Philippine Constitution (Certain Provisions on Property and Labor)

The Philippine Constitution on the Social Purpose of Private Property and
the Explanatory Note to the Corporation Code of 1980 on the Purpose of the Private Corporations

According to Section 6 of the Philippine Constitution, “the use of property bears a social function, and all economic agents shall contribute to the common good”. The State has the duty to promote distributive justice and intervene when the common so demands. The State shall also promote a just and dynamic social order and free the people from poverty and provide adequate social services and promote a rising standard of living and improved quality of life for all (Article II, Section 9). To do this, the Congress shall give the highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities by equitably diffusing wealth and political power for the common good; the State shall regulate the acquisition, ownership, use and disposition of property and its increments. (Article XIII).

In terms of Labor (Article XIII, Section 3), the Constitution mandates that the State shall guarantee the rights of all workers, and the workers must be entitled to the security of tenure, humane conditions of work and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits. The State shall also promote the principle of shared responsibilities between workers and employers. Rights of labor in terms of share in the fruits of production and right of enterprises to reasonable returns to investments, and to expansion and growth must be recognized.

Private corporations should not be merely established for the purpose of private gain, but effective partners of the National Government in spreading the benefits of capitalism for the social and economic development of the nation. (Explanatory note to the Corporation Code of 1980)

Comments: The mandate of the Philippine Constitution on the use of properties is very clear that they shall contribute for the common good since they bear social function. The same Constitution names the State as responsible for promoting distributive justice and intervene when the common good so demands. However, with the current practical scenarios, one can say that the State is not that effective in performing its duty since the current trend is that the properties are being sold to the richest people or “privatized” who in turn monopolize the benefits from those properties at the expense of ordinary citizens who cannot afford to repurchase said properties. Common example are the condominium developers. They purchase as many land as they can without limit or regulation and turn them into profits by reselling them in the form of condominium units to only those who can afford. Because of privatization of common land, rights of people to own a share now turns into privilege for those who can only afford. With this, instead of improving the quality of lives of ALL, discrimination results which is contrary to the provisions of the Constitution.

                        It is also not good to notice that the State is not preventing the widespread practice of labor contractualization which can be thought of as a way to circumvent the mandate of the Constitution/statute to provide living wage and humane conditions of work to all workers. With labor contractualization, workers are simply paid the minimum statutory wage without full benefits. Security of tenure is also absent in labor contractualization.  Often than not, workers bear more responsibilities than employers. There is also a huge gap to the returns being received by the employers vs. the fruits of production being received by the workers.

                        If there are entities who can be considered as truly rich, I would say they are the private corporations. Truly indeed, the government and private corporations are partners in producing gains and spreading the benefits of capitalism for the economic development of the country. However, to say that they are partners in spreading the benefits of capitalism for the social development of the country, it seems that this is not so happening.

                        Perhaps, instead of focusing on never ending political scandals, the State can choose to review and improve on how it enforces the mandate of the Constitution to promote the use of properties for the common good, the rights of all workers and the limitations of private corporations to private gains.

      
       References:

1.       Text

 

http://laws.chanrobles.com/otherlaws/1_otherlaws.php?id=1

Explanatory Note to the Corporation Code of 1980

BUS560M SESSION 10.ppt - De La Salle University-Manila

 

The Ethical Principles in Business

The Ethical Principles in Business

Mr. Manuel G. Velasquez in his book entitled, Business Ethics Concepts and Cases, discusses 5 Ethical Frameworks based on the principles of ethical reasoning, as follows:

1.       Utilitarian – Basis of cost benefit analysis is whether present and future economic benefits outweigh present and future costs

2.       Rights – An individual’s entitlement to something

3.       Justice and Fairness – Comparative treatment given to members of a group

4.       Ethics of Care – Obligation to exercise special care toward those person with whom we have close relationships

(http://blogs.ubc.ca/hinz/files/2013/10/ethics-large.thumbnail.jpg) 

 

The Government’s Role in the Business System

What role should the government assume in the business system? Should the government control the conduct of business or let the market freely flow?There are different ideologies ranging between Individualism to Communitarianism. Each has its own arguments and criticisms. In a command system, a single authority makes the decisions about what is to be produced and how it will be distributed, while in a free market system, individual firms make their own decisions about what they will produce and how they produce it.

