CHAPTER 2: FOUNDATIONS OF THE PRINCIPLES OF BUSINESS ETHICS

Lesson 2.1: Classical Philosophy Used in Business

Socrates: Have the courage to disagree
- Placed on trial and found guilty of “corrupting the youth” of Athens by asking them to
question authority
- Genuinely believes that people should inquire and ask questions, especially the things
they take for granted.
- Taught that decision should come from what is right or wrong or good or bad and
standards can be attained through discussion and moral guidance.

Application to business:
Courage to disagree
- Manager should not sleepwalk or go along with the crowd.
- Manager should be responsible in their actions.
- A good manager is someone with a functionally relevant set of virtues with a view to
personal success and moral excellence

Person A has been working in Jollibee for years until she got promoted as a branch manager.
Even after getting promoted, she still treats her employees fairly and just. After months, Person A
became too busy that she finds it hard to balance her time in doing a lot of works. In a seminar,
managers from different branch advise her to use her position and power to command her
employees to do a certain task for her. One of the managers said that they are doing it for a long
time and it’s effective because it makes their work easy. It’s quite tempting but Person A is not
comfortable relying on someone to do her works, plus, her conscience is telling her not to abuse
her employees. So, she decided not to follow her co-managers’ advice and deal with her busy
schedule rather than dealing with her guilty feelings.

- Believe that the most applicable questions that philosophy had to deal with are related to
how people should live their lives, what kind of actions were righteous, and should people
live mutually in communities and states
- Equated knowledge with virtue which eventually leads to ethical conduct.
- Believe that knowledge or understanding the virtue, or “the good” was enough to make
someone to be happy.
- Believe that no person could willingly decide to do harmful if they were completely
aware of the value of life.
Plato: The power to Rule
- Born in the city of Athens in the year 427 B.C.
- Spent about seven to eight years as a pupil of Socrates
- Arrived at certain belief about the suitable credentials for those whose duty was to rule the
government.
- A person that possessed scholarly as well as ethical qualities should be trusted with the
control to rule above others.
- A person must study themselves in order to find out their level of character. Personal
development and personal insights is the only means to reveal the gifts God has given
everyone.

Application to business:
Person B is the owner of the brand Apple. Apple will be releasing a new product of iPhone
that requires skilled person to do the job. To make sure that the launching of the new product
would be a success, Person B is monitoring her employees to check if they are doing the right
thing. He noticed that Person C is having a trouble assembling the materials. He thought that it
was because the new product is more complicated to make, but when Person D ask Person C’s
help, Person B noticed that Person C is good at designing application software. So, the owner of
the Apple decides to put Person C at design team so he can work better for the improvement of the
launching of the new product.

- It is important to know the strengths and weaknesses of everyone in the organization,

whether a top executive or an ordinary employee.
- There should be continues communication among the members of the organization.
- It is best to hire the right people.
- Companies must fit the exact natural talents of qualified applicants with the job
requirements and expectations

Aristotle (387 B.C) : Let people seek fulfillment

- an ancient Greek philosopher and scientist born in the city of Stagira, Chalkidiki, Greece.
- his father, Nicomachus, died when he was a child, and he was brought up by a guardian
named Proxenus of Atarneus, the husband of his older sister.
- At seventeen years of age, he joined Plato's Academy in Athens and remained there until
the age of thirty-seven.
- he met and married his wife Pythias during his three-year stay in Mysia.
- he founded Lyceum known as Peripatetic School
- In 322 B.C, he got hold of a disease that damaged his digestive organs and died.
 - he is the most practical and business-oriented of all philosophers and chiefly interested
in ethical principles of leadership. He says that the most ethical role of the leader is the
establishment of the conditions under which followers can attain their full potential and to
enhance his own power.
- his philosophy suggests that the employees will work harder for a company, and perform
better, if given tasks they find meaningful and morally worthwhile. It is influenced on
Deci and Ryan’s Self-Determination Theory.

