Tuguegarao Archdiocesan Schools System

LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

NAME OF TEACHER: AMY LIBERTY P. CASIBANG, LPT / 0915-953-8600

MODULE NUMBER: 4 (2 WEEKS)
MODULE TITLE: LESSON 7: IMPLICATIONS OF ETHICAL TRADITIONS FOR BUSINESS
LESSON 8: THE FILIPINO VALUE-SYSTEM AND BUSINESS ETHICS CHALLENGES

LESSON 7: IMPLICATIONS OF ETHICAL TRADITIONS FOR BUSINESS

LEARNING OBJECTIVES:
At the end of this lesson, the students should be able to:
 understand justice theories, right theories and utilitarian theories in relation to business;
 provide brief historical background for virtue ethics; and
 explain the importance of virtue ethics for business and economics

Teleological and Deontological Theories; Justice and Rights Theories

The typical ethical theories or systems presented in applied ethics courses, such as one in business ethics,
can generally be classified as follows: (1) consequentialist (utilitarianism is an example) or teleological (from the
Greek telos or “end”) ethics; (2) deontological or duty-based ethics (“Kantianism” would be an example), and (3) pure
aretaic ethics (primarily Aristotelian-virtue ethics).
Utilitarianism – consider only the consequences of an action: the act itself, the agent’s character, and past
occurrences or traditions bearing upon the act are irrelevant except insofar as they make a difference for the action’s
effects.
Duty-based theories – hold that only the intrinsic character of the action is relevant to evaluating it: consequences do
not matter and neither do traditions or the agent’s character.
Pure aretaic ethics – makes the agent’s character paramount, which is true of Aristotelian virtue ethics.

In Western thought, Rights theories and Justice theories are resorted to a lot. In Rights theories, a right
refers to a person’s just claim or entitlement. A right is an individual’s entitlement to something. Rights can be
understood in several ways. They can be interpreted as absence of prohibitions, authority, or existence of
prohibitions. Rights theories usually focus on the person’s actions or the actions of others toward the person. Under
this theory, the categories of rights are:
(a) Legal rights: defined by a system of laws
(b) Moral rights: based on ethical standards. The decision-making rule is: Let a person freely pursue certain
actions without interference from others.

Justices theories, on the other hand, define justice as the ideal, morally correct state of things and persons. “Give to
another that which is due him/her.” It is based on individual moral rights. Justice can be handled in three sub-
categories:
(a) distributive justice
(b) retributive justice
(c) compensatory justice

Virtue Ethics
The virtue approach to ethics emphasizes people’s character: an ethic of virtues (and vices) focuses on the process of
personal moral character development. It stresses how the good habits or virtues inherent in a person’s character
give them the propensity to act in ways that promote the human character in order to analyze ethical behavior in their
organizations (Dawson & Bartholomew, 2003; Whetstone, 2001).

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 Tuguegarao Archdiocesan Schools System
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
Virtue ethics – which takes the concept of character to be central to the idea of being a good person in business-
keeps at bay the threat of situational (external) determinism: it fills the void between institutional behaviorism and an
overblown emphasis on free will and personal autonomy.

Virtue ethics overcomes “moral schizophrenia” or the need to step out of one’s role and wear, say, the Kantian hat if
the agent prefers to solve the moral dilemma from the deontological perspective, or the utilitarian hat if he desires to
tale the teleological approach as it avoids focusing on rules governing action and rather concerns the fundamental
character and motivations of an individual agent. In essence, since virtue ethics involves the individual pursuing moral
excellence as a goal in and of itself, ethics becomes an objective rather than a constraint.
Having said this, one can enumerate the virtues of virtue ethics as follows (Dobson, 1997; Whetstone,
2001; Koehn, 1995):
1. It is personal.
2. It focuses on the motivations of the actor and the sources of action, bringing a dynamic to ethical
understanding.
3. It is contextual, highlighting the importance of understanding the environment as it effects both actor and his
or her acts.
4. It complements other disciplines addressing human behavior.
5. It focuses on the conformity between right thinking and desire.
6. It treats virtue as a manifest, perceptible feature of action.
7. It conceives of human activity as continuous.
8. It stresses the importance of individuals being able to make contributions of value to a society or communal
enterprise.
9. It preserves a role for excellence and helps counter the leveling tendency of deontological ethics.
10. It stresses that people become what they are within a community.

