ETHICAL

ENVIRONMENT
Dueas, Stephanie Ann Marie
Escobin, Junelyn
Mandap, Dyan Rose

OUTLINE
Introduction

ETHICS
BUSINESS ETHICS
ETHICS & LAW
ETHICS & CULTURE

Ethical Decision Making: A Process Influenced by

Moral Intensity

Corporate Social Responsibility

Whistleblowing

ETHICS

ETHICS
It is defined by Merriam Webster as rules of behavior based on ideas about what is
morally good and bad
Ethics:
1.

An area of study that deals with ideas about what is good or bad behaviour.

2.

Values Defines who we are.

Ethics is SUBJECTIVE, thus it varies with culture.

Ethical then becomes the culture that influences everything.

IMPORTANCE OF ETHICS

To ensure that the organizational goals are not compromised

when decisions for the whole organization are done by few
individuals
To make up for the times when law is silent on an issue
In the governance of the country because for smooth
functioning of the country, all the branches of the government
must work together with cooperation and proper work ethics.
Reputation

BUSINESS ETHICS

BUSINESS ETHICS
"Business Ethics refers to clear standards and norms that help employees to
distinguish right from wrong behavior at work *

Business ethics is not entirely different from ethics in normal sense, it

is a subset of it and is just the set of principles and values which are
important and pertinent to the field of business, vary from culture to
culture.

Choosing right decision at right time

*resourcecenter.com

THE BENEFITS OF ETHICS IN

BUSINESS

There are good business reasons for a strong commitment to

ethical values:

1. Ethical companies have been shown to be more profitable

2. Making ethical choices results in lower stress for corporate

managers and other employees.

3. Reputation, good or bad, endures.

4. Ethical behaviour enhances leadership.

IMPORTANCE OF BUSINESS ETHICS

Help the organization to protect/gain reputation.

Essential in dealing with customers, including customer

service and customer issues.

Needed to make business activities fair and reasonable for

consumers

ETHICAL BUSINESS PRACTICES

Following are a few ethical business practices that should be

followed to build an honest reputation and ensure smooth
running of the organization
Investors: Ensuring safety of their money and timely payment of interest.
Employees: Provision of fair opportunities in promotions and training,
good working conditions, and timely payment of salaries
Customer: Complete information of the service and product should be made
available.
Personal information of the customers should not be used for personal gain.
Competition: Unscrupulous tactics and methods should be avoided
while handling competitors.
Environment: Polluting industries should ensure compliance
with the government norms regarding air, water and noise pollution.

UNETHICAL BUSINESS PRACTICES

Examples:

Resorting to dishonesty, trickery or deception

Greed to amass excessive profit
Creation of false documents to show increased profits
Avoiding penalty or compensation for unlawful act
Harming the environment by exceeding the government prescribed norms
for pollution
Lack of investigation

ETHICAL ISSUES

CONFLICT OF INTEREST advance his or her

own personal interest
FAIRNESS AND HONESTY
COMMUNICATIONS false and misleading
advertising
BUSINESS RELATIONSHIPS behaviour
towards others
PLAGIARISM taking someone else work

IMPROVING ETHICAL BEHAVIOR

1. CODES OF ETHICS
A document that outlines the mission and values of the business or organization, how
professionals are supposed to approach problems, theethicalprinciples based on the
organization's core values and the standards to which the professional will be held.*

2. WHISTLEBLOWING

When a worker reports suspected wrongdoing at work.+

* investopedia.com
+ gov.uk/whistleblowing

SAMPLE OF CODE OF ETHICS

1. Acting with integrity around the globe

Expected of everyone and raising concerns

2. Integrity in the company

Business and financial records, company asset, use of information

3. Conflict of Interest

Outside environment, gifts, meals and entertainment

4. Integrity in dealing with others

Government, suppliers, consumers, competitors

5. Administration of the Code

Responsibility

Investigation of Potential Code Violations

Decisions

Disciplinary Actions

ETHICAL DECISION MAKING: A PROCESS

INFLUENCED BY MORAL INTENSITY

FOUR COMPONENTS OF ETHICAL

DECISION MAKING

MORAL AWARENESS

MORAL JUDGEMENT
MORAL INTENTION
MORAL ACTION

FOUR COMPONENTS OF ETHICAL

DECISION MAKING

MORAL AWARENESS
moral sensitivity

individuals ability to recognize that a situation contains a

moral issue

MORAL JUDGEMENT

formulating and evaluating which possible solutions to the

moral issue have moral justificatio

FOUR COMPONENTS OF ETHICAL

DECISION MAKING
MORAL INTENTION
moral motivation
intention to choose the moral decision over another solution
representing a different value
MORAL ACTION
moral courage

