The Nature and Forms of Business  Control is shared by the partners

Organization  Legal and Tax requirements are

more complicated than sole
Sole Proprietorship
proprietorship
o owned by an individual  Easier to attract investors

Advantage and Disadvantage

Undivided authority Unlimited
TYPES OF PARTNERSHIP
Liability
Full Control Limitation General Partnership
on
size( and -is the partnership wherein the partners
thus on have unlimited liability for the debts and
fund obligations of the partnership
raising
Limited Partnership
power)
Low organizational cost and -is the partnership wherein one or more
License Fees(Tax Savings) general partners have limited liability
(only up to the amount equal to their
No Restrictions capital distributions)

Corporation

-Owned by 5-15 juridical persons

-The corporation has separate legal

existence from its owners.

-The stockholders have limited liability.

Partnership
-Transferable ownership rights (shares
o Owned by 2-4 individuals
of stock)
 A partnership is a juridical person
which has a separate legal -Ability to obtain capital.
personality from that of its
-The corporation has a continous life.
members

-Article 1768
-Subject to NUMEROUS government -There is a great need to develop
regulations. "integrity capacity" or the capability for
repeated process alignment of moral
-Must pay income tax on its earnings, and
awareness, deliberation, character and
stockholders are required to pay taxes on
conduct
the dividends they receive. (Double
taxation of distributed earnings)

-The management structure is at the Integrity Capacity promotes

discretion of the board of directors
 Balanced Judgment
 Enhances Sustained Moral
Development
TYPES OF CORPORATION
 Supportive Systems for Moral
Stock Corporation Decision Making

-Has capital stock divided into shares and

dividends. Surplus profits are given to
shareholders depending on the number of
shares held. Accountability

Non-stock corporation -It is the ability to account or be

responsible for your actions and
-Does not issue shares of stock and is
performance to your stakeholders
established primarily for public interest
(foundation, charity, education, culture, -It is the obligation to demonstrate that
etc.) work has been conducted in compliance
with agreed rules and standards or to
report fairly and accurately on
Fairness, Accountability, and performance results
transparency

Notions of Accountability, Fairness,

What it is:
and transparency
To be liable to explain or justify one's
-Most practicing business leaders in most
actions and decisions
countries are not held accountable for
dysfunctional moral (improper Testing, Forming judgement, taking action
behavior/violation to norms), social, and
Responsibility
environmental performance
What it is not: Instrumental Salience

Not about confrontation, putting someone -an important mechanism for

in his place or giving him a hard time guaranteeing social accountability (Cv 47)

Not a one-off --Allows stakeholders to understand

whether the activities od social
institutuions provide a genuine service to
Fairness civil society and whether money is used
apporpriately
Involves balancing of interest involved in
all decison-making including any decision
related to hiring, firing and the
Minimum competencies expected from
compensation and rewards system
professionals
Can be subjective (based on personal
Technical Skills-encompasses the ability
feelings): What one person sees as unfair
to apply specialized knowledge or
may be perfectly appropriate for another
expertrise
Fairness has something to do with justice
Human Skills-is the ability to
which is to give to another what is due to
communicate with motivate and support
him or her
other people individually and in groups
1. Looks at the balance of benefits and
Conceptual Skills-or decision making
burdens distributed among member of a
skills that managers have to analyse and
group. And;
diagnose complex situations
2. can result from the application of
rules, policies, or lawts that apply to a
society or group Sphere of Work

A.) Human Maturity-a person not only

works hard but also efficiently +
Transparency
Professionalism
Intrinsic or ethical Salience (Individual)
B.) Work is done in a spirit of service
- a person quality necessary to develop and love for those around us an
unity and communion between individuals. individual realizes that work is something
(CV 53, 54) that helps improve well-being