Confucius (551 B.C) : Live a Contented , Moral and Happy Life

- also known as Master Kong Qiu and born in Qufu, Shandong Province, China.
- he belonged to Shi Class, a class structure that was ranked between old nobility and the
common people. People belonging to this class sought social position as per their skills and
talents.
- he was married with Qiguan when he was 19 years old and a year later they were blessed
with a child.
- In his book Analects, he said that the best government is one that rules through rites and
the people's natural morality, rather than by using bribery and coercion.
- He also shielded the idea of an Emperor. An emperor must be honest and his subjects must
respect him, but he must also deserve that respect.
- Confucius' primary focus is virtue and morality. He is concernedwith teaching people
about benevolence, generosity, love, compassion and sincerity.
- He also teaches his students to live a contented, moral and happly life and tell others to
love their work, because they will realize that they are not really working at all.
- He is commonly considered one of the most influential teachers in Chinese history.
 PLUTARCH: BE A GOOD ROLE MODEL
Plutarch came from a wealthy family at Chaeronea, Boeotia. He studied mathematics and
philosophy at the Academy of Athens under Ammonius. He traveled towards Mediterranean
world which includes central Greece, Sparta, Corinth, Patrae, Sardes, and Alexandria. During his
journey he took Roman Citizenship and took the name Lucius Mestrius Plutarchus. He became a
senior priest at the Oracle of Delphi as he spent most of his life at Chaeronea worshipping Greek
god Apollo. He became famous in Roman Empire through his extensive writings and lectures.
Guests from all over the empire used to go to his place to discuss serious topics as he took part
on local affairs in their city.
Plutarch famous work ‘Parallel Lives’ contains biographical sketches of some Greek and
Roman heroes as he believed that humans are exceptionally social creature. According to him
that people was developed as they watch people around and imitate them, so he did Parallel
Lives so young people has something to imitate. He believed that people naturally learn the lives
of heroes and are trained to reflect on their virtue and flaws and will try to be like hem at the end.
They will use them as their role models and will try to be actually like them. He did direct his
readers’ attention to the strengths and weaknesses of his heroes, so people can imitate the former
and avoid the latter as he suggest that people must be conscious on choosing their role models.
Plutarch’s philosophy was ethical and can be actually applied in business. The managers
word to his/her employees are less important than what he/she does. They will not look and
know him/her based on what he/she says. Employees will observe how the manager/boss
behaves, how he/she treats other, how he/she copes up with pressure, and whether if he/she will
stick into his/her words. And these behaviors will be imitated by his/her subordinates. So the
manager/boss must be a good example to all his/her subordinates as they will follow his/her acts
and will even try to surpass him/her.
Epictetus: Build a Flexible Mind-Set
Epictetus (c. 55 - c. 135 C.E.)

Epictetus’ Life:
• He was born in the Phrygian City of Hierapolis in Asia Minors.
• He was a slave in Rome.
• Epaphroditus - Master
• C. Musonius Rufus – Stoic Teacher
• Opened a stoic school in Nicopolis, Greece and taught philosophy up until his death in the year
130 AD.
• Arrian – Student of Epictetus

Works under Epictetus’ Name:

• The Discourses
• The Handbook

Epictetus’ Philosophy:
•”Human beings must focus on what they can control so that they will be able to feel a measure
of independence even in disordered situations.”
•”Human beings are the one who are in charge in the end for how they understand and react to
the constant changes.”

Application in Business:
• Flexible mind-set/thinking

Musonius Rufus (30A.D.-102A.D.): Keep Track of Ones Ethical Progress

- born in Volsinii, an Etruscan city of Italy
-known as "Socrates of Rome"
-friend of Rubellius Plautus, whom Emperor Nero saw as a danger.
-Around 60 A.D. Rubellius was casted out by Nero and Rufus accompanied him into exile in
Asia Manor.
-After Rubellius died, Rufus went back to Rome, where he taught and practiced Stoicism
-Nero exiled Musonius to the dry, uninhabited island of Gyaros in the Aegean Sea.
- Rufus came again in Rome under supremacy of Galba in 68 C.E.
- In 70 A.D. Rufus secured the conviction of the philosopher Publius Egnatius Celer, who had
deceived Barea Soranus, a friend of Rubellius.
-Rufus banished a second time by Vespasian but returned to Rome in the sovereignty of Titus.
Philosophy
- Rufus held that since a human being is made of body and soul, people should train both, but
latter demands greater attention.
Application in business
-Keeping track means trying to take an evidence-based assessment of performance.
EPICURUS (342-270 BCE): The pursuit of happiness
Life of Epicurus
 Epicureanism- A school of thought founded by Epicurus
 18 years old
 32 years old
 Believed that both reason and truth must be subjugated to the overarching goal of
tranquility and freedom from fear.

