Grade

12

BUSINESS ETHICS AND SOCIAL

REPONSIBILITY
QUARTER 3 – MODULE 4

Philosophical
Foundations of
Business Ethics

.
 Lesson
Philosophical Foundations of
4 Business Ethics
After going through this module, you are expected to illustrate how classical
philosophies are reflected into business practices (ABM_ESR12-IIIe-h-2.1)

The ethical principles applied in business practices today have been greatly
influenced by the works of classical Greek and Roman philosophers. Here are the
famous philosophies which have served as foundations of business ethics.

Socrates and the Socratic Method

Socrates is one of the famous Greek philosophers that have immense

philosophical contributions to the world. He lived from 469-399 B.C.E. Known as the
social gadfly at the marketplace, he is best known for the Socratic Method. Named
after him, it was his way of teaching students by asking them question after question.
In a more formal definition, it is “the method of inquiry and instruction employed
by Socrates especially as represented in the dialogues of Plato and consisting of a
series of questionings the object of which is to elicit a clear and consistent expression
of something supposed to be implicitly known by all rational beings.”
While Socratic Method is most commonly taught and practiced in law schools,
it also has application in entrepreneurship. Most often than not, entrepreneurs are
bombarded by their beliefs or the assumptions of others on what is the best plan of
action for pursuing a business. Because of this, entrepreneurial learning is built around
constant questioning and testing of the truthfulness of these assumptions for
validation. Such assumptions can range from beliefs about what the market wants,
where opportunities lie, to the effectiveness of a new product feature.
Moreover, Socrates also insisted on people’s right to think for themselves. He
warned people not to simply go along with the crowd. According to him, doing so is
dangerous in questions of morality, particularly in corporate governance. He valued
his character so much that he would rather die than go against his conscience. In
business organizations, his “dare to disagree” concept can be translated to the
following questions:
• Does your organization encourage independent thinkers and people
who follow their conscience?
• Does it allow people to give critical feedback to managers?
• Does it create opportunities for good people to blow the whistle on bad
behavior?

Plato and His Theory of Forms

Plato, student of Socrates, was an Athenian philosopher who founded the

Platonist school of thought and the Academy in Athens which is considered as the
Western world’s first university. His most famous contribution Theory of Forms, also
called Theory of Ideas, earned him the title as the founder of Western political
philosophy.

The Theory of Forms is the idea that non-physical (but substantial) Forms (or
ideas) represent the most accurate reality. According to Plato, forms or Platonic forms
are objective blueprints of perfection which are separately represented by objects in
the real world. They are pure and unchanging. While there are objects that represent
them in the real world, these can never have the perfect quality of forms. For example,
the Form of human shows qualities one must have in order to be human. It is a
depiction of the idea of humanness. But no actual human is the perfect representation
of the Form human. They are similar, but every human is different, and none are
perfectly human. Arguing that abstract thought is superior to the world of senses, Plato
went on to explain that one’s ability to understand the world of forms is tantamount to
true knowledge or intelligence.

Apart from his Theory of Forms, Plato was also an early advocate of education.
In two of his works (Republic and Laws), he mentioned education as one of the most
important aspects of a healthy state. Plato was an enemy of ‘bought education’. He
even considered it as a heinous crime. Believing that education is a key to a
progressive and just state, he pushed for a state-controlled education. With proper
education, Plato stated that one can be converted from a vicious to a virtuous man.
He also believed that rulers of a just state should be Philosopher Kings “who possess
both a love of wisdom, as well as intelligence, reliability, and a willingness to live a
simple life.”

Aristotelian Ethics

Aristotle is a Greek philosopher and scientist who contributed largely to logic,

metaphysics, mathematics, physics, biology, botany, ethics, politics, agriculture,
medicine dance and theater. He was a student of Plato in the Academy and the
founder of Lyceum, Peripatetic School of Philosophy and Aristotelian tradition.
Following Socrates and Plato, Aristotle considered virtues important to a well-lived life.
Consequently, he proposed an ethical system that would help people reach happiness
or eudaimonia (Greek term for living well or flourishing). This includes a list of virtues
(character traits and tendencies to act in a particular way) found in his Nicomachean
Ethics. Below are the said virtues:

