Corporate Social Responsibility
make society a better place. Providing solutions to
-- Is a practice of business organizations that accounts
for the social and environmental impacts that the
business organization creates.
3 levels of social responsibilities in business
organizations
1. Duty not to harm others.
If a company cause harm to a property or a
person and it could have been avoided by exercising
due care or proper planning, then both the law and
ethics would determine that the business organization
should be held liable for violating its responsibilities
For example, in 2014, the manufacturer of a
popular brand of peanut butter was ordered by the
Food Drug Administration (FDA) to recall one batch of
its products off the market due to the presence of
unacceptable level of Aflatoxin, an anti nutritional toxin
that binds proteins, vitamins, and minerals, which
causes the body not to absorb the nutrients. In a similar
sentence, a global manufacturer of automotive ordered
a “special service campaign or product recall for three
of their car models sold in the Philippines from
November 2004, to June 2010.
2. Responsibility to prevent harm at all cost.
When a company does not cause harm, but has
the potential or the capability to prevent harm from
occurring.
For example, one of the biggest and oldest
pharmaceutical companies in the Philippines created a
subsidiary company in 2002 to market and to distribute
generic medicines that are sold at cheaper prices to
cater to the poor. Because of the lower costs involved in
producing the medicines, the company is able to sell
generic medicines at 20-75 percent cheaper medicine
esp. for the poor who cannot afford to buy the more
expensive branded medicines. The company’s primary
market includes poor patients with chronic or acute
diseases who ago to small hospitals, clinics, or
government facilities. Thus, the company practices its
responsibility to prevent harm by ensuring that
affordable medicine is available to the poor.
3. Responsibility to do good.
The social responsibility to do good things and
social issues and giving support to education, arts, and
culture are some examples of activities or programs
that business organizations can do in line with this
responsibility.
The RMHC (Ronald McDonald House Charities)
was established to make a difference in the lives of
Filipino children through programs that support their
need, for shelter, education, and happiness. The
company runs two flagships programs: one focuses on
teaching beginning reading and other strives to build
day-care centers in areas where they are most needed.
Models of Corporate Social Responsibility (CSR)
There are different views on how corporate and social
responsibility should be executed by companies. In this
section, the different models of corporate social
responsibility will be discussed and explained.
Economic Model
Companies have an economic responsibility to
produce goods and services that correspond to the
demands of the market. In doing so, they contribute to
the growth of the economy and provide jobs to more
employees as they grow and expand. This is referred to
as the economic model of CSR.
The emergence of business process outsourcing
(BPO) companies in the Philippines contributed to the
significant of the Philippine economy and has provided
employment for the Filipinos. Because of this, the
government has provided incentives to BPO companies
such as tax holidays, simplified import-export
procedures, tax exemptions on imported capital
requirement, and the freedom to employ foreign
nationals.
Philanthropic Model
The philanthropic model of CSR defines the free
will of business organizations to contribute to social
causes as a matter of philanthropy. Just as individuals
are not really obligated or required to donate to
charitable institutions, business organizations likewise
have no strict obligation to contribute to social causes.
However, individuals as well as business org. are
encouraged to partake in helping the society beyond
what is required by the law and economics.
 There may be several reasons why a company
gets involved in charity work. One of which is it gives
the company positive publicity and thus creates a good
public image for the company, another reason is that
they earn tax holidays or deductions when they do such
activities.
Social Web Model of CSR
The social web model of CSR views a business
org. as a citizen of the society in which it operates. As
members of the society, business orgs. must conform to
the normal ethical duties and obligations that are
expected from a citizen. Every citizen has a moral
obligation to respect human rights – this is the “moral
minimum” that is expected from everyone whether
acting as an individual or making decisions for a
business organization.
For example, you may insist that you have the
right of freedom to say anything you want to say, but at
the ends when you are already hurting someone else or
you are being a threat to someone by expressing
yourself. In business context, while organizations have
the right to employ the people they need to run the
business, they have the responsibility to provide the
employees a healthy work environment and a just
compensation for their work.
