BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

Chapter 1: THE BASICS OF ETHICS

What is “Ethics?” What is Business? What is Business Ethics?

ETHICS are about what is right and what is

wrong
LAW is about what is lawful and what is unlawful
ETHICS, also known as moral philosophy, is a branch of philosophy that
involves systematizing, defending, and recommending concepts of right
and wrong conduct. The term comes from the Greek word ethos, which
means "character". Ethics is a complement to Aesthetics in the philosophy
field of Axiology. In philosophy, ethics studies the moral behavior in
humans, and how one should act.

MORALITY (from the Latin moralitas "manner, character, proper behavior") is the
differentiation of intentions, decisions, and actions between those that are "good" (or right)
and those that are "bad" (or wrong). The philosophy of morality is ethics. A moral code is a
system of morality (according to a particular philosophy, religion, culture, etc.) and a moral
is any one practice or teaching within a moral code. Morality may also be specifically
synonymous with "goodness" or "rightness." Immorality is the active opposition to morality
(i.e. opposition to that which is good or right), while amorality is variously defined as an
unawareness of, indifference toward, or disbelief in any set of moral standards or principles.
An example of a moral code is the Golden Rule which states that, "One should treat others as
one would like others to treat oneself."

Elements Determining Morality

1. The Act itself

In order to judge the morality of a human act, we must first consider

the act itself. Selling products, can initially seem to be morally good,
but using defective weighing scale, spraying harmful insecticides to
fruits, mixing palay and rice, etc. The act itself is tainted with
deception, and therefore, no longer considered as a morally good act.

2. Purpose or End

The differentiation of intentions, decisions and actions determines

the purpose and end of an action. Some people tend to perform

1|Page
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

actions with the best intentions but sometimes resort to immoral

means in order to arrive at the best results or end.

3. Circumstances

“Circumstances alter cases.” From the moral point of view, the

circumstances of a human act are those factors, distinct from the act itself
and from the purpose, which may affect the morality of the act.
Euthanasia (from the Greek word meaning "good death") refers to the
practice of intentionally ending a life in order to relieve pain and suffering.

Case Study No. 1: The Case of the Boss’ Daughter

As head of the Human Resource Department, you received a phone call

from your Boss who was also the board president and your godfather,
asking to determine whether or not you received his daughter’s
application for a current job opening. You indicated that it had indeed,
come in, but that the closing date for the paperwork/ filing of
application has passed.

“Oh,” he said, “you are not going to let a qualified candidate be

excluded because of a closing date, are you?” Then he added quickly,
“but let me not interfere.” As you hung up the phone, you replayed the
conversation in your mind and pondered the implications.

Later that day, your senior manager asked to see you. Despite offering
him a chair, he chose to stand by the door that he just closed and said,
“I heard that the boss’ daughter has applied for the opening. You are
going to consider her, are you? She worked here years ago, and there
were problems. The place will be up in arms if you take her back.” He
smilingly added, “I just wanted to let you know and to help.” Then he
turned on his heel and left.

The Concept of Responsibility

The general principle relating with responsibility is that whatever hurts the
individual or the institutions necessary for his growth may be looked upon
as evil in some way. Similarly, whatever truly promotes the growth of the
individual and means available to him is morally good. For instance, the
employer who must fire an employee knows that the man’s family will
suffer. Is he responsible for this effect?

Guide Question:

1. What was the intent of firing the employee?

2|Page
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

2. Was it for the common good or was it because he poses a threat to

the employer on some extent?
3. Does the employee really deserve to be fired? What else should be
done before firing the employee?
The Principle of Double Effect

The principle of double effect justifies certain actions that produce

“indirectly” certain evil consequences, provided at least four (4)
conditions are met:

1. The action, by itself and independently of its effect, must not be

morally evil;
2. The evil effect must not be a means to producing the good effect;
3. The evil is sincerely not intended, but merely tolerated; and
4. There is a proportionate reason for performing the action, in spite of
its evil consequences.