Free market system recognizes that there is no constraints on the property that one could own and do to those properties. John Locke argued that natural rights is given to man because he is “human”, meaning, there is no limit to a man’s liberty and natural right to private property. However, criticisms to his argument include conflict between negative and positive rights, the dominance of natural rights of individuals over another individual’s natural rights, immorality (legalizing prostitution, drugs and slavery) and conflict with the demands of caring. Another advocate of free market system is Adam Smith, who believed that private individuals are free to seek their own interests in free markets, that unregulated markets and private property will produce greater benefits than any amount of regulation could, and that a system of competitive markets will allocate resources efficiently among the various industries of society that meet consumer demand, thereby promoting social utility. In short, the government should do nothing. However, critics defends that there are unrealistic assumptions in Smith’s argument as contrasted by the presence of monopolies and oligopolies. People also tend to behave irrationally. Other arguments presented include those of Von Mises and Hayek (“it is in principle impossible for the government to allocate resources with the same efficiency because they do not have perfect information”), Keynes (“total demand for goods and services is the sum of the demand of three sectors – households, business and government”), and proponents of Social Darwinism (“Competition is beneficial as it ensures that the best business firms survive, improving the economic system and produces human progress, therefore the government must stay out of the market”).

Command system advocates believe that a single authority makes the decisions about what is to be produced, who will produce it, and who will get it. According to Karl Marx, the real purpose of the government is to protect freedom and equality and plan the production. Inequalities happen during exploitation of workers by the capitalists. However, critics argue that justice does not mean either equality or distribution according to the need. Justice means distribution according to contribution which requires free markets.

On the other hand, mixed economies allow partially free markets to be subjected to some government intervention to ensure competition, moderate the effects of the business cycle, prevent the most egregious kind of exploitation of workers and guard the environment against destructive effects of pollution and mining, soften possible injustices of distribution through redistributive mechanisms, and limit property rights. It comes closest to combining utilitarianism benefits of free markets with respect for human beings.

Comments: In my opinion, the best option to adopt by a society isthe mixed economy which combines both ideologies from individualism and communism. Some conducts of business need to be regulated by the government, while some need to be left freely flowing at the hands of the market players. There is no one best ideology to adopt since the business market is dynamic. Each business pursuit may be treated as a separate case from another. 

Ethics in the Marketplace

Basically this is just saying that under the conditions of either competition or anti-competition such as monopoly and oligopoly, there can still be issues on Ethics.

1.       Perfectly competitive free markets – results to inequalities; does not maximize society’s total utility, especially those who cannot participate; may conflict with the demands of caring

2.       Monopoly – buyers buy under duress; sellers dictate terms to buyers

3.       Oligopoly – price-fixing; manipulation of supply; collusion among players to cause prices to rise; exclusive dealing arrangements

 

Ethics of Consumer Production and Marketing

The ethical issue arises from the opposing interests between the producer and consumer. The most important question is “Where does the consumer’s duty to protect their own interests end and the manufacturer’s duty to protect consumers’ interests begin?” Producers have several duties, including the duty on ensuring that their products are safe, that they do not misrepresent, that they comply with the sales contract, that they disclose right amount of information.

Truly, the goal of all marketing is the sale. Marketing people needs to be very creative to achieve sales. One of the techniques is the use of influence. But issues will arise when unethical means of influencing would be employed, including threats, coercions, deception, manipulation and lying.

Comments: Irresponsible marketing can be partially blamed on why people are becoming more and more materialistic each day. It distorts people’s mind to believe that a particular product is “necessary” even though in reality, it’s not. As a result, people engage aggressively in debt just to make in reality “unnecessary” purchases.

Ethics of Job Discrimination

3 main common sources of ethical issues at work are discrimination, sexual harassment, and unjust compensation.

