Module 2 – Foundations

of the Principles of
Business Ethics
CONTENT STANDARD:
The learners demonstrate an understanding
of:
1. classical philosophies specifically, virtue
ethics (Socrates, Plato, Aristotle, Confucius,
etc.)
2. the impact of belief systems (Buddhism,
Islam, Christianity, etc.)
3. the Filipino Value System (Utang na Loob,
Filial Piety, Padrino Suki, Bahala na - Mañana,
Amor Propio, Filipino Family Values)
PERFORMANCE STANDARD:
The learners shall be able to:
1. identify the classical philosophies and
their implication for business principles and
practices
2. describe various belief systems, and their
similarities and differences in relation to the
business setting
3. describe how the Filipino value system
affects the attitudes of business constituents
MOST ESSENTIAL LEARNING COMPETENCIES
The learners:
2.1 compare and contrast classical philosophies as they
relate to the business setting ABM_ESR12- IIIe-h-2.1
2.2 give examples of how belief systems affect
business practices ABM_ESR12- IIIe-h-2.2
2.3 analyze simple business situations as they are
affected by the Filipino value system and recommend
ways of confronting ethical challenges in the business
setting ABM_ESR12- IIIe-h-2.3
2.4 distinguish what is GOOD vs. what is morally
unacceptable among the given Filipino values
ABM_ESR12- IIIe-h-2.
Ethics or moral philosophy is a branch of
philosophy that "involves systematizing, defending,
and recommending concepts of right and wrong
behavior.
Business ethics (also known as corporate ethics) is
a form of applied ethics or professional ethics, that
examines ethical principles and moral or ethical
problems that can arise in a business environment.
It applies to all aspects of business conduct and is
relevant to the conduct of individuals and entire
organizations. As an applied branch of General Ethics,
it must be studied from the perspective of Philosophy.
This is because Ethics is a part of moral principles.
Ethics is more concerned with
standards of conduct acceptable to a
group, a profession, or members of
an organization.

The philosophies of these Classical

Philosophers have a great implication
on business and are the foundation of
the principles of the business ethics.
Socrates: dare to disagree
This is dangerous in questions of
morality, and particularly in corporate
governance. When corruption is
uncovered, too often people say
"everyone else was doing it". But our
characters are our responsibility.
Socrates was prepared to die rather
than go against his conscience.
The Socratic approach to questioning is
based on the practice of disciplined,
thoughtful dialogue. Socrates, the early
Greek philosopher/teacher, believed
that disciplined practice of thoughtful
questioning enabled the student to
examine ideas logically and to
determine the validity of those ideas.
For example, a professor might pick a
student at random and question them
(rapid-fire) for the entire duration of the
class. The ultimate goal is to trip the
student up and cause holes in their
argument. At the other extreme, a
professor could choose a group of
students and discuss legal principles.
Like most other ancient philosophers,
Plato maintains a virtue-based
eudaemonistic conception of ethics.
That is to say, happiness or well-being
(eudaimonia) is the highest aim of
moral thought and conduct, and the
virtues (aretê: 'excellence') are the
dispositions/skills needed to attain it.
THE POWER TO RULE

Plato believed that philosophers would

be the best rulers of society because
they're able to understand true
goodness and justice in a way that
other people cannot. Because they
would understand that the greatest
self-benefit is living virtuously, they
would act out morally and not out of
In his metaphysics, he claims that there
must be a separate and unchanging
being that is the source of all other
beings. In his ethics, he holds that it is
only by becoming excellent that one
could achieve eudaimonia, a sort of
happiness or blessedness that
constitutes the best kind of human life.
Aristotle: let people seek
fulfillment
Aristotle's philosophy was an influence
on Edward Deci and Richard Ryan's
Self-Determination Theory, which
suggests that employees will work
harder for you, and perform better, if
you give them tasks they find
meaningful and morally worthwhile.
Confucius
The most famous of his golden rule: DO
NOT DO UNTO OTHERS WHAT YOU
DO NOT WANT OTHERS DO UNTO
YOU, and his famous classic philosophy
is LIVE A CONTENTED, MORAL AND
HAPPY LIFE. Confucian values can aid
in the creation of business leaders who
are true leaders of the society.
Plutarch
The ancient Greek historian and
educator, understood that humans are
incredibly social creatures, who
constantly observe the people around
them and imitate them. He is famous in
his philosophy, BE A GOOD ROLE
MODEL.
Plutarch
In organizational terms, that means
what you say to your employees is less
important than what you do. They will
watch how you behave, how you treat
others, how you cope with pressure and
whether you follow through on your
promises. And they will imitate you,
they will follow your lead.
Plutarch
In organizational terms, that means
what you say to your employees is less
important than what you do. They will
watch how you behave, how you treat
others, how you cope with pressure and
whether you follow through on your
promises. And they will imitate you,
they will follow your lead.
Epicurus
THE ART OF HAPPINESS. Epicurus was a
fourth century Greek philosopher who
taught, rather scandalously, that the aim of
life was simply to be as happy as possible
here on Earth. He warned that humans are
very bad at being happy, and very good at
inventing reasons to be miserable. Today,
some companies are embracing Epicurus'
philosophy, and trying to teach their
employees the art of happiness.
Immanuel Kant
One of the most influential philosophers
in the history of Western philosophy. He
advances the theory of deontology or
deontological ethics, the theory of duty
and obligation.
Activity 2.2
Direction. Identify the following. Write your answer on the
space provided.
Confucius Epicurus Aristotle
Plato Plutarch Socrates