To summarize, business organizations have a
social responsibility to uphold the welfare of
their employees, ensure a safe and healthy
workplace, and observe other human rights
whether or not these are specified or required
by law. The company also has the responsibility
to cause no harm to consumers and to uphold
their rights by providing safe products and not
overstating the benefits of their products just to
make a safe.
Embedded within the social web model of CSR
is the stakeholder theory, which states that every
business decision has an impact on a wide variety of
people, that is, providing benefits to some and imposing
costs on others. Stakeholders are defined as any group
of individuals that can affect or be affected by the
organization. They can be suppliers, employees.
Customers, investors, owners, competitors, the
government, and the general public.
In economics, you have learned the concept of
opportunity costs where every decision also involves
opportunities or choices that are giver up. In
stakeholder theory, business owners make decisions
that may affect a wide variety of people resulting in
benefits for some and costs for others.
Integrative Model of CSR
While nonprofit organizations focus on fulfilling
a mission that provides a solution to a social issue, there
are also for-profit organizations that give utmost
importance to finding solutions to social issues. These
organizations include social entrepreneurship and
sustainability at the core of their business model. A
good reputation may also learn loyalty from employees.
A business organization with a positive umage makes its
employees feel proud of belonging in the organization.
In addition, if the employees are treated well, they also
tend to stay longer and become more productive and
efficient at work.
There is truly nothing wrong with publicizing an
organization’s CSR contributions if the organization
genuinely aims to further the benefits of the society and
not just for the sake of publicity. The practice of
managing the image of a accompany referred to as
reputation management. If a company earns a positive
image, the consumers may give it some slack if they
hear a negative issue about the company. However, if a
company has a negative image to begin with, the
impression may stick with the public no matter what
good it does.
Module 6.
Employer Responsibilities and Employee Rights
• Business organizations will not exist without
their employees. Different employees perform
different functions.
• Business organizations need their employees to
ensure that they will be able to perform what
they promise to their customers, and more.
• In business organizations, one will have to make
decisions on how to treat others in the
workplace and how he/she wants to be treated
ETHICAL ISSUES AND CHALLENGES
IN THE WORKPLACE
Business organizations face ethical challenges in
the workplace in managing their employees. Research
shows that business org. that place employees at the
core of the companies’ strategies produce higher long-
term return to shareholders. In this section, issues and
challenges in employment ethics will be covered.
1. CONCEPTUALIZATION OF EMPLOYEES
(COLLOQUIALLY KNOWN AS “ENDO” OR “END
OF THE CONTRACT” OR “555”)
- It is one of the most talked about
employment-related ethical issues in the
Philippines
- Employees under this arrangement do not
enjoy the social protection benefit that a
regular employee receives such as SSS,
Philhealth, Pag-IBIG fund, vacation and sick
leaves and security of tenure among others.
- Contractual employees are given a 5-month
contract to work in the company.
- When the contract expires on the 5th month,
after a few weeks they will be rehired by the
company under the same arrangement,
circumventing the law-mandated employment
regularization status, which is required upon
staying with a company for 6 months.
• Rewards and compensation benefits that the
employees receive from the company also
impact the attitude and motivation of
employees to do things better and more
efficiently.
• The immediate supervisor or manager handling
the employees also place a key role in the
happiness of the subordinates.
• Employees who are disengaged and not
motivated to commit to work tend to violate
company standards.
EMPLOYMENT RELATIONSHIP (EMPLOYER
RESPONSIBILITIES AND EMPLOYEE RIGHTS)
Companies have a responsibility to take
care of their employees and provide for their
workplace needs. When an employer hires an
employee, and employment relationship is
formed. Employment already raises ethical
issues of POWER, AUTHORITY, OBLIGATION,
RESPONSIBILITY, FAIR TREATMENT AND
EXPECTATIONS. This section will explore the
legal and ethical boundaries that will be fined
employer responsibilities and employee rights,
making up the employment relationship.
DUE PROCESS AND JUST CAUSE
There are times when an employee
commits a mistake, and the employer will have
to take action to give the employee a sanction
commensurate with the mistake committed.
However, before that takes place, the employee
will have to undergo due process.