Eudaimonia - Flourishing life

Ataraxa – life free from mental disturbance
Atomistic Theory – Used as the basis for philosophical system that ultimately sought
ethical ends.
Epicurus has used the atomic theory of Democritus to attack the irrational fear of the gods and
afterlife.
Epicurus used Democritus atomic theory to describe that man has freewill.

2 self-imposed beliefs (these two beliefs produce fear and anxiety and are completely
pointless)
 Punished by the Gods for their bad actions
 Death is something to be feared

Necessary- are those which are essential to generate happiness

Unnecessary Desires- necessity to look for pleasures , a need which certainly produce greater
pain
Modest Pleasure – Abstaining from bodily desire
Application in Business
In a company, Employees should attain the art of happiness so that everyone can perform
their respective work smoothly and intelligently, aside from that, they should take it as part of their
everyday lives so that each of them avoid crab mentality, because when you are happy , you are
contended in what you have and being contended means no discrimination among your colleagues
and you will not push them down nor harm them instead you will build them up and inspired them
to be their best and happy as possible.
2.2 BELIEF SYSTEMS

ANIMISM
 The oldest recognized type of belief in the world. Animist perform nature worship.
 They suppose that all in the universe has a spirit not only humans , but also in some other
animals, plants, rocks, geographic features, other entities of the natural environment. The
animistic approach believes that all this things possess some form of spiritual powers that
is something beyond that.
Example: Yokai (animation from Japan)
 Animism is shaped as a result of the dealing with material, natural and spiritual worlds. All
entities jointly exist and with common origin.
BELIEFS
Believe that there is connection between spiritual and physical (material) world.
Believe that ancestors watch above the living from the spirit world
Example: Dragon Balls
SHAMAN
 Equivalent to priest in this modern day.
 They are person considered as having way to, and control in the world of kind and wicked
spirits.
 Messenger between human world and spirit world.
 Shaman can cure illness by restoring soul in the equilibrium of the physical body of an
individual
 Shamans may visit other worlds/dimensions to fetch guidance to misguided souls and
ameliorate illnesses of the human soul caused by unknown elements.
SHINTOISM
 Is the native Japanese religious systems, it has no official scripture and commandments
and no fixed system of doctrine or ethics. It has also no founder and it arose spontaneously.
 They even say that it is not a religion because it is so intermixed with the culture and
considered it as a part of their everyday life.
 Shinto came from the Chinese term “shen-tao” which means “the way (tao) of the
gods/spirits (shen)”.On the other side the Japanese term is “kami-no-michi” which also
means “the way (no-michi) of the gods/spirits (kami).”
 Main Shinto sources of information for the beginnings of the world is the “Kojiki”
(Records of Ancient Matter) “Nihongi or Nihon shoki” (Chornicles of Japan).
Shinto Teachings and Principles
 Concept of “Kami”
 Teaches that there is a holiness of the whole universe, and that humans can be in tune with
his holiness. Every little thing on earth and heaven have spirits or “kami”.
Trivia: What is “kami”?
“Kami” is a Japanese term that usually translated as “gods” or “spirits”. Certainly, “kami”
refers to the deities of heaven and earth and it also refers to the spirit of human beings and to spirits
in the universe in animals, plants, seas, mountains and so on. Anything or anyone that possesses
“superior power” is considered a “kami”.

 Concept of “On”
The second basis of Shinto belief is an awareness of the productive goodness of nature.
Awareness is implicit in the Shinto interpretation of life has significant philosophical and
ethical implications. Ethical outlook in a way of recognition and knowing the obligations of
individuals towards their benefactors and especially the expression of gratitude.

 Concept of purity and pollution

Teaches that certain deeds create a kind of ritual impurity that one should want cleansed for
one’s own peace of mind and good fortune rather than because impurity is wrong. Wrong
deeds are called impurity (kegare) which is opposed to purity called (kiyome).

 Commitment and Loyalty

Another important theme in Shinto is the principle of saisei-itchi which pointing the concept
of national consciousness and commitment to the nation. Keeping out of trouble by fulfilling
obligations is more important than doing good to others. Disloyalty, not disbelief, is the
greatest short coming for a Shinto adherent.

