CHAPTER I – Moral Reasoning in Business

The essence of studying Business ethics is to provide mangers and decision

makers with a framework for the resolution of moral issues and problems affecting
business activities and the organization. Moral reasoning is a process in which ethical
issues and problems are benchmarked against a moral standard so that a moral
judgment is made possible.

Ethical Moral Norm Moral

Issues/ Moral
REALITY Standard Company Judgment
Proble Policy Ethical
CHECK
ms Principle

SITUATION PROBLEM DECISION RESOLUTION

ANALYSIS ANAYSIS ANAYSIS

Examples: -Gravity of offense -Company -Moral or

Graft -Frequency of rules/policies Immoral
Sexual- offense -Ethical principles -Legal or
Harassment -Harm done -Codes of conduct Illegal
Theft -Number of people -Moral norms
Bribery affected

Characteristics of Good Moral Standard:

1. A good moral standard is one that looks at the issues as something that is very
serious, e.g., murder, graft and corruption, stealing.

2. A good standard must be grounded on good moral argument. A good argument

is an argument that always tells the truth.

3. A good standard should be objective and not subjective. It should be universally

accepted and should apply to all.

4. A good standard, when violated, brings about feelings of guilt, shame, and
remorse of conscience.

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Characteristics of a Good Moral Judgment:

1. A good moral judgment must be logical. This means, that the decision maker
must arrive at an informed resolution of the issue based on logical reason.

2. A good moral judgment must be based on facts and solid evidence. The
information used in the process of moral reasoning must not come from weak
sources like, hearsay, rumors and grapevine.

3. A good moral judgment must be based on sound and defensible moral principles.
A weak ethical principle is open to a lot of criticisms.

The Morality of Profit-Motive

People go into business for a number of reasons. Some go into business for
personal satisfaction. Others are in business to earn a livelihood. Still others are in
business because they want to serve the society through the goods and services they
offer to the customers. But the most common, if not, the most dominant motive why
people go into business is to make a profit.

The Assumptions of Profit-Motive:

Understanding the nature and morality of profit-motive starts with the

examination of some given factors and assumptions in which the idea of profit motive
operates. These factors are the following:

1. Profit-motive in business is an ethical issue. Since business is an integral part of

society, its activities, including profit-making, must be examined from the
perspective of morality.

2. Profit-motive as an ethical issue operates within the two important aspects of our
human conduct – freedom and the structure of business.

A. The Good Side of Profit-Motive:

1. Profit-motive motivates people to do something meaningful, e.g., it gives human

life a goal to pursue and something to life for.

2. Profit-motive promotes ingenuity and cleverness in running a business, e.g.,

business leaders and entrepreneurs have to struggle to overcome obstacle in
order to achieve success.

3. Profit-motive makes people productive.

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 4. Profit-motive generates potential capital for the business.

B. The Bad Side of Profit-Motive:

1. Profit-motive promotes rivalry among competitors. Sometimes the competition

becomes stiff that it results into a “dog-eat-dot” world of business where success
is achieved by competing with other and pushing them down in order that one’s
own business might succeed.

2. Profit-motive makes people focus only on making money, that is, to sell as many
goods as possible without considering whether or not these products satisfy the
needs and wants of consumers and end users.

3. Profit-motive turns the businessman from being a reflective and a questioning

person because it focuses his attention on the practical activity of making money.

4. Profit-motive promotes self interest rather than the common good.

Ethical Considerations of Profit-Motive in Business

1. Earning profit is a good and valid activity in business.

2. Making excessive profits is totally wrong. It leads to greed, avarice, and

manipulation of the customers.

3. Profit is not the “be-all and the end-all” of doing business.

4. “Teachings of the e Catholic Church do not totally condemn profit as part of

business activity.

Cases for Analysis

Case 1: Ethics vs. Profit

A large American company participates in a highly competitive industry. To meet

the competition and achieve profit goals, the company has chosen the decentralized
form of organization. Each manager of decentralized center is measured on the basis of
profit contribution, market penetration, and return on investment. Failure to meet the
objectives established by corporate management for these measures is not accepted
and usually results in demotion or dismissal of a center manager.

An anonymous survey of managers in the company revealed that they felt

pressured to compromise their personal ethical standards to achieve the corporate
objectives. For example, certain plant locations felt the pressure to reduce quality

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control to a level that could not ensure that all unsafe products would be rejected. Also,
sales personnel were encouraged to use questionable sales tactics to obtain orders,
including offering gifts and other incentives to purchasing agents.
The chief executive officer is disturbed by the survey findings. In his opinion, the
company should do something about this problem.

Questions:

1. What are the ethical problems mentioned in this particular case and what are the
probable causes of these problems?

2. Is it alright to do something illegal or unethical to maintain the company’s image

and profitability?

3. If you are the CEO of the company, what would you do and why?

Case 2: Friendship in Business

Asia Pacific Sugar and Sweets Manufacturing Company ordered molasses from
Philippine-Hawaiian International Sugarcane Incorporated on November 5, 2000. When
the time for payment came, Asia Pacific Sugar and Sweet Manufacturing Company
were not ready to pay due to tight financial crisis it was experiencing. Mr. Rolando
Gutierrez, the manager of the said company is a friend of Mr. Frederick Dy, the owner of
Philippine-Hawaiian Sugarcane Incorporated. He talked with Mr. Dy and asked him if it
was all right for the payment to be delayed. For friendship’s sake, Mr. Dy agreed. It was
only 20 days afterwards that the buyer offered to pay. The seller accepted the overdue
account and started delivering the molasses. Upon receiving the second shipment, the
production manager of Asia Pacific Sugar and Sweets Manufacturing Company
reported to Mr. Gutierrez that the molasses did not meet the indicated quality in the
invoice. Mr. Gutierrez ordered the molasses to be returned. Enclosed in the invoice was
a memorandum citing the reasons for its return. This action enraged Mr. Dy.
Immediately; he cancelled the contract and argued that the delay of payment was a
form of “breach of contract.”

Questions:

1. Was the action of Mr. Dy to cancel the contract legally correct and morally
justified?

2. Is it appropriate to extend friendship in business transactions? Discuss you

answer.

CHAPTER II – Good Governance

Good governance is an indeterminate term used in development literature to

describe how public institutions conduct public affairs and manage public resources in

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order to guarantee the realization of human rights.[1] Governance describes "the process
of decision-making and the process by which decisions are implemented (or not
implemented)"

The International Monetary Fund declared in 1996 that "promoting good

governance in all its aspects, including by ensuring the rule of law, improving the
efficiency and accountability of the public sector, and tackling corruption, as essential
elements of a framework within which economies can prosper." The IMF feels that
corruption within economies is caused by the ineffective governance of the economy,
either too much regulation or too little regulation.[8] To receive loans from the IMF,
countries must have certain good governance policies, as determined by the IMF.

The United Nations emphasizes reform through human development and political
institution reform. According to the UN, good governance has eight characteristics.
Good governance is: consensus oriented, participatory, following the Rule of Law,
effective and efficient, accountable, transparent, responsive, equitable and inclusive.

Good governance has 8 major characteristics. It assures that corruption is

minimized, the views of minorities are taken into account and that the voices of the most
vulnerable in society are heard in decision-making. It is also responsive to the present
and future needs of society.

Characteristics of good governance

1. Participation - is a key cornerstone of good governance. It refers to the

involvement of citizens in the development process.

2. Rule of law - this requires fair legal frameworks that are enforced impartially. It
also requires full protection of human rights, particularly those of minorities. Impartial
enforcement of laws requires an independent judiciary and an impartial and
incorruptible police force.

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 3. Transparency - means that decisions taken and their enforcement are done in
a manner that follows rules and regulations. It also means that information is freely
available and directly accessible to those who will be affected by such decisions and
their enforcement. It also means that enough information is provided and that it is
provided in easily understandable forms and media.

4. Responsiveness - requires that institutions and processes try to serve all

stakeholders within a reasonable timeframe.

5. Consensus oriented - requires mediation of the different interests in society

to reach a broad agreement in society on what is in the best interest of the whole
community and how this can be achieved. It also requires a broad and long-term
perspective on what is needed for sustainable human development and how to achieve
the goals of such development.

6. Equity and inclusiveness - it ensure that all its members feel that they have
a stake in it and do not feel excluded from the mainstream of society. This requires all
groups, but particularly the most vulnerable, have opportunities to improve or maintain
their well being.

7. Effectiveness and efficiency - means that processes and institutions

produce results that meet the needs of society while making the best use of resources
at their disposal. The concept of efficiency in the context of good governance also
covers the sustainable use of natural resources and the protection of the environment.

8. Accountability - is a key requirement of good governance.

Facts about Good Governance:

Global Anti-Corruption Day, 9 December, celebrates the signing in 2003 of

the UN Convention against Corruption, which defines corruption and processes for
international co-operation in the recovery of stolen assets.
Good governance plays a significant role in reducing poverty and lifting living
standards.
Good governance assures corruption is minimized, views of minorities are
taken into account and that the voices of the most vulnerable in society are heard in
decision making.
It was estimated in 1999 by both the OECD and the World Bank that US$80
billion a year changes hands as bribes or 'gifts'.

Most of the countries recognized that assistance for improved governance is one
of its key sectors. It addresses five key aspects:

 improved economic and financial management

 increased public sector effectiveness

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  strengthened law and justice
 development of civil society
 strengthened democratic systems

The critical importance of democratic governance in the developing world was

highlighted at the UN Millennium Summit in 2000, where the world's leaders resolved to
'spare no effort to promote democracy and strengthen the rule of law, as well as respect
for all internationally recognized human rights and fundamental freedoms, including the
right to development'. The United Nations work in democratic governance can be
summarized into the following categories:

 Legislatures
 Electoral Systems and Processes
 Access to Justice and Human Rights
 Access to Information
 Decentralization and Local Governance
 Public Administration and Civil Service Reform

Based on a long-standing research program of the World Bank, the Worldwide

Governance Indicators capture six key dimensions of governance (Voice &
Accountability, Political Stability and Lack of Violence, Government Effectiveness,
Regulatory Quality, Rule of Law, and Control of Corruption) between 1996 and present.
They measure the quality of governance in over 200 countries, based on close to 40
data sources produced by over 30 different organizations worldwide and are updated on
an annual basis since 2002.

The Worldwide Governance Indicators are a compilation of the perceptions of a

very diverse group of respondents, collected in large number of surveys and other
cross-country assessments of governance. Some of these instruments capture the
views of firms, individuals, and public officials in the countries being assessed.