• Courage: The midpoint between cowardice and recklessness. The courageous

person is aware of the danger but goes in any way.
• Temperance: The virtue between overindulgence and insensitivity. Aristotle
would view the person who never drinks just as harshly as the one who drinks
too much.
• Liberality: The virtue of charity, this is the golden mean between miserliness
and giving more than you can afford.
• Magnificence: The virtue of living extravagantly. It rests between stinginess and
vulgarity. Aristotle sees no reason to be ascetic but also warns against being
flashy.
• Magnanimity: The virtue relating to pride, it is the midpoint between not giving
yourself enough credit and having delusions of grandeur. It is a given that you
also have to act on this sense of self-worth and strive for greatness.
 • Patience: This is the virtue that controls your temper. The patient person must
neither get too angry nor fail to get angry when they should.
• Truthfulness: The virtue of honesty. Aristotle places it between the vices of
habitual lying and being tactless or boastful.
• Wittiness: At the midpoint between buffoonery and boorishness, this is the
virtue of a good sense of humor.
• Friendliness: While being friendly might not seem like a moral virtue, Aristotle
claims friendship is a vital part of a life well lived. This virtue lies between not
being friendly at all and being too friendly towards too many people.
• Shame: The midpoint between being too shy and being shameless. The person
who has the right amount of shame will understand when they have committed
a social or moral error but won’t be too fearful not to risk them.
• Justice: The virtue of dealing fairly with others. It lies between selfishness and
selflessness. This virtue can also be applied in different situations and has a
whole chapter dedicated to the various forms it can take.

Aristotle added that the listed virtues are not acquired by simply learning the
general rules. They have to be practiced or copied from moral exemplars. For
example, a person becomes friendly by practicing friendliness or a person
becomes temperate by practicing temperance. With frequent practice, he said, the
virtue eventually becomes a habit.

In his Nicomachean Ethics, Aristotle also concludes that the ethical role of the
leader is not to enhance his or her power. But it is to create an environment that
will help the members of an organization realize their potential. He also raised a
set of ethical questions that are directly relevant to corporate leaders who wish to
behave in ethical ways.

• Am I behaving in a virtuous way?

• How would I want to be treated if I were a member of this organization?
• What form of social contract would allow all our members to develop
their full potential in order that they may each make their greatest
contribution to the good of the whole?
• To what extent are there real opportunities for all employees to develop
their talents and their potential?
• To what extent do employees participate in decisions that effect their
work?
• To what extent do all employees participate in the financial gain resulting
from their own ideas and efforts?

Other Philosophies

Immanuel Kant’s Categorical Imperative

Kant is an influential German philosopher who is often credited for his

Deontological Ethics. Deontology is an ethical theory that uses rules to distinguish
right from wrong. According to Kant, ethical actions adhere to universal moral laws,
such as “Don’t lie. Don’t steal. Don’t cheat.” Deontology requires people to simply
follow the rules and do their duty. Unlike consequentialism, it does not consider results
or require weighing the costs and benefits of a situation.
 Kant is also known for his Categorical Imperative: “Act according to the maxim that
you would wish all other rational people to follow, as if it were a universal law.” Kant
believes that it is the basis of judging one’s action as ethically correct or not. Below
are Kant’s four formulations of the Categorical Imperative.

• The Formula of the Law of Nature: "Act as if the maxim of your action were to
become through your will a universal law of nature."
• The Formula of the End Itself: "Act in such a way that you always treat humanity,
whether in your own person or in the person of any other, never simply as a
means, but always at the same time as an end."
• The Formula of Autonomy: "So act that your will can regard itself at the same
time as making universal law through its maxims."
• The Formula of the Kingdom of Ends: "So act as if you were through your
maxims a law-making member of a kingdom of ends."

Jeremy Bentham and John Stuart Mill’s Utilitarianism

Utilitarianism is predicated on the principle “The end justifies the means.” It is the
brainchild of theorists and social reformers Jeremy Bentham and John Stuart Mill. It is
a form of consequentialism and is considered as one of the most influential moral
theories supported by many 21st century thinkers. Like other forms of
consequentialism, its core idea is that actions are judged morally right or wrong based
on their effects or outcomes. It also emphasizes that morality is true or justifiable if it
has positive impact to the society. Generally, utilitarianism is based on the following
three axioms:
• Pleasure, or happiness, is the only thing that has intrinsic value.
• Actions are right if they promote happiness, and wrong if they promote
unhappiness.
• Everyone's happiness counts equally.
Utilitarians do not give much importance to the means to get to the ethical decision.
Instead, their focus is on the end result. In business, utilitarianism holds the principle
that the most ethical choice is the one that produces more benefits than harm.
Utilitarianism can be rule utilitarianism or act utilitarianism. Rule utilitarianism helps the
largest number of people using the fairest methods possible. Act utilitarianism, on the
other hand, makes the most ethical actions possible for the benefit of the people.
Activity 1. Look for the 12 words/phrases associated with the classical
philosophies which are arranged horizontally, vertically, diagonally or backward
in the puzzle. Encircle the words.

