Republic of the Philippines

Department of Education
National Capital Region
DIVISION OF CITY SCHOOLS – MANILA
Manila Education Center Arroceros Forest Park
Antonio J. Villegas St. Ermita, Manila

Business Ethics and

Social Responsibility
Code of Ethics

Quarter 1 Week 3 Module 3

Learning Competency:

The students should be able to formulate “code of

ethics” that reflect core principles derived from analyses.

ABM_ESR12-IIIa-d-1.6 Week 3
 Learning Module for Business Ethics and Social Responsibility

HOW TO USE THIS MODULE?

Before starting the module, I want you to set aside other task/s that may
disturb you while enjoying the lessons. Read the simple instructions below to
successfully enjoy the objectives of this kit. Have fun!

1. Follow carefully all the contents and instructions indicated in

every page of this module.
2. Write on your notebook the concepts about the lessons. Writing
enhances learning, that is important to develop and keep in mind.
3. Perform all the provided activities in the module.
4. Let your facilitator/guardian assess your answers using the
answer key card.
5. Analyze conceptually the posttest and apply what you have
learned.
6. Enjoy studying!

PARTS OF THE MODULE

 Expectations - These are what you will be able to know

 after completing the lessons in the module.
 Pre-test - This will measure your prior knowledge and the concepts
 to be mastered throughout the lesson.
 Looking Back to your Lesson - This section will measure what
 learnings and skills did you understand from the previous lesson.
 Brief Introduction- This section will give you an overview of
the lesson.
  Activities - This is a set of activities you will perform with a partner.
 Remember - This section summarizes the concepts and
 applications of the lessons.
 Check your Understanding - It will verify how you learned from the
 lesson.
 Post-test - This will measure how much you have learned from
the entire module

Page 2 of 16
 Learning Module for Business Ethics and Social Responsibility

LESSON
3
Code of Ethics

EXPECTATIONS

At the end of the module, you will be able to:


 understand the common practices in business organizations


appreciate the importance of Code of Ethics in business organizations

craft a simple “Codes of Ethics” or “Codes of Right Conduct”

Let us start with giving

you an overview about Ethics
in Business.
PRETEST

I. Answer the following questions. Write the letter of the correct answer on the
space provided after each number.
_______ 1. Which of the following statements is true about Ethics?
a. It is the study of the wants and needs in business.
b. It is the study of what is right and wrong in human behavior and
conduct in business.
c. It is the study of the relationship between people in a business.
d. None of the above.

_______ 2. Which is considered an unethical business practice?

a. Treating employees fairly.
b. Selling a good quality product.
c. Hiring the most qualified applicants for vacant positions.
d. Buying substandard materials for production.

Page 3 of 16
 Learning Module for Business Ethics and Social Responsibility

_____ 3. John is always late in his client’s meeting. What can you say about
him?
a. John is very dedicated.
b. John is optimistic.
c. John is unprofessional.
d. John is busy.

_______4. A written set of rules that guide the employee in an organization on

how to conduct himself in accordance with the company’s ethical
standards and values.
a. Mission Statement
b. Goals and Objectives
c. Executive Summary
d. Code of Ethics

_______5. What do you think is the benefit of practicing good business ethics?
a. Low morale of employees
b. Lack of trust
c. High employee retention rate
d. Decrease in product sales
Great, you finished
answering the Pre-Test. You may
request your facilitator to check
LOOKING BACK TO YOUR LESSON your work. Congratulations and
keep on learning!

Last time, you have learned the core principles of good corporate
governance. Let us review.

Fairness in the context of a business organization involves balancing the

interests involved in all decision-making including any decisions related to

Page 4 of 16
 Learning Module for Business Ethics and Social Responsibility
hiring, firing (including the investigatory process), and the compensation and
rewards system.
Accountability in the context of a business organization is the
obligation to demonstrate that work has been conducted in compliance with
agreed rules and standards or to report fairly and accurately on performance
results vis-à-vis mandated roles and/or plans.
Transparency is defined as being authentic in the way an organization
manage themselves externally – to stakeholders, to prospective customers and
talent, and within the community.
Stewardship refers to taking responsibility for the business and the
effects it has on the world around it.

Identify what principle (Accountability, Fairness, Transparency, or

Stewardship) is being applied in the following situations.

_______________1.
FAIRNESS Ms. Reyes keeps her class record organized and updated
because she is very objective in giving grades.
_______________2.
TRANSPARENCY The ABC company holds monthly board meeting to ensure
that every member is well-informed about the current
business situations.
_______________3. Company X hires external auditor to assess and evaluate
ACCOUNTABILITY
their financial statements. If the auditor finds out any
discrepancy, the company will make sure that the
accountants and other financial executives as part of their
responsibilities in the company will make the necessary
adjustments
TRANSPARENCY
_______________4. Mr. Roxas, the manager of the Treasury Department,
reported the savings of the company in all partner banks
accurately.
_______________5.
STEWARDSHIP The security guard of the building always makes rounds
every 2 hours during his night shift to make sure that the
company’s assets are secured.

