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Business Ethics

Ethics- the rules of conduct recognized in respect to particular group, culture. It defines how the things are according to the rules. Business- is a complex activity that involves major activities like production, marketing, manufacturing, and advertising.

Characteristics of Business: 1. Entrepreneur 2. Deals in goods and services 3. Involve production or exchange of goods 4. Series of deals 5. Desire to earn profit 6. Involves element of risks 7. Creation of utilities

Business and Its Environment Nature of Business Business may be understood as the organized efforts of enterprise to supply consumers with goods and services for a profit. Businesses vary in size, as measured by

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the number of employees or by sales volume. But all businesses share the same purpose to earn profit.

The purpose of business goes beyond earning profit. These are: It is an important institution in society Be it for the supply of goods and services Attract and keep companys share price high, thereby protecting the business.

The Businessmans Myths about Business Ethics Some Myths of business about Business Ethics: Myth #1-Ethics is a Personal Affair and not a Public Debatable Matter. Myth#2-Ethics and Business is Relative Myth#3-Ethics and Business do not mix Myth#4-Good Business means good ethics Myth#5-Business is War

The Relationship between Ethics and Business Without morality, business will be chaotic human activity.
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The following arguments justify the significant role that ethics plays the world of business: Business is an integral part of human society In Business as in any other human endeavour, what is legal may not necessarily be moral. Law are insufficient In todays technorant-oriented business education, the trend is to train managers to maximize profits and to quantify the operations of business. Peter Drucker argues that the enterprise is an organ of society and its actions has a decisive impact on the social scene.

3 Moral Reasoning in Business Moral Reasoning is a process in which ethical issues and problems are bench marked against of moral standard so that a moral judgment is made possible.

Framework of Moral Reasoning

Ethical Issues/ Problems

Reality Check

Moral norm Moral standard Company policy Ethical principle

Moral Judgment

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Situation analysis

Problem Analysis

Decision analysis

Resolution

Examples: Graft Sexual Harassment Theft Bribery Gravity of offense Frequency of offense Harm done Number of people Affected cost Company rules/policies Ethical Principles Codes of Conduct Moral norms

Moral/Immoral Legal/Illegal

Morality -Principles concerning the distribution between right and wrong/good and bad behavior. -Principles or habits with respect to right or wrong conduct. It defines how things should work according to an individual ideals and principles.

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Profit Motive The incentive or desire to work or form a business in order to gain profit or make financial gains. A gain, benefit or advantages The desire of a business or service provider to make profit The profit motive is the ultimate purpose of a commercial enterprise to earn profit. The profit motive is closely related to the concern of self interest.

The Good and Bad Sides of Profit Motive Good Sides of Profit Motive: 1. Profit Motive-motivates people to do something meaningful. It gives human life goal to pursue and something to live for. 2. Profit Motive-promotes dignity and clearness in running business leaders and entrepreneurs have struggles to overcome obstacle in order to achieve success. 3. Profit Motive-makes people productive because of the desire for money business have become productive and some of their products have been accept and have enhanced human life. 4. Profit Motive-generates potential capital for business properties, potential, capital. Something that can be interested to established new business. In this way profit also result in more jobs and more goods and service for the public and society as while.

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Bad Sides of Profit Motive: 1. Profit-motive promotes rivalry among competitors. Sometimes the competition becomes stiff that it results into a dog-eat-dog world of business where a source is achieved by competing with others and pushing them down in order that ones own business might succeed. This certainty dramatizes business as an important human activity. 2. Profit-motive makes people focus only on making money, that is, to sell as many goods as possible without considering whether or not these products satisfy the needs and wants of consumers and end users. 3. Profit-motive turns businessman from being a reflective and a questioning person because it focuses his attention on the practical activity of making money. Thus, a life centered on profit results into a narrow existence, deficient in many important human dimensions. 4. Profit-motive promotes self-interest rather than the common good. The profitmotive, has to some extent, benefited some businessmen but it has also created some social costs that many people, if not the majority have to bear, e.g., depletion of the natural resources, toxic wastes being thrown into the rivers, pollution of the environment, and disregard for the next generation to come

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Reaction:
I just like to add that Business Ethics (also corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.