Due process – is defined by merriam -
webster.com as the “rule that a legal case must
be done in a way that protects the right of all
the people involved”
- in business context, it is the
process that an employee facing a disciplinary
action undergoes to ensure fair treatment and
trial
DOWNSIZING
There are times when a company needs to
downsize, that is, to terminate employees to
limit cause due to financial difficulties, closure
of offices or branches, automation and use of
technology that replace human resource, and
other reason that management may deem fit.
Terminating worker is not necessarily an
unethical decision; however, companies must
act ethically in the process of downsizing
When laying off an employees, the
management must maintain respect, dignity,
transparency and consistency.
The stakeholders that will be affected by the
action must be informed about the decisions
regarding downsizing.
This should not come as a surprise for the
employees as they should be aware of the
current business conditions, but the notice
should be given as soon as the need is
determined.
The feeling of uncertainty among the
employees may bring about demotivation in the
workplace, so letting a worker remain in a
position for a period of time after the notice of
termination may not be the best option.
 The cost and benefit of downsizing must be
weighed intently to provide smooth transition. Diversity
Normally, a termination pay is provided to the Diversity refers to presence of differing
terminated employee to help the employee culture, race, religion, language, ethnicity,
cope with the expenses while looking for a new gender, ability, experience, age, social class, and
job. other categories in workplace. Workforce
diversity is important in orgs. because it helps
HEALTH AND SAFETY enhance competitiveness expand organizational
Employers have a responsibility to capabilities encouraged sharing of expertise and
protect the employees’ health and safety while skills from past experiences and enhance access
at work. to market. Although workforce diversity is
Health and safety – are intangible asset that beneficial to the companies, conflicts may also
employees have on our valued both as a means arise due to the differences of the employees.
for attaining other valuable ends and as ends in
themselves.
- they both have
instrumental and intrinsic values.
• Instrumental Value – is defined as a means to
an end. You value things because of their
functions.
• Intrinsic Value – pertains to the value of
something in itself.
• DOLE (Department of Labor and Employment) –
formulated the Occupational Safety and Health
Standards (OSHS) in 1978 in compliance with
the constitutional mandate to safeguard the
workers’ social and economic well-being as well
as their physical safety and health. The OSHS
can be contains specific measures to preserver
workers’ safety in different industries.

DISCRIMINATION AND DIVERSITY

Discrimination
Discrimination is being in favor or against a
person based on group, age, social class, gender
orientation, race, religion or any category to
which that person belongs rather than on
individual merit.
In the Philippines, age discrimination is forcing
Filipinos to find work abroad. According to
Susan Ople of the Ople Policy Center, many
companies are reluctant to hire “older” job
applicants. People above 30 years old are
considered “old” and are being discriminated
against no matter how good their work ethics
are or how skilled they are in their field.

Module 7:Business and Environmental
Sustainability
Environmental Issues and Sustainability
One of the environmental issues that directly
concerns business organizations is the depletion
of natural resources. To help address this issue
Joseph Weiss, identified the 6 Pervasive Factors
that contribute to the depletion of resources.
1. Consumer Affluence
The increase of wealth of individual income has
led to increased and indiscriminate spending
and consumption, which produce waste. As
democratic countries function based on the law
of supply and demand, their economy produces
what is wanted by citizens who have the
capacity to pay, not what might needed by the
impoverished members of the society.
This result in the access of affluent consumers
to all products neccesary or trivial- at their own
disposal This promotion of consumerism leads
to increasing pollution, resource scarcity, and
other forms of environmental degradation
around the world.
2. Materialistic Cultural Values
Most people have acquired the mentality of
consumption over conservation and the
“throwaway culture.” With access to retail
store everywhere, acquiring goods have
never been and excessive production of
disposable or short-lived items.
Take for example the myriad of “instant”
products displayed on grocery stores. Imagine
the packaging that goes with them, which
contributes ti the wastes that are generated
everyday.
3. Urbanization
The concentration of people in cities
increases pollution. More people in the
cities need more cars to transport people
around and more energy to sustain daily
activities at home and in offices. More
people mean more demand for houses,
which pushes the developers to use lands
that once were forests or to reclaim land
from bodies of water.