-Authenticity of a person when it comes C.) Relational Intelligence- ability to

to his/her relationship and genuine connect and interact effectively and
expression of point of view respectfully with people and stakeholders
from various backgrounds, diverse and encourage fair
cultures, and different interests treatment of all people
regardless or demographic
-a combination of emotional and ethical
characteristics (age,
intelligence
gender, preferences, etc)
D.) Trustworthiness-or when an individual o They teach managers how a
demonstrates integrity, benevolence, and diverse workforce will be
ability to not let other people down by better able to serve a
breaking their trust diverse market of
customers
o They foster personal
Accountability, Stewardship, and development practices that
Responsibility in Ethical Business bring out. The skills and
abilities of all workers and
acknowledges how
Boss< Servant Leaders differences in perspective
is a valuable way to improve
-Servant Leaders go beyond their own
performance for everyone.
self-interest and focus on opportunities
to help followers grow and develop Women In Organizations
- Characteristics: Listening, Empathising, Studies Show that:
Persuading, Accepting, Stewardship,
 Firms employing more women in
Developing Followers’ Potential.
managers have managers and will
be in a better position to link with
customers and employees
o Men’s approach-command &
The Notion of Organizational Diversity control
& the Role of Women in Business o Women’s approach-team-
Organization building

Organisational Diversity  More inclined- to

check in frequently
 Effective, comprehensive their subordinate’s
workforce which encourages development
diversity have 3 different  Good listener-
components exactly the skill that
o They teach managers about is most critical for
legal framework for equal managing employees
employment opportunity and customers
  Patience is the key-
less likely to jump
The Social Function of Business
into immediate
conclusions or take Ethics
action too soon
-Moral principles that guide the conduct
 Good ability- are
of individuals (ex. kindness, hospitality,
sensitive and good
honesty)
organizational ability
which help them Accounting and Business Fraud
free to move on a
-is the most common type of violation
new mission
that is committed by business
 Better Management-
organization (Punishment, fines, firing,
Manage their work
lawsuits, and imprisonment)
flawlessly, quality of
managing their
children and are
simultaneously able
to concentrate on
their career Main Reasons that may persuade a
 25% business to act ethically
 29%
 31% 1. Legal reasons and compliance
 35% (permits, contracts, trademarks, patents)
o Firms having a higher 2. Public Image Reason
proportion of women
serving on their boards do 3. Pragmatic Reasons/ believing that
engage in charitable giving acting ethically might be the most direct
to a greater extent path to business success
o Investors value the 4. Moral Reasons (Doing the right thing)
diversity and potential
contribution of women in
the Board-of Directors as a Why should a business be ethically
mean of improving sensitive?
corporate governance
1. Promotion of common good
o The presence of female
directors would bring a 2. Protection of the individual's
female perspective to the interest
bedroom
3. Preservation of the human society in
general
Microfinance
Without ethical consideration, business
-is also an effective tool in the war
will be chaotic human activity because
against poverty in the world
there will be no common understanding
and agreement about what is right or
wrong according to the human conduct
REASONS FOR THE CONTINUOS
POVERTY IN THE MIDST OF
ECONOMIC GROWTH
The paramount for a successful
managerial career:  Economic growth is rarely
uniformed distributed across a
INTEGRITY
country
-the value of being truthful and keeping  Failure of the government
their word (Palabra de honor)  Growth is cultural (some are
trapped on beliefs and even
BUSINESS ROLE IN POVERTY
traditions)
ALLEVIATION

Poverty is conceptualized as a deficiency

or shortage to the living standards of AREAS OF BUSINESS MOST IN
others within the same society or culture NEED OF ETHICAL ATTENTION
(relative poverty), or to a universal
SOCIAL RESPONSIBILITY OF
measure (absolute poverty)
CAPITALIST BUSINESS PRACTICESS
Poverty and shortage was considered
1. PHILANTROPIC RESPONSIBILITY-
synonymous with lack of income, or
give back, be a good corporate citizen
insufficient to meet a household's daily
needs. (Mostly focuses on income) 2. ETHICAL RESPONSIBILITY-do what
is right and just

3. LEGAL RESPONSIBILITY -obey the

BUSINESS ROLE IN OVERCOMING
law and observe legal practices
THE POVERTY TRAP
4. ECONOMIC RESPONSIBILITY-make
Some studies show the Micro, Small
profit to create jobs for the community
and medium enterprises (MSMEs) are
and contribute useful products for the
important contributors to economic
good of the society
growth and is a tool that helps in reducing
poverty in reducing countries

MORALITY OF ADVERTISING
Deceptive advertising-are those who other by an unfair advantage in
make false statements or misrepresent information
the product

