Chapter 6: A ETHICAL ISSUES AND PROBLEMS IN Prevailing Industry Rate - Some claim that paying workers the
BUSINESS & THE CORPORATE WORLD average of what other companies are paying for the same job
result in fair wage. However not all the companies have a
Business is a productive human activity that brings beneficial minimum wage high enough to maintain a decent standard of
contribution to both people and society. Business produces living.
employment, fair deals, creativity, advancement of technology,
customers’ satisfaction. Ironically, however, business is also an
activity that provides an opportunity for some unscrupulous Organizational Factor - Assessment of what type of industry
people to take advantage of others, the abuse of fiduciary the organization operates, the size of the company, and the
relationship between employers and employees and between organization’s profitability to justify its ability to provide fair
buyers and sellers. wages to its workers should be considered.
1. Sexual Harassment Job factor - The nature of the job itself entails the formulation
- Is an issue in the corporate world that must be looked into of a just wage. Duties, responsibilities, and the skills
because it can create a hostile and unhealthy workplace for the requirements of the job are probably the most considerable
employees. determinants of fair wage.
Individual Performance - The trend is that individual
Republic Act No. 7877 defines sexual harassment as, performance or productivity ratings affects the determination of
“Employer, employee, manager, supervisor, agent of the wage/ salary increases.
employer, teacher, instructor, professor, coach, trainor or any
other person who, having authority, influence or moral 3. Gift-Giving and Bribery
ascendancy over another in a work or training or education
environment demands, request or otherwise requires any Gift-giving is merely an act of extending goodwill to an
sexual favour from the other, regardless of whether the demand, individual in an effort to share something with them. Giving gifts
request, or requirement for submission is accepted by the to customers, clients and business partners is a common
object of said act.” practice in the business community.
Bribery is defined as a practice of giving remuneration for
Two Types of Sexual Harassment performance of an act that is inconsistent with the work
contract or the nature of the work one has been hired to
“Quid Pro Quo” Harassment- “Quid Pro Quo” means “This for perform.
That” (something for something) and is defined as requiring a
sexual favour or interaction as a condition of employment or in 4. The Morality of Advertising
exchange for an employment benefit Advertising plays a very significant role in marketing goods and
services. Without advertising, the consumers would not be
A harassment that creates a hostile environment- In this aware of the presence of the diverse products and service
environment, abuses include verbal, physical and visual available in the market.
conducts that create an intimidating, offensive or hostile
environment in the workplace that interferes with work 5. Workplace Romance - is defined as a relationship between
performance. two people who are employed by the same organization.
2. The Problem of Just Wage 6. Ethical Issues in Fair Price
The main objective of compensation is to create a system of • The true cost of the product is concealed.
reard that is equitable to employer and employee. Thus, the • Suggested retail price
general concern is that justice should be a substance of • Use of electronic scanners
compensation. • Promotional Pricing
• Follow the leader pricing
Factors to consider in Formulation of Fair Wages • Price gouging
External Market Factor - These refers to the supply and • Price fixing
demand for labor and the so-called economic and
underemployment. 7. Trade Secrets - is the legal for confidential business
information. That piece of information allows the company to
Laws and Regulations - Workers should be paid in accordance compete effectively.
with laws regulations issued by the government. It requires that
employers pay at least the minimum wage. Examples of trade secrets include customer identities and
preferences, vendors, product pricing, marketing strategies,
Cost of Living - The cost of living relates to basic maintenance company finances, manufacturing processes and other
needs and it must be seriously considered in formulation of competitively valuable information.
wages. A fair wage should be sufficient to meet the increase in
cost of living. 8. Product Misrepresentation
Misrepresentation is observed when there is a transformation of
information to misinformation.
It is when taxpayers exploit legally permissible alternative
The following are the two types of misrepresentation. methods of assessing taxable property or income in order
• Intentional - commonly known as lying to avoid reduce tax liability.
• Unintentional - commonly called as white lie
9. The Morality of Labor Strikes
Strike describes collective action undertaken by groups of
workers in the form of a refusal to perform work.
10. Whistle blowing
It is the disclosure by an employee of confidential information
which relates to some danger, fraud or other illegal or unethical
conduct connected with the workplace, be it of the employer
or his fellow employees.
A whistleblower is someone in an organization who witness
behaviour by members that is either contrary to the mission of
the organization, or threatening to the public interest and who
decides to speak out publicly about it.
11. Multilevel Marketing (MLM) or Pyramiding
Multilevel Marketing is a system of selling on which one signs
up other people to assist him, and they, in turn, recruit others
to help them. It is a system of selling through many levels of
distributors, thus the word “multilevel marketing”.
Pyramiding: In the classic pyramid scheme, participants
attempt to make money solely by recruiting new participants
into the program. The hallmark of these schemes is the
promise of sky-high returns in a short period of time for doing
nothing other than handing over your money and getting others
to do the same.
12. Money Laundering - It is the process of disguising illegally
obtained money so that the funds appear to come from
legitimate sources or activities. Money laundering occurs in
connection with a wide variety of crimes, including illegal arm
sales, drug trafficking, robbery, fraud and terrorism.
13. Conflict of Interest
It occurs in the business context when a person acts in a way
that is to his/her advantage at the expense of the employing
organization. At the time of hiring, when an employee agrees to
the terms of a contract, there is also an implicit agreement that
the employee will not sacrifice the interest of the organization
for his/her personal interest. Conflict of interest violates the
principles of impartiality. Common factors that create conflict
of interest are commercial bribes or gifts.
14. Insider Trading - Refers to the significant facts that have
not yet made public and are likely to affect stock prices.
15. Tax Evasion and Tax avoidance
Ideally, corporations should pay the exact amount of tax to the
government as part of their obligation to the society in general.
However, come companies intentionally evade the payment of
taxes to the government. Tax evasion is “intentional
negligence” of the obligation to pay
Tax avoidance