4. Population explosion
Population growth means more
industrialization, product consumption,
waste and pollution . This means that more
natural resources are required to meet the
growing demands of the population, and
that more people contribute to
environmental pollution.
5. New and Uncontrolled Technologies
Some companies that prioritize profits,
convenience, and consumption over
environmental protection disregard the
impacts of the technologies they used and
developed. Although many business
organizations that focus on technological
advancements are now more aware of their
social responsibility to the environment, it is
still not a mainstream concern for most
companies.
The use of genetically modified organism
(GMO) in food, for example, is currently
controversial due to its environmental
implications. A GMO is any organism with
genetic material that has been artificially
manipulated in a laboratory using genetic
engineering techniques. Small changes in
the genetic makeup of plants and food or
food crops may result to ecological changes
later on, when they adapt to pesticides or
become invasive in farms. This will create
an imbalance in the biodiversity of
ecosystems.
6. Industrialization
Industrial activities deplete natural
resources and the destructive use of
environmental for economic reasons causes
environmental decay. Air and water
pollution due to manufacturing activities,
improper waste management, use and
improper disposal of toxic chemicals, and
other activities are associated with the
manufacturing sector.
 Targeting environmental sustainability in
the Philippines was formulated in the
United Nation’s Millennium Development
Goals (MDGs) which covered the following
goals:
1. Integrate the principles of sustainable
development into country policies and
programs (including reverse loss of
environmental resources)
2. Reduce half the proportion of people without
sustainable access to safe drinking water; and
3. Achieve significant improvement in the lives of
slum-dwellers.
Sustainable business and sustainable
economic development seek to create new
ways in order to do business where the
success is measured based on the triple
bottom line (TBL) approach: economic,
ethical, and environmental sustainability.
Environmental Values
Environmental concerns are relevant to
business because human beings depend on
the environment to survive. Future
generations must enjoy the same things in
future.
According to the Natural Step, an
environmental research and consulting
group, the resources necessary to sustain
life is decreasing, while the worldwide
demand for these resources due to
population growth and consumerist lifestyle
is increasing.
The Natural Step’s Funnel
The Natural Step uses backcasting, a
process in which it examines what the
future will be when we emerge through the
funnel. It follows these steps;
1. Begin with the end in mind, “What do we have
to do in order to be successful in this
endeavor?”
2. Move backward from the vision to the present
3. Move step by step toward the vision
Approaches to Environmental Sustainability
Market Approach
Focuses on efficient markets that seek profits but allow
the market to allocate resources efficiently to serve the
goals of the greater good while seeking profits at the
same time.
The idea in a market approach is the market itself
regulate and decide what is best for the environment.
Market-based approaches to environmental protection
are premised on the idea that it is possible to involve
corporations, individuals, and government, agencies by
using prices that force them to economize. They try to
put the powerful advantages of markets to work in
service to the environment.
The Regulatory Approach
It is tasked to regulate the use of natural resources,
issue permits to businesses that require use of these
resources, and implement policies to prevent pollution
and abuse of natural resources.
The regulatory standards established by the
government are supposed to be in place to prevent the
occurrence of pollution, environment degradation, and
species extinction rather than to offer compensation
after the fact. These laws can be considered as the
minimum standards to ensure air and water quality and
species preservation. Business organizations must
comply with these regulations and must ensure that the
minimum standards are met.
This approach way pose problem and challenges in the
long term.
• business organizations may have influence in
establishing environmental laws.
• business organizations ma have influence
consumer choice.
• If environmental responsibility is totally reliant
on government legislations to protect the
environment, it may fail to recognize the
presence of other environmental issues that are
not covered by the legal restrictions.
Sustainability Approach
Sustainability, or sustainable development, is
“development that meets the needs of the present,
without compromising the ability of future generations
to meet to their own needs”.
The Circular Flow Model
According to economist Herman Daly, we will need a
major paradigm shift in our understanding of economic
activity. The problem with the circular flow model is
that it does not differentiate natural resources from
other factors of production and does not identify the
origin of resources.
The circular flow model just assumes that resources are
provided by the households for the businesses. It also
fails to note that resources are finite and just assumes
that the natural resources are indefinite resource that
can be used by companies.