Cases for Analysis

Case 1: Expired Gravy

Mang Toot’s fast food chain has been known in the business not just only for its
great tasting food and excellent service but also for its cleanly prepared dishes. One
day, Emong, a service crew of Mang Toot’s Makati branch, was preparing the gravy. He
was unaware that the starch he used was already expired. He only noticed it after some
time and the gravy had already been served to some customers. Knowing that it might
cause harm to the customers, he immediately told Bartolome, the branch manager,
about it. Bartolome, the branch manager, about it. Bartolome told Emong not to tell
anyone about it, besides no one is complaining.

Questions:

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 1. What is the moral issue of the given situation?

2. If you were Bartolome, what are you going to do?

Case 2: Shared IT Secrets

When employee Eric Pantaleon quit his job in 1995, IT Systems, his company,
paid little attention. Pantaleon was one of several customer-service representatives of
the Laguna, Philippine-based Computer Company, and the turnover of responsibilities
in the department wasn’t smooth. Following an uneventful exit interview with human
resources officials, Pantaleon left the company to start a job with IT rival, Sampo
Computer, also based in Laguna.

It might have ended there. But when Pantaleon’s new employer began taking
away IT’s market share, its top management started to be alarmed. After some
checking, IT learned that Pantaleon was using inside knowledge of IT’s customers lists
to make sales. Company officials also suspected he might be relying on IT’s customer
specifications and repair manuals.

Questions:

1. Is keeping “trade secrets” still an ethical issue in the age of globalization and
advanced communications technology?

2. It Pantaleon’s action unethical, i.e., using the customers’ list of his previous
company for his new company? Why?

3. If you were Pantaleon, would you also do the same thing as he did? Why or why
not?

CHAPTER III – Ethical Issues and Problems in Business and the Corporate World

Introduction

Business, no doubt, is a productive human activity that brings beneficial

contribution to both people and society. Business produces employment, fair deals,
creativity, and advancement of technology customer satisfaction, among others.
Ironically, however, business is also an activity that provides an opportunity for some
unscrupulous people to take advantage of others, e.g., the abuse of fiduciary
relationship between employers and employees and between buyers and sellers. This
chapter examines the broad array of ethical issues and problems that affect the flow of
business as a dynamic yet, complex human activity.

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1. Sexual Harassment

What is Sexual Harassment?

Sexual harassment is an issue in the corporate world that must be looked into
because it can create a hostile and unhealthy workplace for the employees. For this
reason, the Congress of the Philippines enacted the Anti-Sexual Act of 1995 declaring
sexual harassment unlawful in the employment, education or training environment, and
other purposes.

“The State shall value the dignity of every individual, enhance the development of
its human resources, guarantee full respect for human rights, and uphold the dignity of
workers, employees, applicants for employment, students or those undergoing training,
instruction or education.
Towards this end, all forms of sexual harassment in the employment, education
or training environment are hereby declared unlawful.”

Republic Act No. 7877 defines sexual harassment as, “Employer, employee,
manager, supervisor, agent of the employer, teacher, instruction, professor, coach,
trainer or any other person who, having authority, influence or moral ascendancy over
another in a work or training or education environment demands, requests or otherwise
requires any sexual favor from the other, regardless of whether the demand, request or
requirement for submission is accepted by the object of said act.”

Why Sexual Harassment Occurs

Sexual harassment occurs dye to power struggle between men and women as a
response to a real or imagined loss of power or as an expression of retaliation or flexing
of the new power. This also happens because some organizations and managers allow
it to happen. Historically, sexual harassment has always occurred but there used to be
no label for such behavior. The industrial revolution brought about changes in the
traditional function of men and women which greatly increased gender specialization
and formed a new kind of workplace in the western world. Men and women no longer
work together on the farm or in the family business. The responsibility of each became
more specialized.

Two Types of Sexual Harassment

Sexual Harassment falls into two general categories: 1. The “Quid Pro Quo”
Harassment, and 2. the harassment that creates a hostile environment. “Quid pro quo”
means “this for that” (something for something) and is defined as requiring as sexual
favor or interaction as a condition of employment or in exchange for an employment
benefit (such as promotion, transfer, pay raise). A manager uses his authority to grant

9
pay increases and promotions as a means to extort sexual favors from an employee,
e.g: Go to bed with me and you will get that promotion you want”.

In the Hostile Environment type of harassment, abuses include verbal, physical,

and visual conduct that creates an intimidating, offensive, or hostile environment in the
workplace that interferes with work performance. This type of harassment may be
based on race, religion, national origin, sex, age, marital status, veteran status, sexual
orientation, or disability. Some examples of a hostile environment follow:

 Unwanted touching patting, pinching or brushing up against a person

 Comments about your body, leering, wolf whistling, cat calls, insults of a sexual
nature, persistently pestering for a date

 Displaying or circulating pornographic pictures with the intention of harassing

someone / posting of explicitly sexual materials

 Workplace blackmail – i.e. suggestions that sexual favors may further your
career (or refusal may hinder it)

 Green jokes

 Obscene letters

 Sexual propositions

 Suggestive looks

The Profiles of the Victim and the Harasser:

1. The victims as well as the harasser may be a woman or a man. The victim does
not have to be of the opposite sex.

2. The harasser can be the victim’s supervisor, an agent of the employer, a

supervisor, an agent of the employer, a supervisor in another area, a co-worker,
or a non-employee.
3. The victim does not have to be the person harassed but could be anyone
affected by the offensive conduct.

4. The harasser’s conduct must be unwelcome.

How Sexual Harassment Affects the Workplace

The study showed that use of words, jokes, and gestures were the type of
harassment which created a hostile environment or offensive work environment; it

10
affected the individuals harassed and the persons accused, who may be innocent; such
case can generate costly lawsuits, unfavorable publicity or the invasion of privacy, it can
also affect the bottom line of the employer, managers and co-workers, and affect the
entire life of an organization and its members.

How to Prevent Sexual Harassment in the Workplace

A significant step an organization can take in preventing sexual harassment in

the workplace is through creating a safe, secure, positive work environment by putting
into practice a strong sexual harassment policy.

2. THE PROBLEM OF JUST WAGE

Work and Compensation

Work is said to be for the purpose of obtaining economic gain for the laborer.
Most agree that work is directed to the promotion of life. The duty to preserve one’s life
implies the duty to work and that each has personal duty to take care of himself and not
to be a burden to others.

The Question of Just Wage

The question of ‘What is a just wage:” or “How do you define a ‘fair wage’”? Has
a long history. A number of people of all over the world commented on its definition and
have argued on the appropriate criteria to consider in setting the so-called ‘Just Wage’.
A just wage is defined as that remuneration which is enough to support the wage-earner
in reasonable and frugal comfort. The Catholic Church tells us, “A just wage is the
legitimate fruit of labor.”

The issue of just wage has also been discussed by other agencies:

Universal Declaration of Human Rights

The 1948 Universal Declaration of Human Rights protects the basic rights of the
workers, more specifically:
“The right to work, to free choice of employment, to just and favorable conditions
of work, and to protect against unemployment (Art. 23 [1]) and the right to equal pay for
equal (Art. 23 [2].”

Philippine Constitution and Republic Act 6727

Spread in various parts of the 1987 Philippine Constitution are specific

pronouncements and mandates on the protection and promotion of the rights of workers
in the public and private sectors, as indicated in letter “g” Sec. 3 of Act. XIII.

11
Republic Act No. 6727

The Wage Rationalization Act Declared the policy of the Sate to rationalize the
fixing of minimum wages and to promote productivity-improvement and gain-sharing
scheme to ensure a decent standard of living for the worker and their families.

Factors to Consider in Formulation of Fair Wages

1. External market Factors. These refer to the supply and demand for labor
and the so-called economic conditions and underemployment.

2. Laws and Regulations. Workers should be paid in accordance with laws and
regulations issued by the government. It requires that employers pay at least
the minimum wage.

3. Cost of Living. The cost living relates to basic maintenance needs and it
must be seriously considered in formulation of wages.

4. Prevailing Industry Rate. Some claim that paying workers the average of
what other companies are paying for the same job results in a fair wage.

5. Organizational Factors. Assessment on what type of industry the

organization operates, the size of the company, and the organization’s
profitability to justify its ability to provide fair wages to its workers should be
considered.

6. Job Factors. The nature of the job itself entails the formulation of a just wage.
Duties, responsibilities, and the skill requirements of the job are probably the
most considerable determinants of fair wage.

7. Individual Performances. The trend is that individual performances or

productivity ratings affect the determination of wage/salary increase.

3. GIFT-GIVING AND BRIBERY

GIFT-GIVING

Gift-giving is merely an act of extending goodwill to an individual in an effort to

share something with particular others. Giving gifts to customers, clients, and business
partners is a common practice in the business community. It is normally observed
during special occasions like Christmas, New York, and sometimes every during
birthdays.

Business usually engages in gift-giving for the following reasons:

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  To show appreciation or a favor received;
 To effectively establish goodwill with business partners;
 To advertise; and
 To compete effectively against competitors.

The following are the common forms of gift-giving:

 Samples
 Raffle Coupons / certificates
 Rebates / cash refunds
 Padding expense accounts
 Premiums
 Prizes
 Patronage awards (rewards)
 Tie-up promotions
 Allowance
 Free goods tips

Is Gift-giving Ethical or Unethical?

Business gifts of clients and business associates can raise conflict-of-interest

problems, and knowing where to draw the line, between what is right and wrong, is not
always easy. The clear point is that those who cross that line, intentionally or not, end u
in big trouble.

Examples:

Supposing you are a lawyer by profession and

 Linda, a former client, has steered a half dozen prospective clients your way this
year, and several of them have become valued clients of your firm. Would it be
an appropriate gesture, would it not, to thank her by inviting her and her husband
out for a dinner?

 Jose, your former classmate in law school (now an established law practitioner,
has referred a case that just resulted in a significant settlement. Would there be
anything wrong with sending him a pair of concert tickers as a “thank you”?

Factors in determining the morality of gift-giving

1. Value of the gift. Is the gift nominal in value, or is it substantial enough to

influence a business decision?

2. Purpose of the gift. As long as the gift is not intended or received as a bribe
and remains nominal, there does not appear to be any serious problem.

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 3. Circumstances under which the gift was given or received. A gift given
during the holiday season, for a store opening, or one attached to a special
event is circumstantially different from one unattached to any special event or
occasion.
4. Position between or relationship of the giver and receiver. Could the
recipient’s opinion, influence, or decision result in preferential treatment in
favor of the donor?

5. Acceptable business practice in the industry. Could the act be considered

acceptable in this kind of business?

6. Company Policy. If firms explicitly forbid the practice of giving and receiving
gifts to its customers, vendors or supplies associates, or corporate directors,
then gift-giving would normally be wrong.

7. Laws and Regulations. Certain federal, state, or local government

institutions may impose law that forbids accepting gifts from firms with which
they do business.