The Concept of Proportionality

The fourth condition of the principle of double effect mentions the

importance of proportionate reason in performing a moral action. What
do we mean by proportionality?

Proportionality is to be judged by:

1. The type of goodness or evil involved.

2. The urgency of the situation.
3. The certainty or probability of the effects.
4. The intensity of one’s influence on the effects.
5. The availability of alternate means.

In the abstract, a necessary goodwill outweighs a merely useful good. For

example, something necessary to keep a business in existence will take
precedence over a cut in the ordinary dividend.

In the concrete, necessity is influenced by the urgency of the situation.

Thus, staying in business nowadays involves both research and the ability
to meet one’s payroll. However, since research can be postponed without
irreparable harm, it would take second place to meeting the payroll
because both the company and the employees depend on this for their
existence.

The intensity of one’s influence must be considered since often something

or someone else is the major cause of the evil side effect. In firing a man

3|Page
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

for absenteeism, the employer foresees some hardship in the family. The
major cause is not the employer but the employee whose fault created
the situation.

The availability of alternate means must be considered. If the good

effects can be obtained by a method which involves lesser or no evil
effects, it would be irrational and therefore unethical not to choose the
alternate means, all other things being equal.
The Ethical Concerns in Business

Public concerns about ethical practices in

Embezzlement is the act of dishonestly
business usually relate to issues like withholding assets for the purpose of
embezzlement, accepting bribes or conversion (theft) of such assets by one
poisoning the environment. Such or more individuals to whom such assets
examples suggest managers’ problems have been entrusted, to be held and/or
used for other purposes.
with ethics consist of nothing more than
violations of clear-cut, well-defined laws, rules and codes of conduct.

One set of relationships and responsibilities is directly related to

employees, and includes such areas as discipline, performance appraisal,
safety, and the administration of reward system. Another set is
concerned with customers and suppliers, and includes the intricate
aspects of such elements of timing, quality and price. Ethical dilemmas
also arise when managers have conflicts in
As a businessman, it is essential
values with superiors or peers over such that you do not lose your ethical
things as strategy, goals, policy and perspective when making
administration. decisions.

The Implications of Managerial Action

Those who were engaged in business sometimes appear to lose their

perspective when making decisions that affect people. Perhaps they are
busy, or maybe they just don’t take time to think through the implications
of their actions. It seems unlikely they have not had some ethical
training. Whatever the reason, the outcome is the same – an employee or
group of employees, ends up being treated arbitrarily and unfairly. Ethics
is sacrificed for the expedient accomplishment of a goal.

Case Study No. 2: Harass Him Until He Quits

Danilo Magtanggol is 62 years old and has been with the company for 28
years. He has had a varied career, and possesses a number of skills and
abilities. Mr. Magtanggol is quite set in his ways and somewhat eccentric.
His supervisor and other senior managers would like to see him retire or

4|Page
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

let him go, but his performance meets the standards of the company in all
respects and he has no interest in retirement. No one has been able to
identify any deficiencies that would warrant discharge.

The senior manager in Mr. Magtanggol’s department recently decided to

create a work environment for him that would be so uncomfortable that it
would ultimately cause Mr. Magtanggol to quit. The manager presented
the idea to Mr. Magtanggol’s immediate supervisor who accepted the idea
readily. They began to give Danilo thankless assignments and assigning
him the “graveyard” shift. Younger employees with less experience and
service were given better assignments and shifts. Danilo appealed the
decision but was told by his manager that “the assignments have all been
made; if you don’t like yours, you can look elsewhere.” There is no union
or employee problem-solving process.

Chapter 2: Principles and Forces that Shape Ethical Behavior

When and where do we develop ethical values?

Over time, codes of conduct were developed to ensure survival. These

codes included the nurturing of children, forming of family and tribal units,
and hunting rituals. Below are few of the “influencers” of a person’s
conduct:
1. Father
2. Mother
3. Brother/ Sister
4. Other relatives
5. Friend
6. Teacher
7. Religious Leader
8. Youth/ Peer Group
9. Sports Idol
10. Military Hero
11. Movie Idol
12. Books
13. Religious Writings

Sources of Ethical Values

1. Experience. The values we hold are inseparable from the

endlessly changing experiences of our lives
2. Culture. Human Nature Orientation / Environment Orientation /
Time and Activity Orientation
5|Page
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

3. Science. Science helps make judgment only if we can relate

scientific information to value assumptions made on other bases.
4. Religion. Religion involves not only formal system of worship but
prescription for social relationships.

