MANAGEMENT 24

Social Responsibility and Good Governance

Description of the Course:

The course deals with the fundamental principles of good governance and social
responsibility.

Scope of the Course:

The course consists of five units, each one comprising a module, as follows:
Module I The Concepts of Good Governance and Social Responsibility and
the Basic Principles of Ethics and Philosophy
Module II The Relationship of Ethics and Other Social Sciences in adhering to
the principles of Good Governance and Social Responsibility
Module III Ethical Theories Used in Decision Making
Module IV Business and Ecology
Module V Corporate Social Responsibility and The Development of Good Work
Ethics and Professionalism

Overview of the Course:

The course is designed to inculcate values and beliefs to the students that would guide
them in providing genuine and truthful services, not only to themselves, but most
especially to larger entities such as the community, corporation and the society. The
course discusses critical issues that confront the society as they affect the operation of
the organizations. The concept of good governance and social responsibility would be
applied in a wide array of contexts that includes the business and public sectors.
As future leaders of the country, the students would learn to give importance to faith
in God, patriotism, excellence, concern for others, environmental welfare, and other moral
values that would aid in adhering to the principles of social responsibility and good
governance. In line with this, the course would teach students the fundamental theories
in making sound ethical decisions as part of an organization. Thus, the students would
be trained to be socially and morally responsible managers, entrepreneurs and business
leaders.

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Objectives of the Course:
At the end of the course, the students are expected to:
1. Demonstrate the ability to examine moral issues in business and provide
appropriate ethical solutions to them;
2. Exhibit knowledge of the fundamental ethical principles and be able to apply
them in real life business and organizational situations;
3. Exhibit the character of a professional who is God-fearing equipped with
analytical skills in solving business and organizational dilemmas;
4. Show enthusiasm for the proliferation of the principles of social responsibility
and good governance in the Philippine context to aid in the emergence of a
non-corrupt government and business environment; and
5. Manifest the ability to decide morally and analytically on issues that would affect
oneself, the community, and the society at large.

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 Management 24
Module I
THE CONCEPTS OF GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY AND THE
BASIC PRINCIPLES OF ETHICS AND PHILOSOPHY

Scope of the Module:

This module consists of six lessons, namely:
Lesson 1 An overview of the nature and definition of good governance and
social responsibility
Lesson 2 The Foundation, Scope and Meaning of Ethics and Philosophy
Lesson 3 Professional Ethics and the Concept of Morality
Lesson 4 Professionalism and the Concept of Morals, Ethics and Laws
Lesson 5 Ethics and Philosophy applied in organizations
Lesson 6 Ethical theories applied in Business

Overview of the Module:

The course explains the nature and definition of good governance and social
responsibility. It also encompasses the foundation, scope and meaning of ethics and
philosophy. An overview of professional ethics and the concept of morality would also be
discussed as integral part of implementing good governance and social responsibility.
Moreover, the application of the ethics and philosophy in business organizations would
be explained in relation to good governance and social responsibility.

Objectives of the Module:

After completion of this Module, you should be able to:
1. to identify the concepts of good governance and social responsibility;
2. to determine the nature of professional ethics and concept of morality;
3. to explain the nature of professional ethics and concept of morality;
4. to apply the principles of ethics and philosophy to organizations;
5. to determine the application of ethical theories in business; and
6. to discuss the ethical theories that can be applied in business.

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Management 24
Module I
Lesson 1 The Nature and Definition of Good Governance and Social Responsibility

Lesson Objectives:
At the end of Lesson 1, you should be able to:
1. define the meaning of good governance and social responsibility;
2. differentiate good governance from social responsibility; and
3. apply the concepts of good governance from social responsibility in actual
situations.

Good governance and social responsibility are integral parts of managing private and
public entities. These aspects are particularly useful in public administration and business
management in the attainment of a balance between profit/output and social or public
welfare. Apparently, public administration is the act of the leaders of any government
entities that affect the stakeholders such as the employees and the public. In such an
organization, the welfare of the public is the most important aspect in the operation. On
the other hand, it is apparent that business organizations tend to focus on profit making.
Whichever the case, the concerns toward others or the common good should be taken
top priority by top officials of both public and private organizations. In accomplishing this
objective, the top officials have attained good governance and social responsibility.
But, what is meant by good governance and social responsibility? Indeed, these are
two big concepts that many leaders would have to understand and exhibit as they manage
private or government organizations. Incidentally, bad governance, as they say, is
considered the root causes of evils in many societies nowadays, which is why good
governance would have to be disseminated among leaders.
In dissecting the concepts, we should start from the word “governance.” As defined by
ESCAP United Nations, governance simply means “the process of decision-making and
the process by which decisions are implemented (or not implemented).” In a sense,
governance can be applied in various situations like corporate governance, international
governance, national governance and local governance. This would only mean that the
leaders of organizations, of any form, decide and implement policy or procedures that are
formally or informally agreed upon by the top management. Ultimately, the execution of
decisions that affects the stakeholders is categorized as governance.
Now, good governance entails eight major characteristics. A manner of governance is
good if it is participatory, consensus oriented, accountable, transparent, responsive,
effective and efficient, equitable and inclusive and follows the rule of law. These criteria
should be complied upon by the leaders of an organization in order to be categorized as