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BULACAN STATE UNIVERSITY College of Business Administration City of Malolos A comprehensive written report on: ETHICS AND PHILOSOPHY ETHICS AND MORALITY

ETHICS AND PHILOSOPHY ETHICS also known as moral philosophy, is a branch of philosophy that involves

systematizing, defending and recommending concepts of right and wrong conduct. Is the philosophical attempt to answer Socrates question of How one should I live or How should one live? Given that we already live in a society. Everyone is born with a place in society even if it on stranger and accordingly everyone has expectations for action placed upon them. One is expected to act a certain way as a brother, a friend and a passerby. ETHICS AND MORALITY Ethics is related to morality but it is not the same thing.

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MORALS ETHICS

is how you treat people you know is how you treat people you dont know.

Your morality is what makes you a good daughter/brother. A good friend, even a good employee or boss to the people you know personality in the company.

Your ethics is what makes you a good politician. It is what makes you a statesman. It is also what makes you a good humane CEO of any large company.

Ethics is more important than morality ion creating a functioning society.

Ethics as a Normative Science As a normative science is an inquiry by which people seek to determine which goals are good and which means towards those goals are good. Ethics are called normative science because in ethics we determine norms ideals, standard or values. These sciences are concerned with the standard of values rather than simple apprehension and analysis of what exist or occur. Ethics is not a pure science like Physics and Chemistry it collects data from experience and tries to explain them by natural laws.
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Submitted to: Dr. Eliseo S. Dela Cruz

In partial fulfillment of the requirements for The subject in Ethics in Business Management
Submitted by: Jonalyn Ortega BSBA MGT. 3C

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Reaction:
In this report, Ive learned that ethics, also called moral philosophy, is the discipline concerned with what is morally good and bad, right and wrong. The term is also applied to any system or theory of moral values or principles. Ethics and morals both relate to right and wrong conduct. However, ethics refer to the series of rules provided to an individual by an external source. e.g. On the other hand, morals refer to an individuals own principles regarding right and wrong.

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Bulacan State University College of Business Administration City of Malolos A comprehensive written report on: Moral Sense Theory Ethical Relativism Situational Ethics Theological System Deontological Systems

MORAL SENSE THEORY. Also known as sentimentalism is a theory in moral epistemology concerning how one knows moral truths. It is a view in meta-ethics according to which morality is somehow grounded in moral sentiments or emotion. Some take it to be primarily a view about the nature of moral facts or moral beliefs. SITUATIONAL ETHICS. It is a theological theory or consequential theory, in that is concerned with the outcome or consequences of an action; the end. In the case of situational ethics, the ends can

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justify the means or rules can be used to justify the means if a situation is not intrinsically bad. ETHICAL RELATIVISM. It is basically the theory that holds that morality is relative to the norms of ones culture. That is, whether an action is right or wrong depends on the moral norms of the society in which it is practiced. The same action may be morally right in one society but be morally wrong in another. This states that there are no universal moral standards, ones that can be universally applied to all the people at all the times. THEOLOGICAL SYSTEM. Theological ethical systems are those that determine the rightness or wrongness of an act or statement through the result of said actions or statements. Some in the system believe that the amount of good that an act or statement determines the quality or morality of an action. DEONTOLOGICAL SYSTEM. It defines the condition of morality or ethical acts or statements on the basis of the inherent nature or the ones duty. An example of deontological system is ethical formalism. Ethical formalism is a system that determines how moral and act or statement is by the outcome of such acts or statements.

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In this system an act is not seen as moral as ethical if the sole purpose of doing or saying something in order to get some sort of self recognition for doing said act.