__________________ 1. He was the most practical and

business oriented of all philosophers. His classic philosophy is
LET PEOPLE SEEK FULFILLMENT.
__________________ 2. He is best known for the Socratic
method of question and answer. He is known for his classic
philosophy, HAVE THE COURAGE TO DISAGREE.
__________________ 3. He was a fourth century Greek
philosopher who taught that the aim of life was simply
to be as happy as possible here on Earth. He is very
famous for his ART OF HAPPINESS.

__________________ 4. His prime belief was that a

person must study themselves in order to find out
their level of character. His classic philosophy is THE
POWER TO RULE.

__________________ 5. He is famous for his golden rule

and his famous classic philosophy is LIVE A
CONTENTED, MORAL AND HAPPY LIFE
Plato held that the moral values are
objective, absolute, or eternal. They
never change, they are universal as they
apply to all rational creatures around the
world and throughout the time. Aristotle
on the other hand philosophized that
virtues are good habit that we
acquire which regulate our emotions.
Kantian ethics emphasize a single
principle of duty, that we have moral
duties to one self and others.
Since ethics is universal and the same
for all, companies should obey the
same ethical rules wherever they
operate. It usually starts on those basic
ethical norms on which all or the majority
of people agree. Thus, the history of
ethics in business makes evident
that ethical doctrines have
influenced the thinking on the
morality of businesses.
Since ethics is universal and the same
for all, companies should obey the
same ethical rules wherever they
operate. It usually starts on those basic
ethical norms on which all or the majority
of people agree. Thus, the history of
ethics in business makes evident
that ethical doctrines have
influenced the thinking on the
morality of businesses.
The Ethics of Aristotle: Virtue
Theory

Virtue Theory doesn't judge actions

as right or wrong but rather the
character of the person doing the
actions. It put emphasis on the
development of human values and
moral character. His virtue theory turns
out to be the most promising
The Ethics of Aristotle: Virtue Theory
Instead of trying to form specific rules
for everyone to follow, it proposes to
build a virtuous character. In a sense,
we all know what it means to have a
virtuous character, we all know who
can be counted upon to do the right
thing. In this classic virtue theory, four
virtues stand out, courage, moderation,
justice, and prudence. Virtues matter in
The Ethics of Bentham and Mill:
Utilitarianism
Jeremy Bentham, an attorney, a
consultant to the British Parliament in
the late-eighteenth century. Bentham
found a ready supporter and lieutenant
in James Mill (1773–1836), a Scottish
lawyer who came to assist Bentham in
championing utilitarianism as a political
philosophy.
The Ethics of Bentham and Mill:
Utilitarianism
Utilitarian ethical theories are based on one’s
ability to predict the consequences of an
action. When making moral decisions, we are
advised to select that action which produces
the greatest amount of good for the
greatest number of people. If the balance of
good or happiness or usefulness outweighs that
of evil, harm, or unhappiness, then the choice is
a moral one. Due to this emphasis on the
outcome of ethical decisions, utilitarianism is
The Ethics of Kant: Deontology

The term deontology stems from the Greek

deon—duty, obligation, or command. The
deontological class of ethical theories states that
people should adhere to their obligations and
duties when engaged in decision making when
ethics are in play. Kant argued that there is more
foundational principle of duty. He call it
categorical imperative, it simply mandates an
action, irrespective of one’s personal desires.
The Ethics of Kant: Deontology