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good governance. If successfully abided, it would minimize corruption, takes care of the
welfare of the majority, and the opinions of the stakeholders are heard (ESCAP United
Nations).
The concept of good governance is more applicable in government entities than in
business organizations. This is because the government is the major entity in
governance. Although there are other organizations that may employ good governance
such as land lords, associations of peasant farmers, cooperatives, NGOs, research
institutes, religious leaders, finance institutions political parties, and the military, those in
the government has to exhibit good governance in making and executing decisions
(ESCAP United Nations).
On the other hand, social responsibility is an ethical concept that obligates an
organization or individual to act for the welfare of the society at large. On a deeper level
of understanding, social responsibility is considered a duty that every person or
organization has to perform for the benefit of the common good. Consequently, the term
also connotes an attempt to balance between the factors that affect an organization or
individual such as profit, the environment, and the public. Thus, a person is socially
responsible if he is able to contribute in the earn profit without sacrificing the welfare of
the people and the environment. In doing so, the actions taken by the person or
organization should not give harm to the stakeholders but instead obtain certain social
goals.
In contrast to good governance, social responsibility is commonly applied more on
business organizations than government entities. The top officials of business
organizations are duty bound to take care of the environment and the public as they try
to generate profit from their activities. Nevertheless, the two concepts are
interchangeable, which implies that they can be used in the operations of government
entities and business organizations.
The main point is that top officials or business leaders have to strictly abide with the
principles of good governance and social responsibility in formulating and implementing
policies of their respective organizations. The concern for the common good and the
environment should be included in their strategies and agenda in compliance with good
governance and social responsibility.

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Management 24
Module 1, Lesson 1
SELF-PROGRESS CHECK TEST

True or False.
_____ 1. Social responsibility is an ethical concept that obligates an organization or
individual to act for the welfare of the society at large.
_____ 2. In contrast to good governance, social responsibility is commonly applied
more on business organizations than government entities.
_____ 3. The concept of good governance is more applicable in government entities
than in business organizations.
_____ 4. As defined by ESCAP United Nations, governance simply means “the
process of decision-making and the process by which decisions are
implemented (or not implemented).”
_____ 5. Social responsibility is considered a duty that every person or organization
has to perform for the benefit of the common good.
_____ 6. Good governance is impossible to achieve because corruption is normal.
_____ 7. Social responsibility is just for leaders, not for employees.
_____ 8. Bribery is prevalent because of bad governance.
_____ 9. Good governance is also a social responsibility.
_____ 10. Social responsibility is dependent on good governance.

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Management 24
Module I
Lesson 2 The Foundation, Scope and Meaning of Ethics and Philosophy

Lesson Objectives:
At the end of Lesson 2, the students are expected to:
1. explain the meaning of ethics and philosophy;
2. discuss the major concerns of ethics and philosophy; and
3. relate ethics and philosophy to the application of good governance and social
responsibility.

Overview of Ethics and Philosophy

Ethics is a branch of philosophy. In other words, philosophy is a bigger field than
ethics. Philosophy encompasses many topics that are related to human existences. It
basically deals with issues that concern the truth about everything. As generally defined,
philosophy is the love of wisdom. Wisdom is the same with the term ‘truth’, which means
philosophers are lovers of the truth. It is the field of specialization that searches for the
truth that is relevant to man’s existence in this world.
As mentioned, ethics is one of the areas of concerns in philosophy. As the study of
morality, ethics is a critical examination of the actions that are considered right or wrong.
So, the focus of study of ethics is on morality. Morality, in this sense, is the idea of right
and wrong, good or evil action. Good can be interpreted as moral, proper, or ethical.
Man is the only being in the world that has the capacity to make moral reasoning and
moral judgment. No other being in the world that is capable of processing and judging
whether a behavior is in accordance or in violation of moral standards. Consequently,
morality emerges from the fact that man is a being of action. It is part of human nature to
act and therefore to decide whether the action is good or bad. And man is more than
capable of making moral decisions because of his superior intellect. This natural intellect
has become his instrument to understand things that would cause good or bad actions
and consequences of his actions. Aside from this, man is natural free. Free will is the
entailing ingredient that makes man a responsible being when it comes to making moral
reasoning and moral judgments.
Incidentally, the ability to decide morally is applicable in every social situation that one
has to take. However, in good governance and social responsibility, ethics is usually
applied in business operations and public administration. Top officials of any
organizations have to be equipped with the capacity to implement ethically sound moral
decisions. The operations of any organizations have tremendous impacts on the
stakeholders such as the customers or the public. The knowledge in ethics of the top
officials would be very useful in weighing options for the company and the stakeholders.