Submitted to: Dr.Eliseo S. Dela Cruz In partial fulfilment of the requirement for the subject in ethics in business management. Submitted by: Joanna Camille R. Fabian

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Reaction:
The report was explained very well but Id like to add some few more information. Moral sense theory (also known as sentimentalism) is a theory in moral epistemology concerning how one knows moral truths. It is a view in meta-ethics according to which morality is somehow grounded in moral sentiments or emotions. Ethical Relativism is the prescriptive view that different groups of people ought to have different ethical standards for evaluating acts as right or wrong, these different beliefs are true in their respective societies, and these different beliefs are not instances of a basic moral principle. Situational ethics, or situation ethics, is a Christian ethical theory that was principally developed in the 1960s by the then Episcopal priest Joseph Fletcher. It basically states that sometimes other moral principles can be cast aside in certain situations if love is best served; as Paul Tillich once put it: "Love is the ultimate law." Theological System is an academic discipline that aims to give a critical and balanced account of central themes in Christian belief and practice. Deontological ethics or deontology is the normative ethical position that judges the morality of an action based on the action's adherence to a rule or rules. It is sometimes described as "duty" or "obligation" or "rule" -based ethics, because rules "bind you to your duty".

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BULACAN STATE UNIVERSITY College of Business Administration City of Malolos Comprehensive Written Report On: Development of Business Ethics

Business ethics tend to cover various activity levels including responsibilities, obligations, employees, customers, businesses, environment, and national/multinational governments. There are times when ethics is dictated by the folkways and conventions although there are also times when federal laws affect it as well. This is where institutionalized business ethics enter the scenes which include the contracts, product safety, pricing, warranties, and many others. There are now professions and corporations that contribute to the establishment of the code of ethics. Business Ethics is about what is perceived as good or bad in the business world. If there is good Business Ethics, which is acceptable by the norms of a given society, (nowadays we have a global society) then this will definitely contribute to Good Corporate Governance, which will be good corporate leadership to satisfy the norms of the society as perceived by the very society.

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Ethics and Business Professionalization

The term ethics is generally used to mean the discipline (area of learning) dealing with what is good and bad. The term encompasses the study concerned with the principles of human duty. The society, through its beliefs, norms and practices sets expectations to professional who in turn inculcate such expectations into their professional ethics. The professionals therefore are guided by their ethics as they apply their professionalism into corporations. Both business ethics and professionalism are founded on the sense of right and wrong, what is fair and just, accountability and transparency.

There are two kinds of ethical obligation in business. There are obligations that business people have simply as human beings. There are further obligations they have as members of a profession. There is a difference. If a friend tells you that you should take an aspirin a day to prevent heart disease, then you dont really expect him to know what he is talking about. The friend should be sincere and perhaps should practice what he preaches before offering advice, but you would expect nothing more. Ethics in General Ethics is a quest for, and understanding of those factors that lead to a good life. Barclay defines ethics simply as the science of behavior while Gichira defines it as the

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systematic study of human actions from the point of view of their rightness or wrongness as means for the achievement of mans ultimate happiness. The term ethics is generally used to mean the discipline (area of learning) dealing with what is good and bad. The term encompasses the study concerned with the principles of human duty that moral principles or system of a particular: the moral principles by which a person is guided: the rules of conduct recognized in certain association or department of human life.For our purposes in this discussion, we may settle for ethics to mean the principles of conduct governing an individual or conduct that is characteristic of an individual or group or persons. The only elaboration that we need to make is to emphasize the fact that the moral principle involves the guidelines of right and wrong behavior: right behavior being ethical and wrong behavior being unethical. Development of Human Conduct Development of Human Conduct is textured in experimentation through hits and misses, trials, and errors. In these experiments, whatever came to satisfy the fourth instinct of pleasure that was of repeated to form a habit of individuals in a society. Thus habituation is the first stage of evolution of a culture.