M I L L R W W R E P M Z W W P O I U Y G H H
Q Q M I T G H G J L N V F A H S I Y G D L F
D A N O G A I O V A N X G G K O X D I F F B
F S B J H D J I C T B O V H J C C X B G B X
G S C H Y F N J V O L J N L X R B V V X X K
H F F H U L M K B N X H B O Z A N V N E K R
J S F G S Y O L M P Z G S N X T M B M D R D
U T I L I T A R I A N I S M C E L C P X D L
W G E F A D D F G H J K L K B S N X K Z Y L
T H R B W S S E N I P P A H N P M Z L R Z O
Y U Y X P O I U V B N M L K M O X Z O F V R
U J O K U F N P H I L L O S V L Z E Y V X N
S O C R A T I C M E T H O D H J H F U B O O
J G H N V C R A T I C M E Z G T C B J K J T
B K I N R I P O I U V B N Z S N V N K P H H
N A V M T X R I N G A E M M S M B M L D G I
L N C V G Z D T A S D F R V S L N M N E I N
B T V C H Z C X U R E O R B D G M N X D V G
V D B X B C V B N E F C F N F V L C S V N L
U F N P H I L O S O P H E R K I N G A E M K

Activity 2. Read each item carefully. Then, identify whether each statement is
TRUE or FALSE. Write the correct answer on the space before each number.
__________1. Deontological ethics judges an action as right or wrong based on
results.
__________2. From the perspective of Nicomachean ethics, a leader’s ethical role is
to strengthen his/her power over followers.
__________3. Real-world representations of Platonic “forms” are imperfect.
__________4. Utilitarianism is focused on the consequences of actions.
__________5. Socratic method is a way of questioning included in the categorical
Imperative.

Activity 3. Based on what you have learned from the lesson, fill in the table below
with the needed information
Philosopher/Theorist Philosophy Example of a business
practice reflecting the
philosophy

1.

2.
3.

4.

5.

References
• https://philosophynow.org/issues/90/Plato_A_Theory_of_Forms
• https://en.wikipedia.org/wiki/Plato
• https://www.thoughtco.com/what-is-the-socratic-method-2154875
• https://www.merriam-webster.com/dictionary/Socratic%20method
• https://www.yourarticlelibrary.com/education/platos-theory-of-
education/40135
• https://en.wikipedia.org/wiki/Philosopher_king
• https://owlcation.com/humanities/An-Introduction-to-Platos-Theory-
of-Forms
• https://iep.utm.edu/util-a-r/
• https://ethicsunwrapped.utexas.edu/glossary/deontology
• https://www.qcc.cuny.edu/socialsciences/ppecorino/ciseshv_text/Ch
apter-3-Ethics/ch-3-Categorical-Imperative.html
• https://plato.stanford.edu/entries/aristotle-ethics/
• https://bigthink.com/scotty-hendricks/aristotles-11-guidelines-for-
living-a-good-life
• https://www.scu.edu/ethics/focus-areas/business-
ethics/resources/advice-from-aristotle/
• https://www.theguardian.com/sustainable-business/business-learn-
from-ancient-philosophers
• https://www.investopedia.com/terms/u/utilitarianism.asp
• https://www.business2community.com/business-intelligence/5-
greek-philosophers-can-teach-us-business-01202336
Answer Key (Activities)
Activity 1.
M I L L R W W R E P M Z W W P O I U Y G H H
Q Q M I T G H G J L N V F A H S I Y G D L F
D A N O G A I O V A N X G G K O X D I F F B
F S B J H D J I C T B O V H J C C X B G B X
G S C H Y F N J V O L J N L X R B V V X X K
H F F H U L M K B N X H B O Z A N V N E K R
J S F G S Y O L M P Z G S N X T M B M D R A
U T I L I T A R I A N I S M C E L C P X D L
W G E F A D D F G H J K L K B S N X K Z Y L
T H R B W S S E N I P P A H N P M Z L R Z O
Y U Y X P O I U V B N M L K M O X Z O F V R
U J O K U F N P H I L L O S V L Z E Y V X N
S O C R A T I C M E T H O D H J H F U B O O
J G H N V C R A T I C M E Z G T C B J K J T
B K I N R I P O I U V B N Z S N V N K P H H
N A V M T X R I N G A E M M S M B M L D G I
L N C V G Z D T A S D F R V S L N M N E I N
B T V C H Z C X U R E O R B D G M N X D V G
V D B X B C V B N E F C F N F V L C S V N L
U F N P H I L O S O P H E R K I N G A E M K

