BUSINESS ETHICS

& Social Responsibility

 BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

OBJECTIVES
At the end of the session, the learners are hoped
and expected to be able to:

1. Identify the key actors of governance;

2. Discuss the function of each actor;
3. Explain the relationship among the key actors;
4. Draw an expanded governance framework.
 Homework/Assignment
For session 3:
• Read a news article about any
business entity operating in the
Philippines. Be sure to answer the
questions:
What? Who? When? Where? Why?
What kind of business is it?

• Prepare for a short quiz (10points)

next meeting
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What is
Governance?
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Areas of Governance
1.Governance in “global space”
2.Governance in “national space”
3.Governance in “organization space”
4.Governance in “community space”
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In Global Space…
or global governance - deals with issues outside the purview of
individual governments
Institutions of global governance
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In National Space…
- Within a country: this is sometimes understood as the
exclusive preserve of government, of which there may be
several levels: national, provincial or state, indigenous, urban
or local
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In Organizational Space…
- this comprises the activities of organizations that are usually accountable to a board
of directors
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In Community Space…
or community governance - this includes activities at a
local level where the organizing body may not assume
a legal form and where there may not be a formally
constituted governing board
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Governance
- essentially means the process of decision-making and
implementation

- refers to the manner in which the organizations involved

relate to each other
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Corporate Governance (Private Sector)

- refers to the system of direction and control of business
corporations

Public Governance
- refers to the method through which power is exercised in the
management of the country’s political, economic and social
resources for development (World Bank, 1992).
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The Relationship among

Government, Governance
and Governability
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There can be good governance when

government is manned by people who
have the ability to govern and when
the people themselves are willing and
allow themselves to be governed.
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Example: While a person issued with a

driver’s license has the right to drive a
motor vehicle on the road, such driving is
subject to traffic rules and regulations like
driving within speed limits.
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The Governance Framework

State State- creating a favorable political,

legal and economic environment
Market- Creating opportunities for
Civil
Market people
society Civil Society- Mobilizing peoples’
participation
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The Government
- The Institution, that is, the establishment that governs.
- The group of people that control a country, that is, the elected and
appointed officials that lead.
- The people, that is, the citizens and constituencies that compose
the country.
- A system of people, laws and officials that define and control the
country/state.
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The Market
- the area of economic activity in which buyers and sellers
come together and the forces of supply and demand affect
price

- the business sector and the private sector

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Civil Society
- defined as a community, nation, or broad grouping of people having
common traditions, institutions, and collective activities and interests

- includes political parties, interest groups, non-governmental

organizations, the media, the academe and the church, among
others
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The Functions of
Government, Market
and Civil Society
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Government – create a favorable political, legal and economic environment that is

conducive for business to prosper.

Investment Policies such as tax incentives and efficient operations such as streamlined business
processes application must be in place.

This obligation of the government finds legal basis from the Philippine Constitution, Art. II,
Section 20 which states:

Section 20. The State recognizes the indispensable role of the private sector, encourages private
enterprise, and provides incentives to needed investments.
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Market/Business Sector – create employment opportunities for

the people. Labor intensive businesses are best to create employment
opportunities for people. Moreover, them employment must come
with just wages in order for the people to have decent lives

Civil Society – mobilize people’s participation, cooperate with the

government but also hold government and market/business
accountable.
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The right to hold the government accountable finds legal basis from the Philippine
Constitution specifically:

Art. II, Section 1. The Philippines is a democratic and republican State. Sovereignty
resides in the people and all government authority emanates from them.

Art. II, Section 27. The State shall maintain honesty and integrity in the public service
and take positive and effective measures against graft and corruption.

Art. II, Section 28. Subject to reasonable conditions prescribed by law, the State adopts
and implements a policy of full public disclosure of all its transactions involving public
interest.
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The Relationship among

Government, Market and Civil
Society
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If government wants to encourage investment opportunities, it must provide an enabling

environment for business to thrive.

For example, the peace situation must be stable and there is no threat of kidnapping of rich
businessmen for ransom or bombing. Applying for a business permit must be easy and taxes
must not be prohibitive. If the people/civil society want the government to be not corrupt, it
must not offer or pay bribes to government officials and report and testify against those who are
corrupt so that they can be prosecuted. If the people/civil society want the business sector to
engage in good business practices such as paying their employees just wages, they should
patronize those that practice good business and boycott those that employ illegal practices. For
example, if a mall or department store does not pay the correct taxes to the government or
engages in child labor, the customers must not patronize such business.
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REFLECTION
Art. II, Section 13. The State recognizes the vital role of the youth in nation-building and shall
promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall
inculcate in the youth patriotism and nationalism, and encourage their involvement in public
and civic affairs.
As students, to what sector do
you belong? As students, what
can you contribute to good
governance?