Business Practices
Since Shinto is the largest religion in Japan and nearly 80% of their population practice it
even their businesses, cars and buildings and even workplace it is normally blessed by a
Shinto priest it is called “kannushi” during the ground breaking ceremony. There is an
annual visitation of the Shinto priest for repurification if it the business was build outside
Japan. Gift-giving is important. However, according to Shinto tradition number 4 is unlucky
and symbolizes death.
Hinduism- It is considered as the oldest religion on the world that originated in India. They do
believe in reincarnation that was influenced by Karma and Dharma. It in this religion it also
had the caste system which is consists of Brahmin who are the priests, spiritual and intellectual
leaders, second is the Kashatriya which are the rulers, warriors and nobles that are protected,
third caste are the Vaisya these are the farmers, merchants and traders lastly are the shudras
which are the servants and labourers.
This also believe that all life are sacred.
This have the well known practice which is the Namaste, it is the act of bringing together
both palms of their hand and slightly bowing the head.
This also considered Brahman as the God of hindus and core of an individual.
12 Business Practices
1. Business meetings starts with a handshake called Namaste.
2. Names speaks volumes about an Indian background.
3. Always use the appropriate formal title.
4. Business cards should be exchange at the first meeting.
5. Business involves building relationships.
6. Meetings should be arranged well in advance.
7. Flexibility is vital.
8. When entering a meeting room the elder figure must approach and greet first.
9. Business dealings involve negotiations and can be slow.
10. Businessmen must has patience and demonstrate good character.
11. When negotiating avoid high pressure and being forceful.
12. Once their are agreement made it should be celebrated with a dinner.

Judaism- It is the oldest monotheistic religion that originated in the Middle East. It believes to
only one God and focuses on the relationship of God between human. Jews considered
themselves as descendants of Abraham with whom God created “Covenant”.
It has no identifiable founder and only consider Abraham as their father.
It has the Torah that is the foundational text that means divine instruction and guidance,
it is part of the Tonakh or the Jewish Bible that contains the history of Jews.
Business Practices
These business practices were all based biblical laws or the commandments of God.
1. Organizations must have righteousness, kindness, justice and love as its practice.
2. Honesty in all business transactions.
3. Deceptive Practices are banned.
4. Taking responsibility and accountability.
5. Rights and interest of workers must be given.
 6. One is expected to take safety measures.

BUDDHISM – It originated in India in the sixth century BCE and its name came from the title
“Buddha” (Enlightened One), by which the first and most famous Buddhist leader is Siddhartha
Gautama.
Siddharta Gautama – bothered by the human depression that he saw around him every day and
realized that desire was the root cause of all suffering.
Four Noble Truths
1. Life is full of pain and suffering
2. Human desire causes this suffering
3. By putting an end to desire, humans can end suffering.
4. Humans can end desire by following the Eightfold Path.
The Wheel of Life – one of the most important symbols of Buddhism and stands for the endless
cycle of life through reincarnation.
The Eightfold Path
1. Know that suffering is caused by desire.
2. Be selfless and love all life.
3. Do not lie, or speak without cause.
4. Do not kill, steal, or commit other unrighteous acts.
5. Do not do things which promote evil.
6. Take effort to promote righteousness.
7. Be aware of ones physical actions, state of mind, and emotions.
8. Learn to meditate
Buddhist believe in an endless cycle of reincarnation which is closely to the beliefs of Hinduism
but Buddhist do not believe in deities because for them the humans has the capacity to save
oneself and achieve enlightenment.
10 Business Practices of Buddhism
1. Too cold, too hot, too late
2. None can live without toil
3. Develop the mind of equilibrium
4. The Eightfold Path
5. Work means to discover the world and then give oneself wholeheartedly to it.
6. The most valuable service is one rendered to ones fellow humans.
7. Every individual has a responsibility to help guide the global family in the right direction.
8. Do not dwell in the past, do not dream of the future, concentrate the mind on the present
moment.
9. One can only lose what he clings to
 10. A jug fills drop by drop.