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Submitted to: Dr. Eliseo S. Dela Cruz

In partial fulfillment of the requirements for The subject in Ethics in Business Management
Submitted by: Jose Mari R. Brigino BSBA MGT. 3C

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Reaction:
Ive learned that business ethics has evolved through time and across disciplines into a discipline that is one of the most important topics in the field of business. Businesses need to remain open to learning more about how to build an effective ethics initiative and understanding the importance of managing the internal organizational culture to maintain a commitment to integrity and transparency. Personal character and ethical leadership will continue to be key ingredients to improving business ethics in the future.

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BULACAN STATE UNIVERSITY College of Business Administration City of Malolos Comprehensive Written Report On: Business and its Environment

Business and its Environment Environment- Refers to all external forces which have a bearing on the functioning of the business The business environment poses threats to a firm or offers immense opportunities for potential market exploitation. Types of Business Environment Technological Environment technology changes fast and to keep pace with it, the businessman should be ever alert to adopt changed technology in their business. Economic Environment business obtains all their needed inputs from the economic environment and it absorbs the output of the business.

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Political Environment influences exerted by three political institutions in shaping, directing, developing and controlling business activities.

Natural Environment where the business obtains all the raw materials for the business.

International Environment pertains to global relationship of a business, as to other countries around the world.

Social and Cultural Environment refers to the peoples attitude to work and wealth; role of the family, marriage, religion and education; ethical issues and social responsiveness of business.

I.

Culture and Its Effect on Organization

Culture is the behavior that results when a group arrives at set generally unspoken and unwritten rules for working together. Is made up of the values beliefs, underlying assumptions, attitudes and behaviors shared by a group of people.

Organizational Culture defined as:

1. Culture is how organizations do things. 2. In large part, culture is a product of compensation. 3. Organizational culture is the sum of values and rituals which serves as glue to integrate the members of the organization.

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4. Organizational culture is the civilization in the workplace. 5. Culture is the organizations immune system.

Does Organizational Culture Affect Organizations Performance?

With a strong organizational culture, employees do things because they believe its the right thing to do and feel theyll be rewarded for their actions. However, if the leadership team lacks integrity or squelches diversity, powerful cultures can morph into cults, cliques, castes and insider clubs.

II.

Individual and the Environment

Four Cultural Types:

1. Creative Culture (Leadership example; Steve Jobs, Apple) 2. Collaborative Culture (Leadership example; Dave Packard, HP) 3. Competitive Culture (Leadership example; Scott Mc Nealy, Sun and Larry Ellison, Oracle ) 4. Controlled Culture Leadership example: Lou Gerstner, IBM)

III.

Factors Affecting the Environment

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Individual working with the organization Gender of the employees The nature of the business Goals and objectives of the company The management and its style of handling the employees

Submitted to: Dr. Eliseo S. Dela Cruz

In partial fulfillment of the requirements for The subject in Ethics in Business Management
Submitted by: Gino Harani BSBA MGT. 3C

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Reaction:
The report was well explained. Ive learned that there are many factors affecting a business. The environment of the business may affect its functioning in a positive or negative way. It may lead to destruction of the business or success of the business. Central to the understanding of Business and its environment is the idea that the world in which business operates is constantly changing and this requires businesses, if they are to be successful, to adapt and respond to these changes.

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Bulacan State University College of Business Administration City of Malolos

Comprehensive Written Report on: Ethical Issues and Problems In Business and the Corporate World

Moral Principles

The principles of right and wrong that are accepted by an individual or a social group. Ethical principles are standards of conduct defining the kind of behavior an ethical person should and should not engage in. The following list of principles incorporates the characteristics and values that most people associate with good character and ethical behavior.