For Kant, we should treat people as an end,

and never as a means to an end. That is
why we should always treat people with
dignity, and never use them as mere
instruments.
The Ethics of John Rawls: Justice
Theory
Rawls is a uniquely American political
philosopher, and this can be seen from his
emphasis on political liberty. He labeled his
ethics to be “justice as fairness,” and he
developed it over nearly a lifetime. In
Western thought, Rights theories, a right
refers to a person’s just claim or
entitlement. Justice theories define justice
as the ideal, morally correct state of things
Lesson 2 - Explain how the belief
systems influence business
practices

A belief system is a set of principles

or tenets which together form the basis
of a religion, philosophy, or moral code.
Religion is defined as a set of beliefs
concerning the cause, nature, and
purpose of the universe, especially
when considered as the creation of a
superhuman agency or agencies,
usually involving devotional and ritual
observances, and often containing a
moral code governing the conduct of
human affairs. It is a systematic set of
beliefs that influences human
Judaism
The Jewish business ethics is illustrated by
the widely quoted Talmudic tradition that in
one’s judgment in the next world the first
question asked is: “Were you honest in
business?” Thus, in the treatment of
workers, the Jews are obliged to pay their
workers on time, pay their workers a living
wage and treat their workers with dignity
and respect. On the side of the workers, it is
important not to steal company time.
Christianity
Christian businessmen and women follow
the stewardship doctrine. Accordingly, as
God appointed mankind as the stewards
of the earth, the Lord entrusted them all
his resources to manage them with care
and skill. Christian business professionals
depend on the Lord’s leadership for
their business by asking blessings
through prayer to provide strategic
direction, resources, earnings, etc.
Christianity
Christian business professionals also believed
that the Lord delight in justice, therefore in
conducting a business transaction, they must be
fair, like paying the workers with fair wages and
appropriate work conditions. Thus, it is not only
biblical but most likely it improves business
since employees will tend to work more and be
productive and happy in their work. Being
productive means, we use our knowledge and
resources that Lord has given to us. In the life of
Christian business professionals, hard work is
Islam
Prophet Muhammad’s doctrine on honesty and
kind dealings with customers are the secrets of
success in business. According to Islam, no
fraud or deceit, sellers must avoid making
many oaths when selling merchandise,
mutual consent is necessary. They are also
strict when it comes to weights and measures.
The prophet also forbade monopolies and a free
enterprise is encouraged. Hoarding merchandise
to increase the price is forbidden. Islam also
requires being honest in dealings with Muslim
Hinduism
The third religion in the world by a number of
believers mainly in India. The Tata Group is the
most respected business house in India. The five
core Tata values describe their businesses
process. Integrity is to conduct business fairly,
with honesty and transparency.
Understanding is to care, show respect,
compassion and humanity for colleagues.
Excellence is to constantly strive to achieve the
highest possible standards of work in the quality
of goods and services.
Hinduism
Unity is to work with colleagues and
building a strong relationship across the
group, and with customers and partners
around the world, based on tolerance,
understanding, and mutual cooperation and
to continue to be responsible.
Buddhism
Work hard, no excuses, to those who do
not want to work, they let their chance pass
by. A good work ethics and a great attitude,
very little will stand in your way. If you work
hard, rest well, is one of the values of
practicing Buddhism is a focus on
centering and balance. The Buddhist
practice of mindfulness can be a key to
good business. Remember to be calm, and
not to obsess too much about positive
Confucianism
Confucian ethics are described as
humanistic. Confucianism is the most
profound and dynamic thought system
in traditional Chinese culture. It is not
surprising that traditional Chinese
business culture was deeply associated
with Confucianism.
Taoism
Taoists believe such good behavior is
an essential part not only of self-
improvement but of improving the
world as a whole. Taoism suggests that
the ideal way for a leader to run their
country is by example. A good leader
is one that the people respects and
whose instructions are willingly
followed.
Shintoism
Work is understood to be a self-
expression of the great life force,
Japanese people try to unify themselves
with the great life force by
concentrating on their own work. For
Japanese, the company name is more
important than the job title, the
community they belong to is much
more important than what they do.
Lesson 3 - Filipino Values that
Influence Business Practices