In summary, considering managerial ethics from a virtues perspective allows us to discuss the strengths or
weaknesses of the character of the individual. For instance, a person can, and should, resist given pressures, even at
considerable cost to oneself. That is the very basis on which virtue ethics has proven to be so appealing to people in
business. It is the hope that they can, and sometimes will, resist or even rise up against pressures and policies that
they can find to be unethical.

Virtue Ethics: Historical Background

Virtue ethics possesses deep historical importance and its roots can be traced to such great ancient
historians such as Socrates, Plato, and Cicero (Card, 2004).

Plato, through the influenced of Socrates was convinced that there is an objective truth which is not
simply relative to an individual’s beliefs – philosophized a great deal on important ethical concepts, including some
specific virtues: he wrote Charmides which was about temperance; the Laches was about courage, and the Euthyphro
was about piety. Believing that man is deprived of true life for as long as he remains chained to the body since the
essence of man is his soul, Plato’s ethics essentially looked to freeing the soul from its bondage to the body. For Plato,
the life which, most closely reflects the divinity- which he conceived as a multiplicity possessing diverse
characteristics- is the life of virtue.
For Aristotle, just like for the classical philosophers, happiness was a type of activity and an achievement,
rather than a feeling. His definition of happiness contains two vital concepts: “Activity of soul”, which means the
exercise of reason, and this is “in accordance with virtue,” which describes the quality of the performance. His virtue
theory, then is, focused on character development and describes a right action as one that virtuous agent is disposed
to make in the circumstances in order to flourish or live well. Happiness was a term indicating success: to have lived a
happy life was the same as having been a success at human life.
In this classic virtue theory, four human virtues stand out as being the “hinge” or “cardinal” virtues:
courage, moderation, justice and prudence. Plato was the first philosopher to give such list of the four main virtues,

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 Tuguegarao Archdiocesan Schools System
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
although the label itself, ”cardinal virtues”, was not coined until the second half of the 4th century AD by Ambrose of
Milan.
The teleology of Aquinas, thus, differentiates and raises his ethics from that of Aristotle: that all human
action has an end, and that this end is the first and most important source of morality of human action, but that these
particular ends presuppose a last end which communicates its finality, and this is none other than divine causality.
Hence, the eternal law- the plan containing what God wants to do- is the supreme norm of morality.
Having examined the overwhelming case against reason, Hume came down squarely on the side of
sentiment as the source of morality. With regards to the virtues, he differs from Aristotle and Aquinas in at least two
ways: in distinguishing between original and secondary impressions, he categorizes pride (vice) and humility (virtue)
as being part of the latter (which he also refers to as “passions”). Also, in his lengthy discussion of justice, he always
assumed social utility as an overarching intention of humans, thus rendering the otherwise virtuous action of the just
person as idle, that is, superfluous or unworkable.
Immanuel Kant, to whom we owe the largely deontological branch of ethical theory, believed in and
taught the existence of a priori moral principles which are held by all rational beings as necessary and universal-
independent of our actual experience. This knowledge is a priori in the sense that it does not depend on men’s actual
behavior. This meant that the fundamental moral law- which he called the categorical imperative- can be stated as
follows: Those actions are right that they conform to principles one can consistently will to be principles for everyone,
and those actions that are wrong that are based on maxims that a rational creature could not will all persons should
follow, Thus Kantian ethics has come to be considered duty ethics; the categorical imperative is the unconditional
directive for behavior: it is binding on everyone because each rational being acknowledges an obligation to follow
reason.
Several contemporary scholars have championed the resurgence of virtue/ character ethics, the foremost
among them being Elizabeth Anscombe, particularly through her essay “Modern Moral Philosophy,” and Alasdair
Maclyntyre through his all-important book, After Virtue. Maclyntyre, viewed as one of the most prominent proponents,
defines virtue as acquired human qualities that enable persons to achieve the “good” in their chosen profession.
Virtue ethics has likewise seen a renaissance with popular writers, such as William J. Bennett and his The Book of
Virtues.

Why Virtues should matter in Management and Finance

Managing in ethical ways is not merely about avoiding bad outcomes. There are many arguments for
bringing ethics to bear business decision-making. Recently, finance ethicists have begun emphasizing that the focus
should be on virtues and the qualities of the practitioner.
The “virtue” in virtue ethics is defined as some as some desirable character trait, such as courage, which
lies between two extremes, such as in the case of rashness and cowardice. Thus, the “virtuous” agent is involved in
continual quest to find balance in decision-making. Such an agent does not apply any specific rules in making
decisions but rather attempts to make decisions that are consistent with the pursuit of a particular kind of excellence
that, in turn, entails exercising sound moral judgment guided by such virtues as courage, wisdom, temperance,
fairness. integrity and consistency.
The virtue approach to ethics emphasizes people’s character: an ethic of virtues (and vices) focuses on
the process of personal moral character development. It stresses how the good habits or virtues inherent in a
person’s character give them the propensity to act in ways that promote the human race to flourish. Thus, it has been
proposed that managers add an attention to virtues and virtues and vices of human character as a full complement to
moral reasoning according to a deontological focus on obligations to act and a teleological focus on consequences.

