BEFORE THE

LETTER
TJS - B
Sir - A
fuijdt
ethics
cvtjofttft
businesses
qsjodjqmft
principles
mfbefstijq
leadership
Fowjsponfoubm
dpodfso
environmental concern
BUSINESS ETHICS
&
SOCIAL
RESPONSIBILITY
ABMSPECIALIZEDSUBJECT

The course deals with the fundamental concepts,

principles, and practices of ethical standards in the
business environment. It combines the theoretical
foundations of setting up business enterprises with the
conduct of entrepreneurial activities in the context of one’s
accountability and social responsibility.

Specifically, the course aims to: (1) provide students with a

basic understanding of the mechanisms whereby
companies can be made to act in the best interest of
shareholders, other stakeholders, and society as a whole;
(2) provide students with knowledge of general ethical
principles as applied to the special situations of business
and the ability to make informed judgments through case
analyses; and (3) equip students with the ability to
formulate basic strategies in relation to corporate ethics
and governance.
KEY TAKEAWAYS
• Business ethics refers to
implementing appropriate
business policies and
practices with regard to
arguably controversial
subjects.
• Some issues that come up
in a discussion of ethics
include corporate
governance, insider trading,
bribery, discrimination,
social responsibility, and
fiduciary responsibilities.
• The law usually sets the
tone for business ethics,
providing a basic guideline
 Principles of Business Ethics
It's essential to understand the underlying
principles that drive desired ethical behavior
and how a lack of these moral principles
contributes to the downfall of many otherwise
intelligent, talented people and the businesses
they represent.

There are generally 12 business ethics

principles:
 Principles of Business Ethics
1. Leadership: The conscious effort to adopt,
integrate, and emulate the other 11 principles
to guide decisions and behavior in all aspects of
professional and personal life.

Principles of Business Ethics

2. Accountability: Holding yourself and others
responsible for their actions. Commitment to
following ethical practices and ensuring others
follow ethics guidelines.
 TWICE
BEFORE THE
LETTER
kpvgitkva
integrity
nqacnva
loyalty
hcktpguu
fairness
vtcpurctgpea
transparency
 dwukpguu
qticpkbcvkqp
business organization
 Principles of Business Ethics
3. Integrity: Incorporates other principles—
honesty, trustworthiness, and reliability. Someone
with integrity consistently does the right thing and
strives to hold themselves to a higher standard.

Principles of Business Ethics

4. Respect for others: To foster ethical behavior and
environments in the workplace, respecting others
is a critical component. Everyone deserves dignity,
privacy, equality, opportunity, compassion, and
empathy.
 Principles of Business Ethics
5. Honesty: Truth in all matters is key to
fostering an ethical climate. Partial truths,
omissions, and under or overstating don't help
a business improve its performance. Bad news
should be communicated and received in the
same manner as good news so that solutions
can be developed. Principles of Business Ethics
6. Respect for laws: Ethical leadership should
include enforcing all local, state, and federal
laws. If there is a legal grey area, leaders should
err on the side of legality rather than exploiting
a gap.
 Principles of Business Ethics
7. Responsibility: Promote ownership within an
organization, allow employees to be
responsible for their work, and be accountable
for yours.

Principles of Business Ethics

8. Transparency: Stakeholders are people with
an interest in a business, such as shareholders,
employees, the community a firm operates in,
and the family members of the employees.
 Principles of Business Ethics
9. Compassion: Employees, the community
surrounding a business, business partners, and
customers should all be treated with concern
for their well-being.
Principles of Business Ethics
10. Fairness: Everyone should have the same
opportunities and be treated the same. If a
practice or behavior would make you feel
uncomfortable or place personal or corporate
benefit in front of equality, common courtesy,
and respect, it is likely not fair.
 Principles of Business Ethics
11. Loyalty: Leadership should demonstrate
confidentially and commitment to their
employees and the company. Inspiring loyalty in
employees and management ensures that they
are committed to best practices.

Principles of Business Ethics

12. Environmental concern: In a world where resources are
limited, ecosystems have been damaged by past practices,
and the climate is changing, it is of utmost importance to
be aware of and concerned about the environmental
impacts a business has.
Chapter 1
The Role of Business in
Social and Economic
Development
Lesson 1 The Nature and
Forms
of Business
Organization
At the end of the session the learners will be able
to:
a. Differentiate the forms of business
organizations
b. Give examples of forms of business
organizations
c. Explain the roles of business in social
and development.
BUSINESS
Is an activity that is part and
parcel of human society: It is an
entity in which economic
resources or inputs, such as Business from a
materials and labor, are put
together and processed to Moral Perspective
provide goods or services or Business is organizations
outputs
Complexto enterprises
customers. involving should help in the promotion
major activities like purchasing, of the common good and in
manufacturing, marketing,
the protection of persons’
advertising, selling, and
accounting. rights and interests.

