INTRODUCTION TO BUSINESS ETHICS b b b
MODULE 1 b
BusinessbOrganizationsbexistbtobservebconsumers'bneeds,bandbinbreturn,btheybmakebprofitsbwhenbpeo
plebpatronizebtheirbproductsbandbservices.b
BUISINESSbORGANIZATIONS
• Entitybthatbaimsbtobearnbabprofitb
• ProductsbcanbbebTANGIBLEb(physicalbobjects)borbINTANGIBLEb(non-
physical/services)b
PROFITb
• Amountbofbmoneybremainingbafterballbcostbrelatingbtobabproductborbservicesbhavebbeen
bdeductedbfrombthebtotalbsalesborbrevenueb
BUSINESSESbCANbBEbCLASSIFIESbASbFOR-PROFITbORbNONPROFIT
FOR-PROFITb
• Aimsbtobmakebabprofitbtobsustainbthebbusiness
• Builtbtobservebthebbusinessbownersbbybdirectlyborbindirectlybsellingbgoodsborbservicesb
NONPROFITb
• Aimsbtobadvocatebandbimplementbactivitiesbforbwhichbitbnormallybraisesbfundsbfor,btobf
urtherbitsbobjectivesbsuchbasbprovidingbsocialbassistancebforbthebbettermentbofbsocietyb
• Builtbtobservebpublicbinterestb
• Sometimesbreferredbtobasbpartbofbcivilbsocietyborgb(Thirdbsectorbofbsociety,bwithbthebgo
vtbandbbusinessbasbthebfirstbandbsecond)b
• NObONEbcanbownbNPOsb
• Headedbbybgoverningbboardbofbtrusteesb
• Inbdevelopingbsectors,bthebNPOsbareboftentimesbreferredbasbNongovernmentbOrganiz
ationsb(NGOs)b
• NGOsb-bcomplementbgovtbinbdeliveringbsocialbservicesbtobpeoplebandbcommunitiesb
FORMS OF BUSINESS ORGANIZATIONS
b b b
SOLEbORbSINGLEbPROPIETORSHIPb
, • Ownedbandboperatedbbybanbindividualb
• Ownerbownsballbassetbandbprofitsbgeneratedb
• Totalbliabilitybforblossesbandbdebtsb
• Doesbnotbneedbabbigbcapital,bitbisboftenblimitedbtobthebowner'sbsavingsborbloanbforms.b
EXAMPLES:b
1. Sari-saribstore
2. OnlinebStore
3. FoodbCartbFranchiseb
4. FreelancebWorkb
PARTNERSHIPb
• Composedbofbtwoborbmorebindividualsbwhobpoolbtheirbresourcesb
• EachbownerbisbcalledbPARTNER
• Noblimitbtobnumberbofbpartners,bbutbneedsbpermissionbandbapprovalbofbotherbpartnersb
• Partnersbgetbtobenjoybthebprofitsbandblossesbtogetherb
• GENERALbPARTNERb:bunlimitedbliabilitybforbdebtsbandbobligationsb
• LIMITEDbPARTNERb:bonlybhasbliabilitybupbtobthebextentbofbtheirbcapitalbcontributions
CORPORATIONb
• FormedblegallybthroughbarticlesbofbincorporationbfiledbwithbthebSecuritiesbandbExchangebCo
mmissionb(SEC)b
• Atbleastb5bbutbnotbmorebthanb15bpersonsb
• AccordingbtobREVISEDbCORPORATIONbCODEbINb2019b-
bcorporations bwithbonlybonebstockholderbcanbbeborganizedb
• HASbOWNbLEGALbPERSONALITY,bDISTINCTbANDbSEPARATEbFROMbTHEbPERS
ONSbFORMINGbTHEbORGANIZATION
• Hasbsamebrights,bduties,bandbliabilitiesbasbabpersonb
• Canbhavebperpetualbexistencebunlessbotherwisebspecifiedbinbitsbarticlesbofbincorporationb