ACTIVITY 1
Matching Type: The lesson mentioned that the Theory of the Virtues is important for business ethics because if a
person possesses virtue (i.e., moral excellence, the disposition to perform effectively his or her proper function), the
exercise of the virtues can help lead to ethical business performance.
Below is a listing of 11 virtues and their corresponding definitions or related quotations. Match each virtue
with its corresponding correct definition by writing.

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 Tuguegarao Archdiocesan Schools System
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph

a. temperance f. justice k. integrity

b. industry g. respect
c. order h. courage
d. responsibility i. moderation
e. frugality j. tranquility
f.
___1. Ability to choose for oneself between right and wrong; the ability to answer for one’s conduct and obligations.

___2. Adherence to moral and ethical principles; soundness of moral character; firm adherence to a code.

___3. An act of giving particular attention, to hold in high or special regard, to honor or hold in high esteem.

___4. Mental or moral strength to venture, persevere and withstand danger, fear or difficulty.

___5. Avoid extremes. Forbear resenting injuries so much as you think they deserve.

___6. Be not disturbed at trifles, or at accidents common or unavoidable.

___7. Let all your things have their places. Let each part of your business have its time.

___8. Eat not to dullness. Drink not to elevation.

___9. The quality of being impartial or fair; the administration of equitable law.

___10. Lose no time. Be always employed in something useful. Cut off all unnecessary actions.

___11. Make no expense but to do good to others or yourself (i.e., waste nothing).

LESSON 8: THE FILIPINO VALUE SYSTEM AND BUSINESS ETHICS CHALLENGES

LEARNING OBJECTIVE:

At the end of this lesson, the students should be able to:

 provide a historical background to business ethics in the Philippines;

 explain the major Filipino values affecting business; and
 enumerate the various business ethics challenges flowing from these Filipino business values.

The term “Business Ethics” in the Philippine Context

One can say that Filipino business values are greatly affected by family-oriented laws prevailing in the
country. For example, The Family Code of the Philippines provides that “the parents and those exercising parental
authority shall have with respect to their unemancipated children or wards the following rights and duties:

1. to keep them in their company, to support, educate and instruct them by right precept and good example,
and to provide for their upbringing in keeping with their means;
2. to give them and affection, advice and counsel, companionship and understanding;
3. to provide them with moral and spiritual guidance, inculcate in them honestly, integrity, self-discipline, self-
reliance, industry and thrift, stimulate their interest in civic affairs and inspire in them compliance with the
duties of citizenship;
4. to enhance, protect, preserve and maintain their physical and mental health at all times;
5. to furnish them with good and wholesome educational materials, supervise their activities, recreation and
association with others, protect them from bad company, and prevent them from acquiring habits detrimental
to their health, studies and morals;
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 Tuguegarao Archdiocesan Schools System
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
6. to represent them in all matters affecting their interests;
7. to demand from them respect and obedience;
8. to impose discipline on them as may be required under the circumstances; and
9. to perform such other duties as are imposed by law upon parents and guardians.

Since there are lots of Chinese influence on Filipino culture because of the migration to the Philippines of many
Chinese since centuries ago, one needs to also mention the familiarity with Confucian ethics and business lessons
derived from Confucius’ sagely wisdom. From Confucian ethics emanate the emphasis on social obligations, ethical
decision-making, positive business dealings and harmonious relationship within the organization and the value of
learning and education; these bring attendant benefits and good practices including good business management and
labor practices. In Confucian ethics, the practice of the Tao- “the way of life”, or the ultimate purpose and
enlightenment in life- is very important. Along with this, we also recognize other common Confucian values: (a) Filial
piety; (b) brotherhood, peer-ship and equality; (c) loyalty and fidelity; (d) trustworthiness; (e) courtesy and
politeness; (f) righteous, right conduct and courage; (g) uprightness, honor, integrity and character; and (h) humility
and shame. Wherever Confucian ethics has influenced business, the business people would establish good
relationship amongst one another and thus more people would be encouraged to practice similar good habits or
virtues.