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 Ethics and philosophy basically determine how to formulate and assess policies to be
implemented by government agencies and business organizations within their scopes or
jurisdictions. Policies are written procedures in an organization that top officials and
employees would have to be abided. These policies are in placed to systematically
organize the operations of the company and the behavior of the employees and top
officials. In this manner, it is important that rules and regulations are supported by ethical
framework for their moral justifications. In other words, policies do exist to ensure that
behaviors of top officials and employees are regulated and follow certain moral standards.
In dealing with good governance and social responsibility, a strong foundation about
ethics is crucial. Aside from the moral considerations, the study of ethics would also
provide religious considerations. Apparently, when one talks about morality, religious
perspectives are still significant. Ethical actions are inevitably intertwined with the
religious beliefs of religious groups. In this context, top officials would have to respect the
religious implications of their decisions that would affect the employees and the public.
Along with the religious consideration, top officials or any employees, for that matter,
would be able to make sound decisions on the professional level. This would imply that
the operation of the organization would comply with the highest professional standards
through the ethical reasoning or justification of the top officials or employees. Ethics and
philosophy provide substantial intellectual tools for decision makers in conceptualizing
policies that would be within the bounds of professionalism.
One very good thing about ethics and philosophy is that business leaders, top officials,
public officials, or even ordinary employees would not be concentrated too much on profit
making or earning income for their own interest. Ethics can inevitably lessen one’s
greediness and be able to prioritize what is good for others or the public. In this manner,
organizations would operate with social responsibility and in accordance with the
principles of good governance because of the theories coming from ethics and
philosophy.
Indeed, the wisdom of philosophers is highly relevant in managing organizations,
public or private, because of the intellectual implications of their analysis and abilities to
confront problems and provide effective solutions to daily activities without sacrificing the
welfare of others. This is what makes philosophy an admirable field of specialization.
Although, the field is not designed for managing profit making activities, it is very much
helpful in weighing conflicts that would consider the common good, which most business
leaders are sorely lacking.

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Management
Module 1, Lesson 2
SELF-PROGRESS CHECK TEST

True or False.
_____ 1. Ethics can inevitably lessen one’s greediness and be able to prioritize what
is good for others or the public.
_____ 2. Ethics and philosophy basically determine how to formulate and assess
policies to be implemented by government agencies and business
organizations within their scopes or jurisdictions.
_____ 3. Man is the only being in the world that has the capacity to make moral
reasoning and moral judgment.
_____ 4. Philosophy is the study of profit making.
_____ 5. In philosophy, wisdom is the same with the term ‘truth’,
_____ 6. Ethics is not applicable in business operations and public administration.
_____ 7. Policies do exist to ensure that behaviors of top officials and employees are
regulated and follow certain moral standards.
_____ 8. Morality emerges from the fact that man is not capable of judging his action
as right or wrong.
_____ 9. Ethics is a critical examination of the actions that are considered right or
wrong.
_____ 10. Ethics is a bigger field than philosophy.

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Management 24
Module I
Lesson 3 Professional Ethics and the Concept of Morality

Lesson Objectives:
At the end of Lesson 3, the students are expected to:
1. define the meaning of professional ethics;
2. discuss the concept of morality; and
3. apply the principles of professional ethics and the concept of morality to the
implementation of good governance and social responsibility.

Adhering to the fundamental tenets of good governance and social responsibility

would certainly require professional ethics and a profound notion of morality. Good
governance and social responsibility are considered among the highest forms of moral
standards and professionalism. It should be emphasized that organizational actions
normally affect many stakeholders. In fact, as the company operates on a larger scale,
the effects to the beneficiaries (employees, investors, or the public) would also be wider
in scope. The impacts can either be positive or negative depending on the nature of the
activities. Professional ethics and the concept of morality would, therefore, limit the
negative consequences of the operation and would inevitably promote the welfare of the
common good. This is how essential professional ethics and the concept of morality are
in the compliance of the top officials or business leaders to the principles of good
governance and social responsibility.
But, what is professional ethics? Professional ethics is a branch of ethics that focuses
on the study of morality on the organizational context. In other words, actions are decided
based on the impact on the activities or operations of the organization through
professional ethics.
As an individual, man is a being of action, i.e., he has to act constantly. Behaviors can
be conscious or instinctive. Whatever the reasons for doing something, humans are
judged based on the consequences of their actions. However, as the highest form of
animals, man has superior intellect. Man has the capacity to know and understand what
is right and wrong because of his innate intellectual ability. Aside from that, man has free
will, which permits him to act or not to act according to his own volition.
To elaborate, man should always act in accordance to certain legal and moral and
cultural standards formulated and imposed by a group, community, or society at large. It
is, therefore, necessary for him to conduct moral reasoning or the effort to intellectualize
whether his actions would abide or violate a particular aspect of legal or cultural standard.
Legal standards are usually in written forms, which are formulated and justified by law