THEbCORPORATIONbCODEbOFbTHEbPHILIPPINESbCATEGORIZESbCORPORATIONbINTOb2bTY
PES:bSTOCKbANDbNONSTOCKb
• STOCKbCORPORATIONb
o Forbprofitborganization
o hasbcapitalbstockbthatbisbdividedbintobsharesbandbisbauthorizedbtobdistributebtobthebsha
reholdersbdividendsborballotmentsbofbthebsurplusbprofitsbonbthebbasisbofbsharesbheld.b
• NONSTOCKbCORPORATIONb
o Nobpartbofbitsbincomebisbdistributablebasbdividendsbtobitsbmembers,btrustees,borboffice
rsb
o allbthosebearnedbarebusedbtobfurtherbpromotebofbtheborganizationb
o formedbforbcharity,breligious,beducational,bprofessional
, • CLOSEbCORPORATION
o Sharesbofbstockbarebnotbavailablebonbstockbexchangeborbanybpublicbmarketb
o Cannotbmakebpublicbofferingbofbitsbstockb
• OPENbCORPORATION
o ListedbinbthebPhilippinebStockbExchangeb(PSE)b
o Gonebpublicbinbraisingbitsbcapitalb
o MakesbandbINITIALbPUBLICbOFFERINGbtobgetblistedbinbthebPSEbwherebitsbstocksb
arebtradedb
ADVANTAGESbOFbAbCORPORATIONbASbAbFORMbOFbBUSINESSbORGANIZATIONb
1. UNLIMITEDbLIFEb
2. CREDIBILITYb
3. EASEbOFbTRANSFERRINGbOWNERSHIPb
4. PROTECTINGbPERSONALbASSETSb
COOPERATIVEb
• Anbautonomousbandbdulybregisteredbassociationbofbpersons,bwithbabcommonbbondbofbinteres
t,bwhobhavebvoluntarilybjoinedbtogetherbtobachievebtheirbsocialbeconomic,bandbculturalbneeds
bandbaspirationsbbybmakingbequitablebcontributionsbtobthebcapital bacquired...
• RegulatedbbybthebCOOPERATIVEbDEVELOPMENTbAUTHORITYb
• Membershipbisbvoluntarybandbregisteredbthroughbitsbarticlesbofbcooperationb
• Joinbbybcontributingbmembershipbfeebandbbuildingbupbsharebcapitalbovertimeb
BUSINESS ORGANIZATIONS AND THEIR ENVIRONMENT
b b b b b
1. POLITICALbFACTORSb-
bThebsituationbinbabcountrybandbthebworldbinfluencesbhowbbusiness boperatebandbgrow
2. ECONOMICbFACTORSb-
bInflation,bpriceblevelbofbcommodities,binterestbrates,bdemandbandbsupply,bexchangebrates
3. SOCIOCULTURALbFACTORSb-
bPeople'sbattitudes,bbehaviors,bcustoms,bcultural bheritage,bbtraditions,bbeliefs,bandblifestyleb
4. TECHNOLOGICALbFACTORSb-badvancesbinbtechnologyb
5. ENVIRONMENTALbFACTORSb-
bEcological bfactors blikebstorms,bfloods,bdroughts. bwildfires,bvolcanicberuptions,bearthquakes
,bandbpollutionb
6. DEMOGRAPHICbFACTORSb-
bagebgroup,bgender,bincomebdistribution,bpopulationbsize,bgeographicalblocation,brace,bethni
city
7. REGULATORY/LEGALbFACTORSb-blegalbrulesbandbregulations
ECONOMIC SYSTEMS b b
ECONOMICS b
, • Studybofbhowbresourcesbusedbinbproductionbofbgoodsbandbservicesbarebdistributedbforbconsu
mptionbwithinbabsocialbsystemb
RESOURCESb
• includesbnatural,bhuman,bandbfinancialbresources
• sometimesbcalledbFACTORSbOFbPRODUCTIONb
ECONOMICbSYSTEMb