Filipino values refer to the set of values that

significant and inclined with one’s culture by the
influenced of people connected with like family,
relatives, ancestors or friends. It preserves social
harmony that promotes connection, unity and may
understand set of people. It includes the inimitable
collection of dependable philosophies, moral codes,
ethical practices, etiquette, cultural and personal
values encourage by the family or the society they
belong.
Pakikisama (Fellowship)
The word “pakikisama” (fellowship) comes
from the word “sama” and prefix “paki”,
and literally means to accompany
someone. Fellowship is used to maintain
good relations with others, and the
fellowship is associated with adaptation,
dealings and harmony. In business
practices, the proprietor must establish
“pakikisama” to their employees, suppliers
and customers because it implies closeness
Hospitality
Is the relationship between a guest and a host,
wherein the host receives the guest with
goodwill, including the reception and
entertainment of guests, visitors, or strangers.
Entrepreneurs should master on how to treat
and provide excellent services on welcoming
their suppliers and customers to create a good
reputation and relationship since hospitality
plays the fundamental role to increase or
decrease the volume of sales, popularity and
production growth in a business.
Family Orientation
It refers to the family in which a person is raised.
It includes one’s parents and siblings. It may
also include grandparents or other relatives. It is
a primary platform for which one encounters
early socialization experiences. Values and
beliefs can be learned from the family that will
inculcate to a child as he/she matures into an
adult. The Filipino valued their family and being
closed to one another until the last of their
generation. Most of the successful
entrepreneurs acquired and gained this ample
knowledge in dealing with their business from
Family Orientation

Consequently, they became well trained to

manage their family business. Others inherit the
skills not only from their family business but also
the values and beliefs in managing and
operating their business.
Joy and Humor
Business operates and growth not only by
means of profit and management. An
entrepreneur operates business to find joy and
happiness in his life. Helping people by
promoting employment and providing quality
product and services to their clients create a
joyful feeling. Filipino values always find reason
to feel joy and has a sense of humor to
established camaraderie to others. It sheds light
on the optimism and positivity of Filipinos in
whatever situation they are in. It serves as a
coping technique to remain determined in every
Ability to Survive
A Filipino has a sense of resourcefulness or the
ability to survive with whatever situation or
challenges they have. They have an extraordinary
ability to create something out of almost nothing. If
a Filipino is trap in an uninhabited island, he would
still be able to find a safe area to stay, provide
materials to build a house, find foods to eat and
create different tools to survive. In business, if it is
needed to promote and increase the volume of
sales, a Filipino has always the ability to find
different techniques, marketing strategy and idea
to perform and create a productive in order the
Hard work and Industriousness

Filipinos are determined and persistence to

accomplish whatever they have set in their
minds. In business, hard work and
industriousness play a vital role to establish
and develop business progress. They need
employees who are willing to work
overtime, with minimal supervision and
resourcefulness comes with a hard work to
serve the business.
Flexibility, Adaptability and Creativity

Filipino has an ability to adapt, adopt and

adept in any changes and challenges in life
either in spiritual, social, emotional and
physical aspect. In business, unplanned and
anticipated events in market would not
disturb the flexibility and adaptability
values of Filipino entrepreneurs. They could
easily produce creative strategy, technique
and style to adjust challenges and compete
Utang na Loob (Debt of Gratitude)
It shows duties and responsibility to pay the debts
(utang) and return it with inner-self-free will (na-
loob) the unsolicited gift or good treatment
received from other people. An obligation to
appropriately repay the good deeds which value is
impossible to quantify or if there is a quantifiable
value it may involve deeply personal internal
dimension that will usually starts from one
generation and continue to another generation. In
business, plenty of reasons that it may influence
the business practices either positive or negative
outcome that may vary with ethical issues.
Filial Piety
To show respect, love, care and support to
their elders, parents, relatives and
ancestors. It upholds the affection and
display courtesy to the family that most
cases are likely working together in one
company; living together in one house;
paying the house bills of their parents. It
also to take good care to one’s parents and
engage in good conduct not just towards
parents but also outside the home so as to
Padrino (Whom you know
system)
It supports with the strong
relationship of people. Most of the
job seekers automatically hired
regardless with their qualifications
and educational background
through endorsements, political
connections, family affiliations
Suki
It shows loyalty and trust relationship
between a customer and supplier. It
usually establishes at the market or
business. If a buyer finds a trusted
seller that offers a quality product they
need, the loyalty and commercial
connection of a buyer will be
established to the seller and made
several business transactions with their
Bahala Na
The Bahala Na Filipino value shows
letting things happen beyond their
control. It shows an attitude of a person
that is willing to submit everything to
God or leaving things to happen by
fate. Some of investors operate
business beyond their control, they will
only believe that the market will accept
it if they will “do their best and let God
Mañana Habit
It comes from the Spanish word
“Mañana” which literally means
“tomorrow” or “unspecified future
time”. In business, the attitude that
tends to delay the task, putting off
tomorrow what they can do for today or
postpone on the things that should be
done right now may reduce volume of
sales, loss customer trust and
Amor Propio

Is a Spanish word which means “self

– love”, a sense of self-esteem or
self-respect that prevents a person
from swallowing his pride and
concerned for one’s reputation. It
includes sensitivity to personal
insult or affront.