BRIBERY

Bribery is defined as practice of giving remuneration for performance of an act

that is inconsistent with the work contract or the nature of the work one has been hired
to perform.

Examples of bribery:

 A motorist offered a certain amount of money to a police officer in order not be

issued a ticket for speeding;
 A citizen seeking paperwork or utility line connections gave an expensive gift to a
functionary in exchange for a faster service;
 A construction company shared percentage of its income to a civil servant in
order to win a contract; and
 A narcotics smuggler bribed a judge to lessen criminal penalties.
Bribery is obviously unethical because of the following reasons:
 It is generally used as an instrument to gain personal or corporate advantage;
 It corrupts the concept of justice and equality;
 Bribery produces cynicism and a general distrust of institutions;
 It destroys people’s trust in the integrity of professional services, of government
and the courts, of law enforcement, religion, and anything it touches; and
 It treats people as commodities whose honor can be bought and sold. It thus
tends to degrade the respect we owe to other human beings.

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4. Morality of Advertising

Advertising plays a very significant role in marketing goods and services. Without
advertising, the consumers would not be aware of the presence of diverse products and
services available in the market. Sometimes, even the mere presence of advertising can
sell a product due to consumer perception that a heavily advertised product is a product
of “good value”.

Famous marketing guru Philip Kotler defines advertising as “any paid form of
non-personal presentation and promotion of ideas, goods, or services by an identified
sponsor.” Wells, Burnett and Moriarty, likewise defined advertising as “paid non-
personal communication from an identified sponsor using mass media to persuade or
influence an audience”.

The primary purpose of advertising is to inform potential buyers of the availability

to a certain product by providing relevant information on its uses, benefits and how it
might serve the needs and wants of individuals.

Some Issues in Advertising (cf. William Shaw, Business Ethics (San Jose University,
California: Wadsworth Publishing Co., 1999) p.369ff.

Deceptive Advertising

Deceptive ads are those which either make a false statement and therefore, lie,
or which represent the product without making any statement. Deceptions may occur
not only through sentences or propositions but also though pictures, individual words, or
through certain combinations of objects which can deceive the eye and mind.

Another deceptive technique in advertising is ambiguity. When ads are

ambiguous, they are considered deceptive. The use of weasel words is often
complementary and ambiguity in advertising. Weasel words are used to avoid or recoil
from a direct or straightforward statement.

Exaggeration

Consumers might also be misled through exaggeration. Exaggeration occurs

when advertisements tend to make false claims of the benefits of the goods or services
which is actually unsupported by valid evidence. For example, claims that a pain
reliever provides “extra pain relief” or is “50 percent stronger than aspirin,” that it “upsets
the stomach less frequently” or is “superior to any other nonprescription painkiller on the
market” contradict evidence that all analgesics are effective to the same degree.

Psychology Appeals

Advertisers play on several different tactics to get people interested in their

products. There are some advertisements that are directed at arousing human

15
emotional needs rather than reason. This one area in advertising that presents a
serious moral concern.

Ads Directed at Children

Most advertisers have recognized that advertising to children is effective and

eventually became a big business recently. Children are a special group of consumers
who do not regard reason. In the U.S., the advertising industry spends $12 billion per
year on ads targeted to children, bombarding young audiences with persuasive
messages. Children between ages 4 and 12 receive as gifts about $20.3 billion and
spend approximately $17.4 billion of it on items such as snacks, candy, and toys.

Philippine Law on Advertising

CONSUMER ACT OF THE PHILIPPINES

Article 108 of the Act declares that “The State shall protect the consumer from
misleading advertisements and fraudulent sales promotion practices.” The Department
and of Trade and Industry is responsible for enforcing the provisions of the Act. With
respect to food, drugs, cosmetics, devices and hazardous substances, the Department
of Health is the agency that oversees these products.

PHILIPPINE ASSOCIATION OF NATIONAL ADVERTISERS (PANA)

In 198, advertisers formed the Philippine Association of National Advertisers

(PANA). Since then, the PANA has been engaged in a continuing campaign to regulate
abuses committed by untruthful advertisers. The PANA issued a Code of Ethics which
includes the following statement of general principles:

Good Advertising recognizes both its economic and social responsibility to help
reduce distribution costs and to serve the public interest.

Good Advertising depends for its success on public confidence.

Good Advertising tells the truth. It is accurate, honest, and trustworthy.

Good Advertising conforms not only to the laws but also to the generally
accepted standards of good taste and decency, and to moral and aesthetic sentiments
of the country.

Good Advertising seeks public acceptance on the basis of positive and

constructive statements, made on the merits of the product or service advertised, rather
than by the disparagement of competition.

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 Good Advertising does not allow any activity that involves the exploitation of the
goodwill, attached to any other firm, product, or service.
Good Advertising helps to dignify the individual and contribute to the building of a
civilized society.

Cases for Analysis

Case 1: The Confused Accountant

Yvonne Pillar is a young accountant who came from a poor family. She was
recently hired by a big company called Chameleon Co.

When it was time to audit the accounting books of the company, Yvonne was
instructed by her boss to manipulate the numbers in order to reduce the taxes the
company will have to pay the government. The company official said that if she would
not heed the command, she would be terminated.

The employment condition that time was really tight and the chances of finding
another job are very minimal.

Questions:
1. If you were Yvonne Pillar, will you obey your boss? Why or why not?

2. Are you morally obligated to follow an order that is illegal?

3. Explain the moral implications of the military slogan: “Obey first before you
complain.”

Case 2: The Immoral Video Shop

Mr. Jun Quesadilla owns a video shop in Manila. His store has a wide variety of
original VCDs and DVDs which he gets from a legal source and is approved by the
Videogram Regularly Board. He has all the legal papers and permits to operate this type
of business. However, Mr. Jun Quesadilla has a secret room in his store which he uses
to avoid the authorities. The room contains all the latest titles of pirated VCDs and
DVDs, including x-rated tapes. He also uses another selling strategy to make more
money by telling customers that the VCDs and DVDs they want to rent are “reserved”
and he would only give this to them if they would rent them for higher price.

Questions:

1. Is it right to sell pirated VCDs, DVDs, and x-rated tapes in the shadow of a
certified video shop? Briefly explain why.

17
 2. In your own opinion, would you patronize pirated CDs and DVDs which are
cheaper than the original ones because it is more economical? Why or why not?

Case 3: Golden Taurus Garment Company

Golden Taurus is a garment company managed by a Taiwanese national. The

company is experiencing is experiencing near bankruptcy because of the current strikes
of its employees’ union. The management attributes the current difficulty in the
company’s financial condition to labor unrest. Eva Wu, the owner, has experienced
being bullied and receives several death treats.

Some of the issues raised by the employees against the management are the
below minimum wage salaries. Also, employees do not get their 13th month pay even if
the law entitles every employee regardless of employment status. Also, employees are
asked to sign a 5-month contract, which excludes them from getting the year-end bonus.
Per company policy, only those employed with 6-months employment contract can get
the year-end bonus.

Long working hours and less break time add to the complaints of the employees.
Working hours start at seven in the morning and end at six in the evening. Break time in
the morning is from 10:00 to 10:15 and none in the afternoon. Employees can eat their
lunch between 12:45 and 1:00 which gives them only a fifteen-minute lunch break.

Employees are also concerned with violation of contract. Sewers are given quota
which is against the agreed per piece basis. They are also troubled with the poor
working conditions and the inadequate supply of water for their personal hygiene in the
restroom.

Without the knowledge of employees, Golden Taurus filed a bankruptcy status,

and later operated under a new company name.
Questions:
1. Does the company’s current financial condition justify the compensation given
to employees? Explain.
2. Is it ethical to deny the employees the information about the company’s
financial conditions and decisions?
3. It is moral to let the employees sign a 5-month contract instead of the usual 6-
month contract?

Case 4: XYZ Cement Company

In 1982, XYZ Cement Company began its plant operation Pampanga. Local
residents were very happy because of the economic benefits they got from the plant
especially the 400 local residents employed. After a few years of operation, the plant

18
started to emit large volumes of pollution. Local residents noticed the constant vibration
and loud noise coming from the plant.

Local residents filed a suit against the company asking the court to issue an
injunction to close the plant. The residents claimed that the loud noise and the
vibrations posed dangers to their health and damaged their property.

The company was using the best available technology in their operation. The
court refused to issue the injunction arguing that closing the plant would mean more
harm than good to both parties. The court instead ruled that XYZ should pay the
residents a onetime fee to compensate them for the damages done. The amount was
computed based on the fair market price the residents would receive if they were
inclined and able to rent their property.

Questions:

1. Was the decision of the court fair? Why or why not?

2. If you were the owner of the cement plant, what will you do to solve the
problem? Explain your answer.

3. Discuss the cost and benefit of the case from the perspective of the principle
of utilitarianism.

5. OFFICE ROMANCE

People at work see each other every day, work together as teams, sometimes
partners on specific projects. Through this, they get sense of fulfillment and find
encouragement from on another. Sometimes, people at work get attracted to each other.
Survey says that somewhere from 25 to 33 percent of the employees at a given
company have had office romances once in their careers.

WHAT IS OFFICE ROMANCE

Office romance is defined as a relationship between two people who are

employed by the same organization. It is characterized by mutual attraction between the
parties and a desire for a personal, romantic relationship. Office romance is very likely
to happen as long as men and worn work together.

Benefits of Office Romance

Office romance offers benefits for the employees in particular and also for the
company in general. These benefits include friendship, mutual support to each other at

19
work, and other personal experiences. Employees involved in a love relationship
overcome rough times at work because of mutual support and inspiration.

Disadvantages of Offices Romance

Like any other relationship, office romance is risky. It is sensible to have a head
start about the possible outcomes of a workplace romance engaging into it.

Damaged Professional Reputations

It is likely that has relationships whether in offices or in any other workplace can
damage work reputations.
Disturbed Co-workers

The biggest concern is the reaction of co-workers and of they will support the
relationship or not. Even if the relationship is discreet, co-workers will eventually find out
what is happening-time is the only question.

Changes in Productivity

The productivity of the people involved in the romance and that of even the
spectators of the relationship are at stake.

Dating the Boss

The most disturbing type of romance is one that involves the supervisor or
manager and a subordinate.

Extramarital Affairs

Extramarital affairs may also occur inside the office. These are obviously risky
and subject to moral issues.

Ethical Issues in Office Romance

Interventions

Office romance has always been an issue for companies especially the question
on when it is best for organizations to control romance in the office.

Legal/Ethical Considerations

There are several legal and ethnical issues to consider. If proximity and repeated
disclosure are found, should an organization separate the persons involved? This could
raise some legal issues such as discrimination.