• describesbhowbsocietybdistributesbitsbresourcesbtobproducebgoodsbandbservicesb
• unlimitedbdemandbforbgoodsbandbservicesb
• challengebinbhowbtobmeetbthisbdemandbwithinbablimitedbsupply
•
•
THE PHILIPPINE COMPETITION ACT
b b b b
• Competitionbcanbpushbbusinessborganizationsbtobimprovebtheirbproductsborbservices
• THISbLAWbAIMSbTObMAINTAINbCOMPETITIONbINbTHEbMARKETbTObPREV
ENTbANTI-
COMPETITIVEbACTIONSbANDbTObPROHIBITbCERTAINbBUSINESSbPRACTI
CESbTHATbAREbCONSIDEREDbHARMFULbTObCONSUMERSb
• ThebPhilippinebCompetitionbActb(R.A.b10667)bcreatedbthebPhilippinebCommissionban
dbmandatedbtobenforcebthebactbforbpromotingbandbprotectingbmarketbcompetitionb
ROLES OF BUSINESS ORGANIZATIONS IN THE SOCIETY
b b b b b b
Primarybobjectivebisbtobdevelop,bproduce,bandbdistributebgoodsbandbservicesbtobthebmarketbinborderbtobge
neratebprofitsbb(PCAPOI)
1. PROVIDINGbGOODSbANDbSERVICESb
2. CREATINGbEMPLOYMENTbOPPORTUNITIESb
3. ADVANCINGbTHEbECONOMYb
-
bTheb1987bPhilippinebConstitutionbrecognizesbentrepreneurshipborbputtingbupbbusinessesbasbanbenginebof
beconomicbgrowthb
-
bArticlebXII,bSectionb1bhighlightsbthebrolebofbprivatebenterprisesbinbsupportingbequitablebdistributionbofbi
ncomebandbwealth,bsustainingbproductionbofbgoods,bandbservices,bandbexpandingbproductivity,btherefore
braisingbthebqualitybofblifeb
MODULE 1 b
BusinessbOrganizationsbexistbtobservebconsumers'bneeds,bandbinbreturn,btheybmakebprofitsbwhenbpeo
plebpatronizebtheirbproductsbandbservices.b
BUISINESSbORGANIZATIONS
• Entitybthatbaimsbtobearnbabprofitb
• ProductsbcanbbebTANGIBLEb(physicalbobjects)borbINTANGIBLEb(non-
physical/services)b
PROFITb
• Amountbofbmoneybremainingbafterballbcostbrelatingbtobabproductborbservicesbhavebbeen
bdeductedbfrombthebtotalbsalesborbrevenueb
BUSINESSESbCANbBEbCLASSIFIESbASbFOR-PROFITbORbNONPROFIT
FOR-PROFITb
• Aimsbtobmakebabprofitbtobsustainbthebbusiness
• Builtbtobservebthebbusinessbownersbbybdirectlyborbindirectlybsellingbgoodsborbservicesb
NONPROFITb
• Aimsbtobadvocatebandbimplementbactivitiesbforbwhichbitbnormallybraisesbfundsbfor,btobf
urtherbitsbobjectivesbsuchbasbprovidingbsocialbassistancebforbthebbettermentbofbsocietyb
• Builtbtobservebpublicbinterestb
• Sometimesbreferredbtobasbpartbofbcivilbsocietyborgb(Thirdbsectorbofbsociety,bwithbthebgo
vtbandbbusinessbasbthebfirstbandbsecond)b
• NObONEbcanbownbNPOsb
• Headedbbybgoverningbboardbofbtrusteesb
• Inbdevelopingbsectors,bthebNPOsbareboftentimesbreferredbasbNongovernmentbOrganiz
ationsb(NGOs)b
• NGOsb-bcomplementbgovtbinbdeliveringbsocialbservicesbtobpeoplebandbcommunitiesb
FORMS OF BUSINESS ORGANIZATIONS
b b b
