Business Ethics
Definition of Business
•Ethics
Business ethics refers to moral principles and social
values that business should adopt in its code of
conduct.
• These are rules that business must accept and follow
in its day to day operations for the welfare of society
and all its stakeholders.
Definition of Business
•Ethics
The purpose of business ethics is to ensure a
consistent moral attitude within the company, from
executive-level management to the new hire.
• Business ethics helps to ensure everyone in a
workplace is treated with respect, fairness and
honesty.
Importance of
Business Ethics
Importance of Business
Ethics
• Builds trust and reputation
• Profitability & Efficiency
• Employee Morale & Productivity
• Stakeholder Relationships & Legal Compliance
• Sustainable Development
1. Building Trust &
Reputation
Trust is the foundation of any successful business. Ethical
behavior — like honest advertising, fair pricing, and
responsible treatment of employees — makes customers,
suppliers, and employees feel secure in dealing with a
company.
Over time, this creates a strong reputation that encourages
loyalty and positive recommendations.
Building Trust & Reputation
Example
BDO Unibank – Known for the slogan “We find ways”,
BDO maintains customer trust by providing reliable
financial services, protecting client information, and
honoring commitments.
Because of its reputation, it attracts loyal customers
and talented employees.
2. Profitability &
Efficiency
Being ethical can actually make a business more profitable
in the long run.
Customers trust and buy more from companies they
believe in, suppliers are willing to work better with them,
and investors feel more confident putting in money.
Avoiding unethical shortcuts also prevents costly fines,
lawsuits, or loss of customers due to bad publicity.
Profitability & Efficiency
Example
Monde Nissin Corporation – Maker of Lucky Me!
noodles and SkyFlakes biscuits.
They maintain consistent product quality and comply
with food safety standards, which builds customer trust.
3. Employee Morale &
Productivity
Employees who know they work for an ethical
company feel proud and motivated.
They are more engaged, produce better work, and
are less likely to leave the company, saving money
on hiring and training new staff.
Employee Morale &
Productivity Example
Ayala Corporation – Offers fair wages, benefits, and
career growth opportunities, creating a positive
workplace where employees are motivated to
perform well and stay long-term.
4. Stakeholder
Relationships & Legal
Compliance
A business has many stakeholders — customers,
suppliers, employees, investors, and the
community. Ethical companies treat each group
fairly, communicate openly, and consider their
needs. This builds loyalty and support that help
the business grow.
Stakeholder
Relationships & Legal
Compliance Example
Ginebra San Miguel – Maintains good
relationships with sugarcane suppliers, ensures
fair payment, communicates transparently with
shareholders, and supports local communities
through corporate social responsibility (CSR)
programs.
Legal Compliance
Following ethical principles helps a business avoid
breaking laws.
This means fewer legal issues, fines, or penalties, and
better public image.
Ethical companies not only obey the law but often go
beyond the minimum requirements.
Legal Compliance
Example
• Globe Telecom – Complies with data
privacy laws to protect customer
information, ensuring they meet legal
requirements and maintain customer trust.
6. Sustainable
Development
Ethical companies think about the long-term effects of
their operations on the environment and society.
They choose eco-friendly and socially responsible
practices, even if they cost more, because they
contribute to a better future and strengthen the
company’s image.
Sustainable Development
Example
• SM Supermalls – Has solar panel
installations, waste segregation programs,
and energy-efficient building designs,
showing commitment to environmental
sustainability while still serving millions of
shoppers.
Benefits of
Business Ethics
Benefits of Business Ethics
• Improved Employee Retention
• Stronger Collaboration
• More Effective Leadership
• Increased Professional Value
1. Improved Employee Retention
When a company practices fairness, respect, and
transparency, employees feel valued and secure.
This reduces turnover because workers are less
likely to leave for another job, saving the company
recruitment and training costs.
Improved Employee Retention
Example
Ayala Corporation – Offers competitive salaries,
benefits, career development, and promotes ethical
practices in the workplace.
Employees are motivated to stay, resulting in low
turnover rates.
2. Stronger Collaboration
An ethical work environment builds trust among team
members, making it easier for them to share ideas,
solve problems together, and achieve common goals.
This leads to better teamwork and stronger
relationships between departments.
Stronger Collaboration Example
Ginebra San Miguel – Maintains transparency with
suppliers, distributors, and employees, allowing
smooth cooperation during product launches and
marketing campaigns.
3. More Effective Leadership
Leaders who act ethically gain the trust and respect of
their team. Employees are more likely to follow and
support leaders who lead by example, treat people
fairly, and make honest decisions.
More Effective Leadership Example
Jollibee Foods Corporation – Tony Tan Caktiong,
the founder, is admired for his humble leadership
and ethical approach to business.
(Leading by Example) - His humble
beginnings show employees that success comes
from hard work, perseverance, and patience.
4. Increased Professional Value
Employees and business leaders who consistently act
with integrity gain a strong reputation in their industry.
This makes them more respected, trusted, and sought
after for partnerships, promotions, or new
opportunities.
Increased Professional Value Example
• Henry Sy Sr. – Founder of SM Supermalls, SM Markets, and
SM Department Stores.
• He built his reputation through honest business dealings,
consistent quality service, and fair treatment of employees
and partners.
• SM became known for reliability — always delivering a safe,
clean, and enjoyable shopping experience.
In short, business ethics isn't just a
"nice-to-have"; it's a crucial element for
long-term success and sustainability in
the business world.
It's about creating a responsible and
trustworthy organization that
contributes positively to society.