Activity 2.
1. FALSE 2. FALSE 3. TRUE
4. TRUE 5. FALSE
Activity 3. Answers may vary.
Name:__________________________________ Date: _____________
Grade/Section:________________ Score:____________

SUBJECT: Business Ethics and Social Responsibility

QUARTER 3
Worksheet No. 4

Most Essential Learning Competency: Illustrate how classical philosophies are

reflected into business practices

• K to 12 BEC CG: ABM_ESR12-IIIe-h-2.1

PART 1. Read each item carefully. Then, write the letter of the correct answer
on the blank.
___1. Which revolves around the concept that the end justifies the means?
a. Deontology b. Virtue Ethics c. Utilitarianism d. Philosophy
___2. Who believes that happiness is “the meaning and purpose of life”?
a. Socrates b. Aristotle c. Plato d. Kant
___3. Which was representation of Plato’s attempt to cultivate human’s capacity for
abstract thinking?
a. Virtue Ethics c. Moral Education
b. Forms Theory d. Duty-Based Ethics
___4. Which philosopher is known for his Categorical Imperative?
a. Socrates b. Aristotle c. Plato d. Kant
___5. Which is a way of thinking that allows individuals to define their own purpose
for learning and explore this purpose through open-minded questioning of what
they hold to be true?
a. Indirect Method c. Scientific Method
b. Socratic Method d. Direct Method
___6. Which philosopher believes that virtue cannot be taught in the classroom?
a. Socrates b. Aristotle c. Plato d. Kant
___7. Which is the philosophy of Socrates?
a. The end justifies the means.
b. Whoever monopolizes is a sinner.
c. The unexamined life is not worth living.
d. Do not do unto others what you do not want others do unto you.
___8. The net benefits that accrue to those parties affected by the choice is ______.
a. business responsibility c. moral responsibility
b. social responsibility d. shared responsibility
___9. Which best describes the underlying principle of utilitarianism?
a. The goodness of an action depends on its effects.
b. The abstract world is superior to the real world.
c. Doing good is a duty to be performed.
d. Practice turns virtue into a habit.
___10. Whose philosophy is applied in a business organization that encourages
everyone to freely express their opinions about a proposed policy?
a. Socrates b. Plato c. Aristotle d. Kant

PART II. Performance Task. Select one from the philosophies discussed in the
module and write an essay discussing its implication on business practices.
Write your answer on a separate piece of paper.
Rubric for the Essay
Criteria 1 2 3 4 5 Scor
e
Relevanc The essay Few parts Some Most parts All parts of
e barely of the parts of of the the essay
shows essay the essay essay effectively
discussion show show show a show a
and discussion discussion discussion clear
understandi and and and discussion
ng of the understan understan understan and deep
topic. ding of the ding of the ding of the understan
topic. topic. topic. ding of the
topic.
Organizati The essay Few parts Some Most parts All parts of
on barely of the parts of of the the essay
shows essay the essay essay show
logical show show show logical
organizatio logical logical logical organizati
 n and organizati organizatio organizatio on and
smooth on and n and n and smooth
transition of smooth smooth smooth transition
ideas and transition transition transition of ideas
supporting of ideas of ideas of ideas and
ideas. and and and supporting
supporting supporting supporting ideas.
ideas. ideas. ideas.
Mechanic The essay Most parts Some The essay The essay
s is barely of the parts of has minor is free
readable essay the essay but almost from
and have have negligible errors in
comprehen noticeable noticeable errors in grammar,
sible due to errors in errors in grammar, punctuatio
significant grammar, grammar, punctuatio n and
errors in punctuatio punctuatio n or usage.
grammar, n and n and usage.
punctuation usage. usage.
and usage.
Total
Answer Key (Worksheet)

Part I
1. C 6. B
2. B 7. D
3. B 8. A
4. D 9. A
5. B 10. A

Part II
Essays may vary.