Identifying values (acquired) in life:

Thru experience:

___________________________________________________________________________
__
Thru culture:

___________________________________________________________________________
__
Thru Science:

___________________________________________________________________________
__
Thru Religion:

___________________________________________________________________________
__

List all your values acquired from each of the sectors of society as listed
above:

Identifying your own stand on different moral and social issues:

What are the influences/ issues/ values you can think of on the issues
below?
Say something about each of the terms listed:
1. Poverty
2. Labor Unions
3. Whistle blowing (informing the public about the illegal or immoral
behaviour of an employee or organization
4. Abusing the environment for profit
5. Graft and Corruption
6. Exposing workers to unhealthy and unsafe conditions (hazardous
workplace)
7. Job discrimination and exploitation of workers
8. Wages

6|Page
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

We are not always good (We neglect the real meaning of the Issue)
1. We would never steal money from the cash drawer, but we use the
company car to run personal errands “while doing our tasks.”
2. We observe working hours scrupulously and often put in overtime,
so telling the boss we get caught in traffic, when we actually
overslept, seems excusable enough.
3. We give out best to the company and work hard, so gossiping about
my supervisor to fellow employees just helps me let off a little
steam.
4. We know our co-worker is running a small business of her own on
the side using the company’s resources (machines, etc.) but we’ve
been friends for years, and she is a single parent with a son in
college. No one knows it but me.

Ethical values on the Job

Very Somewh Not
Importan at Importan
VALUES/ ISSUES
t Importan t
t
1 Honesty
2 Fairness
3 Obedience to Law
Compassion (concern for pain of
4
others)
5 Respect for others
6 Loyalty
7 Dependability
8 Courage
9 Helpfulness
1 Self-Control
0
1 Truthfulness
1
1 Tardiness and Punctuality
2
1 Deference to Authority
3
Ethical Conflicts

Conflicting loyalties, fear or failure, and/or fear of being fired put our
ethical values on the line. This time, we will check some actual job
situations that would test our ethical standards. Honest and brief
explanation is required for each situation.

7|Page
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

Would you:

1. Alter a financial report at your boss’ direction?

2. Protect a friend whose drinking is causing problem in the company?
3. Take credit for work done/ prepared by someone else?
4. Put off safety measure because the cost will affect profitability?
Change a performance appraisal to reflect more positively on an
individual whose advancement is important to your supervisor?

What are the things that YOU WOULD NOT DO,

DO, even at the risk of
being fired?
fired?

I would refuse to:

1. _____________________________________________________________________
_____________
2. _____________________________________________________________________
_____________
3. _____________________________________________________________________
_____________
4. _____________________________________________________________________
_____________
5. _____________________________________________________________________
_____________

Case Study No. 3: Using the Office Phone

Suppose a Makati-area manager, Mr. Toledo, learns that his

assistant, Miss Mary Telebabad, is using the office phone at
least once a week to talk to her sister in Cebu for an hour or
so. The manager confronts her with the discovery by asking
Mary, if, in fact, she is making the long distance personal
telephone calls.

Mary answers, Yes. Why? Have I done anything wrong?

What is so terrible about my using the phone anyway? The
company is big enough to afford it; what is one phone call or
two to Cebu? Feeling expansive, she adds, I phoned my
mother a couple of time last week because I wanted to find
out her trip to Hong Kong. What is the problem?

1. If you are Mr. Toledo, how would you respond?

8|Page
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

2. What are your views on using the company phone to make personal
calls?
3. What are your views on employees using company resources/ small
items?