Article 108 of the Consumer Capital of

POLLUTION AND RESOURCE
the Philippines (RA 7394)
DEPLETION
-The state shall protect the consumer
Business organizations should take
from misleading advertisements and
seriously the task of taking care of
fraudulent sales promotion practices
Earth, by regularly embarking on projects
Article 110-"It shall be unlawful for any seeking to diminish or eradicate pollution,
person to disseminate or to cause the and to renew the natural resources they
dissemination of any false, deceptive, or tend to use or deplete.
misleading advertisement in any medium"

Basic Employee Rights, Job

Whistle-Blowing
Discrimination, other labor-related
ethical issues is the act of an employee(former or
current) of disclosing what he believes to
Presidential Decree NO.422 or The
be unethical or illegal behavior to higher
Labor Code of the Philippines
management(internal-whistle blowing)or
-lays down the rights of workers related to an external authority or the public
to wages, rights to self-organization, (external whistle blowing)
collective bargaining , security of tenure
Some whistle-blowers are seen as
and just &humane conditions of work"
traitors or violators of organization
R.A No. 6727 mandates the fixing of loyalty while other see them as heroic
the minimum wages applicable to defenders of values which is more
different industrial sectors important than company loyalty.

Insider Trading Code of Ethics

Stock Market Scenario-is the buying or

selling of shares of stock on the basis of
• “The attempt to state the major
information known only to the trader or
philosophical principles and articulate
to a few persons
the values embraced by the
Finance scenario-reward without risk, organisation” (Stevens, 1996)
wealth generated and injury done to • “Codes articulate ethical parameters of
the organisation.” (what is acceptable
and what is not)
• “Note Codes that contain open • Corporate Culture refers to the
guidelines describing desirable assumptions, beliefs, goals, knowledge,
behaviours and closed guidelines and values that are shared by the
prohibiting certain behaviours.” (Nijhof organisational members which when
et al., 2003) supported by various operating norms,
• “Codes clarify the norms and values the can exert a decisive influence on the
organisation seeks to uphold” (Kaptein, overall ability of the organisation.
2004)
• Code of Ethics/Conducts
The Notion on Organisational Culture
• It falls down to this
Values • Functionalist View: Organisational
Beliefs Culture is a component of integrated
Principles social system which includes a social
Rules structure component which maintains an
Culture orderly social life, adaptation, and
• According to Sauser’s Taxonomy (2008) equilibrium with its physical
… environment. (Allaire and Firsirotu,
• The most ideal type of culture is the 1984)
Culture of Character. • “Serving the common good” and
It is an organizational culture whose promotes the effectiveness of the
leaders and members are truly organisation and the well-being of all its
committed to ethical conduct and stakeholders. (Alvesson, 2002)
make ethical behaviour a • Culture as a social glue/Integration
fundamental component of their Approach: organisations are integrated
every action. and controlled through informal, non-
Culture of Compliance is an structural means (Shared values,
organisational culture where leaders beliefs, understanding, and norms)
know what is right, do what is right, which will avoid fragmentation, conflict,
but do not value what is right. and tension.
Members from these firms may be
tempted to break rules when
opportunities occur. Creating an Ethical Corporate Culture
Culture of Neglect has an organisation
• For an organisation to achieve a culture
with awareness of what is right but
of character, they must posses the
through some flaw in the culture,
following:
this effort results to a breach of
• They are at ease in interacting with
moral standard. (conscious choice of
diverse internal and external
action)
stakeholders.
• Fairness is strictly practiced on the
Corporate Culture organisation.
• Responsibility is individual rather than
collective. Responsibility for personal
actions is essential.
• They see their activity in terms of
purpose.
• There is a clear vision of integrity
throughout the organisation.
• The vision is embodied by the top
management, over time.
• The reward system is aligned with the
vision of integrity.
• Policies and practices are aligned with
the vision of the organisation.
• Every significant leadership decision
has ethical value dimensions.

Creating Corporate Code of Ethics

• Adopt a code of ethics.

• Provide ethics training/orientation.
• Hire and promote ethical people.
• Correct unethical behaviour.
• Take a proactive strategy.
• Conduct a social audit.
• Protect whistle-blowers.
• Empower individuals of integrity.
• Assure commitment form the top.
• Communicate the standards of
conduct throughout the organisation.
• Designate an ethics officer that
would enforce ethical standards.
• Establish a process on reporting
violations of ethical standards.
• Assure due diligence in the
organisation’s Board of Directors.
Lead by example.