BUSINESS ETHICS AND

CORPORATE SOCIAL
RESPONSIBILITY

MARIO ALEX S.J. CLARIN

 TODAY’S BUSINESS CHALLENGES

1. Globalization
2. Increased Competition
3. Age of Information, Technology and
Innovation
4. Redefinition of Work – Knowledge Workers
5. Outsourcing – Diminished Job Security /
The Rise of the Gig Economy
6. Increasing Regulation of the Work Place

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 ETHICAL ISSUES
FOR THE INDIVIDUAL

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 WHAT IS ETHICS?

Ethics refers to the principles of conduct governing

on individual or group, and specifically to the
standards utilized to decide what the proper
conduct should be.

Ethics involves the study of moral issues and

choices.

Ethics is about choices; Ethics is about conduct.

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 MODEL OF ETHICAL BEHAVIOR

Cultural, Organizational, Political, Legal and

Economic influences determines an Individual’s
ethical or unethical behavior

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 MODEL OF ETHICAL BEHAVIOR

Cultural Influences: Family

Education
Religion
Mass Media

Organizational
Influences: Ethical Codes
Culture
Role Models
Rewards System
Pressure to deliver
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MODEL OF ETHICAL BEHAVIOR

Individual’s own makeup :

Personality
Values
Moral Principles
Gender
Past Acts

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 MODEL OF ETHICAL BEHAVIOR

Males have a judicial perspective – Based on

ideal of reciprocal rights and driven by rules and
regulations.

Females have a care perspective – Involves

compassion and an ideal of attention and response
to need.

Do you agree? Or is this stereotyping at its worst?

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 ETHICS AND VALUES

Ethical decisions involve normative judgments –

Implies that something is good or bad, right or
wrong, better or worse.

Normative judgments always involve morality –

Society’s accepted ways of behavior.

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Morality

- is never situational
- cannot be established or changed by
authoritative bodies
- address matters of serious consequence
- override self-interest

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Ethical behavior has become an important
political and social issue. No longer is it just
a personal matter.

How can we get rid of graft and corruption?

By utilizing an “iron fist” approach?

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Ethical decision-making requires the moral
transformation of all individuals. The ethical
decisions of individuals multiplied a certain
number of times become the ethical decisions
of the nation.

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 Legal and Ethical Decisions

-What is legal may not always be ethical

- firing someone 3 weeks before retirement

- charging a naïve customer an exorbitant
price
- spying on an employee’s email messages

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 An Agent’s Intention

A bad act is still a bad act no matter how good

the intentions are.

The good end never justifies the bad means.

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 INDIVIDUAL ETHICS

Ethical dilemmas have a way of sneaking

up on us.

Front stage behavior (when people are

around) versus Back stage behavior (when
people are alone)

Inconsiderate behavior versus

Unethical behavior versus
Illegal behavior

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What will you do:

- If no one is watching?
- If there is no chance of you getting
caught?

Behavior is shaped by the world around

us expressed by rules and regulations
(expressed) as well as cultural norms
(implied)

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 Criteria of What is Ethical

1. An act is said to be bad if it is deemed a crime in

the law of the state. The state represents the
will of the people.

2. An act is said to be good or bad depending on

what the majority believes (shared values and
beliefs).

3. The goodness or badness of an act is determined

by one’s own conscience.

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 Criteria of What is Ethical

4. Human nature determines the goodness and

validity of an act.

5. An act is good or bad according to what God

has pointed out explicitly in revealing himself
to us.

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ETHICAL ISSUES
IN BUSINESS

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 ORGANIZATIONAL CULTURE AND
ETHICAL BEHAVIOR
Organizational culture is the set of shared,
taken for granted, implicit assumptions that a
group holds and that determines how it perceives,
thinks about and reacts to various situations.

This culture is shown by an organization’s

artifacts – values, dress, awards, vision, rituals,
stories, myths, physical manifestations.

Organizational values and beliefs constitute the

foundation of a culture which in turn influences
behavior of individuals.
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 ORGANIZATIONAL VALUES

Five Key Concepts:

- concept or beliefs
- pertains to desirable behaviors
- transcends situations
- guides selection or evaluation of behavior
and actions
- ordered by relative importance

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 ORGANIZATIONAL VALUES

Two Kinds:

- Expressed: stated values and norms

- Enacted: exhibited by actual behavior

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 5 STAGES OF CORPORATE MORAL
DEVELOPMENT

Stage 1 – Amoral Organization

- Business exists purely for profit

- “Everybody does it anyway”
- “Don’t get caught”
- Profitability and productivity are
paramount
- Ethical concerns only after public outcry

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 5 STAGES OF CORPORATE MORAL
DEVELOPMENT

Stage 2 – Legalistic Organization

- Complies with the letter of the law

- Legality more than morality

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 5 STAGES OF CORPORATE MORAL
DEVELOPMENT

Stage 3 – Responsive Organization

- Begins to strike a balance between

economic and social values
- Recognizes social responsibilities
- Doing right is a means to an end
(profits) and not the overriding
business principle

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 5 STAGES OF CORPORATE MORAL
DEVELOPMENT

Stage 4 – Emergent Ethical Organization

- Balance between profit and ethics is

pursued
- Ethics endeavors are still ad hoc
activities, not yet integrated
to mainstream business

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 5 STAGES OF CORPORATE MORAL
DEVELOPMENT

Stage 5 – Ethical Organization

- Organization-wide acceptance of
ethical values
- Balance between ethics and profits
- Corporate social responsibility is
adhered to
- All stakeholders are served

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 Organizations Shape Ethical Practices

One employee’s character flaws rarely cause

corporate misconduct. Unethical business practice
involves the tacit, if not explicit, cooperation of
others and reflects the values, attitudes, beliefs,
language and behavioral patterns that define
an organization’s culture.

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 The Influence of Top Management

The behavior of a superior is an important factor

in influencing ethical decisions.

- tell staffers to do whatever is necessary

to achieve results
- look the other way when wrongdoing occurs
- play favorites

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 Ethics Policies and Codes

The leader’s actions may be the single most

important factor in fostering corporate behavior
of a high ethical standard. An Ethical Policy signals
that top management is serious about ethics and
works to foster a culture that takes ethics
seriously.

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Creating an ethical organization means creating
the organizational culture that supports it.

Organizational culture can be defined as the

characteristics, traditions and values that
employees use.

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 Some Organizations:

• engage in bribery and other corrupt practices

• utilize child labor
• tolerate sexual harassment
• practice discriminating behavior
• continue polluting the environment

WHILE INCREASING PROFITS

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CONTEMPORARY ETHICAL ISSUES
IN BUSINESS

1. Hiring
2. Compensation
3. Whistleblowing
4. Child Labor
5. Conflict of Interest
6. Confidentiality Rules
7. Non-Compete Clauses
8. Office Relationships
9. Practice of Profession/Outside Activities
10. Gifts and entertainment
11. Time theft
12. Privacy in the work place
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CORPORATE SOCIAL
RESPONSIBILITY

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