The ultimate basis of the Filipino psyche for its judgments in the realm of business ethics rests, however, on the
concepts of sin (kasalanan) and virtuous action (mabuting gawa), which are clearly of a religious extraction. About 90
percent of the population adheres to the Christian faith and therefore subscribes to the morality encapsulated in the
Decalogue.

Business ethics corresponds to a wide range of concept pairs in Filipino. On the immediate level, business ethics
implies what is right or correct and what is wrong, what is allowed or legal and what us prohibited or illegal in trade
or business. On another level, there is a reference to what is good and what is bad, although in a highly utilitarian and
instrumental rather than in an absolute moral sense. That is to say, what is good in business is what is profitable and
brings prosperity; whereas what is bad is what constitutes a losing proposition. Of course, there also is a term for
what is just, but hardly does this bear on the ordinary conduct of business. Furthermore, influences perhaps by their
Chinese neighbors, Filipinos have developed a very high regard for luck (buenas or swerte), considering it to be a
much sought after though not always morally deserved good in business.

Business Ethics Challenges in the Philippines

Basic education’s usual approach to ethics teaching in the Philippines has been generally pedantic. Teachers
and parents repeatedly admonish us about inherited do’s and don’t’s, perhaps thinking that the repetition would drive
is ethical. In a country where much is needed to combat what critics call endemic corruption, moral numbness has
crept in. Along with moral numbness, an underdeveloped capability for moral reasoning and the lack of moral courage
make business ethics learning particularly challenging in the Philippines. Undeniably, it is an increasing morally numb
and indifferent culture. Like a highly resistant disease, corruption in the Philippines seems to refuse to go away
despite highly publicized criticisms from local and international media, multilateral funding agencies, and prominent
local academics. The truth is the average Filipino has become immune to unethical behavior among high-ranking
business and government officials because many publicized cases have gone unresolved; few leaders have been
sanctioned and imprisoned. The issues get buried; the unethical business and government leaders go scot-free are
promptly forgotten. The long-term result is that future generations of officials never learn the lesson that their power
and offices are not their personal entitlement but a duty to communities. Even more unfortunate is the fact that
sometimes these misbehaving role models are admired despite the source of their money. They are emulated.
Without moral indignation and vigilance, one of the most effective corrective to ethical wrongdoing among leaders is
gone and unethical behavior perpetuates.

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 Tuguegarao Archdiocesan Schools System
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
ACTIVTY 2
Write the letter that corresponds to the correct answer on the space provided before the number.

___1. What notion should be at the heart of ethical theory, according to virtue ethics?
a. duty b. intrinsic value c. moral character d. pleasure
___2. What is the relationship between duty and virtue, according to virtue ethics?
a. Duty is defined as what a virtuous person would do.
b. Virtue is defined as a character trait that leads us to do our duty.
c. The two concepts are independent of one another.
d. If one does one’s duty, virtue is unnecessary.
___3. What is a moral exemplar?
a. A non-absolute moral rule. c. A situation that illustrates the consequences of a moral
principles.
b. A person who serves as a role model. d. A person to whom the moral rules do not apply.
___4. Which of the following do virtue ethics have a hard time explaining?
a. Moral complexity c. The role of emotions in morality
b. Moral education d. How we can know who our role models should be
___5. What does moral understanding require, according to virtue ethics?
a. The application of absolute rules to particular cases
b. Calculation about the effects of one’s actions
c. An exceptional amount of intelligence
d. Emotional maturity
___6. How did Aristotle think virtue could be acquired?
a. It is inborn
b. One must have a conversion experience in which one experiences the good directly
c. Virtue is acquired through education and training
d. It is impossible to become virtuous.
___7. How do virtuous people differ from vicious people?
a. In their behavior b. In their thoughts c. In their perceptions d. All of the above
___8. What do people seek above all else, according to Aristotle?
a. Eudaimonia b. Ataraxia c. Pleasure d. Power
___9. What is a tragic dilemma?
a. A situation in which one has two options, only one of which will have a good outcome.
b. A situation in which a good person’s life will be ruined, no matter what she does.
c. A situation in which one must choose between self-interest and morality.
d. A situation in which it is impossible to behave morally.
___10. Which of the following is a statement of the priority problem?
a. Virtue ethics wrongly defines duty in terms of virtue instead of vice versa.
b. A person can be virtuous without having all her priorities straight.
c. The consequences of an action sometimes have priority over one’s intentions.
d. Virtue ethics lacks a way of ranking moral principles in terms of importance.