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makers or policy makers to standardize the behavior of the constituents. On the other
hand, cultural standards usually take various forms like traditions, practices, or customs
that regulate the behaviors of the people. The ability to reason out whether one’s action
is in adherence or violation of such standards is innate in man and highly indispensable
in making decisions.
Likewise, organizations affect many people as they operate according to their
objectives. The concept of morality would be relevant when top officials and employees
seriously consider the moral implications of their actions and outputs of the company to
the stakeholders. In order to implement morally sound decisions, top officials or business
leaders would have to be adept in the field of professional ethics.
Business organizations, for that matter, should be managed by leaders with broad
knowledge in professional ethics to put some moral limitations on the pursuit of profit,
which is the common objective in the business industry. Professional ethics would serve
as a conscience on the top officials of business organizations to prevent the operation
from going beyond what is legal and what is moral in exchange for profit.
The main issue that professional ethics would help resolve in the arena of business
and public administration are those that concern the morality of actions. Indeed, the
criteria for judging the morality of an action is a very difficult and controversial issue in
any industry but it can be resolved through the knowledge in professional ethics.
Incidentally, standards of morality would vary from one perspective to the other.
Actions may be morally correct based on certain authority figures such as the parents,
elders, teachers, or the Bible. In other words, an action can be oral if it abides the
frameworks of the mentioned authoritative people of respective institutions of a society.
But, moral actions can also be dependent on the situation. Behaviors that are beneficial
to a person may be considered moral from another point of view. In addition, the motive
of the person is highly crucial in determining moral actions as proposed by other ethical
theories. In short, people working for any organizations would have to be skilled in
balancing the point of views in evaluating moral actions, which would be learned through
professional ethics.
To put it succinctly, professional ethics and the concept of morality can be of great
assistance to top officials and employees as they pursue the principles of good
governance and social responsibility. Again, good governance and social responsibility
don’t just compel every stakeholder in a company to focus on profit making. These two
concepts are more concern on the moral implications of the operation of the company
than income. Certainly, professional ethics teaches anybody to comply with the highest
level of moral character that would inevitably contribute to the welfare of the majority. In
a sense, professional ethics would make business leaders or public officials to become
morally upright as they lead many people toward the principles of good governance and
social responsibility.

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Management 24
Module 1, Lesson 3
SELF-PROGRESS CHECK TEST

True or False.
_____ 1. Professional ethics would serve as a conscience on the top officials of
business organizations in pursuing profit making.
_____ 2. Legal standards are usually in written forms, which are formulated and
justified by law makers or policy makers to pursue profit making.
_____ 3. Professional ethics and the concept of morality would, therefore, promote
profit making.
_____ 4. Professional ethics teaches anybody to comply with the highest level of
moral character that would inevitably contribute to profit making.
_____ 5. The main issue that professional ethics would help resolve in the arena of
business and public administration are those that concern profit making.
_____ 6. Professional ethics would make business leaders or public officials to
become more profit oriented.
_____ 7. Professional ethics is a branch of ethics that focuses on the study of morality
on the organizational context.
_____ 8. People working for any organizations would have to be skilled in balancing
the point of views in evaluating moral actions, which would be learned
through professional ethics.
_____ 9. Man has free will, which permits him to act or not to act according to his
own volition.
_____ 10. Organizations tend to affect many people as they operate according to their
objectives.

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Management 24
Module I
Lesson 4 Professionalism and the Concept of Morals, Ethics and Laws

Lesson Objectives:
At the end of Lesson 4, the students are expected to:
1. recognize the importance of professionalism to the implementation of good
governance and social responsibility;
2. identify the relationship of morals, ethics and laws; and
3. apply the concept of morals, ethics and laws to the realization of good
governance and social responsibility by organizations.

Good governance and social responsibility are concepts directly related to

professionalism. Professionalism doesn’t only mean performing ethically within the legal
bounds of the organization. It entails making decisions that would provide positive
contributions to stakeholders of the company and the larger community where it operates.
In this sense, leading an organization requires professionalism and a profound
understanding of morals, ethics and laws.
As much as possible, the corporate leaders have to balance their responsibilities to
the employee, other stockholders and the law. It is but natural for a business organization
to pursue profit in order to provide jobs and income to its stockholders. This is one of the
primary objectives of a business that should not be neglected. Of course, if a company
would not gain profit, the worst thing that could happen is bankruptcy. In this scenario,
the obligation of the company to its employees and stockholders would inevitably be
neglected.
In connection, upholding the law is another equally important objective of the top
executives of any business organizations. Even if the company is earning a lot but if it
violates certain laws, it would also encounter difficulties because it is legally liable to the
government. Complying with legal standards is necessity to implement the spirit of the
laws that intends to protect the welfare of the public. Aside from respecting the laws and
its genuine intention, organizations would avoid legal charges by abiding with the legal
standards. In other words, following the laws is more practical than violating them since
court settlements are quite expensive in case non-compliance is charged against the
company.
Simply put, the company has greater responsibility in upholding the laws than to its
employees and stockholders. Upholding the law is a duty of any private citizens and
corporations in a country. If laws are neglected, many companies would operate
unethically and illegal transactions would proliferate that may tantamount to chaos and a