CONFUCIANISM – teaches natural social order to society

Confucius – during the Chou Dynasty there was a mass disorder, confusion and corrupting
moral standards that made Confucius to be worried about the breaking of the Chinese society. He
proposed a single treatment that is to stress a sense of social order and mutual respect.
Five Relationships
1. Ruler to ruled.
2. Father to son.
3. Older brother to younger brother.
4. Husband to wife.
5. Friend to friend.
Business Practices of Confucianism
Confucian emphasis on respect to be reflected in workplace decorum.
Characteristics of Confucianism Business Ideology
1. The way to perceive a crisis.
2. The importance of relationship (Guanxi)
3. Strategy and preparation
4. Re-evaluating what success really means
5. What Confucius said

TAOISM
Taoism is derived from the chinese term" tao" meaning the way. It represents a naturalistic model
about how one should live their life. It suggests the idea of the Yin and Yang. The belief is that there is a
natural way and proper way of doing something.

YIN AND YANG IN BUSINESS:

YIN YANG
(Passive) (Active)

Balanced Company Outside in Inside out

Growth Efficiency Improvement Venturing and speed

Management Working in your business Working on your business

Leadership Employee Empowerment Coaching and Energizing

 Processes Managing Operations Managing innovations

Opportunities Anticipating and searching Pursuing and Experiment

Change Adapting to change Creating change

Customer Success Listening and tailoring Leading and co innovation

Employees, Partners Managing differences Harnessing diversity

CHRISTIANITY
Christianity is currently the most popular religion in the world in terms of the number of worshipper.
A monotheistic religion that is developed from Judaism. Christians believe that there is a Holy Trinity
formed by the creator(father), the redeemer(son), and the sustainer(holy spirit). They believe that these
three entities were all part of the single higher power.

BUSINESS PRACTICES:
1. INTEGRITY - It is about doing what is right rather than what is expedient
2. COMMITMENT TO EXCELLENCE - When business organizations commit themselves in the
pursuit of excellence, they exalt the word of God.
3. COMMITMENT TO ITS PEOPLE - This includes the area of fair compensation, performance
recognition, and providing growth opportunities of the owners to their workers.

ISLAM
Many westerns continue to associate Islam primarily with the Middle East. It is the world’s second largest
religion and fastest growing major religion. The word Muslim or Islam means “one who submits to the
will of Allah”. The prophet Mohammed and his followers were forced to leave the city of Mecca because
Mohammed received the word of God (Allah) and he shared with his followers. Townspeople soon
became fearful of the Mohammed’s preaching and he began to receive threats. As a result, he fled to the
nearby city of Medina, where people began to believe in his message. The flight of Mohammed from
Mecca to Median was instrumental to the founding of the religion of Islam, and is known as the Hegira.
Mohammed and his followers returned to Mecca and declared a jihad or holy war. At that time, the
majority of Mecca’s people converted to Islam. After the Prophet’s death, those revelations were
compiled into Qur’an, Islam’s sacred book and they only believe in one god (monotheistic).
Five Pillars of Islam
1. Confession of Faith / Shahada- The belief that “there is no God but Allah, and Mohammad is
His prophet.” It is an understanding of its meaning and an assent from the heart.
2. Prayer / Salat- Consists of five daily canonical prayers.
3. Charity / Zakat- Must give alms to the poor, and support the local Mosque by donating a portion
of their income.
 4. Fasting / Sawm- During the Ramadam, the ninth month of the Muslim calendar, all Muslims
must fast during daylight hours, except the very young or sic.
5. Pilgrimage / Hajj- A person may perform the hajj by proxy appointing a relative or friend going
on the pilgrimage to “stand in” for him or her.

Business Practices of Islam

1. Contracts should be fair to all parties- Partnership is preferred over hierarchical claims.
2. Speculation is prohibited- Investment in an Islamic mutual fund is always encouraged among
industries except for the gambling industry.
3. Interest is prohibited- Religious belief that you do not charge interest or accept interest.
4. Compassion is required when a business is in trouble- If somebody is experiencing financial
reversals, no pressure can be placed on them, because that is not an appropriate thing to do when
somebody is down.

Cultural Differences
1. Power- People can often reach high places by virtue of their birth and social position.
2. Community- People’s role in the society is respected and the group takes precedence.
3. Rules- The written rules governing any scenario are the final authority.
4. Communication- People get their points across in long, winding stories, and being
straightforward is seen as impolite.
5. Islamic Finance- Muslin finance takes the concept of fairness very sincerely, and charging
interest is regarded unfair, so it is expected that resistance to instruments like options and futures
would be encountered.

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