SOLEbORbSINGLEbPROPIETORSHIPb
, • Ownedbandboperatedbbybanbindividualb
• Ownerbownsballbassetbandbprofitsbgeneratedb
• Totalbliabilitybforblossesbandbdebtsb
• Doesbnotbneedbabbigbcapital,bitbisboftenblimitedbtobthebowner'sbsavingsborbloanbforms.b
EXAMPLES:b
1. Sari-saribstore
2. OnlinebStore
3. FoodbCartbFranchiseb
4. FreelancebWorkb
PARTNERSHIPb
• Composedbofbtwoborbmorebindividualsbwhobpoolbtheirbresourcesb
• EachbownerbisbcalledbPARTNER
• Noblimitbtobnumberbofbpartners,bbutbneedsbpermissionbandbapprovalbofbotherbpartnersb
• Partnersbgetbtobenjoybthebprofitsbandblossesbtogetherb
• GENERALbPARTNERb:bunlimitedbliabilitybforbdebtsbandbobligationsb
• LIMITEDbPARTNERb:bonlybhasbliabilitybupbtobthebextentbofbtheirbcapitalbcontributions
CORPORATIONb
• FormedblegallybthroughbarticlesbofbincorporationbfiledbwithbthebSecuritiesbandbExchangebCo
mmissionb(SEC)b
• Atbleastb5bbutbnotbmorebthanb15bpersonsb
• AccordingbtobREVISEDbCORPORATIONbCODEbINb2019b-
bcorporations bwithbonlybonebstockholderbcanbbeborganizedb
• HASbOWNbLEGALbPERSONALITY,bDISTINCTbANDbSEPARATEbFROMbTHEbPERS
ONSbFORMINGbTHEbORGANIZATION
• Hasbsamebrights,bduties,bandbliabilitiesbasbabpersonb
• Canbhavebperpetualbexistencebunlessbotherwisebspecifiedbinbitsbarticlesbofbincorporationb
THEbCORPORATIONbCODEbOFbTHEbPHILIPPINESbCATEGORIZESbCORPORATIONbINTOb2bTY
PES:bSTOCKbANDbNONSTOCKb
• STOCKbCORPORATIONb
o Forbprofitborganization
o hasbcapitalbstockbthatbisbdividedbintobsharesbandbisbauthorizedbtobdistributebtobthebsha
reholdersbdividendsborballotmentsbofbthebsurplusbprofitsbonbthebbasisbofbsharesbheld.b
• NONSTOCKbCORPORATIONb
o Nobpartbofbitsbincomebisbdistributablebasbdividendsbtobitsbmembers,btrustees,borboffice
rsb
o allbthosebearnedbarebusedbtobfurtherbpromotebofbtheborganizationb
o formedbforbcharity,breligious,beducational,bprofessional
, • CLOSEbCORPORATION
o Sharesbofbstockbarebnotbavailablebonbstockbexchangeborbanybpublicbmarketb
o Cannotbmakebpublicbofferingbofbitsbstockb
• OPENbCORPORATION
o ListedbinbthebPhilippinebStockbExchangeb(PSE)b
o Gonebpublicbinbraisingbitsbcapitalb
o MakesbandbINITIALbPUBLICbOFFERINGbtobgetblistedbinbthebPSEbwherebitsbstocksb
arebtradedb
ADVANTAGESbOFbAbCORPORATIONbASbAbFORMbOFbBUSINESSbORGANIZATIONb
1. UNLIMITEDbLIFEb
2. CREDIBILITYb
3. EASEbOFbTRANSFERRINGbOWNERSHIPb
4. PROTECTINGbPERSONALbASSETSb
COOPERATIVEb
• Anbautonomousbandbdulybregisteredbassociationbofbpersons,bwithbabcommonbbondbofbinteres
t,bwhobhavebvoluntarilybjoinedbtogetherbtobachievebtheirbsocialbeconomic,bandbculturalbneeds
bandbaspirationsbbybmakingbequitablebcontributionsbtobthebcapital bacquired...