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disregard to public welfare. Instead of contributing to economic, such condition would
result to bankruptcy because of the prevalence of malpractices. The laws are formulated
to impose social order for the welfare of the whole society not only of some sectors, which
business leaders would always keep in mind.
To illustrate the connection of professionalism, morals, and the law, the U.S.
companies have been recognized as very competitive as compared with their foreign
counterparts as a result of US business ethics law. The US business ethics law is quite
admirable since it is trying to level the playing field among competitors by preventing any
malpractices that could happen among companies. The government strictly implements
anti-bribery laws among many small, medium, and large corporations to promote fair
competition. Obviously, bribery and other corrupt practices should be apprehended so
that competition would be fair among all companies. Ethical conducts of large
corporations are essential in making the business environment more competitive and
reputable (Henriques, 2010).
Gift giving or any forms of bribery inevitably corrupt the system because transactions
may become personal if gifts are accepted by government officials or top executives of
private companies. Formality and professionalism don’t recommend us to make
transactions through monetary assistance in the form of bribery. If gifts are given, a depth
of gratitude would eventually arise among the participants, which may distort the objective
and process of the transaction. The US law against gift-giving is strict about this, which
makes the Americans more professional as compared with other nationalities.
Unfortunately, Asian businessmen are susceptible to corruption because of the
strong influence of the traditional culture that contradicts the modern way of negotiating.
Professionalism is usually ignored in situations whether there is a chance not to be
caught by the authorities. The temptation to pursue any forms of malpractices is quite
high if the laws are not seriously implemented by the government agencies. This is how
important the government’s role in regulating actions taken by organizations.
However, business leaders who have high moral standards tend to voluntarily abide
with the laws and ethical conduct. It is professionalism if people follow the rules and codes
of conduct that are imposed by the government and the society at large. Whether there
is a possibility that a company would be caught or not, it should not engage in any
unethical and illegal practices. A company’s conduct would tell the public how dignified it
is in dealing with its customers or clients. Top officials should also be reminded that they
are the ones who should first uphold what is ethical and legal. Things such as honor,
dignity or reputation ought to be observed on how these officials would uphold what is
ethical in business transactions.
Apparently, anybody within the company regardless of the position has the legal
obligation to uphold what is legal and ethical. If an employee is caught making illegal
payments, he is legally liable for executing the intention of the company. Everybody has

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the natural capacity to determine what is right and what is wrong. Nobody should be
excused from any legal liability if he has conducted any unethical or illegal operation even
if it is done in the interest of the company.
So, professionalism is related to the compliance to the laws and high ethical conduct
by any business leaders, employees, and other stakeholders of the company. Exhibiting
professional behavior in dealing with various transactions and aspects of the organization
would also imply good governance and social responsibility.

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Management 24
Module 1, Lesson 4
SELF-PROGRESS CHECK TEST

True or False.
_____ 1. Formality and professionalism don’t recommend us to make transactions
through monetary assistance in the form of bribery.
_____ 2. People working for the company regardless of the position has the legal
obligation to uphold what is legal and ethical.
_____ 3. Professionalism is related to the compliance to the laws and high ethical
conduct by any business leaders, employees, and other stakeholders of the
company.
_____ 4. Ethical conducts of large corporations are essential in making the business
environment more competitive and reputable.
_____ 5. The temptation to pursue any forms of malpractices is quite high if the laws
are not seriously implemented by the government agencies.
_____ 6. Complying with legal standards is necessity to implement the spirit of the
laws that intends to protect the welfare of the public.
_____ 7. If gifts are given, a debt of gratitude would eventually arise among the
participants, which may distort the objective and process of the transaction.
_____ 8. Top officials should also be reminded that they are the ones who should
first uphold what is ethical and legal.
_____ 9. Everybody has the natural capacity to determine what is right and what is
wrong.
_____ 10. Exhibiting professional behavior in dealing with various transactions and
aspects of the organization would also imply good governance and social
responsibility.

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Management 24
Module I
Lesson 5 Ethics and Philosophy Applied in Organizations

Lesson Objectives:
At the end of Lesson 5, the students are expected to:
1. apply ethics and philosophy in managing organizations;
2. explain the importance of organizational models in managing organizations;
and
3. identify the most common organizational models.

In search of the truth particularly in balancing the welfare of many stakeholders, the
profound knowledge from ethics and philosophy is quite relevant and essential for those
who are managing and leading an organization. As the organization operates and affects
the lives of many people, decisions of top officials would have to be as ethically as
possible.
The accumulated wisdom about everything that is important to man in the field of
philosophy is helpful for people as they reflect on every action they take as part any
organization. Although philosophy deals with various truths, it can give anybody a broader
perspective in dealing with a wide array of problems that may be encountered by
organizations. The ability to understand deeply regarding what has to be done can be
acquired through philosophical insights. Philosophy can also teach the business leaders
to discern what is real and what is not in relation to the operation of the company. In this
context, this innate skill that a person can acquire in philosophy is very helpful in the
formulation and understanding of organizational models that guide everybody working for
the company.
Organizational models are indispensable for the attainment of success. These are
mental maps that serve as guides for anybody, employees or supervisors, that work for
a company. They dictate the behaviors of the stakeholders and arrange the activities in
lieu of the vision and mission of the company. Business leaders would have to be
equipped with extensive knowledge of the models that can be applied in the company for
the achievement of profitability and productivity.
Consequently, it is essential for the business leaders to know the importance of
management model to the operation of the organization. The term implies on the manner
in which the company operates and eventually generates income. Management model
that an executive employ in handling the firm is quite crucial because it touches all aspects
of the operation such as the basic choices pertaining to the sources of revenue, the cost
structure, and the alternatives to be taken.