Another important thing to note is that the circular flow
model treats economic growth as limitless. To keep up
with . To keep up with the population growth, the
economy with population growth, the economy must
grow. To provide for better standard living, the
economy must grow
However, according to some estimates, the economy
would need t o grow 5-10 larger over the next 50 years
in order for the developing countries to have the same
standard or living as the developed ones.
The Sustainable Model
The sustainable model recognizes that the economy
exists within the biosphere with finite resources, unlike
the circular flow model. The sustainable model also
recognizes the input of natural resources, and the
presence of wastes produced at each stage of economic
activity that are dumped back into the biosphere.
This model identifies the “biophysical limits to growth”.
Matching the rate and type of economic activity and the
resources needed to sustain the economic activity is
what creates a sustainable practice, which is the
ultimate environmental responsibility of business.
Principles for Business Sustainability
The general principles for a sustainable business based
on the sustainable model
Eco-efficiency
Practically “doing more with less”, and has been an
environmental guideline for decades. Business
organizations can improve energy efficiency in their
offices through energy-saving lighting, better building
design, more environmentally friendly product design,
and more efficient distribution channels.
Biomicry
Is the second principle where ideally, the waste
materials of the company are turned into resource by
another firm. The ultimate goal of this principle is to
eliminate waste instead of just reducing it. An example
is the closed-loop production, a manufacturing or
production that seeks to help what is perfectly waste
back into production.
Service-based economy
Involves a shift in business model from goods (tangible
products) to services (intangible products). It
interprets consumer demand as a demand for services-
transportation, laundry and maintenance for cars and
appliances, among others.
This principle produces incentives for product redesigns
that create more durable and more recyclable products.
Module 8:Ethics and Marketing
Marketing
Is defined as a business activity that aims to build value
for the customers and manage customer relationship in
order for the company to gain value in return. This
exchange of transaction involves convincing the
customers of a product’s value through marketing
activities- advertising events, sponsorships, and many
more.
Product Safety and Liability
Business organizations have a foremost ethical
responsibility to design, manufacture, and promote
their products in ways that does not cause harm to
others. The focus of much of the discussion on
business’s responsibility for product safety is on
assigning liability, or determining who is at fault, for
harms caused by unsafe products.
Business organizations have the responsibility to
provide the goods at an agreed price. When providing
products to the market, they usually follow the caveat
emptor approach, which assumes that consumers have
the responsibility to look out for their own interest and
protect their own safety when buying a product. The
problem in this approach is that unless the business
ensures that a product is safe, the buyers a reliable for
any harm they suffer,
The Tort Standards or the quasi-delicit as it called in
the Philippines, covers the liabilities of companies.
Liability for quasi-delicit under the Civil Code of the
Philippines require the following conditions:
1. An unlawful act or omission amounting to a
fault or negligence, imputable to the defendant.
2. Damage or injury to the plaintiff
3. Such damage or injury being the natural and
probable, or direct and immediate consequence
of the defendant’s wrongful act or omission
4. There being no preexisting contractual relation
between the plaintiff and the defendant
To further explain this, a company is liable for the
actions of its employees. For instance, if a bus driver
hits an person or damages a personal or
government property, the bus company is liable for
the actions of its driver. The company will have to
shoulder the medical expenses of the person the
driver hit or pay for the damages to the property
and be responsible for repair and construction or
such
Ethical Issues in Advertising
Advertising
Advertising is an important in marketing in order to
introduce a product updates, and remind and persuade
the costumers to buy the product. Consumers benefit
from this tool by receiving information so they can
make informed choices in the market place. This tool
also give them the convenience of knowing what
products are available in the market.
The most common in advertising the truth, or how
much of the truth is declared , in advertising materials.
For example, a company may claim that its product can
do these things or produce these benefits where in fact
the product can only do so much. Worse, the product
may not even have the benefits it claims to have in the
first place.
Sustainable Marketing
Sustainable or green marketing, focus on actions that
promotes sustainable ways of marketing a business
organization’s products. Remember that there are four
Ps in marketing- product, price, place, and promotion.
Each component must contribute to the practice of
green marketing