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Sexual Harassment

Sexual harassment is a very delicate subject. Pierce and Aguinis (1997) have
posited that sexual harassment may sometimes arise when a bad workplace romance is
terminated. There are few reasons why this issue may exist. One of the persons involve
in a failed romance may seek vengeance, may try to revive, or would want to remove
the other person involved.

6. THE PROBLEM OF FAIR PRICING

Our everyday life requires the exchange of goods services between two or more
parties. These everyday exchanges are given the conditions of a barometer we usually
call the price.

Determining a Fair Price

On why a price for a product or service has to be established assumes two

theories. First is that man is entitled to enjoy the fruits of his labor and as an effect sets
a price he deems reasonable for his produce.

Ethical Issues in Fair Price

In the limelight of the business arena, prices are normally set differently and
consequently, receive pressure to line up to ethical standard. These are some of ethical
issues brought by pricing:

a) True cost of the concealed

b) Suggested retail price
c) Use of electronic scanners
d) Promotional pricing. Promo prices such as “SALE” items manipulate consumers
in buying products that are thought to be cheaper. Odd Price Policy on the other
hand, deals with both price and advertising ethics that uses odd numbers such
as 49.99 instead of 50.00. Odd price has a psychological impact on consumers
making them believe that they are paying a lesser price.
e) Follow the leader pricing.
f) Price gouging. Price gouging takes advantage of an economic situation.
g) Price fixing. Price fixing uses the power of the retailer among the producers
correspondingly controlling product price.

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Cases for Analysis

Case 1: The Case of the Malicious Manager

Strike, Inc. is a well known company in the field of Information Technology (IT). It
has been the main and primary producer of educational software and business
operational progress like database filing, computerized payroll system, and hardware
designed swipe machine and bar code system. Jeffrey Jacobs, the manager, has been
working for the company for almost 25 years. His expertise in system application and
development made him the best and the most competent in the managerial position. He
is aggressive and hardworking but at times unpredictable and bossy. His persona
attachment and close professional interaction with female employees of the company
have been noticed by many.

One day, Bernadette Ryan, the head of the system developers, went to Jeffrey’s
office for product consultation. The meeting went on and Jeffrey’s comment about the
new project is its marketability and user-friendly functionally. Bernadette, on the other
hand, continued to explain the advantages of the system when Jeffrey stood up and
approached the door. She just continued discussing the features of the new system
being developed. Without her knowing it Jeffrey suddenly appeared at her back, sort of
listening to her discussion. Jeffrey started to make sleek movers; he intentionally put his
hands, touched and sort of massaged Bernadette’s shoulders. Bernadette was
surprised about the actions of her boss. She stood up and said, “I’d rather go.” As she
was walking her way out of the room, Jeffrey got hold of her arms and said, “I know you
like what I’m doing. Come on, try me!” Bernadette felt that she was being harassed and
exclaimed, “Stop or I’ll scream! This is sexual harassment!” Jeffrey felt more aggressive
and told Bernadette that being the manager; he has the right to be the boss and handle
his subordinates his own way. Jeffrey further imposed that if she would not submit
herself to his personal aggression, he would tell other employees about the incident.
Moreover, he would definitely fire her and tell everyone that it was Bernadette who did
the first move of flirting. Bernadette was shocked. She ran out of the door to get out of
Jeffrey’s malicious and questionable disposition.

Questions:

1. Is the action of Jeffrey Jacobs considered sexual harassment? If so, what type of
sexual harassment?

2. What appropriate actions should Bernadette do in order to prove that the incident
happened?

3. State the implications of sexual harassment to Bernadette and to the

organization?

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7. TRADE SECRETS AND CORPORATE DISCLOSURE

TRADE SECRETS

A trade is the legal term for confidential business information. That piece of
information allows the company to compete effectively.

Examples of trade secrets include customer identities and preferences, vendors,

product pricing, marketing strategies, company finances, manufacturing processes, and
other competitively valuable information. This includes essentially any confidential
business information. This includes essentially any confidential business information
such as customer lists, financial information, employee data, production cost or sales
data, and documents memorializing important negotiations.

1. The information must not be “generally known or readily ascertainable” through

proper means. Information known to someone or known to non-competitors is
still capable of being a trade secret.

2. The information must have “independent economic value due to its secrecy.” It is
more concerned on the money that the company has spent in developing the
information.

3. The trade secret holder must use “reasonable measures under the
circumstances to protect” the secrecy of the information.

CORPORATION DISCLOSURE

The information that a corporation is morally obliged to disclose coincides with

much that is legally required, though pressures for increased disclosure are based, for
the most part, on moral arguments. According to De George, the moral basis for
corporate disclosure rests primarily on the following arguments: (1) Each person has the
right to the information he needs to enter into a transaction fairly, and (2) Each person
has the right to those actions of others that will seriously and adversely affect him or her.

PRODUCT MISREPRESENTATION AND CAVEAT EMPTOR

MISREPRESENTATION

Misrepresentation is observed when there is transformation of information to

misinformation. Gorospe, in his book, Philippine Business Ethics, (pp.21-24)
distinguishes the two types of misrepresentation as either international or unintentional
misrepresentation.

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 1. Intentional misrepresentation – a scenario whereby the person is fully aware or
deliberately misrepresents things, commonly known as lying

2. Unintentional misrepresentation – a scenario whereby the person is not aware

and does not deliberately act on misrepresenting things. It is a situation where
the person involved believes that it is the right and acceptable thing to do. It is
also commonly called as white lie.

Definition of Lying

Lying can be defined as the act of making others believe something that they,
themselves, do not believe in. it happens when somebody tries to convince others with
untrue statements.

Types of Lying

1. Use of ambiguous terms is the act of deliberately using vague terms or open-
ended statements that can have several meanings to mislead people that one is
telling the truth. Statements like. “I was at the office around 8:00 a.m.”

2. Use of false statements is the act of making a statement from which false
conclusions may be drawn eventually misleading others. This type of lying is
often observed in advertising a product to be the “best-seller” brand.

3. Through action is a type of lying where the person gets caught in the act of
wrongdoing. A good example of this is when someone is caught red-handed of
stealing and still denies the accusation.

4. Suppression of correct information is an intentional or unintentional act of hiding

the correct information which eventually misleads others.

According to Catholic moral theology, lying becomes sinful when:

(cf. Karl H. Peschke, SVD. 1987. Christian Ethics. Manila: Divine World Publications, pp.
587-592)

1. It leads the neighbor to error.

2. It breaches a promise
3. It violates the nature of speech.

In general, lying is not a grievous sin. It is considered grievous only when it

becomes gravely detrimental to neighbors and causes great dishonor to God. However,
lying can be morally justified when:

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 1. Used to protect innocent people
2. Used to protect national security / important secrets
3. Used in the name of self-defense
4. Used in protection of bodily integrity

Business Practices Involving Misrepresentation and Lying

Aside from intentional and unintentional misrepresentation, the act of

misrepresentation may be further classified into other types: direct misinterpretation and
indirect misinterpretation.

1. Direct misrepresentation is characterized by actively misrepresenting something

about the product or service. It gives the business bad name because deception and
lying are used in the process of selling the product to the customers. Some
examples of direct misrepresentation:

A. Deceptive packaging. The objective is to create an impression wherein the

buyers or the end users will see an improvement, either by size or by weight
without any change in the price. It can also be done the other way around,
introducing a new packaging and lowering the price.

B. Adulteration is the unethical practice of corrupting a genuine commodity by

imitating or by adding something to increase its bulk or volume, or even by
substituting an inferior product for a superior one for the purpose of profit or
gain.

C. Misbranding or Mislabeling is the act of copying a product’s design to the

closet possible way, giving an impression that it is the same with the leading
brand.

D. Short weighing is the most common type of direct misrepresentation. It can be

easily spotted in wet and dry markets.

E. Short-changing is taken directly from a situation where the seller gives the
customer less than the change he should get. It covers all situations from
quality and quantity of goods the buyer should get in exchange for money.

F. Short measuring is an unethical practice observed in products that depend on

the length and / or volume.

G. Short numbering the seller means giving consumer the quantity by piece of
product less than the number he paid for.

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 H. Misleading Advertising. The term “false” means any representation or symbol
that is inconsistent with facts, and where the deviation would be unacceptable
to a significant number of the general or relevant public, and would lead to
misunderstanding or incorrect decisions. The term “misleading” means any
representation or symbol that would cause a significant number of the general
or relevant public to misunderstand or make incorrect decisions, regardless of
whether such representation or symbol is consistent with facts.

The common practices involved in indirect misrepresentation

A. Caveat Emptor means, “let the buyer beware”, and is a practice very common
among salesmen, based on this concept, it is the responsibility of the consumer
to determine for himself the defects or negative features of the product.
Therefore, it is not the responsibility of the seller to reveal any defect of the
product he is selling, thus, the customer cannot expect the seller to voluntarily
provide that kind of information.

B. Deliberately withholding information in any business transaction is also an

unethical practice.

C. Business Ignorance is passive deception because the businessman is unable to

provide the customer with the complete information he needs to make a fair
decision.

8. THE MORALITY OF LABOR STRIKE

Strike action (or simply strike) describes collective action undertaken by groups
of workers in the form of a refusal to perform work.

Workers go on strike for different reasons:

 For higher compensation

 To improve the workplace
 For shorter working days
 To stop their wages from going down
 For more benefits
 Because they think their company has been unfair

Types of strike:

A sit-down strike (or sit-in) is a strike in which workers show up to work, but
refuse to work.

A general strike is a strike affecting all areas of a labor force across many
industries, typically throughout an entire country or a large section hereof.

26
 A sympathy strike (or secondary strike) is a strike initiated by workers in one
industry and supported by workers in a separate but related industry.

Unfair labor strike is an action taken by an employer (including any agent or

representative of an employer), that is believed to be inimical to the interest of an
employee organization.

A jurisdictional strike refer to a concerted refusal to work undertaken by a union

to assert its members’ right to particular job assignments and to protest the assignment
of disputed work to members of another union or unorganized workers.

An economic strike is based on a demand for better wages or benefits than the
employer wants to provide.

A wildcat strike is against the will of the leadership of the union, or without a
union.
A slow-down is a form of work stoppage in which employees deliberately reduce
their individual production.

A recognition strike is a kind of strike forcing employers to recognize and deal

with them.

9. WHISTLE-BLOWING

Whistle-blowing is the disclosure by an employee of confidential information

which relates to some danger, fraud, or other illegal or unethical conduct connected with
the workplace, be it of the employer or of his fellow employees.

A whistle-blower is someone in an or organization who witnesses behavior by

members that is either contrary to the mission of the organization, or threatening to the
public interest, and who decides to speak out publicity about it.