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 Birkinshaw (2010) argues that choosing the right management model is the major
source of advantage in today’s generation. This is why it is very important that an
executive has to be clear about the management model that one has to take in order to
achieve success. Birkinshaw (2010) defines management model as the options that an
executive makes with regard to the manner of accomplishing the objectives of the
business. The scopes included in the management model are the formulation of clear
objectives, how activities are coordinated and the how resources are allocated.
Moreover, management model is all about making choices in the mentioned areas
that are vital to the growth of the business. Organizations differ from the model of
management utilize in the attainment of success. In light of this, the success of the model
is dependent on the nature of the organization. For instance, Linux is operated based on
open-source software community while Google has a highly-informal and university-like
type of management model. As compared with the two, Microsoft opts for a traditional
and hierarchical structure. Though they compete intensively with one another and each
of them has attained their own success, they adopted different types of management
models (Birkinshaw, 2010).
As an overview, it is important to discuss the most commonly used and the oldest
management models available for top officials that would help them in governing and
understanding the operation of their organization. The most traditional management
model is the Scientific Management Theory, which was formulated by Frederick Taylor.
The basic characteristics of such model include small and routine tasks performed by the
workers and careful evaluation of the output and activities. The emphasis is the
standardization of the tasks of the workers in order to accurately measure their
performances. It is an output-based management model wherein workers are rewarded
and punished based on their output. This management model is highly recommended in
workplace where tasks are routine or mechanistic such as in factory or assembly line
(McNamara).
The next most commonly used management model is Max Weber’s bureaucratic
Management Theory. The focused of bureaucratic structure of Weber’s management
model is the establishment of clear hierarchy of positions, authorities and control. Every
office has apparent duties and responsibilities that can be observed by supervisors and
workers for their effective implementation of vision and mission of the company
(McNamara).
The third most commonly used management model is the Human Relations
Movement postulated by Elton Mayo. This model basically contradicted the scientific
management model where workers are treated as machines that contribute to the
functioning of the company. In contrast to that, the human relations model adheres to the
fact that workers should be treated with respect. The dehumanizing effects of work should
be reduced if not totally changed in order for the workers to perform effectively. Workers
in this model are viewed as a part of a group. In this sense, if one is adversely affected

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by the unfair and dehumanizing practices of the management, the others who are not
affected would tend to aid in the process. In short, the priority of this model is the welfare
of the workers against the dehumanizing condition of the workplace. This is why this
management model is strongly promoted by unions around the world for the protection of
the workers (McNamara).
The mentioned management models are considered the pioneers in the field of
business. However, in the recent years, experts and consultants have formulated new
management models to suit the dynamic nature of the business environment of the new
generation.
Accordingly, there are five models of management that emerged in the contemporary
period. These are Systems Approach, Situational or Contingency theory, Chaos theory,
and Team Building theory. As briefly accounted, systems theory treats the organization
as a system with various parts operating for the benefit of the whole. In short, all parts of
the system such as the inputs (money, raw materials, and people) have to converge to
produce certain outputs (products or services). Situational theory adheres to the notion
that decision making has to consider all factors involved in the existing situation (Olum,
2004).
Consequently, the action taken by the executives in terms of planning and
coordination has to analyze the current condition of the organization. On the other hand,
Chaos theory proposed by Tom Peters in 1942 suggests that the chaotic conditions of
the organizations amidst the turmoil created by some global factors can still be controlled.
This theory further claims that as the organization continues to grow, it would reach the
saturation point when it would become very unstable. In such a scenario, managers
should be flexible enough to formulate strategic plans that would contain the instability.
The Team Building theory is the last recent management model to be discussed in this
paper. This theory prioritizes teamwork, best practices and continuous development of
the teams in the organization. In addition, it attempts to eliminate the hindrances created
by hierarchy that would eventually flatten the levels of position (Olum, 2004).
The main point of presenting these organizational models is that they emanate from
the ability of people to rationalize and make everything in the company relatively
organized. Also, the proponents of these organizational models were intellectuals in their
own fields of specialization, which make them very reliable. The wisdom they acquired in
searching for the truth about organizational activities led them to formulate models or
systems that would help managers, supervisors, and CEOs in dealing with real issues
that confront any firms. Philosophy then has helped these thinkers to comprehend the
nature of organizational operations that contributed to the emergence of models or
systems that would serve as guides for future leaders.

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Management 24
Module 1, Lesson 5
SELF-PROGRESS CHECK TEST

True or False.
_____ 1. Chaos theory proposed by Tom Peters in 1942 suggests that the chaotic
conditions of the organizations amidst the turmoil created by some global
factors can still be controlled.
_____ 2. Philosophy can also teach the business leaders to discern what is real and
what is not in relation to the operation of the company.
_____ 3. The Team Building theory prioritizes teamwork, best practices and
continuous development of the teams in the organization.
_____ 4. Elton Mayo’s theory tend to focus on the establishment of clear hierarchy of
positions, authorities and control.
_____ 5. In search of the truth particularly in balancing the welfare of many
stakeholders, the very limited knowledge from ethics and philosophy
doesn’t help in managing an organization.
_____ 6. Frederick Taylor is the founder of the Human Relations theory.
_____ 7. The basic characteristics of the scientific management model include small
and routine tasks performed by the workers and careful evaluation of the
output and activities.
_____ 8. Contingency theory treats the organization as a system with various parts
operating for the benefit of the whole.
_____ 9. models are indispensable for the attainment of success.
_____ 10. Philosophy and ethics are not applicable to the management of
organizations.

