
in exposing these abuses, thereby earning
conditions, paid starvation wages and
for them the titles “social reformist”
used child labor in order to maximize
profit.
● Problems of cultural minorities, unsafe
products, unfair advertising and urban
poor problems were given little if no
attention at all.
2.4 AFTER the Period of Depression ● Abuses of capitalism were extremely
rampant and the government tolerated
● The government, especially in these deplorable business practices.
progressive countries, protected the
welfare of the public against abuses of PHASE 2
businesses. ● Management was considered both as
● Businesses viewed social responsibility an instrument of stockholders and as
as an adherence to rules and trustee for all groups who contribute to the
regulations and compliance with business enterprise.
administrative and legal standards. ● Aside from profit maximization,
● As the growing demands for higher CSR management's concern was also to
emerge, approaches to this moral maintain a fair balance in the interests of
employee, customers, creditors, 3. MANAGERIAL VIEW
stockholders and the community. 4. PUBLIC VIEW
5. CHRISTIAN VIEW
PHASE 3
● Security of basic goods and services CLASSICAL VIEW
was no longer a principal problem. ● The primary responsibility of business is
● Social and economic problems brought profit maximation.
about by economic growth expanded the ● Obligation of management is to notify
concept of social responsibility of stockholders for their investments.
management. ● Supported by Milton Friedman, one of
● Society demanded management's active the most effective advocates of economic
participation in helping solve social and freedom and free enterprise.
environmental problems in view of the vast ● According to the Milton Friedman an
resources (funds, manpower, materials, economist that today managers are
management skills and technology) of profession, their social responsibility is to
businesses. minimize the profit. According to him their
● Business is expected to contribute to the first priority should be to run the business in
improvement of the quality of life, which ● the best interest of owners.
involves cultural, social, educational,
political factors and economic security. ROBERTSON AND NICHOLSON,
● Society is unstable if the quality of life of “A certain amount of rhetoric may be
the people is poor. inevitable in the area of social responsibility.
● Business contribute for a good quality of Managers may even believe that making
life and society. statements about social responsibility
● A prosperous society is the best insulates the firm from the necessity of
environment for a business to thrive in. taking social responsibility action.
● Business will benefit from its self
investment in society. MOIR 2011 is more ambivalent.
“Whether or not business should undertake
PERSPECTIVES ON CORPORATE CSR, and the forms that responsibility
SOCIAL RESPONSIBILITY should take, depends upon the economic
perspective of the firm that is adopted.”
➢ People's attitudes, values, and
management culture differ. Consequently, SOCIOECONOMIC VIEW
each has a social responsibility in society ● Maximizing profit is the second priority
since every individual, body or institution ● The first priority is protecting and
makes up a society. Businesses have improving society's welfare
different viewpoint on social responsibility ● Modern business organizations are not
as well. only economic institution, but they engage
their self in such activities to influence
DIFFERENT PERSPECTIVE ON CSR political process for their benefits.
● Society encourages business to become
1. CLASSICAL VIEW involved in its social, political and legal
2. SOCIOECONOMIC VIEW environment.
MANAGERIAL VIEW
● Does not emphasize profit maximation
and interests of stockholders.
● Concerned not just with the internal
running of the business but must also be
concerned with the externsl environment in
which the business operates.
● To balance the interestt of employees,
customers, suppliers, and the local
● Plant community is the role of managers
of big businesses. ECONOMIC RESPONSIBILITY
● Be profitable
PUBLIC VIEW ● The foundation upon which all others
● Includes the needs and interests of the rest
whole society in contrast with the ● REQUIRED of business by society
● Classical and managerial views.
● Established harmony with both business LEGAL RESPONSIBILITY
corporations and public interest. ● Compliance with laws and regulations
● Law is society's codification of right and
CHRISTIAN VIEW wrong; Play by the rules
● Excess wealth should be given to the ● REQUIRED of business by society
less fortunate. Wealthy individuals have a
responsibility to share their blessings with ETHICAL RESPONSIBILITY
the poor. ● Be ethical
● A successful corporation should perform ● Obligation to do what is right, just and
its social responsibility more by returning fair; avoid harm
● A fair portion of its profits to the people ● EXPECTED of business by society
in the form of social services.
● Based on the teachings of Jesus Christ PHILANTHROPIC RESPONSIBILITY
as taught in the Bible. ● Be a good corporate citizen
● Contribute resources to the community;
THE FOUR CORPORATE improve quality of life
RESPONSIBILITIES ● DESIRED of business by society

