BUSINESS ETHICS

LESSON 1: NATURE OF BUSINESS LESSON 2: PURPOSE OF BUSINESS

Business Purpose of Business

- An activity that one does with diligence - Earn profit

and care - Make money
- System where goods and services are - Financial Returns
exchange for money or another
Subjective Purpose
- According to Duska and Ragatz, it is a
Purposeful Activity - Income for the family
- Independence
Bisigness: careful, anxious, occupation
- Family legacy
Bisig: careful, anxious, diligent, occupied - Try Novel idea
- Help Community
Enterpreneur
- Opportunity
- self-motivated person who is not afraid - Enjoy dealing with people
to undertake new ways of - People satisfaction
accomplishing something
Objective Purpose
- capacity and willingness to develop,
organize and manage business with any MILTON FRIEDMAN
risks
- American Economist
- According to Dunn and Shaeffer,
- Use its resources and engage in
entrepreneur will turn underutilized
activities to increase its profit
resources into a potentially more
- Profit Motive
useful.
- According to Peter Drucker, PAUL CAMENISH
entrepreneur does not just agree
- Essential element of business is to
Anthra Prerna: self motivated respond to societal needs for Life
Enterpreneurial Spirit: characterized by Sustenance and Life Enhancement
innovation and risk taking. - Profit is essential but not the primary
Enterpreneurial Act: creative and innovative motive
- Profit is the means not the end

RONALD DUSKA
ENTERPRENEUR BUSINESS PERSON
Insight aspect, social Business aspect, - American professor
utility guarantees profit - The motive coincide the purpose but
does not alter the latter
innovator Imitator - Primary purpose is neither personal
benefit nor accumulation of wealth
Risk taker Playing it safe
Goes beyond profit Motivated by Some further thoughts
motive. Driven by his financial rewards - Human person has needs and wants
creative juices - Rationale behind business are needs
Founders (V.M.G.V) Owners
and wants
- Profit is an incentive

Capitalist AIKO MORITA

- Owns productive assets that he can, if - Eliminate all profit seeking activities
he chooses, live comfortably on the - Emphasis on performance, ability and
income generated by these assets personal character.
- Provide capital
HENRY FORD
- Profit mindset
- Motivated by WEALTH ACCUMULATION - Reasonable profit
Social Role of Business
1. 1987 Philippine Constitution
- The goal of national economy is, a more
equitable distribution of opportunities,
income and wealth. Goods and services
are produced for the benefit of people.
2. Corporation Code of the Philippines
- They are not entities established or
private gain but a partner of national
government for social and economic
development
LESSON 3: FORMS OF BUSINESS ORGANIZATION
A. SOLE PROPRIETORSHIP
- Manager is also the owner
- Easiest to set up; simplest form of
business organization
Advantage
- You’ll get all the profit and business
decisions are your discretion.
Disadvantage
- Unlimited liability (Karen Collins)
- Personal Asset
- Owner dies, business cease to exist.
-
B. PARTNERSHIP
- R.A. 386 or Civil Code of 2949
- Two or more persons bind themselves
to contribute money, property, and
industry to a common fund with
intention of dividing profit.
- Established for common benefit and
interest of partners
- Exercise profession.
Ethical Issue
- Breach of partnership agreement
- Management issue
- and environmental aspirations of government
C. CORPORATION
- Artificial being created by law, having
the right of succession and the power,
attributes and properties expressly
authorized by law to its existence.
Types of Corporation
Stock- Stockholder/Shareholders
Non Stock- Members
Advantages (Collins)
: limited liability
: financial resources
: continuity
Ethical Issues
- Tax Fraud
- Irregular Accounting Practice
- Bribery
- Wasteful personal spending
- Right of work
-
D. COOPERATIVE
- R.A 6938 or Cooperative Code of the
Philippines
- Traced back to as early as Utopia
(Thomas More) and commonwealth
during English civil war
- Voluntary and open membership
- Democratic member control
- Concern for Community
- Offers alternative to traditional
business organization.
- ROBERT OWEN is the father of
cooperative
Types of Cooperative
- Credit
- Consumer
- Producer
- Service
- Electric
Significance of Business in Modern Society
- Creates employment
- Respond to basic needs
- Challenge and change the common
- Socioeconomic development
ROBERT GIACALONE & KENNETH THOMPSON
Collective Egocentricity- business profession
occupies a central role in society
WHEELER AND MCKAGUE
The role of business and trade was to be central,
if not pre-eminent, in meeting economic, social
and people.
PARADOXICAL ROLE- perfecting nature while
destroying it
JOSEPH SCHUMPETER- creative destruction
LESSON 4: THE NATURE OF ETHICS AND
BUSINESS ETHICS

TERMS

Praescribere: to write beforehand

Ethos: character, habit, dwelling place

Ethimos: regularity and routine

Ethics: the discipline that investigates the

rightness and wrongness of human action

Business Ethics: systematic study of ethics

applied to the issues arising in business

Mores: refers to one’s disposition, character,

temperament, manners, customs, or the proper
behavior of a person in society

Morality: the set of beliefs of an individual and/

or the system of principles and judgements
shared by a society, community or culture.

OTHER FACTS

NOEL COWARD: “the higher the building the

lower the moral”

Cicero originally coined the term moralis in

searching for a Latin translation of the Greek
word ethikos