Page 5 of 16
 Learning Module for Business Ethics and Social Responsibility

BRIEF INTRODUCTION

Business and Ethics are always interrelated. Ethics

guides us that we are doing the right thing. In the conduct of
our business, we need to follow ethical standards of the
company.
But first, let us define what is Ethics?

Ethics is derived from the Greek word “ethikos” which means “having
to do with character. The Latin word for ethos is “mos” (or “mores”). That is
why we known Ethics as the Moral Science or Moral Philosophy. It refers to
the theory of morality of right conduct.

Definitions of Business Ethics

1. Business Ethics is the study of what is right and wrong on human
behavior and conduct in business.
2. Business Ethics is the study of perceptions of people about morality,
moral norms, moral rules, and ethical principles as they apply to
peoples and institutions in business.
3. Business Ethics is the study, evaluation, analysis and questioning of
ethical standards, policies, moral norms, and ethical theories that
managers and decision makers use in resolving moral issues and
ethical dilemmas affecting business.

But how can business be considered as an ethical organization?

Previously, you learned about the core principles of good governance in
business namely accountability, fairness, transparency, and stewardship.

Page 6 of 16
 Learning Module for Business Ethics and Social Responsibility
Ethical organizations are based on these core principles. A business with
good practice of accountability makes sure that all the financial obligations
from its debtors are paid on time. Accountability of a company can also be
shown in proper planning, hiring, and keeping employees, and budget
management and reporting. An ethical organization also based on the
principles of fairness. Employees who feel secured, because there is no
impartiality, often stays with the company organization build. Meanwhile,
transparency and stewardship also are known characteristics of good
governance in an organization. Transparency in business builds the trust of
the employees to the company, and the stakeholders such as the suppliers,
investors, and of course the customers. Whereas stewardship is an ethical
practice of managing the resources of the company well.
To ensure that all those principles are practiced by all employees in the
organization, Code of Ethics, or Code of Conduct are crafted to be the guiding
light of the business in ensuring good ethical practice. What is Code of Ethics?

ETHICAL CODE OR CODE OF ETHICS are principles adopted by an

organization to assist those in the organization called upon to decide; it is
about understanding the difference between “right” and “wrong” and to apply
this understanding to their decision. In addition, Code of ethics is a written set
of guidelines issued by an organization to its workers and management to help
them conduct their actions in accordance with its primary values and ethical
standards.
o CODE OF CONDUCT: it is a document designed to influence the
behavior of employees. They set out the procedures to be used in specific
ethical situations and delineate whether a violation of the code of ethics
occurred and, if so, remedies should be imposed.

o CODE OF PRACTICE: it is adopted by a profession or by a governmental

or non-governmental organization to regulate that profession. It may be
styled as a code of professional responsibility, which will discuss difficult
Page 7 of 16
 Learning Module for Business Ethics and Social Responsibility
issues, difficult decisions that will often need to be made, and provide a
clear account of what behavior is considered “ethical” or “correct” or
“right” in the circumstances.

o CODE OF ETHICS is not written solely for the purpose of doing

ethical business practice. It can also be applied and practiced in
school, government, and even professional groups.

There is code of ethics for teachers, accountants, engineers, lawyers,

doctors, nurses, and all other professionals to ensure that they are
following the same ethical standards in their professional practice.

ACTIVITIES

Directions: Choose the letter of the correct answer.

Activity 1. What is Ethics all about?
_____1.
A. Morally correct behavior C. Making lots of money
B. An ethnic minority D. A fooolish person
_____2.

A. A set of criminal laws C. A set of classroom

B. A set of moral principles rules D. Telling half-truth
_____3.

A. It is a code of conduct for a particular profession and not related to

personal life.
B. It is a field of study that focuses on faith and religion
C. It is a branch of philosophy that deals with morality
D. It is what we do when others are watching

Page 8 of 16
 Learning Module for Business Ethics and Social Responsibility
Activity 2: How ethical are you?
1. After finding a diamond ring in a hotel room. You:

a. Keep it because you believe in the finder’s keeper philosophy

b. Turn it over to the lost and found department of a hotel
c. Consider it yours unless the previous occupant looks for it and
the front desk calls your attention to turn over it.
d. None of the above.

2. After lunch, the waiter brings the check. Upon checking it, no dessert,
and drinks to the bill. You:
a. Pay the bill. It was their mistake.
b. Call the waiter and ask him to recompute the check and add
the dessert and drinks.
c. Pay the bill and give him the bigger tip since you saved money
because of the dessert and drinks that were not included in the bill.
d. None of the above.