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20
Management 24
Module I
Lesson 6 Ethical Theories Applied in Business

Lesson Objectives:
At the end of Lesson 6, the students are expected to:
1. explain the application of ethical theories to business; and
2. discuss the importance of business ethics in the implementation of good
governance and social responsibility.

Apparently, the behavior of the top officials and the HR officials is crucial in
establishing the ethical standards of the company. Professionalism and good values
would have to come first from the top level of the corporate hierarchy in order to shape a
culture that promotes productivity that entails social responsibility, as emphasized in the
previous lesson.
Business and Ethics are usually in contradiction with each other. The first one pursues
profit while the other one promotes what is moral and what is socially responsible action.
At hindsight, it is but natural for any business organizations to earn profit since it is the
lifeblood of the company. However, ethics would dictate that top officials and the
employees would have to observe some standards in dealing with the customers. These
standards are not only legal but most especially ethical.
The theories in Business Ethics have already evolved over time. The actual conditions
of the generation have produced various kinds of theories to limit or regulate the behavior
of corporations, large or small. Earning profit should not only be the priority of the
company and this objective would have to be complemented and supported by ethical
standards.
A profound comprehension of business ethics is highly essential in understanding the
limitations of business in dealing with various transactions. The usual ethical problems in
business such as overpricing, advertising false wants, profit making, frauds, deceptive
advertising techniques and other unethical practices can be fixed by the various ethical
theories. These ethical theories basically originated from certain philosophical
frameworks that evolved over time. In this part of the module, an explanation of the
general frameworks of the major ethical theories would be presented. These ethical
theories would be elaborated in module three.
As an overview of these theories, one of the fundamental arguments in ethics is the
notion that actions have no intrinsic ethical character. This means that there are no
actions that are naturally good or bad. On the other hand, one school of thought claims
that there are actions have intrinsically right or wrong, which implies that regardless of the

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21
intention and the consequences, the action itself can be viewed as good or bad. The next
school of thought that can be considered by business leaders is a perspective that says
that there are virtues that would have to be promoted regardless of the intention, duties,
or consequences of the actions.
Another prevailing theory in ethics is called the Teleological Theory. This ethical theory
is result –oriented. It advocates that the consequence is more important than the action
itself. It stresses the outcome of the action and argues that there are no actions that are
intrinsically good or bad. The practical implications of the action and the appeal to
common-sense make this ethical theory very popular to most people.
It is dependent on the idea that making moral decisions are simple and practical
because it focuses on the fact whether the action would help or hurt other people. In this
sense, right actions are those that would give benefit rather than harm to others while
wrong actions would do otherwise.
The next ethical theory is the Deontological approach in which actions are viewed to
have intrinsic value. In other words, there are actions that are naturally good or bad. There
are standards that are absolute and rule-based. No matter what the consequences are if
the action itself is bad, the said decision of doing it is bad. Consequences and intention
are immaterial as long as the action itself is innately good or bad. Moreover, it is duty
based, wherein following one’s duty is more important than pleasure. This is why it is
categorized as act oriented ethical approach.
The Virtue ethics, on the other hand, adheres to the principle that there are certain
virtues that are inherently good and bad. Virtues such as honesty, justice, equality and
the like are viewed as the criteria of being moral or immoral of any human actions.
Subsequently, these virtues should not be corrupted by anything because if they are
totally ignored or distorted, the action is considered immoral.
On a deeper analysis, business and ethics seems incompatible because of the
apparent purposes. In business, it is acceptable to earn more profits. The higher the
revenues the more successful is the company, as viewed from a business perspective.
On the contrary, ethics focuses on what is good, legal, and proper. It doesn’t prioritize
money, per se, but the ethical standards that ought to be abided by the doer.
So, the criteria of business are entirely distinct from that of ethics. For business minded
people, success is measured in terms of quantity like profit, money, productivity, etc.
However, ethics advocates the quality of the operation such as welfare of the customers
or the concern for environment. This is why it is reasonable to combine the two aspects
into one, business ethics. This area of specialization would help the leaders to balance
the two opposing interests, morality and money.
Unfortunately, profit making has been the main focus of most businessmen that is
viewed by moralists as unethical. Money making activities tends to serve self-interests
that usually lead to greediness and ignorance of the ethical and legal standards. As a