Four elements encompass whistle-blowing:

1. The disclosure of information, be it internal or external, must be made in good

faith;
2. The disclosure must be made by a current, former or prospective employer;
3. The information must be linked with misconduct on the part of the employer, and
4. Evidence of the misconduct should exist as well as information regarding the
identity of the wrongdoer.

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TYPES OF WHISTLE-BLOWING

1. Internal whistle-blowing occurs within the organization. It is going “over the head
of immediate supervisors to inform higher management of the wrongdoing.”

2. External whistle-blowing occurs outside the organization. It is revealing illegal

and immoral activities within the organization to outside individuals or groups
such as media men, public interest groups, regulatory body, or non-government
organizations.

A. Current – those who blow the whistle on present employers.

B. Alumni – those who blow the whistle on former employers.
C. Open – whistle-blower who does not disclose his identity.
D. Anonymous – whistle-blower who does not disclose his identity.

Studies also revealed that whistle-blowers experience each of the following forms
of retaliation:

 Lost their job or were forced to retire

 Received negative job performance evaluations
 Had work more closely monitored by supervisors
 Were criticized or avoided by co-workers
 Were blacklisted from getting another job in their field
Along with management retaliation, the majority of the whistle-blowers also
experience severe emotional effects of their whistle blowing activity:

 Severe depression or anxiety

 Feelings of isolation or powerlessness
 Distrust of others
 Declining physical health
 Severe financial decline
 Problems with family relations

HOW TO BLOW THE WHISTLE (www.whistle-blower.org)

1. Before taking any irreversible steps, talk to your family or close friends about
your decision to blow the whistle.

2. Be alert and discreetly attempt to learn of any other witnesses who are upset
about the wrongdoing.

3. Before formally breaking ranks, consider whether there is any reasonable way to
work within the system by going to the first level of authority.

28
 4. Develop a plan, such as strategically-timed release of information to government
agencies so that your employer is reacting to you, instead of vice-versa.

5. Maintain good relations with the administration and support staff.

6. Before and after you blow the whistle, keep a careful record of events as they
unfold.

7. Identify and copy all necessary supporting records before drawing any suspicion
to your concerns.

8. Break the cycle of isolation research and identify and seek a support network of
potential allies, such as elected officials, journalists, activists.

9. Invest on funds to obtain legal opinion from a competent lawyer.

10. Always be on guard not to embellish your charges.

11. Always be on guard not to embellish your charges.

12. Do not wear your cynicism on your sleeves when working with the authorities.

10. MULTI-LEVEL MARKETING (MLM) AND PYRAMIDING

MULTI-LEVEL MARKETING

Multi-level marketing is a system of selling in which one signs up other people to

assist him, and they, in turn, recruit others to help them. It is a system of selling through
many levels of distributors, thus the word “multi-level marketing”.

PYRAMIDING

In the classic “pyramid” scheme, participants attempt to make money solely by

recruiting new participants into the program. The hallmark of these schemes is the
promise of sky0high returns in a short period of time for doing nothing other than
handing over your money and getting others to do the same.

MLM Pyramiding
1. Legal 1. Illegal
2. Income generated only on product 2. Income is generated solely on the
sales process of recruiting others into the
pyramid
3. Provides a training program 3. No training program

29
 4. Consumable, reasonably priced
quality products
5. Serves legitimate economic function
such as a channel of distribution for
relatively small or new companies
with excellent products
6. Sponsoring participants earn
nothing by mere sponsoring.
Recruitment is optional.
7. Earnings are ultimately tied to
product consumption of end-users
8. Enormous efforts to sell are exerted
9. Largely, products are sold to the
consuming public
10. Bonuses are based on sales to final
users who are not members of the
scheme
4. Few retail sales and high cost,
slower moving products
5. No legitimate economic function
such as no economic benefits, but a
mere transfer of money from one
person to another without legitimate
business
6. Recruiting participants get benefits
from recruitment
7. Earnings are tied to the act of
recruitment
8. Little effort or no effort is being
made to sell to the public
9. Products are consumed internally
within the organization
10. Bonus entitlements are based on
goods absorbed by members within
the structure

Moral Issues in Pyramiding

1. Too much materialism and greed.

Testimonies of those at the top, contents of brochure, or videotape of a disguised

MLM will more likely be shown to you to encourage you to join with the promise of
success, large new homes, luxury cars, money in the bank, a grand vacation all over
the world, or even a Lear jet.

2. They con the public, making them believe that they are a legitimate MLM.

3. The intentions are bad.

11. UNFAIR COMPETITION

Is competition good or bad? Competition is healthy and can be a motivation for

firms to produce better products or offer better services. Without competition, firms can
just relax and quality will suffer. Thus, competition becomes bad only when it eliminates
a competitor like in cutthroat competition.

1. A monopoly is defined as a market situation where there is only one provider of a

kind of product or service.

30
 2. Oligopoly, on the other hand, denotes a situation where there are few sellers for
a product or service.

3. Perfect competition is a situation in which no firm or consumer is large enough to

dictate prices.

Difference between a War and Competition

In a war, two contenders fighting hurl directly at each other whereas in a

business competition, two or more parties are vying for the opportunity to provide the
customer’s needs whether it is a product or service.

Difference between Fair and Unfair Competition

Fair competition is doing business under ethical rules of conduct behavior and
judgment. It is attaining success in business through the merits of its products or
services while unfair competition is unethical business practice. It is doing business with
the goal of profit without regard to others.

General unfair competition consists of:

 Deceptive trade practices such as misrepresentation and false advertising.

 Business interference to prevent competitor from continuing with its business
process or business contract.
 Anti-competitive market practices such as under cost selling to kill the competitor.
 Defamation of a competitor or badmouthing a competitor to a customer.
 Caveat emptor or indirect misrepresentation by withholding information from the
buyer.
 Violation of intellectual property right such as copyrights, patents, trademarks,
and service marks.

The Intellectual Property Code of the Philippines (R.A. 8293)

R.A. 8293, otherwise known as Intellectual Property Code of the Philippines as to

provide an intellectual property and industrial property system which will enhance the
development of domestic and creative activity, facilitate transfer of technology, attract
foreign investment, and ensure market access for our products.

12. MONEY LAUNDERING

WHAT IS MONEY LAUNDERING

Money laundering is the process of disguising illegally obtained money so that

the funds appear to come from legitimate sources or activities. Money laundering

31
occurs in connection with a wide variety of crimes, including illegal arms sales; drug
trafficking, robbery, fraud, racketeering and terrorism.

Money Laundering Process

Placement – physically placing bulk cash proceeds. It is during the placement stage
that physical currency enters the financial system and illegal proceeds are most
vulnerable to detection.

Layering – separating the proceeds from criminal activity from their origins through
layers of complex financial transaction. Layering describes as activity intended to
obscure the trail which is left “dirty” money.

Integration – providing an apparently legitimate explanation for the illicit proceeds.

During the final stage in the laundering process, illicit proceeds. During the final stage
in the laundering process, illicit proceeds. During the final stage in the laundering
process, illicit funds are integrated with monies from legitimate commercial activities as
they enter the mainstream economy.

13. CONFLICT OF INTEREST

Conflict of interest in the business context occurs when a person acts in a way
that is to his advantage at the expense of the employing organization.

Types of Typical Conflict of Interest

1. Self-dealing. For example, you work for the government and use you official
position to secure a contract for a private consulting company your own.

2. Accepting benefits. Bribery is one example; substantial (non-token) gifts are

another. For example, you are the purchasing agent of your department and you
accept a case of liquor from a major supplier.

3. Influencing peddling. Here, the professional solicits benefits in exchange for

using her influence to unfairly advance the interest of a particularly party.

4. Using your employer’s property for private advantage. This could be as

obvious as stealing office supplies for home use.

5. Outside employment or moonlighting. An example would be setting up a

business on the side that is in direct competition with your employer.

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 6. Post-employment. Here a risky situation can be one in which a person who
resigns from a public or private employment and goes into business in the same
area.

14. INSIDER TRADING

WHAT IS INSIDER TRADING

Insider trading refers to the significant facts that have not yet made public and
are likely to affect stock prices.
Ethical Issues Related to Insider Trading

 It violates fiduciary relationships between insider and outside clients.

 It promotes greed and personal gain at the expense of others.
 It renders the transaction between two contracting parties as unfair.

Cases for Analysis

Case 1: The Bank Depositor

A depositor entered into a trust agreement with a commercial bank under clear
and certain terms that it would carry an interest at a net rate of 8.6%. The branch
manager of the bank assured him that his deposit amounting to 1 million is very safe
income generating and income-derived is tax free. However, he was not furnished a
single piece of document except the official receipt for P1 million. The trust agreement
which the branch manager made him sign in blank was given to him only after he made
stern demand for copies of documents relative to his deposit. He was not informed in
what manner his money is being used by the bank, making him believes that it is just an
ordinary deposit. Even the Trust Agreement did not name who the beneficiary of the
alleged trust will be. But while the copies of the documents given to him do not bear his
conformity, those filed with the Bangko Sentral ng Pilipinas (BSP) have his alleged
signature.

The depositor is demanding the return of P1 million from the commercial bank
where he placed the amount under a trust agreement. The depositor, through his lawyer,
filed letters of complaint with the Department of Thrift Bank and Non-Bank Financial
Institutions of BSP. No action has been taken despite the lapse of more than one month
except for the informal talk with the department’s lawyer who told the complainant that
the bank has answered the initial complaint.

To date, however, the complainant has not been furnished copy of such reply.
This, allegedly, gives the depositor the notion that the erring bank enjoys the protection
of some BSP officials.

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Questions:

1. What moral principle is being violated in this case? Is the action, implementation,
or performance of the branch manager and the officials from BSP in accordance
with their duties? Did they carry out their functions uprightly and morally?

2. What is the moral implication of this case to the banking and finance industries?

Case 2: BIG MAK BURGER

McDonald’s Corporation (McDonald’s) sued L.C. Big Mak Burger, Inc. for
trademark infringement and unfair competition by “Big Mak” due to colorable imitation
on the signages, wrappers, and containers of its registered “Big Mac” mark for the same
food products.

Big Mak appealed the case. But the final decision of the court favored
McDonald’s

There exist some distinctions between the names “B[ig] M[ac]” and “B[ig] M[ak]”
as appearing in the respective signages, wrappers, and containers of the food products
of the parties. The infringement goes beyond the physical features of the questioned
name and the original name. There are still other factors to be considered. Applying the
dominancy test, the Court fined the respondents’ use of the “Big Mak” mark results in
likelihood of confusion. First, “Big Mak” sounds exactly the same as “Big Mac”. Second,
the first word “Big Mak”. Is exactly the same as the first word in “Big Mac”. Third, the
first two letters in “Mak” are the same as the two letters in “Mac”. Fourth, the last letter in
“Mak” while a “k” sounds the same as “c” when the word “Mac” is pronounced. Fifth, in
Filipino, the letter “k” replaces “c” in spelling, thus “Caloocan” is spelled “Kalookan”.