3. In a team meeting, your boss congratulates you for a project that

was done by someone else from the team. You:
a. Stay silent in the meeting and later approach your co-worker you
are sorry the boss did that
b. Explain to boss immediately that it was not your work and give credit
where credit is due.
c. Never say anything about it.
d. None of the above.

4. Your company has a policy that prevents employees from accepting

gifts. The policy also requires that you inform your manager about the
gift. A supplier you have known for several years offers you a hotel gift
certificate. You:

Page 9 of 16
 Learning Module for Business Ethics and Social Responsibility
a. Accept the gift and tell your manager afterward.
b. Accept the gift and do not tell your manager about it.
c. Inform your boss and hope for approval.
d. None of the above.

5. You are with some friends at the park. There are three different bins in
the area. A friend threw an empty soda can in the paper bin. You:
a. Better not say anything.
b. Move the can into the correct bin.
c. Give him stick to take the can out and advise him to put it in the
correct bin.
d. None of the above

REMEMBER

Ethics refers to the theory of morality of right conduct.

Business Ethics is the study of what is right and wrong on human behavior
and conduct in business.
Code of ethics is a written set of guidelines issued by an organization to its
workers and management to help them conduct their actions in accordance
with its primary values and ethical standards.

CHECK YOUR UNDERSTANDING

Activity 1: Finding the ETHICAL or UNETHICAL.

Directions: Write ETH if the statement is ETHICAL; UNETH if the statement is

UNETHICAL.
________1.
ETH Obeying company’s rules and regulations.
ETH
________2. Developing professional relationships with co-workers.
________3.
UNETH Taking credit for others hard work.
________4.
UNETH Using or taking company’s supplies for personal purposes.

Page 10 of 16
 Learning Module for Business Ethics and Social Responsibility
________5.
UNETH Conducting personal business during working hour.
UNETH
________6. Engaging in negative gossip about someone you work with.
________7.
UNETH Extending lunch/ snack breaks.
________8.
ETH Showing initiative without being told.
________9.
UNETH Lying inside and outside the workplace.
________10.
UNETH Using foul language on co-workers in and out of the workplace.
Activity 2: Finding the LIE and TRUTH.
Directions: Write LIE if the statement is FALSE; TRUTH if the statement
is TRUE.
__________1.
TRUTH Ethics is a set of principles of conduct governing an individual or
group.
TRUTH
__________2. Code of Ethics is a written statement of policies and principles that
guides the behavior of all employees or members of an organization.
LIE
__________3. Employees should obey only written work rules.
TRUTH
__________4. Ethical character traits include integrity, honesty, and justice.
__________5.
LIE To enhance the profits of the business continuously is the objective
of the Code of Ethics.

POSTTEST

I. Multiple Choice.
Directions: Read carefully the given statements after each question. Encircle
the letter of the correct answer.
1. Which of the following are the functions of a Code of Ethics?
a. It can express a shared commitment on the part of a professional society’s
members to strive and to satisfy certain ethical standards and principles.
b. It can help foster an environment in which ethical behavior is the norm.
c. It can serve as a guide or reminder in specific situations.
d. All of the above.

Page 11 of 16
 Learning Module for Business Ethics and Social Responsibility
2. Which of the following is a practice of fair treatment of workers at workplace?
a. Recreation facilities at the workplace.
b. Rights of workers to fairness and dignity.
c. Right of workers to have a share in company’s profit.
d. None of the above.
3. Ethical issues do not exist in accounting because the field involves primarily
objective data.
a. True
b. False
4. Which of the following is the study and practice of decisions about what is
good
or right?
a. Law c. Ethics
b. Morals d. Business
5. A businessman who owns a medical store in a small town is the only outlet
that sells face mask. There is a great necessity and high demand for the use
of the item due to COVID-19 pandemic, so he charges irrational amount of
doubling the price. The community gets mad of the situation. This business
practice is most likely:
a. Ethical because it is not illegal for the owner to set its prices based on
maximizing profits.
b. Ethical because the owner focuses only on the impact of decisions on his
business.
c. Unethical because business operates in a community and communities
have expectations for behavior of individuals, groups, and businesses.
d. None of the above.