➢ The idea behind corporate social W10: WORKPLACE ETHICS,

responsibility is that companies have PROFESSIONAL ETIQUETTES,
multiple responsibilities to maintain. These WORKPLACE NETIQUETTE
responsibilities can be arranged in a
pyramid, with basic responsibilities WORKPLACE ETHICS
closer to the bottom.
DEFINITION of Work
➢ Work is both a personal and a social
activity. As a personal activity, it aimed at 4. Never assign them tasks beyond their
developing a person and as a social activity strength, nor employ them in work not
its purpose is the preservation of human suited to their age or gender
society. Work therefore, has moral and legal 5. Give them a fair wage
implication. 6. Provide for their health and social
recreation
1. Work is the “use” or application of our 7. Provide them time for the practice of their
physical powers to accomplish certain religion
tasks. 8. Instruct them on how to use their money
2. The purpose of work is to obtain an wisely
economic gain or power. This is part of 9. Instruct them to love their family
essence of work. 10.Provide them with opportunities for
promotion
HOW TO ENJOY WORK & CREATE
SPIRITUAL VALUES IN THE BASIC DUTIES OF WORKERS
WORKPLACE:
1. Work honestly and comply with all
1. Practice the Golden Rules agreement
2. Guard your mouth 2. Never injure capital, nor steal from the
3. Stop the green jokes employer
4. Practice the ethical behavior 3. Never outrage the person of the employer
5. Learn to forgive 4. Never employ deceit or violence in
6. Be generous presenting a cause
7. Respect superiors and coworkers 5. Never consult with “agitators” or men of
8. Be considerate evil principles
9. Perform your work and fulfill your duties
to the best of your ability PROFESSIONAL ETIQUETTES
10. Be grateful person
11. Do not bring the problems at home to ➢ The era of Globalization has created a
the workplace or vice versa need for specialized skills and knowledge.
12. Be an inspiration to other The needs for specialized skills and
13. Read the Bible everyday knowledge in business has created a trend
14. Develop a personal relationship with which prods people and organizations to be
God identified with a particular profession
15. Smile and enjoy your work basically because it brings with a prestige, a
sense of respect, professional esteem and
BASIC DUTIES OF EMPLOYERS status symbol.

1. Respect the dignity of the workers Based on Webster’s dictionary, the

2. Appreciate their work meaning:
3. Never treat them as a slaves for making
money Professional
➢ Is relating to or characteristics of the
profession. Engaged in one of the ● Respecting the rights and dignity of
professions. Participating for gain in an students, colleagues, and parents.
activity not engaged in by amateurs. ● Maintaining confidentiality regarding
student information and professional
Professionalism matters.
➢ In the other hand is the conduct that ● Upholding academic integrity and
characterizes a profession or a professional honesty in teaching, assessment, and
person, or it can also be the pursuit of a research.
profession for gain or livelihood. ● Committing to ongoing professional
development and staying current with best
● The word Profession and Professional practices.
imply a public declaration with the forced of ● Avoiding discrimination and
a promise. Professions are groups which promoting diversity, equity, and inclusion
declare in a public manner that their ineducation.
members will act in a certain ways ● Fostering positive relationships with
according to their profession and that the students, parents, and the community.
same group and in some instances, the
society may discipline those who fail to In some cases, members must be
conform to its prescribes ways. The sanctioned for violation of the code. These
traditional professions include medicine, sanctions may include the following:
law, education and clergy.
● Members of the profession create their ● Payment of a fine;
own set of rules, set standards of practice ● Payment of the cost of any investigation;
and profession, and at the same time ● Reprimand;
discipline their own professional codes of ● Imposition of conditions on membership;
conduct. A Professional code of ethics is a ● Suspension from membership; and
set of behavioral guidelines that members of ● Expulsion from membership
a profession are required by their
association to observe in the course of their 7 MUST-KNOW NETIQUETTE RULES
professional practice. These guidelines in FOR PROFESSIONAL BEHAVIOR
general terms, prescribes responsibilities
that members must adhere to and ➢ Online interactions are just as important
questionable situations in which they must as face-to-face ones. In our fast-paced
not be involved. world, chock-full of technology, we’re
communicating more virtually than ever
➢ In the field of education, educators before – whether conducting business or
adhere to a Professional Code of Ethics that not.
guides their conduct and responsibilities ● Learning how to manage your online
towards students, colleagues, and the relationships and maintain good “netiquette”
education profession as a whole. This code are not only good for business they’re also
typically includes principles such as: good for job security.

● Providing a safe and inclusive 1. EXERCISE THE GOLDEN RULE - “Do

learning environment for all students.
unto others as you would have them do digital media. If you want your message
unto you”. If you wouldn’t speak to him/her read, go easy on the words.
that way face to face, then don’t do it online.
7. SHHH, IT’S CONFIDENTIAL - Don’t, I
2. YOUR CYBER FINGER PRINT - repeat, don’t reveal company secrets such
Remember everything you post in as data, competitive advantage, intellectual
cyberspace is for all to see. Even if you’ve property and much more. It will cost you
deleted the post, text, tweet blog, email, your job and your credibility.
etc., it matters not. If you’ve published it, it’s
traceable. W11: WHISTLEBLOWING CONFLICT OF
INTEREST
3. THINK TWICE BEFORE YOU POST
THAT PIC - At the risk of stating the Whistle Blowing
obvious, avoid posting unprofessional ➢ Is the disclosure by an employee of
pictures of yourself or with co-workers confidential information which relates
unless you/they mind them being shared to some danger, fraud, or other illegal or
with everyone. As a brand ambassador of unethical conduct connected with the
the company, posting a picture to your workplace, be it of the employer or of his
Facebook, Twitter, Instagram of you employees.
chugging a beer at a company happy hour
does not reflect the company in the best Whistle Blower
light – and you may even get canned (pun, ➢ Is someone in an organization who
intended). witnesses behavior by members that is
either contrary to the mission of the
4. NEVER USE PROFANITY organization, or threatening to the public
interest, and who decides to speak out
public about it