Case Study No. 4: The Dilemma at Affordable Homes Company

Affordable Homes company is in stiff

competition for the dwindling amount of
prime residential building land available
near a fast-growing urban area. Although
the law of supply and demand has drive
house prices to astronomical heights,
costs of building have kept rapid pace,
and profit margins for Affordable Homes are narrow.

A thicket of local building regulations, environmental impact reports,

developer fees and permits complicate the process, but they have also
provided for special “arrangements” with two discreet municipal officials
who will expedite transactions for an added gratuity. It is common
practice with some of Affordable Homes’ competitors.

Affordable Homes’ President, Gene Aguila, has wrestled with the question
of gratuities for some time. There is increasing legal risk in the situation.
Also, Mr. Aguila has provided himself through the years for being totally
honest. He is also an active member of the Knights of Columbus in his
church and a lay minister. But now that competition has never been
together, and Mr. Aguila is starting to suffer economically because his
projects move slower than those of competitors.

Mr. Aguila calls in Robert, who has responsibility for obtaining the
necessary permits. We need to stay competitive, says Mr. Aguila, We’ve
got nearly 300 people on the payroll, and that is lot of jobs to lose if we
cannot compete. See who you can talk to, Robert. I don’t care what you
need to do to get the permits approved... just do it.

Guide Questions to answer using the standard format of Case Analysis:

1. What is the present situation of the case? Give the highlights of the
case.
2. Provide a competitive analysis on the situation.
3. What actions are demanded? Specify all actions required.
4. What ethical issues are visible on this case?

9|Page
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

5. How would you solve the problem of the Affordable Homes

company?
6. How do you think Robert should respond? Cite all the possible
responses of Robert.
7. How should Gene act and react to the problem? Cite all the
possible reactions of Gene.
8. What solutions can you think for this case?
9. What advise can you give to both Robert and Gene.
10. What should Affordable Homes do in order to avoid
encountering same problem in the future?

Case Study No. 5: Taking Other People’s Credit

Mr. Adan, a supermarket Manager, asks Henry to submit a report

which is to include a background analysis of some data, and
recommendations based on the interpretation of that data. Mr.
Adan asks Henry to get the report together within two weeks. Off
Henry goes. He delegates the research, analysis, and report writing
to one of his subordinates, Rhoda, who completes the work in ten
days and gives the report to Henry. Henry takes Rhoda’s work,
reads it, is satisfied with the content, retypes the cover page to
show his name, not Rhoda’s, and then submits it to Mr. Adan as if it
were his own work. He accepts praise and gives no credit to Rhoda,
who, in fact, did the research and wrote the report.

Class Discussion: What is your reaction to not being given

acknowledgment for work that you have done and then seeing
someone else being praised for it?

The Norm of Morality (Characteristics)

1. Norms are purely internal. Internal norms, such as conscience,

make sense only if they are based on something outside of us as
individuals, which can rightfully lay total claim to us.

2. Norm based on current opinions and customs. “Everybody is

doing thus it is right,” but right is still right no matter how many
people are wrong. (Ex: annulment; Marriage of the same gender;
Pre-Marital Sex; Graft and Corruption; formal and liberal courtship;
drugs and abuses; etc.)

3. Norm of expediency. Other people regulate their actions in

accordance with what is useful at the moment rather than what is

10 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

objectively right or wrong. (Case No. 4 – bribing two municipal

officials to facilitate speedy registration)

4. Norm of preference. There are others who act in accordance with

what is desirable, what one “prefers” doing rather than what is right
or wrong. (Ex: Tax collection is most often done with fraud –
friends and relatives are computed less taxes; other sales and
incomes are not declared so as to avoid taxes)

5. Situation ethics. There are no standards for human activity; we

must always act in what we perceive to be right, by letting the
situation speak to us. We must always do what we feel is right for
us. Discretion and proper judgment of the situation makes the
situation itself a valid basis of next actions.

6. Evaluation. Ethics and morality is not a matter of current opinions

or actions of the majority. Proper evaluation of the “potential
action” will guide to ethics.