individuals behavior or action in a situation

RULES FOR ETHICAL DECISION

MAKING

SIX COMPONENTS OF MORAL

INTENSITY

MAGNITUDE OF CONSEQUENCES
TEMPORAL IMMEDIACY
SOCIAL CONSENSUS
PROXIMITY
PROBABILITY OF EFFECT

CONCENTRATION OF EFFECT

SIX COMPONENTS OF MORAL

INTENSITY

MAGNITUDE OF CONSEQUENCES degree to which an

individual may be harmed by or benefit from the decision
makers action

TEMPORAL IMMEDIACY length of time between the action

and its consequences

SIX COMPONENTS OF MORAL

INTENSITY

SOCIAL CONSENSUS degree of agreement among a social

group that an action is good or bad

PROXIMITY nearness of the decision maker to the individuals

potentially affected by the consequences

SIX COMPONENTS OF MORAL

INTENSITY

PROBABILITY OF EFFECT likelihood that the predicted

consequences and the expected level of harm/benefit will
occur

CONCENTRATION OF EFFECT relationship between the

number of people affected and the magnitude of harm

CORPORATE SOCIAL
RESPONSIBILITY

CORPORATE SOCIAL
RESPONSIBILITY

Engaging in economically sustainable business

activities that go beyond legal requirements to protect
the well-being of employees, communities, and the
environment

Stakeholder driven

Performance driven

CORPORATE SOCIAL
RESPONSIBILITY

What is business expected to be or to do to

be considered a good corporate citizen?
(Carroll, 1998:1)

Motivation driven

CSR: A PROCESS MODEL OF

SENSEMAKING

Sensemaking - a process by which individuals develop

cognitive maps of their environment (Ring & Rands, 1989)

Organizational Sensemaking - a tripartite view of its

essential processes:
- Cognitive
- Linguistic
- Conative

COGNITIVE CSR DIMENSIONS: WHAT

FIRMS THINK

Identity Orientation
Individualistic
Relational
Collectivistic
Legitimacy
- Pragmatic
- Cognitive
- Moral

LINGUISTIC CSR DIMENSIONS: WHAT

FIRMS SAY

Justification
- Legal
- Scientific
- Economic
- Ethical

Transparency
- Balanced
- Biased

CONATIVE CSR DIMENSIONS:

HOW FIRMS TEND TO BEHAVE

Posture
- Defensive
- Tentative
- Open

Consistency
- consistency-between
- consistency-within

CONATIVE CSR DIMENSIONS:

HOW FIRMS TEND TO BEHAVE

Commitment
- Instrumental
- Normative

CSR: DIMENSIONS OF THE

SENSEMAKING PROCESS

CORPORATE SOCIAL
RESPONSIBILITY

The process by which managers within an organization

think about and discuss relationships to stakeholders as
well as their roles in relation to the common good, along
with their behavioral disposition with respect to the
fulfillment and achievement of these.

SAMPLE ORGANIZATIONS
PRACTICING CSR

WHISTLEBLOWING

WHISTLEBLOWING

The disclosure by organisation members (former or

current) of illegal, immoral, or illegitimate practices under
the control of their employers, to persons or organisations
that may be able to effect action (Near & Miceli, 1985)
pagsisiwalat, or "pagbuking ng katiwalian.

can either be made internally or externally (Brennan &

Kelly, 2007; Near & Miceli, 2008)

Voluntary and role-prescribed whistleblowing

 Jubb (1999)

WHISTLEBLOWING

WHISTLEBLOWING
PROCESS

WHISTLEBLOWERS

Share a belief of absolute moral standards, a strong sense

of individual responsibility, and a fierce commitment to
upholding moral principles

altruism and professional responsibility, factors like

employment, income, education, and seniority in the
organization determine peoples decision to blow the
whistle

FACTORS AFFECTING
WHISTLEBLOWING

FACTORS AFFECTING
WHISTLEBLOWING

Ayers and Kaplan (2005)

1) perceptions about the seriousness of wrongdoing;
2) personal costs;
3) personal responsibility related to a wrongdoing; and
4) moral equity judgments

TO BLOW THE WHISTLE OR NOT

Blowing the whistle

- moral reasons (something has to be done)
- practical reasons (obligations as a employee / citizen)

Not blowing the whistle

concern for ones well-being
- cultural constraints (ayoko ng gulo, pakikisama, utang na
loob, shrug it off)
-

WHISTLEBLOWING: WAS IT WORTH IT?

Subject matter and accuracy of information

Authorities approached
Handling of the divulged information
Treatment and behavior of the whistleblower
Outcomes of the exercise.

WHISTLEBLOWING: SUPPORTING
STRUCTURES

Government agencies

Private firms

Employees unions

Support institutions

WHISTLEBLOWING: EXISTING
LEGAL FRAMEWORK

Republic Act No. 6981 - The Witness Protection,

Security and Benefit Act

Presidential Decree No. 749 issued in 1975 grants

immunity from prosecution to bribe givers and their
accomplices who serve as witness in graft cases against
public officers.

References:
1.) Introducing Business Ethics
2.) Ethics and law co-relation in business, society, government and governance
3.) Ethical Decision Making: A Process Influenced by Moral Intensity
4.) Business Ethics and the Legal Environment of Business
5.) Business Ethics and social responsibility
6.) Corporate Social Responsibility: A Process Model of Sensemaking by Basu,
K. and G. Palazzo,
7.) Whistleblowing in the Philippines: Awareness, Attitudes and Structures .
Asian Institute of Management, June 2006 .
8.) Culture and Ethics Management: Whistleblowing and Internal Reporting
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