• RegulatedbbybthebCOOPERATIVEbDEVELOPMENTbAUTHORITYb
• Membershipbisbvoluntarybandbregisteredbthroughbitsbarticlesbofbcooperationb
• Joinbbybcontributingbmembershipbfeebandbbuildingbupbsharebcapitalbovertimeb
BUSINESS ORGANIZATIONS AND THEIR ENVIRONMENT
b b b b b
1. POLITICALbFACTORSb-
bThebsituationbinbabcountrybandbthebworldbinfluencesbhowbbusiness boperatebandbgrow
2. ECONOMICbFACTORSb-
bInflation,bpriceblevelbofbcommodities,binterestbrates,bdemandbandbsupply,bexchangebrates
3. SOCIOCULTURALbFACTORSb-
bPeople'sbattitudes,bbehaviors,bcustoms,bcultural bheritage,bbtraditions,bbeliefs,bandblifestyleb
4. TECHNOLOGICALbFACTORSb-badvancesbinbtechnologyb
5. ENVIRONMENTALbFACTORSb-
bEcological bfactors blikebstorms,bfloods,bdroughts. bwildfires,bvolcanicberuptions,bearthquakes
,bandbpollutionb
6. DEMOGRAPHICbFACTORSb-
bagebgroup,bgender,bincomebdistribution,bpopulationbsize,bgeographicalblocation,brace,bethni
city
7. REGULATORY/LEGALbFACTORSb-blegalbrulesbandbregulations
ECONOMIC SYSTEMS b b
ECONOMICS b
, • Studybofbhowbresourcesbusedbinbproductionbofbgoodsbandbservicesbarebdistributedbforbconsu
mptionbwithinbabsocialbsystemb
RESOURCESb
• includesbnatural,bhuman,bandbfinancialbresources
• sometimesbcalledbFACTORSbOFbPRODUCTIONb
ECONOMICbSYSTEMb
• describesbhowbsocietybdistributesbitsbresourcesbtobproducebgoodsbandbservicesb
• unlimitedbdemandbforbgoodsbandbservicesb
• challengebinbhowbtobmeetbthisbdemandbwithinbablimitedbsupply
•
•
THE PHILIPPINE COMPETITION ACT
b b b b
• Competitionbcanbpushbbusinessborganizationsbtobimprovebtheirbproductsborbservices
• THISbLAWbAIMSbTObMAINTAINbCOMPETITIONbINbTHEbMARKETbTObPREV
ENTbANTI-
COMPETITIVEbACTIONSbANDbTObPROHIBITbCERTAINbBUSINESSbPRACTI
CESbTHATbAREbCONSIDEREDbHARMFULbTObCONSUMERSb
• ThebPhilippinebCompetitionbActb(R.A.b10667)bcreatedbthebPhilippinebCommissionban
dbmandatedbtobenforcebthebactbforbpromotingbandbprotectingbmarketbcompetitionb
ROLES OF BUSINESS ORGANIZATIONS IN THE SOCIETY
b b b b b b
Primarybobjectivebisbtobdevelop,bproduce,bandbdistributebgoodsbandbservicesbtobthebmarketbinborderbtobge
neratebprofitsbb(PCAPOI)
1. PROVIDINGbGOODSbANDbSERVICESb
2. CREATINGbEMPLOYMENTbOPPORTUNITIESb
3. ADVANCINGbTHEbECONOMYb
-
bTheb1987bPhilippinebConstitutionbrecognizesbentrepreneurshipborbputtingbupbbusinessesbasbanbenginebof
beconomicbgrowthb
-
bArticlebXII,bSectionb1bhighlightsbthebrolebofbprivatebenterprisesbinbsupportingbequitablebdistributionbofbi
ncomebandbwealth,bsustainingbproductionbofbgoods,bandbservices,bandbexpandingbproductivity,btherefore
braisingbthebqualitybofblifeb