Moral and Nonmoral Standards

Some actions are contrary to “normally-accepted” acts are oftenly

considered nonmoral provided they do not pose a serious threat to
human well-being:

1. Wearing shorts to formal gatherings is an “unacceptable”

gesture
2. Murdering the british-english with the commonly used “Tag-Lish”
3. Photographing the finish of a high-speed race with a low-speed
camera
4. Wearing red-colored clothing or garments during funerals
5. Whistling during night-times
6. Pointing at the rainbow
7. Playing music or singing during bereavement

But the violation does not pose a serious threat to human well-being.

Characteristics of Moral Standards

1. They concern behaviour that can be of serious consequence to

human welfare
2. Their validity depends on the adequacy of the reasons that
support or justify them

11 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

Morality and Etiquette

Etiquette refers to any special code of behaviour or courtesy.

Etiquette refers to what is “socially appropriate.”

Examples:

1. Eating using one’s fingers during formal dinner or fine-dining (no

etiquette)
2. Saying “please” or “thank you” (good etiquette)
3. Giving a knife with the sharp-point facing the other person (no
etiquette)
4. Carrying one’s elbows on the table while eating (bad etiquette)
5. Cleaning one’s nostrils in public (bad etiquette)
6. Chewing food with your mouth open
7. Assisting ladies in going in and out of the door
8. Whistling to ladies
9. Observing proper telephone manners
10. Communication etiquette (when to talk and when to listen,
maintaining eye contact)
11. Responding to invitations (RSVP)
12. Formal greetings to strangers

Morality and Law

Law can be defined as follows:

1. A rule of conduct or procedure

established by custom, agreement,
or authority.

2. The body of rules and principles governing the affairs of a

community and enforced by a political authority.

3. The condition of social order and justice created by adherence to

such a system.

4. A set of rules or principles dealing with a specific area of a legal

system.

5. The system of judicial administration giving effect to the laws of a

community.

12 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

C Statutes are laws enacted by legislative bodies.

C Ordinances are laws enacted by local governing bodies like city
councils.
C Common Law refers to laws applied in the English-speaking world
before there were any statutes.
C Constitutional Law refers to court rulings on any law.

Relationship between Law and Morality:

In theory and practice, law codifies customs, ideals, beliefs, and a

society’s outlooks, its views of right and wrong, good and bad. But it is
a mistake to view law as sufficiently establishing the moral standards
on an individual, a profession, an organization, or society. Law simply
cannot cover the variety of individual and group conduct.

Although useful in alerting us to moral issues and informing us of our

rights and responsibilities, law cannot be taken as an adequate
standard of ethical or moral conduct. Conformity with law is neither
requisite nor sufficient for determining moral behaviour, any more than
conformity with law is not necessarily immoral, for the law disobeyed
may be unjust.

Chapter 3: RESPONSIBILITIES OF THE CORPORATION

Case Study No. 6: Building a Dam

A dam was proposed to be built on a certain river in a natural

setting that would produce hydroelectric power and create
recreational activities, such as boating, swimming and water-skiing.
The only problem, as environmentalist see it, is that there is a
certain species of small fish found only in this river that will become
extinct if the dam is built. The fish is not used for food or sport; in
fact, no one knows what purpose it serves by being in the river.
Should the dam be built or not? Why or why not? Would it make a
difference to your answer if the small fish were a good food fish or
could it be used in some other commercial way, or is its extinction

13 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

sufficient reason not to build the dam? Explain your answer in

detail.

A. The Purpose of Business Firm

Two Points of Views relating to the firm’s purpose:

1. Social Point of View. The firm exists to supply goods and services to
consumers as efficiently as possible.

2. Individual Point of View. The firm exists to supply income, power,

prestige, creative satisfaction, or a combination of these to work for it
or with it.

“The manager must reconcile claims and

harmonize means
so that all legitimate goals are obtained by
ethical means.”