Page 12 of 16
 Learning Module for Business Ethics and Social Responsibility
II. CASE STUDY: Sarah-Matteo Wedding

Sarah Geronimo and Matteo Guidicelli have a

“secret marriage,” as the media described it,
last Feb. 20 at the Victory Christian
Fellowship Church, followed by a “secret”
post-marriage dinner with Matteo’s family and
very close friends (including Swatch Lady
Virgie Ramos who reportedly reserved the
venue) at the Ministry of Crab restaurant in
Shangri-La at the Fort, BGC.
However, Atty. Romy Macalintal asserts that there is no such thing as
‘secret marriage’ because a marriage cannot be celebrated without at least two
witnesses and the person authorized to solemnize it. Hence, the Sarah-Matteo
marriage cannot be secret because of the presence of those witnesses aside from
some friends or relatives who might have been invited to attend the ceremony.
He added that it might be “secret” to the parents of the bride (Divine and
Delfin) but not to the entire world. It is a common knowledge that Sarah’s
parents are against Matteo (and all the other actors linked to her before).
Was Sarah’s decision to marry Matteo, morally right? Did she disobey her
parents? In Ephesians 6: 1-3 it says, “Children, obey your parents in the Lord, for
this is right. Honor your father and mother, which is the first commandment with
promise: that it may be well with you and you may live long on earth.”

Question: If you were Sarah, whom do you follow? Your heart or the law of
God? Expound your answer.
______________________________________________________________________________
______________________________________________________________________________
NOTE: ANSWERI PA INI
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Page 13 of 16
 Learning Module for Business Ethics and Social Responsibility

Source:
https://cebudailynews.inquirer.net/290980/limits-of-parents-concerns-the-
sarah-and-matteo-wedding
https://www.philstar.com/entertainment/2020/03/04/1997836/no-such-
thing-secret-marriage
https://journal.com.ph/entertainment/showbiz/brouhaha-sarah-matteo-
wedding

REFLECTIVE LEARNING SHEET

Everyday we make different decisions that will impact our future.

Decisions that will lead to actions; actions that promote a high level of
standard of ethics at all times. Action such as helping others.
The Book of Philippians Chapter 2 verses 3-5 says, “Do nothing
out of selfish ambition or vain conceit. Rather, in humility value
others above yourselves, not looking to your own interests but each
of you to the interests of the others.” Helping others is a good
business. We are most likely to succeed as an entrepreneur if we are
motivated by helping solve other people’s problems.

Assuming you
are starting a
new company.
Write a code of
ethics for the
firm.

Page 14 of 16
 Learning Module for Business Ethics and Social Responsibility

E-SITES

To further explore the concept learned today and if it possible to connect

the internet, you may visit the following links:
https://cebudailynews.inquirer.net/290980/limits-of-parents-concerns-the-
sarah-and-matteo-wedding
https://www.philstar.com/entertainment/2020/03/04/1997836/no-such-
thing-secret-marriage
https://journal.com.ph/entertainment/showbiz/brouhaha-sarah-matteo-
wedding

REFERENCES

Banoc, R. (2020). Limits of parents’ concerns: the Sarah and Matteo wedding.
Retrieved on June 18, 2020 from
https://cebudailynews.inquirer.net/290980/limits-of-parents-concerns-
the-sarah-and-matteo-wedding
Roa, Floriano C. (2007). Business ethics and social responsibility.
Quezon City: Rex Bookstore, Inc

Acknowledgements
Writers:
Mutya S. Capili, MBE
Estela Marie C. Reyes, MBA
Editor: Isabel A. Gumaru, DBA
Evaluator: Ellaine I. Dela Cruz, DBA
Validators & Reviewers:
Remylinda T. Soriano, EPS, Math
Angelita Z. Modesto, PSDS
George B. Borromeo, PSDS
Management Team:
Maria Magdalena M. Lim, Schools Division
Superintendent-Manila
Aida H. Rondilla, Chief Education Supervisor
Lucky S. Carpio, EPS
Lady Hannah C Gillo, Librarian II-LRMS

Page 15 of 16
ANSWER KEY:
PRETEST: LOOKING BACK TO YOUR LESSON:
I. I. Identification
1. B 1. Fairness

2. D 2. Transparency
3. C 3. Accountability
4. D 4. Transparency
5. C 5. Stewardship

ACTIVITIES:
Activity 1: Activity 2:
1. A 1. B
2. B 2. B
3. C 3. B
4. C
5. C

CHECK YOUR UNDERSTANDING

Activity 1: Activity 2:
1. ETH 1. TRUTH
2. ETH 2. TRUTH
3. UNETH 3. LIE
4. UNETH 4. TRUTH
5. UNETH 5. LIE

6. UNETH
7. UNETH
8. ETH
9. UNETH
10. UNETH

POSTTEST

I. Multiple Choice
1. D
2. B
3. B
4. C
5. C

II. Case Study (Answer varies)

Rubrics for Grading the Case Study:

5- If the paragraph consists of 5 or more sentences with correct and
complete Information.
4- If the paragraph consists of 3 to 4 sentences with correct information.
3- If the paragraph consists of 2 to 3 sentences with correct information.
2- If the paragraph consists of 2 sentences with correct information
1- If the paragraph consists of only one sentence with correct information.
Page 16 of 16