Furthermore, respondents’ inability to explain sufficiently how and why they came
to choose “Big Mak” for their hamburger sandwiches indicates their intent to imitate
petitioners “Big Mac” mark. Contrary to the court of Appeals’ finding, respondents’ claim
that their “Big Mak” mark was inspired by the first names of respondent Dy’s mother
(Maxima) and father (Kimsoy) is not credible. For one, he could have put his father’s
name ahead of his mother’s, as is usually done in this patriarchal society, and derived
letters from said names in that order. Or, he could have taken an equal number of
letters (i.e., two) from each name, as is the more usual thing done. Surely, the more
plausible behind respondents’ choice of the word “Mak”.

Under Section 23, in relation to Section 29 of RA 166, a plaintiff who successfully

maintains trademark infringement and unfair competition claims is entitled to injunctive
and monetary relief. Here, the RTC’s decision was upheld in issuing the injunction on
August 1990 (Made permanent in its Decision of 5 September 1004) and in ordering the
payment of P400,000 actual damages in favor of petitioners, exemplary damages of
P100,000, plus attorney’s fees and litigation expenses. The injunctive writ is

34
indispensable to prevent further acts of infringement by respondents’ corporation. Also,
the amount of actual damages is reasonable percentage (11.9%) of respondent
corporation’s gross sales for three (1988-1989 to 1991) of the six years (1984-1990)
respondents have used the “Big Mak” mark.

Questions:

1. Why is unfair competition also unethical and not just illegal?

2. Research and comment on R.A. 8293 (IPC) on Registration of Trademarks and
Service Marks. Cite some reasons why a mark cannot be registered.

Case 3: The Asacro Company

The Asacro Company was foundry for copper in Tacoma, Washington. People
used to talk of the “Tacoma aroma” when referring to the foul smell emitted by Asacro’s
giant chimneys. The company’s activities, however, did not just produce bad smell.
Worse, they also0 released a notability high amount of arsenic.

In the 70’s the company had invested more than $40 million in an attempt to
reduce the arsenic emission. But in 1983, the agency for environmental protection told
the company that the law demanded that they reduce the emission of arsenic by at the
very least, 25%. Arsenic is carcinogenic. The agency estimated that the arsenic
emissions of the company led to four lung cancer cases a year. The new restriction was
aimed at reducing this figure to the probably of just one case yearly.

Questions:

1. What is the ethical issue in the case?

2. If you are the president of Asacro Compny, what would you do and why?
3. Discuss the ethical implications of the case using the utilitarian principle.

Case 4: Silver Chemical Company

Silver Chemical Company’s new president, Mr. David Santos, has learned that,
for the past four years, the company has been dumping its industrial waste into the local
river and falsifying reports to authorities about the levels of suspected cancer-causing
materials in that waste. The plant manager says that there is no proof that the waste.
The plant manager says that there is no proof that the waste can cause cancer and
there are only few fishing villages within a hundred kilometers downriver. If the company
has to treat the substance to neutralize its potentially injurious effects and then transport
it to a legal dumpsite, the company’s operating costs might go to a level that might
make the firm 10,000 local employees could become unemployed and the town’s
economy might collapse.

35
Questions:
1. What is the ethical dilemma that Mr. Santos, the company president, is facing?
2. Why is environmental pollution a moral issue?
3. If you are the president, what would you do? And why?
4. If you are the president, what would you do? And why?
5. Cite three other ethical issues that we can find in this case.

CHAPTER IV – Corporate Social Responsibility

Corporate Social Responsibility – it is the obligation of decision makers to take actions which
protect and improve the welfare of the society as a whole along with their own interest. It is also called
corporate conscience, corporate citizenship, social performance, or sustainable responsible business)[1]
is a form of corporate self-regulation integrated into a business model. CSR policy functions as a
built-in, self-regulating mechanism whereby business monitors and ensures its active compliance with
the spirit of the law, ethical standards, and international norms. ISO 26000 is the recognized
international standard for CSR (currently a Draft International Standard). It is about how businesses align
their values and behavior with the expectations and needs of stakeholders - not just customers and
investors, but also employees, suppliers, communities, regulators, special interest groups and society as
a whole. The way CSR is put into practical action varies from company to company. Some examples of
how this commitment may be undertaken include:

 investing in community projects

 supporting research initiatives
 introducing occupational health and safety measures
 adopting environmentally friendly practices, or
 drafting and applying a code of ethics to company operations

Some Examples of C.S.R includes:

Woolworths (the fresh food people) is through their commitment to the environment. As
part of this obligation, Woolworths created the ‘greenbag’ as a plastic bag alternative
and also provides training to its 30,000 staff on how to ‘fill the bag and not the
environment.’

AGL (Australia’s energy company operates the ‘energy for life’ community
investment program, which involves paying the winter energy bills for homeless shelters
in Australia.

For McDonalds, the motto ‘giving back’ forms an ‘integral part of everything
[they] do.’ One example of how McDonalds gives back to the community is through the
Ronald McDonald House charity. This provides seriously ill children with facilities and
support that helps these kids to live a ‘brighter, happier and healthier’ life.

36
 The environmental program of San Miguel Foundation Inc. covers the
protection of land, water, and air. On a smaller scale, the Foundation conducts tree-
planting projects on areas identified by different San Miguel Corporation (SMC) plants.
Tree-planting projects are usually scheduled to coincide with plant celebrations.

Perspectives on Corporate Social Responsibility

People’s attitudes, values, and management culture differ. Consequently, each

has a social responsibility in society. Businesses have different viewpoints on social
responsibility as well.

CLASSICAL MANAGERIAL PUBLIC CHRISTIAN

VIEW VIEW VIEW VIEW
 The primary  Doers do not  Includes the  excess wealth
responsibility of emphasize profit needs and should be given
business is profit maximization interests of the to the less
maximization. and interests of whole society in fortunate.
stockholders contrast with the Wealthy
 Obligation of  To balance the classical and individuals have
management is interests of managerial a responsibility
satisfy employees, views. to share their
stockholders for customers,  Establishes blessings with
their investment. suppliers, and harmony with the poor.
 Supported my the local plant both business  a successful
Milton Friedman, community is the operations and corporation
on of the most role of managers public interest. should perform
effective of big its social
advocates of businesses. responsibility
economic more by
freedom and returning a fair
free enterprise. portion of its
profits to the
people in the
from of social
services.

 Based on the
Teachings of
Jesus Christ as
taught in the
bible.

37
Arguments In Support of Corporate Social Responsibility (Fajardo, 2000)

1. Long-run self-interest. In the long run, business enterprises will benefit from their
own investment by using their resources, in reducing or eliminating social
problems.

2. Business resources. Business could use their huge resources in the

improvement of societal and environmental conditions.

3. Viability of Business. As embodied in the deed of a corporation, business is

granted powers and privileges by the government due to their contributions to the
economy and valuable services to society.

4. Public Image. Charitable, civic, and socio-economic projects are some of the
activities where businesses take part.

5. Profit from Social Problems. Businesses can turn problems into profits by being
creative and resourceful.

Arguments against the Practice of Corporate Social Responsibility

1. Profit maximization. Corporate executives and managers are primarily

responsible to investors and stockholders.

2. Lack of Social Skills. Businessmen lack the appropriate skills in solving social
concerns.

3. Lack of Social Accountability. The social needs and problems should not depend
on businessmen.

4. Higher Product Cost. Businesses’ active participation is social, charitable, or civic

projects lead to additional expenses ad wastes man-hours of the company.

The Four Corporate Social Responsibilities

Taking it from The Pyramid of Social Responsibilities, a four-part model

developed by Archie B. Caroll and published in the July – August 1991 issue of the
Business Horizons, the corporate social responsibilities of a business can be classified
into four as can be seen from the next figure.

1. Philanthropic Responsibilities – DESIRED of business by society

2. Ethical Responsibilities – EXPECTED of business by society
3. Legal Responsibilities – REQUIRED of business by society
4. Economic Responsibilities – REQUIRED of business by society

38
 A Corporate/Business ethics often focuses on social issues. It may set out
general principles about an organization's beliefs on matters such as mission, quality,
privacy or the environment.

Cases for Analysis

Case 1: Prudence Comes With Fortitude

The pain reliever medicine, Analgesia-T manufactured by CPC Company is a

well-known analgesic that provides relief from pain and serves as a palliative to people
worldwide. However, in the early 1980’s, several persons died after taking capsules of
the well-known medicine. It was found out, that the medicines contained cyanide, a higly
poisonous, white crystalline element accidentally mixed with the medicines because of
factory defect. The sister company of CPC, the Jackson Company took the initiative and
without delay, made steps to resolve the problem. It readily ordered the retrieval of the
product from the market. Be that as it may, the company lost about $100 million dollars
by recalling more than 31 million bottles of Analgesia-T. The Jackson Company made
all efforts to launch an information campaign in order to allay the fear of the toll-free
customer care hotline. Millions of capsules were tested by reliable agencies, and the
company offered to reimburse the amount of the medicines thrown away by the
customers. Even the company president made that the company has taken several
steps to ensure that the medicines reach them safe ad free of poison. The company
likewise pioneered in introducing the tamper-proof medicine seal that has become the

39
standard in the pharmaceutical industry most of which now has “tamper resistant for
your protection” printed on its blister packs. In all of these actions, the means of
recalling the medicines from the market has been the most effective action taken by the
Jackson Company. It may have lost millions of dollars, but the intention gave the
consumers and its employees across the world, they are primary responsible for their
customers.” It is this credo that made them believe that they have taken the best actions
necessary. And truly, after only two months since the crises, the compay was able to
recover 80% sales of the medicine.

Questions:

1. Why do you think it is important for the Jackson Company to hold on to its credo?

2. The actions taken by the Jackson Company support many areas of Corporate
Social Responsibility, what are these?

3. What other suggestions can you give the Jackson Company in order to assist its
sister company CPC?

Cases 2: Where is after-sales service?