12 Principle an Executive should possess:

Honesty Integrity Promise-Keeping Loyalty

Fairness Caring-Concern for others Respect for others Law abiding

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Commitment to Excellence Leadership

Reputation Morale Accountability

Gift Giving and BRIBERY Bribery-the making of illegal payment, or bribes, to persons in official positions as a means of influencing their decisions. Gift Giving- something given voluntarily without payment in return, as to honor a person or an occasion or to provide assistance;

Sexual Harassment: Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment. When this conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance, or creates an intimidating, hostile, or offensive work environment.

Sexual harassment can occur in a variety of circumstances, including but not limited to the following: The victim as well as the harasser may be a woman or a man. The victim does not have to be of the opposite sex.

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The harasser can be the victim's supervisor, an agent of the employer, a supervisor in another area, a co-worker, or a non-employee.

The victim does not have to be the person harassed but could be anyone affected by the offensive conduct.

Unlawful sexual harassment may occur without economic injury to or discharge of the victim.

The harasser's conduct must be unwelcome.

There are also adverse consequences arising from sexual harassment for employees. It has direct impact on the profitability of the enterprise where staff takes sick leave or resign their post because of sexual harassment, and on the economics efficiency of the enterprise where employees productivity is reduced by having to work in a climate in which individuals integrity is not respected. In general terms, sexual harassment is an obstacle to the proper integration of women into the labor market. The problem of lust wage: Wage is payment for labor or services to a worker, especially remuneration on an hourly, daily, or weekly basis or by the piece. One of the most important aspects of a job for most workers is the wage it pays. Wages allow workers to make a living from their labor. They also provide incentives to be productive and loyal to an employer. In a broader sense, the wages workers earn fuel the economy.

Summary of Current Regional Daily Minimum Wages Rates As of June 2013

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(In Pesos)

Non-agricultural NCR R3 419-456 285-336

Plantation 419 271-306

Non- Plantation 419 258-290

Example: Magna Carta Benefits para sa mga Empleyadong PAGASA, nilagdaan na. These benefits include subsistence and laundry allowance, longevity pay and hazard pay

Submitted to: Dr. Eliseo S. dela Cruz

In partial fulfillment of the requirements for The subject it Ethics in Business Management

Submitted by: John Jairus G. Perez BSBA Mgt. 3C


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Reaction:
I just like to add that ethical issues are an area of the corporate world that most businesses deal with on a regular basis. The importance is growing with the continuous development of technology. Companies need to be aware of ethical obligations of their products and decisions. Privacy is a problem that occurs due to the fact that companies can access individuals information on the history of the websites a person has visited to develop customer trends through cookies, web bugs, and other means. Following ethical principles is essential to keep corporations on top and away from any negative consequences that unethical practices may lead to.

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Reaction: The report was well explained. I just like to add some information from the internet that the desire to curb romances with a no-dating policy has increased with the growing awareness of sexual harassment in the workplace. This heightened awareness aside, companies are not jumping on the no-dating bandwagon as much as it might seem; just 12 percent of survey respondents in 2003 implemented such a policy, according to the American Management Association (AMA), with the majority specifically prohibiting morally questionable boss/employee fraternizing. Even with such a rule in place, there may be little legal power to enforce it if the state considers it privacy infringement. To sidestep this possibility, employers can impose an ethics code that more solidly supports the company's stance.

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Bulacan State University College of Business Administration City of Malolos, Bulacan A Comprehensive Written Report on: Fair Pricing, Trade Secret and Company Disclosure Price is a value that will purchase a finite quantity, weight, or other measure of a good or service. Fair price is a good price or the price that is favourable for both buyer and seller In general, a fair price is one that man has not yet resolved, though some factors are considered such as: The cost of materials. Operating and marketing expenses A reasonable profit margin

Ethical issues in Fair Price True cost of product is concealed Suggested retail price Use of electronic scanners Promotional pricing Follow the leader pricing Price gouging Price fixing

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Trade Secret Information, including a formula, pattern, compilation, program device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from no being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy It is the legal term for confidential business information allows the company to compete effectively. Examples of trade secret include: Customers identities and preferences Vendors Product pricing Marketing strategies Company finances Manufacturing processes Other competitively valuable information such as: customer lists, financial information, employee data, production cost or sales data and documents memorializing important negotiations.