Comments: Although our constitution and laws uphold very strict standards against job discrimination and sexual harassment, nevertheless, companies and managers still find their ways to circumvent them and practice such. The constitution mandates a “living” wage for workers. However, the minimum statutory wage seems not reflective of the living wage. Top companies choose applicants graduate from specific schools. This means that job discrimination still exists in our current society.

References:

1.       Text 

Business Ethics Concepts and Cases, Seventh Edition - Velasquez, Manuel G.

BUS560M SESSION 5.ppt - De La Salle University-Manila

 

2.       Images

 

http://blogs.ubc.ca/hinz/files/2013/10/ethics-large.thumbnail.jpg

 

Business Ethics vs. Pursuit for Profit

 

Business Ethics vs. Pursuit for Profit

Business Ethics, as defined by Mr. Manuel G. Velasquez in his book entitled, Business Ethics Concepts and Cases, is a specialized study of moral right and wrong that concentrates on moral standards as they apply to business policies, institutions and behavior. It is a study of moral standards and how these apply to the systems and organizations through which modern societies produce and distribute goods and services, and to the people who work within these organizations. Systemic issues in business ethics are ethical questions raised about the economic, political, legal, and other social systems within which businesses operate.

(http://blogs.ubc.ca/hinz/files/2013/10/ethics-large.thumbnail.jpg)

 

Conflict or Harmony Between Business Ethics and Business Pursuit for Profit?

I agree that the main consideration for pursuing business is profit. But that does mean that anyone who is into business has the right to employ whatever means he/she wants in order to obtain profits? Certainly, the answer is not. There is no absolute freedom for anyone to employ whatever means to gain profit, especially if those means are already classified wrong, abusive or harmful to the society and/or environment. The pursuit of profit must not conflict with the concept of what is right or ethical in the conduct of business. As discussed in our class and hereby reiterated, a person who is engaged in business must conform to certain business ethical standards for the following reasons:

1.       An argument for business ethics tells us that since ethics governs all voluntary human activities, it shall also govern business because business is also a voluntary human activity.

 

Comments: There is much greater need for ethics which shall govern the business since business involves transactions with another individual/entity who is of equal importance with the individual/entity who is initiating the transactions. In short, business is naturally a human interaction with another human being.

 

2.       Businesses require at least minimal adherence to ethics on the part of those involved in the business (e.g., the honoring of contracts by customers, managers and employees); businesses require a stable society in which to carry on its dealings: morality is a stabilizing force in the society.

Comments: Business transactions are conducted via the meeting of the minds between/among persons. Transactions could not be consummated if contracts are not honored by the persons who previously agreed to the transactions. If this happens, the society will become unimaginably unstable. Ethics is therefore a key to avoid such chaotic scenario.

3.       Unethical businesses become targets of moral outrage which works to their detriment, while ethical behavior cultivates good will and loyalty among customers and employees.

Comments: Conducting business unethically produces unfavorable consequences to business owners in terms of legal cases, scandals, loss of public trust (negative image to the society) and eventual loss of customers that may lead to bankruptcy and closure of such business. Businessmen who conduct business unethically are condemned by the society. On the other hand, doing business in the right way attracts more and more customers and employees who want to be associated with such business. This results to higher goodwill, better public image, more competent personnel, and loyal customers who repeatedly patronize products that will eventually lead to better equity and stable business profits.

4.       No studies have found a negative correlation between socially responsible behavior and profits.

Comments: Businessmen who are socially responsible do not necessarily have lower profits. One reason is because being socially responsible does not necessarily mean that a businessman must incur higher costs. There are many ways in which social responsibility can be practiced.

Therefore, I shall conclude that the business pursuit for profit must be in harmony with business ethics since good ethics is good business that eventually translates into good profit. This may not be noticeable in the short run, but probably in the long run, the effect becomes more apparent.

 

References:

1.       Text

Business Ethics Concepts and Cases, Fifth Edition - Velasquez, Manuel G.

             BUS560M SESSION 5.ppt - De La Salle University-Manila

2.       Images

http://blogs.ubc.ca/hinz/files/2013/10/ethics-large.thumbnail.jpg