CHAPTER 7:

COMMON UNETHICAL
PRACTICES OF BUSINESS
ESTABLISHMENTS
COMMON UNETHICAL
PRACTICES OF BUSINESS
ESTABLISHMENTS
 MISREPRESENTATION
 Direct Misrepresentation
 Indirect Misrepresentation

 OVER-PERSUASION
DIRECT MISENTERPRETATION- actively
misrepresenting about the product or customers
 DECEPTIVE PACKAGING
 MISBRANDING OR MISLABELING
 FALSE OR MISLEADING ADVERTISING
 ADULTERATION
 WEIGHT UNDERSTATEMENT OR SHORT
WEIGHING
 MEASUREMENT UNDERSTATEMENT OR SHORT
MEASUREMENT
 QUANTITY UNDERSTATEMENT OR SHORT
INDIRECT
MISREPRESENTATION
Omitting unfavorable information about the
product/service
A.CAVEAT EMPTOR
 COMMON AMONG SALESMEN
 “LET THE BUYER BEWARE”
 LYING
B. DELIBERATE WITHHOLDING OF
INFORMATION
 EXIST IN A BUSINESS
TRANSACTION

C. PASSIVE DECEPTION
 NOT AS OBVIOUS
 EX. BUSINESS IGNORANCE
 OVER
PERSUASION
 PERSUASION USED FOR THE
SOLE BENEFIT OF SELLING A
PRODUCT WITHOUTH
CONSIDERING THE INTEREST
OF THE BUYER
 CORPORATE ETHICS
UNETHICAL PRACTICES OF
CORPORATE MANAGEMENT:
A.BOARD OF DIRECTORS
1.PLAIN OF GRAFT
 GETTING THE EARNING THAT
OTHERWISE WOULD GO TO OTHER
STOCKHOLDERS
2. INTERLOCKING DIRECTORSHIP
 Practiced by a person who holds
directorial positions in two or more
corporation that do business with each
other

CONFLICT OF INTEREST
 Disloyal selling (who to protect)
3. INSIDER TRADING
 When a person with access to
confidential information uses that
information to trade in securities of
information
4. NEGLIGENCE OF DUTY
 Not attending board meeting regularly
B. EXECUTIVE OFFICERS AND
LOWER LEVEL MANAGERS
1. Claiming a vacation trip to be a
business trip
2. HAVING EMPLOYEES DO WORK
UNRELATED TO BUSINESS
Example: Lower managers asking
employees to run personal errands

3. LOOSE OR INEFFECTIVE
CONTROLS
Example: Loose monitoring over petty
cash fund
4. UNFAIR LABOR PRACTICES
 Violation of the provisions of the labor
code

5. Making false claims about losses to free

themselves from paying the compensation
and benefits provided by law
6. Making employees sign documents
showing that they are receiving fully what
they are entitled to under the law when
they are in fact receiving only a fraction of
it

7. Sexual harassment
C. UNETHICAL PRACTICES OF
EMPLOYEES
 CONFLICT OF INTEREST
An employee acts for his personal gain with or
without prejudice to his employer

 DISHONESTY
E.g. Employees theft, taking credit for
another employee’s idea
CHAPTER 8:
ETHICAL
DILEMMA
Ethical Dilemma
 Example: Finding a 1000 pesos
and deciding whether to find the
owner or to keep the money
 Six Steps in Solving Ethical Dilemma
1.Obtain the relevant fact
2.Identify the ethical issues from the facts.
3.Determine who is affected by the outcome of
the dilemma and how each person or group is
affected.
4.Identify the alternatives available to the
person who must resolve the dilemma
5.Identify the likely consequences of each
alternative
6.Decide the appropriate action.