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consequence, malpractices and corrupt activities are manifested because of the too much
pursuit of profit. Ethics would remind these leaders to make a balance the competing
interests.
As mentioned above, humans would have to be morally upright. Certainly, businesses
are not exempted from these ethical principles. The issue of social responsibility and
moral reputation would require these large corporations to comply not only with certain
legal frameworks but most especially moral standards. With ethics, business leaders
would adhere to what is apparent and go beyond what is natural. Profit making is of
course natural but not always moral. Anybody leading a company has to be reminded of
the things that would bring goodness to all stakeholders, not only for a particular person.
Balancing morality and money inevitably places top officials or anybody for that matter
in a very delicate situation. The pursuit of money is easier than following certain moral
conduct especially if one is managing a business organization. Unfortunately, money is
not the only consideration but also the welfare of others. In doing so, the business leader
has to be unselfish enough to provide the best products or services for the customers and
other stakeholders while trying to earn profits.
As accounted by a particular ethical theory, regardless of the interest of anybody or
any cultural standards, one must uphold what is right. In the said principle, lying or
deception is certainly immoral even if it would bring profits to the company. This is highly
essential because moral principles are viewed to be unbendable even for profitable
purposes.
The compatibility issue is observed when most business leaders would opt for the
pragmatic approach where actions and decisions are judged based on the consequences.
If this is so, consequences are usually measured by business experts in terms of
quantifiable variables such as revenues or income. Unfortunately, ethical effects can’t be
quantified. There is no amount of money that can compensate for the degradation of the
environment due to the operation of a business, let say, factories. This is why the
pragmatic approach is criticized by other moralists from other schools of thought because
the measurement is just concentrated on profit, which is highly unethical.
The bottom line is that these ethical theories serve as the conscience of the business
leaders and employees in the execution of the vision and mission of the company. If the
business leaders would conduct themselves unethically, then the people in the lower rank
would also do the same. This would inevitably create a corporate culture that promotes
immorality or malpractices, which is supposed to be avoided. Thus, these ethical theories
would inevitably aid in the attempt of the business leaders to adhere in the principles of
good governance and social responsibility.

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Management 24
Module 1, Lesson 6
SELF-PROGRESS CHECK TEST

True or False.
_____ 1. Business ethics would help the leaders to balance the two opposing
interests, morality and money.
_____ 2. The Virtue ethics adheres to the principle that there are certain virtues
that are inherently good and bad.
_____ 3. Deontological approach proposes that actions have intrinsic value.
_____ 4. Teleological theory is an ethical theory that is result –oriented.
_____ 5. Business and Ethics are exactly compatible with each other in terms of
their principles.
_____ 6. Balancing morality and money inevitably places top officials or anybody
for that matter in a very easy situation.
_____ 7. A profound comprehension of business ethics is highly essential in
understanding the limitations of business in dealing with various
transactions.
_____ 8. The issue of social responsibility and moral reputation would require
these large corporations to comply not only with certain legal
frameworks but most especially moral standards.
_____ 9. The pragmatic approach judges the morality of an action based on the
consequences.
_____ 10. Ethical theories serve as the conscience of the business leaders and
employees in the execution of the vision and mission of the company.

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24
 MANAGEMENT 24:
Social Responsibility and Good Governance
Module Test I

Name: DLC:

I. True or False. (20 pts)

_____ 1. Man should always act in accordance to certain legal and moral and cultural
standards formulated and imposed by a group, community, or society at
large.
_____ 2. Weber’s management model proposes that every office has apparent duties
and responsibilities that can be observed by supervisors and workers for
their effective implementation of vision and mission of the company
_____ 3. Ethics is the study of morality.
_____ 4. Philosophy is a branch of ethics.
_____ 5. Good governance requires philosophical insights.
_____ 6. Business leaders don’t need philosophical insights in the successful
implementation of social responsibility.
_____ 7. Company officials should prioritize good governance than profit making.
_____ 8. Earning profit is not included in the principles of good governance and social
responsibility.
_____ 9. Business ethics teaches leaders to make a balance between money and
morality.
_____ 10. Management models are formulated through philosophical insights.

II. Multiple Choice. (10 pts.)

_____ 1. Ethics and philosophy are useful in
a. formulating policies to be implemented by government agencies and
business organizations within their scopes or jurisdictions.
b. determining whether the policy is good or bad
c. both A and B
d. neither A nor B

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_____ 2. Corruption can be avoided in an organization through
a. good governance c. both A and B
b. social responsibility d. neither A nor B
_____ 3. In order to manage successfully an organization, it is important to select the
right
a. religious beliefs c. motto in life
b. management model d. all of these
_____ 4. What is the main concern of philosophy?
a. money c. profitability
b. productivity d. truth
_____ 5. What is the main concern of ethics?
a. money c. morality
b. profitability d. none of these
_____ 6. What are the main concerns of business ethics?
a. morality and profit c. benefits of the
b. interests of the workers
owners d. none of these
_____ 7. Bribery usually happens in an organization because
a. Gifts are given by clients to the employees
b. Gifts are asked by employees from clients in exchange for services
c. both A and B
d. neither A nor B
_____ 8. Good governance and social responsibility can be implemented
successfully through
a. philosophy c. business ethics
b. ethics d. all of these
_____ 9. Good governance is more applicable on
a. public administration c. both A and B
b. business d. neither A nor B
organizations
_____ 10. Social responsibility is more applicable on
a. public administration d. neither A nor B
b. business
organizations
c. both A and B

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