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Trade Secret Act The Trade Secret Act prevents misappropriation or wrongful taking of confidential or secret information. The taking of information would be wrongful when the taking is breach of contract, breach of fiduciary obligation, theft and other illegal matters. Corporate Disclosure The information of public companies, mutual funds and corporate insiders must disclose to the investing public. According to De George, the moral basis for corporate disclosure rests primarily on the ff. Arguments: Each person has the right to the information he needs to enter into a transaction fairly. Each person has the right to those actions of others that will seriously and adversely affect him or her.

Submitted to: Dr. Eliseo S. Dela Cruz In partial fulfilment of the requirement for the subject, Ethics in Business Management Submitted By: Marjorie M. Bernardo
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Reaction:
In this report, Ive learned that a fair price is the price point for a good or service that is fair to both parties involved in the transaction; trade secret is any confidential business information which provides an enterprise a competitive edge; and corporate disclosure is information public companies, mutual funds and corporate insiders must disclose to the investing public.

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Bulacan State University College of Business Administration City of Malolos

Comprehensive Written Report on: Product Misrepresentation and Caveat Emptor The Morality of Labor Strike

Product Misrepresentation Misrepresentation => is a concept in a contract law referring to a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract. => occurs when product advertising, packaging, labels or other product information available to consumers misrepresent material facts concerning the quality or use of the product. Some examples of how misrepresentation can lead to product liability are as follows: When product salesperson overstates what the product can do, the safety of the product, or what the product can be used for. When product information fails to warn of risks of the product. When product information fails to list some ingredients of a product.

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Two kinds of Product Misrepresentation: Negligent Misrepresentation => occurs when the manufacturer did not intend to misrepresent the product. Intentional Misrepresentation => occurs when the manufacturer or seller of a product sets out to mislead the consumer about the products safety, effectiveness or quality.

Caveat Emptor

Caveat Emptor (Latin, let the buyer beware) Caveat, may he beware emptor, buyer =>generally, it is the principle that controls the sale of real property after the date of closing, but may also apply to sales of other goods. =>An old adage that notifies a buyer that the goods he or she is buying are as is, or subject to all defects. => The buyer could not recover damages from the seller for defects. => The buyer purchases at his own risk in the absence of an express warranty in the product.

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Caveat Emptor

Buyer Beware

You get what you pay for

Dont expect something for nothing

if it sounds too good to be true, it probably is

Caveat Venditor (Latin, let the seller beware) =>mirror image of Caveat Emptor, a warning that, unless they expressly disclaim any responsibility, they will be held liable if the sold items are found defective in any way or vary from the specifications. => establishes a set of good business practices that protect the seller. Morality of Labor Strike Strike Action => labor strike, on strike, strike => is a work stoppage caused by the mass refusal of employees to work. => Very powerful weapon used by trade union and other labor associations to get their demands accepted.

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Causes of strikes:
Dissatisfaction with company policy

Salary and incentive problems Wrongful discharge or dismissal of workmen Withdrawal of any concession or privilege Hours of work and rest intervals Leaves with wages and holidays Dispute connected with minimum wages

Submitted to: Dr. Eliseo S. Dela Cruz

In partial fulfillment of the requirements for The subject in Ethics in Business Management
Submitted by: Ma. Nica Abigail O. Dela Cruz BAM 3-C

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Reaction: Ive learned that Caveat emptor is used to suggest that you really need to check things before you buy them and make sure they are what they say they are. That could be because the product is being misrepresented. However, there are also a lot of other reasons, including product quality. Misrepresentation can be used in many different contexts, so it has a broader application than the context of caveat emptor. A labor strike usually takes place in response to employee grievances.

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