Profit Thus, businesses make the

Objective of most businesses. goods and services you use
each day.
It is the difference between the
amount earned and the amount
spent in buying, operating, or
producing something.
TYPES OF BUSINESS
ORGANIZATIONS
There are generally three types of
business organizations operated for profit:
Service Business
Provides services rather than products to customers.

Merchandising Business
Sells products from other businesses to customers.

Manufacturing Business
Change basic inputs into products that are sold to
customers.
 FORMS OF BUSINESS ORGANIZATIONS
The three types of businesses – service, merchandising and manufacturing – may be organized to the following,
given the large size and huge amount of resources required to operate a manufacturing business, most
manufacturing businesses are corporation.

SERVICE MERCHANDISING
MANUFACTURING

Sole Partnership Corporati

Proprietorship An association of two or more An on
entity created by law that
people is
separate and distinct from its
A business owned by one as partners owners and its
person It refers to an agreement in which continued existence
dependent upon theiscorporate
the individuals share the profits structures of the state in which it
and liabilities of a business is incorporated.
venture.
 FORMS OF BUSINESS
ORGANIZATIONS cont.
Sole Proprietorship Partnership
NUMBER OF Corporation
1 2 or more At least 5
POSSIBLE
OWNERS
WHO MANAGES Owner Partners Board of Directors and
THE (but he may hire somebody) (or they may hire managers) operating management
BUSINESS
TERMINATION Death of the owner Death of any As stated in the Articles
OF BUSINESS partner or of Incorporation, not to
withdrawal of a exceed 50 years.
partner
GOVERNMENT Department of Trade and Department of Trade and Securities and Exchange
AGENCY Industry - DTI Industry - DTI Commission - SEC
ASSIGNED TO
REGULATE
TRANSFER OF Sell the business (it’s a new Sell the business or Sell Stocks
OWNERSHIP entity under a new owner) interest of a partner
(consent of other
partners is necessary)
LIABILITY Unlimited ; other properties not Generally unlimited; There are Limited to the
OF used in the business may be held types of partnerships that limit stock
OWNERS liable for the obligations of the the liability of the partners investment of the
ROLE OF BUSINESS IN THE
ECONOMY
Small Businesses
Vital and significant contributors to economic development, job
creation, and the
general health and welfare of economies.

Microbusinesses
Firms that employ fewer than ten people.

Form a dynamic, integral part of the market economy, providing goods

and services and a gateway by which millions enter the economic and
social mainstream of society.

Corporations
Large businesses offer better jobs than small businesses, in terms of
both compensation and stability. Also provide such benefits as:
Links with suppliers, increased consumer spending, the transfer of
knowledge
from one firm to another, and the sharing of pool of workers.

Competitive Forces
Competitive forces sometimes fail to steer companies in a socially
beneficial way
ETHICAL
ISSUES
The wave of large corporations has brought with it a host of new ethical issues,
including:

Possibilities of exploiting the workers who labor at the new

machines

Manipulating the new financial markets

that finance those large enterprises

Producing massive damage to the environment.

Class
Activity:
Case Problem Analysis
Abakada Company began a small enterprise buying and selling various
Guide Instruction:
Based on the situation above, give the
food products. After a few years of successful operations, it added owner of Abakada Company appropriate
apparel and footwear to its wares. During this initial stage, Abakada advice regarding whether or not to
managed to work on the basis of its proprietor’ capital, borrowing from incorporate his business. You might wish
its bank from time to time when needed. to categorize the pros and cons into the
following issues:
After more years of operation, Abakada found that it needed to draw
larger amounts of funds through bank borrowing, as well as to hire
more personnel for the growing marketing needs and services, apart • BUSINESS SIZE
from administrative functions like accounting, among others. The
proprietor carefully weighed his options: • MISSION AND OBJECTIVES

• Shall I incorporate my business so that I can have greater and • PROCEDURES FOR
easier access to funds, especially larger loans from banks? INCORPORATION
• If I hire more people as my company goes bigger, will I be able to
manage and • PERSONNEL
control well the personnel working for me?
• If I begin offering ownership shares to other people outside my • CONTROL
family, will serious disagreements arise among us in terms of
products and services to offer in the future as well as managerial • FUNDING SOURCES
style?
• LEGAL AND TAXATION
 Thank
You!
Reference(s):
Racelis 2017. Business Ethics and Social Responsibility.
Rex
Bookstore First Edition. Pages 2 -10

Commission on Higher Education (CHED) 2016.

Fundamentals of Accountancy Business and
Management 1 (FABM1) Teaching Guide. Page 27

For suggestions, email your Presentation made

message to: by:
GIAN PAULO M. RABANAL, LPT,
hyperion.helios22@gmai MBA©