B. Ethical Considerations in Transactions with Employees

1. Identifying ethical concerns in employee transactions.

a Selecting new employees h Terminating employee

services
b Awarding merit increases i Communicating
c Setting goals and performance j Supporting employee ideas
standards and efforts
d Evaluating performance k Delegating work
e Giving performance feedback l Arranging, training and dev’t
opportunities
f Disciplining m Providing health, safe working
conditions
g Selecting personnel for n Granting time off with or
promotion without pay
2. Hiring

Employers generally hire people who will maximize the efficiency of

the firm, which is an organizational ideal. In meeting this obligation,

14 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

employers must be careful to honor the moral ideal of treatment of

employees.

2.1 Screening. When done properly, screening ensures a competent

pool of candidates and guarantees that everyone is dealt with
fairly. But when screening is done improperly, it undermines
effective recruitment and invites injustices into the hiring process.

2.2 Tests. Tests are generally designed to measure the applicant’s

verbal, quantitative, and logical skills.

 Aptitude Tests help determine job suitability

 Skill Tests measure the applicant’s proficiency in specific

areas such as typing and shorthand.

 Personality Tests help determine the applicant’s maturity

and sociability

 Dexterity Tests help to determine how nimbly applicants

can use their hand and fingers.

2.3 Interviews. When ethical issues arise in interviewing, they almost

always relate to the manner in which the interview was conducted.
The literature of personnel management rightly cautions against
rudeness, coarseness, hostility, and condescension in interviewing
job applicants. In guarding these qualities, personnel managers
would do well to focus on the humanity of the individuals who sit
across the desk from them, mindful of the very human need that
has brought those people into the office.

3. Promotions

One essential criterion that applies to hiring also applies in promotion:

job qualification. The “other” factors involved in this process are:

a) How long have you been with the firm?

b) How well are you liked?
c) Whom you know?
d) When were you last promoted?

15 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

To highlight ethical issues in promotion, the following factors serve as

bases for promotion:

3.1 Seniority. It refers to the longevity on a job or with a firm.

Frequently, job transfers or promotions are made strictly on the
basis of seniority; individuals with the most longevity automatically
receive the promotion.

“A policy that provides for promotions strictly

on the basis of qualifications seems heartless,
whereas the ones that promotes seniority alone seems mindless”...

3.2 Inbreeding. It is the practice of promoting exclusively from within

the firm. In theory, whenever managers must fill positions, they
should look only to competence. The most competent, whether
within or without the firm, should receive the position. In this way,
responsibilities to owners are best served.

3.3 Nepotism. It is the practice of showing favouritism to relatives

and close friends. For instance, when a firm is strictly a family
corporation and has its purpose providing work for family
members, nepotistic practices are generally justified. But, even if
relatives and/or close friends qualify the position, responsible
management must also consider the impact of nepotistic hiring:

 Will the selection breed resentment and jealousy among other

employees?
 Will it discourage qualified outsiders from seeking employment
with the firm?
 Will it create problems in future placement, scheduling, or
dismissal of the relation?
 Will it make the relation an object of distrust and hostility within
the organization?

4. Discipline and Discharge. Personnel departments establish

guidelines for behaviour based on such factors as appearance,
punctuality, dependability, efficiency, and cooperation. Discharge
should go through 3 processes: reprimand, suspension, termination.

Ethical approaches to maintaining discipline:

16 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

a. Make sure your people know the standards of the performance

desired
b. Teach them how to maintain standards
c. Encourage them as they progress in the direction desired

Disciplinary Guidelines (Rating Sheet):

CRITERIA 5 4 3 2 1
1. I determine whether or not the employee has been
warned and understands the consequences of such
conduct.
2. I assure myself that the order or rule violated is
reasonably related to safe, ethical, legal or efficient
operations.
3. I make sure disciplinary action is not taken until a
complete investigation has been completed.
4. I make every effort to assure that the investigation is
fair, objective and includes the employee’s input.
5. I analyze the evidence carefully to determine whether
or not it provides substantial proof of guilt.
6. I check to see if the rules or orders violated have been
consistently enforce in the past.
7. I make sure that penalty is reasonably related to the
seriousness of the offense, and it applied even-
handedly and without discrimination.
TOTAL SCORE

Instructions:

1. Add and the total your score: _______________________________

2. If you scored 28 or above, you seem to be on target in
administering discipline. If you scored between 21 and 27, you
have the right idea but need to work harder in those areas where
your score is 3 or lower. If you scored under 21, you need to re-
examine your approach to discipline and seek appropriate training.