Spidermart is a shop in Celia’s neighborhood. It is well-known for being very

spacious, well supplied, and for its enticing advertisement. Celia bought a show nozzle
at the store and was assured by the salesman that despite the product’s being quite
expensive, Celia bought a shower nozzle at the store and was assured by the salesman
that despite the product’s being quite expensive, and Celia got more value for her
money because the product is guaranteed to last a lifetime and was imported from one
of the largest sanitary product manufacturers in the world. However, when Celia’s
plumber was installing the nozzles, he discovered that the nozzles and she saw how the
water kept gushing out from the wrong places even if they were properly installed. She
was convinced that it is a factory defect so she went back to Spidermart and told the
salesman about it. The salesman would not believe her story but Celia insisted until the
store manager be summoned. The manager sided with the salesman right away and
kept convincing Celia that it must be because of wrong installation. The commotion then
resulted to Celia claiming that the shop was only violating its catchphrase and that she
had been deceived. The manager still maintained not to replace the defective nozzles.
Celia told her friends about it and one of them suggested that she raise this issue to the
Consumer’s Union. The Consumer’s Union met with the director of Spidermart and
warned that they will publicize the issue if the shop will not do anything about the matter.
The shop director, out of fear of having the issue blown out of proportion by the
Consumers’ Union, agreed to have the nozzles replaced. Only then was the issue
resolved.

40
Questions:

1. In what instances in the case were violations of corporate social responsibility

evident?

2. Was it right for the store manager to immediately side with the salesman? Why or
why not? Justify your answer.

3. Celia’s case may only be one of the many unpleasant episodes that happened
and remained uninvestigated at Spidermart. Replacing the defective nozzles
does not totally resolve the core of the matter as the Consumers’ Union has
given Spidermart a warning and many customers may suddenly come out in the
open hearing the news about the case of Celia. As a shop director, what are the
next steps that you must do?

CHAPTER V – Work

Definition of Work

Work is both a personal and a social activity. As a personal activity, it is aimed at

developing a person and as a social activity its purpose is the preservation of human
society. Work therefore has moral and legal implications.

Work is legitimate use of our mental and bodily powers for economic gain or
profit. (Agapay, 1991)

1. Work is the “use” or application of our physical powers to accomplish certain

tasks. It is the “use” because nobody can own another man’s body, nor can
anyone sell his body or any part of it, purposes of material advantage and gain.

2. Work is the purpose of obtaining an economic gain for the power. It belongs to
the essence of work that it can be compensated.

The Meaning of Work in the Holy Bible

From the biblical ponit of view, God is seen as the author of work and he also
blessed and sanctified work. In the Old Testament, God did not only create man, he
was also the author of work. In Genesis chapter 1, He creates a pattern for us to
follow – He created the world for six days and rested on the seventh day. The reason
for this respite is for man to appreciate the value and meaning of work.

In the New Testament, the meaning of work could be understood from the
perspective of the mystery of God’s incarnation. When Christ became man, humanity
was blessed and sanctified, including human work. Seen from this perspective, work

41
therefore, is not drudgery, not even a curse, but an activity that has been sanctified,
then it must also sanctify the worker.

The Theological Meaning of Work According to St. Thomas Aquinas

St. Thomas Aquinas enumerates four purposes of work in his treatise entitled
“Summa Theologica”:
1. It provides for one’s daily livelihood.
2. It prevents idleness which is a source of many evils.
3. It curbs the rebellious flesh.
4. It enables man to give alms from his material surplus.

The Human Perspective of Work

Work Workers Other Workers

Object Object Object

- A Task to - A Task to - A Task to
be done be done be done

When he works:
- He accomplishes something
- He defines himself
- He measures his work as a person
- He develops himself
- He provides am occasion to relate with
others

How to Enjoy Work and Create Spiritual Values:

1. Practice the Golden Rules.

42
 2. Guard your mouth.

3. Stop the green jokes.

4. Practice ethical behavior.

5. Learn to forgive.

6. Be generous.

7. Respect superiors and co-workers.

8. Be considerate.

9. Perform your work and fulfill your duties to the best of your ability.

10. Be a grateful person.

11. Do not bring the problems at home to the workplace. (vice-versa)

12. Be an inspiration to others.

13. Read the bible every day.

14. Develop a personal relationship with God.

15. Smile and enjoy your work. (Remember: Work has been sanctified, it must also

sanctify you.)

Basic Duties of Employers: (Agapay)

1. Respect the dignity of the workers.

2. Appreciate their work.

3. Never treat them as slaves for making money.

4. Never assign them tasks beyond their strength, do not employ them in work not

suited age or gender.

5. Give them commensurate and fair wages.

43
 6. Provide for their health and social recreation.

7. Provide them time for the practice of their religion.

8. Instruct them how to use their money wisely.

9. Instruct them to love their family.

10. Provide them with opportunities for promotion

Basic Duties of Workers:

1. Work honestly and comply with all agreements.

2. Never injure capital, nor stealing form the employer.

3. Never outrage the person of the employer.

4. Never employ deceit nor violence in presenting a cause.

5. Never consult with “agitators” or men of evil principles

Cases for Analysis

Case 1: “Fair Wage”

CHEHOMA Corporation has been operating for almost ten years now. After five
years of operation, it started borrowing money from the bank yearly to keep its business
going. Due to global crisis and weakening of the Philippine economy, the company, the
company failed to pay its debts to the bank. And because of this situation, the bank
issued the company a letter of notice telling the company that if it fails to pay its debts,
at least the interest, within a year, the bank will have no choice but to take over the
company. Consequently, the company was forced to act on it; it decided to cut down its
expenses by having a mass lay-off of its employees in order to cope with the demands
of the bank. But certain groups of employees opposed the idea so they initiated a
dialogue with the management. They said that they prefer a salary below the minimum
wage rather than to lose their jobs especially those times. However, the management
told them that this is against the law and that the company might face a criminal offense.
Still the employees continued to plead until the company gave in. as a consequence,
they told the employees that they would have to sign a document stating that they
actually received the right wage. It is to appear that the company is paying the right
amount of wage to the employee.

44
Questions:

1. Clearly the company violates the law when it allowed its employees to receive
the wage below the minimum that the law requires. Is this decision morally
correct? Why or why not?

2. The employees insisted on what was legally wrong. Is this action morally justified?

Case 2: Religion in the Workplace

A woman was working as a head nurse at a clinic that employed about 20 people.
The owner and manager was a member of a religious cult. During business hours,
everything seemed normal for the head nurse to manage the office of this size, but
during the 2 hour lunch break, al the employees has to go to the rooftop and attend in-
house teachings. These courses encompassed everything from the communication
skills to office efficiency. They were all designed by a man who founded a religious cult
of which the owner was a member. Granted that they were business seminars, staff
members and employees including the head nurse felt those teaching were heavily
colored with religious influences. They had to understand every word as an important
key in learning lessons. However, most of the words could not be understood because
they cannot be found in dictionaries. Whenever she would ask her boss about a word,
they would usually end up discussing the cult leader’s works and eventually she would
have to read paragraphs out of the religious teachings to fully understand everything.
She felt as though she was being brainwashed but could not complain because she
loved her work.

Questions:

1. What is the main ethical issue in this case?

2. Is it morally right for business owners to impose their religious orientations on

their employees? Why or why not? Explain your answer.

3. Is religious discrimination unethical? Explain your answer.

Good Governance and Social Responsibility Core Values

45
 1. Faith and belief in Almighty God
*Draw a symbol/symbols on the assigned values or a symbol of success of EDSA based on your
personal perceptions or knowledge regarding the event (e.g. Rosary, dove, Mama Mary etc.)
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – May Bukas pa (Rico J. Puno) and I Believe, Keep the faith (Guns and Roses)
*Activity: a. Have a discussions on the significance of the EDSA People power experience
to Filipinos. Describe the practical benefits of the experience (e.g. Defeat of tyranny, deposing corrupt
leaders).
b. Cite Filipino culture and attitude/history that are testaments to this fact.
c. Clippings/Pictures from magazines, newspapers illustrating the value of faith in God
(20 pictures/clippings)
d. Give at least 10 quotations regarding faith in God
e. Answer “My Personal Faith – Evaluation and Resolution” Page 6. (Modules on Good
Citizenship Values)
f. Make a Group Personal Prayer

2. Respect for life

*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – Sino Ako? and Tao
*Activity: a. Pictures/clippings of social issues (Death penalty, abortion, drug addiction,
military and rebel offensive, juvenile delinquents, prostitution, rape, child labor, chaos/rallies,
terrorism, violence, environmental degradation, smuggling, jueteng, murder, war, smoking) (20
pictures/clippings)
b. State the reasons to avoid/eliminate/reduced these social problems (All)
c. Give at least 10 quotations regarding
d. Choose at least two poems citing the essence on respect for life
e. Answer “How much is life worth to me? Page 12 (Modules on Good Citizenship
Values)
f. Make a Group Personal Prayer

3. Order
*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – “He” and choose at least one song on related values
*Activity: a. Newspaper clippings and illustrations that illustrate the value of Order (20
pictures/clippings)
b. Give at least 10 definition of order
c. How to cultivate and encourage the value of Order in their area of concern? (5 each)
1. teachers
2. Barangay Officials
3. Students
d. Choose at least two poems citing the essence of order
e. Answer “The Order of Your Life” Page 19 (Modules on Good Citizenship Values)
f. Make a Group Personal Prayer

4. Work
*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols

46
 *Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – In His Time and Kung Kaya Mong Isipin (Joey Ayala)
*Activity: a. Discuss the Filipino culture of, and with regard to the following: Kapit sa
patalim, ningas-kugon, manana habit, pwedeng-pwede na, and bahala na.
b. Differentiate job and work
c. Answer “The 1-Million-Peso question: Where Will I Put my Million?” Page 25
d. Explain the following quotations:
1. Don’t settle for mediocrity, aim for excellence
2. Well done is better than well said
3. Do your best and God will take care of the rest
4. Living within your means is spending less than what you earn
5. Pray and work: Pray as if everything depended on God and work as if
everything depended on you.
6. Learn to invest your God-given talents in your work, for work is God’s provision
to prosperity.
e. Clippings/pictures on quality work or motivation on work (20 pictures/clippings)
f. Make a Group Personal Prayer

5. Concern for the Family and Future Generations

*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – Hindi Kita Malilimutan (Basil Valdez) and Anak (Freddie Aguilar)
*Activity: a. Newspaper clippings on Family issues and articles (20 pictures/clippings)
b. Have a brief discussion on some major issues the Filipino family faced today:
1. Broken families (separated parents)
2. Teenage pregnancies
3. Vulnerability of the youth to drug addiction and other vices
4. Threats of technology and unrestricted media
5. Declining family morals and values among Filipinos
6. Fraternities and sororities in school
7. Juvenile delinquency
8. Sex Education
9. Population Problem
10. Responsible parenthood
c. Give at least ten quotations regarding the value and respect for family
d. Get at least two poems citing the importance of family and future generations
e. Answer “The Family Angle: A Reflection of Modern-day Family Realities. Page 32
f. Make a Group Personal Prayer