Studies also revealed that whistle blowing

experience each of the following forms of
retaliation.
5. BITE YOUR TONGUE - Don’t post
when you’re angry. Instead, take the ● Lost their job or were forced to retire
24-hour rule to clear your head. This will ● Received negative job performance
help you refrain from saying something evaluations
you’ll likely later regret. And resist the urge ● Had work more closely monitored by
to use all CAPS, as it may be interpreted as supervisors were criticized or avoided by
you’re shouting. co-workers.
● Were blacklisted from getting another
6. LESS IS MORE - Avoid going on and on job in their field
to get your point across. According to a ● There were considered traitors to their
study from Microsoft Corp., people typically organization
lose their attention after eight seconds,
showcasing the impacts of the brain and
The majority of the whistle blowers also 1. Before taking any irreversible steps, talk
experience severe emotional effects of their to your family or close friends about your
whistle blowing activity: decision to blow the whistle.

2. Be alert and discreetly attempt to learn of

● Severe depression or anxiety any other witnesses who are upset
● Feelings of isolation or powerlessness about the wrongdoing.
● Distrust of others
● Declining physical health 3. Before formally breaking ranks, consider
● Severe financial decline whether there is any reasonable way to
● Problems with family relations work within the system by going to the first
level of authority. If you do decide to
break ranks, think carefully about whether
TYPES OF WHISTLE-BLOWING you want to “go public” with your
concerns or remain an anonymous source.
1. Internal Whistle-Blowing
● Occurs within the organization. It is 4. Develop a plan, such as
going “over the head of immediate strategically-timed release of information to
supervisors to inform higher management of government agencies so that your
employer is reacting to you, instead of vice
the wrongdoing.”
versa

2. External whistle-Blowing 5. Maintain good relations with the

● Occurs outside the organization. It is administration and support staff.
revealing illegal; and immoral activities
within the organization to outside individuals 6. Before and after you blow the whistle,
keep a careful record of events as they
or groups such as media men, public
unfold.
interest groups, regulatory baby, or
non-government organizations. 7. Identify and copy all necessary
supporting records before drawing any
3. Current suspicion to your concerns.
● Those who blow the whistle on present
employers 8. Break the cycle of isolation research and
identify and seek a support network
potential allies, such as elected officials,
4. Alumni journalists and activists.
● Those who blow the whistle on former
employers. 9. Invest on funds to obtain legal opinion
from a competent lawyer.
5. Open
● The whistleblower discloses his identity. 10. Always be on guard not to embellish
your charges.
6. Anonymous 11. Engage in whistle blowing initiatives on
● The whistleblower does not disclose his your own time and with your own
identity resources, not your employer’s.

HOW TO BLOW THE WHISTLE 12. Don’t wear your cynicism on your
sleeves when working with the authorities.
CONFLICT OF INTEREST common financial interest if these are
relevant to the functions to be performed.
Conflict of interest in the business context
occurs TYPES OF CONFLICT OF INTEREST
● When a person acts in a way that is to
his/her advantage at the expense of the 1. Self-Dealing - It occurs when a
employing organization. At the time of management-level professional accepts a
hiring, when an employee agrees to the transaction from another organization that
terms of the contract, there is also an benefits the manager and harms the
implicit agreement that the employee will company or the company's clients. Gift
not sacrifice the interest of the organization issuance is also a very common conflict of
for his/her personal interest. interest.
● Conflict of interest violates the principles
of impartiality. The “Interest” may be 2. Accepting Benefits - Accepting gifts
financial or not. from external interested parties to gain an
advantage is a conflict of interest. While
The common factors that create conflict of sometimes people give gifts without an
interest: ulterior motive, it can improperly influence
someone's judgment on whether it's
Gifts valuable.
● Accepting a gift is unethical if acts as
bribe or extortion in that it influences the 3. Influence Peddling - Here, the
impartial judgment of the employee. professional solicits benefits in exchange for
using her influence to unfairly advance the
GENERAL PRINCIPLES interest of a particular party.

➢ The term “conflict of interest” means 4. Using your employer’s property for
something more than individual bias. There private advantage.
must be an interest, ordinarily financial, that
could be directly affected by the work of the 5. Outside Employment or Moonlighting -
Committee. No employee may seek or accept outside
➢ The term “conflict of interest” applies employment that creates an inherent conflict
only to current interest. It does not apply to with the their employment.
past interest that have expired, no longer
exist, and cannot reasonably affect current 6. Post-Employment - a risky situation can
behavior. Nor does it apply to possible be one in which a person who resigns from
interests that may arise in the future but not a public or private employment and goes
currently exist, because such future into business in the same area.
interests are inherently speculative and
uncertain.
➢ The term “conflict of interest” applies not
only the personal financial interest of the
individual but also to the interest of others
with whom the individual has substantial