5. Wages. From the ethical point of view, it is very easy to say that
firms should pay a fair and just wage, BUT WHAT CONSTITUTES
SUCH A WAGE?

Variables involved in setting wage rates and establishing salaries:

17 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

1. The employee’s contributions to the firm

2. The market for labor and products
3. The competitive position of the company
4. The creative power of the firm and its union
5. Seasonal fluctuations
6. Employee’s individual needs

Fair Wage is one that significantly help individuals satisfy their basic needs.
Ethical Guidelines in Setting Wage System:

1. What is the prevailing wage in the industry? The salaries of

similar positions in the industry can provide some direction for
arriving at a fair wage.

2. What is the community wage level? Highly urbanized cities

have higher rates than in the countryside.

3. What is the nature of the job itself? Some jobs require more
training, experience, education; some are physically or emotionally
demanding; some are downright dangerous; risky or unskilled jobs
often attract the least educated and most desperate for work.

4. Is the job secure? Compensation could take the form of higher

pay, fringe benefits, or a sensible distribution of the two. On the
other hand, guarantees of job security are grounds for wage
compromises by labor.

5. What are the employer’s financial capabilities? What can the

organization afford to pay? Can it afford wages higher than the
minimum wage?

6. What is the law? The law requires that businesses pay at least
the minimum wage.

Non-Agriculture P 456.00
Agriculture (Plantation & Non-Plantation) 419.00
Private Hospitals with bed capacity of 100 or less 419.00
Retail/ Service Establishments regularly employing 15 workers or less 419.00
Manufacturing Establishments regularly employing less than 10 workers 419.00

Ethical Implications in Choosing Between People

Manager’s Bottlenecks in Choosing between People:

18 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

1. Am I biased toward an employee for any reason?

2. Am I evaluating demonstrated skills bona fide against job
requirements?
3. Am I being overly influenced one way or the other by irrelevant or
surface characteristics?
4. Am I being pushed in a direction not of my choice by someone else?
5. Am I measuring all people against the same criteria?
6. Is age or salary level influencing my thinking more than it should?
7. Am I really analyzing the important elements of this transaction or
am I simply following a past practice that should be tested?
8. Would I be willing to have my decision criteria applied to me under
similar circumstances?
Ethics and Performance Appraisal

Business managers sometimes resist doing performance appraisal on the

grounds they do not want to be judge and jury with respect to an
employee’s career. Some feel positive feedback will cause employees to
let down. Other think that negative feedback is demoralizing, demeaning,
and perhaps unethical, so they often give employees better performance
appraisals than they deserve.

Managers who follow correct performance evaluation and feedback

procedures create an environment in which there are no surprises, and
employees have the opportunity to correct deficiencies and grow.

Case Study No. 7: The Dance on the Lemons

When Romeo Mendoza joined the Swerte Corporation, he sat down

with Elsa Cruz, the senior executive to whom he reported, to learn
the goals of the organization, and to find out as specifically as
possible what was expected of him. As the discussion progressed,
Romero became increasingly ill at ease. Miss Cruz seemed
reluctant to talk in specifics, and avoided sharing confidential
information pertinent to Romeo’s position.

As the discussion progressed and Romeo’s frustration grew, he

asked Miss Cruz about the new assignment his predecessor had
been given. “Oh,” Miss Cruz said with a sly grin, “he has joined the
Dance of the Lemons.” “What do you mean?” asked Romeo.
“Well,” said Miss Cruz, “he was not performing effectively, so we
moved him to another assignment.” “Will he do better there?”
asked Romeo. “Who knows?” said Miss Cruz “but at least he is out
of my hair.”