6. Love
*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – “The Power of Your Love” and “Tell the World of His Love”
*Activity: a. Pictures from magazines, newspapers illustrating love (e.g. scenes of happy
and successful family life, people/organizations doing acts of kindness and charity, EDSA 1 and 2
pictures that depict love of freedom and democracy) (20 pictures)
b. Pictures from magazines, newspaper illustrating violence and other social issues that
do not display the value of love. (20 pictures/clippings)
c. Give an anecdotes or quotations wherein the value of love is highlighted
d. Solicit ten definitions or descriptions of love
e. Answer “Pay it Forward ….. with Love” Page 42. (Modules on Good Citizenship Values)

47
 f. Answer the ff”: 1. Discuss the effects of living a life without love
2. How can you demonstrate the value of love in your family, your
country and in school?
3. How can you be more loving persons for others?
4. What benefits you can possibly reap from being a loving person?
g. Make a Group Personal Prayer

7. Freedom
*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – “The Impossible Dream” and “Bayan Ko”
*Activity: a. Pictures from magazines, newspapers illustrating freedom (20
pictures/clippings)
b. Brief discussions of the value of Freedom by defining the value and its importance.
c. Give five persons who fight for freedom. Please provide its stories and pictures.
d. Add a short input on the matter by citing real examples that highlight the implications
*EDSA 1 and 2)
e. Answer the following:
1. What values did Benigno Aquino reap as a result of his steadfast hope, belief
and love for freedom? Explain all values.
2. What were some of the things that Ninoy Aquino had to give-up to gain
freedom?
3. Accdg. To Jose Rizal “Nations win their freedom by deserving it, by loving
what is just, what is good, what is great to the point of dying for it.”
4. Explain “Freedom without responsibility results to anarchy”
f. Explain Benigno Aquino’s “Seven Vital Social Messages on Freedom” Page 49
(Modules on Good Citizenship Values)
g. Make a Group Personal Prayer

7. Peace
*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – “Let there be Peace” and “One More Gift”
*Activity: a. Clippings/Pictures from magazines, newspapers illustrating peace (20
pictures/clippings)
b. Give at least 10 persons who were chosen for Nobel Peace Prize winner. Discuss their
contributions to society or community.
C Give at least ten quotations regarding the value of peace
d. Answer “Where Peace is Absent, Peace May Be Sought” Page 55 (Modules on Good
Citizenship Values)
e. Answer “Living in Peace: A Practical Guide. Page 56. (Modules on Good Citizenship
Values)
f. Make a Group Personal Prayer

8. Truth
*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – Get at least two songs or poems regarding truth

48
 *Activity: a. Clippings/Pictures from magazines, newspapers illustrating truth (20
pictures/clippings)
b. Have brief discussions of some major issues dealing with the value of truth:
1. Unexplained wealth of public officials, dishonesty in public offices
2. The truth About war (The War Against Terror in Iraq)
3. How the media handles the truth?
4. An examination of our country’s current conditions (economy, social
developments, politics, values, the Filipino family, standard of living of Filipinos, education, peace and
order situation, and employment)
5. The Truth Commission which will be establish by Pres. Noynoy Aquino headed
by Hilario Davide
c. Discuss the issue on “whistle blowers.” Give at least 5 examples of whistle blowers.
Discuss the issue.
d. How to cultivate and encourage the value of truth in their area of concern: (5 answer
each)
1. Teachers
2. Barangay Officials
3. Students
e. Explain the quotations about LIES, TRUTH, and THE TRUTH ABOUT LIES. Pages
63,64,65.
f. Make Group Personal Prayer
9. Justice
*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – Katarungan (Freddie Aguilar) and Get at least one song or poem regarding
justice
*Activity: a. Clippings/Pictures from magazines, newspapers illustrating justice system (20
pictures/clippings)
b. Explain the following
1. Widening social disparity between the rich and poor in the Philippines
2. Many pending cases in the courts (Unresolved cases of the murder of Ninoy
Aquiino, Evelio Javier, The Kuratong Baleleng, Nida Blanca, Bubby Dacer). Discuss the
cases briefly
c. Explain the Philippine conditions regarding the following social ills:
a. unfair and illegal labor practices
b. abuse of power
c. graft and corruption
d. trial by publicity
e. inhuman working conditions
d. Answer “Justice Starts With Me” Page 69. (Modules on Good Citizenship Values)
e. Give at least ten quotations regarding justice
f. Discuss the issues of the following groups who take justice into their own hands:
1. New People’s Army
2. Abu Sayaff Group
3. Moro Islamic Liberation Front
4. Moro National Liberation Front
5. Magdalo Group (Mutiny/coup d’ etat)
6. Media Killings and summary execution
g. Make Group Personal Prayer

10. Unity
*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)

49
 *Learning Objectives (5)
*Reflection Songs – Magkaisa (Vicente Sotto III and Homer Flores), Hawak Kamay (Yeng
Constantino) and If We Hold on Together.
*Activity: a. Clippings/Pictures from magazines, newspapers illustrating unity (20
pictures/clippings)
b. Cite EDSA 1 and 2 experiences and the significance of People’s Power
c. Answer/explain the following:
1. United we stand, divided we fall
2. It is better to work with sinners but united than to work with saints but divided
3. What is the importance of amicable dialogue as a means of resolving
conflicts/disagreement and the preservation of unity?
4. Give examples of how we may cultivate and encourage the value of unity.
5. What is the value of Arms Raising Exercise
d. Give at least ten quotations regarding unity
e. Get at least two poems regarding unity
f. Make a Group Personal Prayer

11. Equality
*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – Get at least two songs or even poems showing the value of equality
*Activity: a. Clippings/Pictures from magazines, newspapers illustrating the essence of
equality. (20 pictures/clippings)
b. Cite at least ten quotations regarding equality
c. What equality means to most people? (3 answers each)
1. An ordinary Filipino Citizen
2. Small-scale Filipino entrepreneurs
3. The Filipino youth
4. The Overseas Filipino Workers
5. The Politicians
d. What are the sections embodied in the 1987 Philippine Constitution pertaining to
equality?(At least 5)
e. How to cultivate and encourage the value of equality in their area of concern: (5 each)
1. Teachers
2. Barangay Officials
3. Students
f. Make Group Personal Prayer

13. Respect for Law and Government

*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – Pananagutan (Eduardo Hontiveros) and Get at least one song or even poem
showing the value of equality
*Activity: a. Clippings/Pictures from magazines, newspapers illustrating the essence of
Respect for Law and Government (Crimes, lawlessness, wars, graft and corruption) (20 pictures/clippings)
b. Cite at least ten quotations regarding Respect for Law and Government
c. Give at least five definitions for the following terms:
1. Law
2. Government
3. Respect
d. Explain the following and give concrete examples:
1. Violation of traffic rules and regulations

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 2. Water and electric pilferages in households
3. Insurgency, mutiny, coup d etat,
4. Tax evasions
5. Vote buying and other acts off election fraud
e. State examples of how may cultivate and encourage the value of respect for law and
government in their area of concern:
1. Teachers
2. Barangay Officials
3. Students
f. A World Without Laws or Government. What if…………..
1. There are no traffic rules?
2. Every person is free to do anything he wishes to another?
3. There are no regulations in the pricing of commodities by business
establishments?
4. There are no law enforcers?
5. Dangerous drugs are allowed to proliferate in the streets?
6. The government is not given respect and authority to carry out its functions?
7. Any country has the right to attack or invade another?
8. Any individual or group resort to promote an ideology, pursue an agenda or
overthrow a government?
g. Make a Group Personal Prayer

14. Patriotism
*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – Pagbabalik (Lolita Carbon) and Bayan Ko
*Activity: a. Clippings/Pictures from magazines, newspapers illustrating the essence of
patriotism (20 pictures/clippings)
b. Cite at least ten quotations regarding patriotism
c. Answer the following:
1. Give at least five definitions of a hero.
2. Do you know ordinary persons whom you think fit your description of a hero?
Give the description of his/her heroic deed. (at least 5)
3. What are the simple things every Filipino can do to help our country? At least
10
d. Answer “Simple People, Real Heroes – Everyday. Page 95 (Modules on Good
Citizenship Values)
e. Get an articles or write ups regarding patriotic deeds.
f. Make Group Personal Prayer

15. Promotion of the Common Good

*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – Pasasalamat (Joey Ayala) and get at least one poem regarding the
promotion of the common good.
*Activity: a. Clippings/Pictures from magazines, newspapers illustrating the essence of the
promotion of common good (20 pictures/clippings)
b. Cite at least ten quotations regarding the promotion of common good
c. Answer the following questions:
1. What are some things that are intended for the common good?
2. What benefits can we reap if we promote the common good?

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 3. How are those things which constitute the common good violated today? How
are they being violated? By whom?
4. What are some ways by which we can protect and promote the common good?
d. Give at least 10 definitions of common good, and 10 definitions of general welfare.
e. Give some examples of how to cultivate and encourage the value of promotion of the
common good in their area of concern: 5 each
1. Teachers
2. Barangay Officials
3. Students
f. Explain the poem entitled “Commonality” Page 131 (Modules on Good Citizenship
Values)

16. Concern for the Environment

*Draw a symbol/symbols on the assigned values or a symbol
a. Discuss and enumerate the significance of the symbol/symbols
*Biblical Passages (5)
*Learning Objectives (5)
*Reflection Songs – Masdan mo ang Kapaligiran ( Lolita Carbon and C. Banares) and look for a
poem regarding Concern for the Environment
*Activity: a. Clippings/Pictures from magazines, newspapers illustrating the essence of the
Concern for the Environment (20 pictures/clippings)
b. Cite at least ten quotations regarding the Concern for the Environment
c. Briefly make a reaction on the following social issues:
1. Perennial waste problems in urban areas
2. Global warming
3. Proliferation of factories and industries that endanger the environment
4. Denudation of forest, land quarrying, reckless mining, land reclamation from
the sea, destruction of coral reefs, and illegal fishing.
5. Lack of effective legislation designed to protect the environment
6. Ineffective enforcement of existing laws designed to safeguard the
environment
7. lack of resolve of the ordinary citizen towards caring for the environment
8. Inadequate education of the youth and masses regarding the dire state of our
environment and natural resources.
9. Kaingin method
10. Illegal loggings
d. Make or create a house using recycled materials
e. Show examples of how may cultivate and encourage the value of concern for the
environment in their area of concern: 5 each
1. Teachers
2. Barangay Officials
3. Students
f. Look for the famous poem “A Tree” by Kilmer
g. Cut an articles regarding the care for the environment
h. Make a Group Personal Prayer

Font size - 12
Font style - Arial
Spacing -1
Top Margin -1
Bottom Margin -1
Left Margin -1
Right margin -1
Bond paper - Corona

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Folder - Color Green/Color Yellow

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