19 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

“Was there any particular reason why you assigned him to another
position, rather than terminate him?” Romeo asked. “Oh, we
seldom terminate senior employees, we just move them around the
organization hoping we will find a place they will fit in. All of us
know these moves happen – we call it Dance of the Lemons.”

Sixty days later, after having located another position, Romeo

Mendoza resigned.

1. Why do you think Romeo resigned?

2. What would you have done under similar circumstances?
3. Does this case involve managerial ethics? Why or why not?

Improve Your Ethical Batting Average

You can be successful at performance appraisal and have a clear

conscience, or be a miserable failure filled with doubt and remorse.
Below are the factors that make the difference:

No. SUCCESSFUL APPRAISERS MISERABLE FAILURES

1. Leaders who engage in mutual Those who establish arbitrary,

goal-setting and open unilateral performance goals or
communication. standards. They may or may not
communicate them to
employees.

2. Leaders who establish clear, Those who have not though

measurable expectations and through what they expect or
provide a climate conducive to don’t know how to measure
success. success, thereby creating a
threatening atmosphere in which
to work.

3. Leaders who ask questions, Those who never seek the ideas
listen carefully, and appreciate of others or listen, yet have a
and use the ideas of others. solution for everyone else’s
problems.

20 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

4. Leaders who publicly recognize Those who spend too much time
positive performance, and looking for things that are wrong
privately correct improper and too little time looking for
performance when it occurs. things that are right.

5. Leaders who give honest Those who accept substandard

feedback on performance performance or misrepresent it
against mutually understood in providing feedback.
goals.

6. Leaders who follow through on Those who do not take their

their commitments commitments seriously.

An ethical appraisal is a fair and honest assessment of

performance
against mutually established and understood goals and standards
that leave both parties feeling that have gained something.

Ethics and Communication with Employees

When employees discuss how trust is built in work groups, they stress the
importance of open and honest communication. They refer to this kind of
communication as leveling, or telling it like it is.
Managers wanting to be fairer and open in their communication should
ask themselves the following questions frequently:
1. What do employees working for me need to know?
2. What do employee working for me want to know?
3. How do I provide it?
4. When do I get someone else to provide it?
Most people “listen” by interpreting and judging what the other person
says and them preparing responses or thinking about something else.
This behaviour is unconscious, but it obstructs the ability of the other side
to be able to reach him.

Administering Reward Systems

Incentive systems are designed to reward people on the basis of
performance and their overall contribution to the organization. Managers
must be honest. They must understand the work being performed and be
able to differentiate clearly between levels of performance by individuals.

21 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.
BUSINESS 2 (Business Ethics) Summer Classes_Year 2013

They must also have some personal convictions about what is right and
wrong, as well as the courage to stand behind their decisions.
Guidelines for Ethical Administration of Reward System: When I
administer rewards systems:

CRITERIA
1. I lay ground work by ensuring there is mutual understanding
5 4 3 2 1
about what is expected in terms of performance.
2. I update job descriptions as changes occur and insist that the
salary grade of employees remain appropriate to their 5 4 3 2 1
positions.
3. I consistently monitor performance against expectations and
5 4 3 2 1
give all employees appropriate standards
4. I am alert for both superior and inferior performance as
5 4 3 2 1
related to goals and standards.
5. I note and communicate to other employees efforts to
5 4 3 2 1
development and increase their potential.
6. I refuse to let non-performance factors like friendship, race,
religion, family background, sex, or age influence my 5 4 3 2 1
decisions.
7. I test my decisions to be sure that are based on assumptions
5 4 3 2 1
or impressions.
8. I make decisions on objective data and push aside any
5 4 3 2 1
unwillingness to help my employees face reality.
9. When I observe other who are unethical in distributing
5 4 3 2 1
awards, I resist the same impulse in myself.
10.I strive to maintain equity between employees and am
5 4 3 2 1
prepared to justify with facts my decisions to anyone.
TOTAL SCORE
Note: A score below 40 suggests you need to do some hard work to
improve the ethical administration of your reward system.

22 | P a g e
Discussion Notes of Mr. JASPER V. DULOSA, M.M.