ENRON REFLECTION

(image from: http://en.wikipedia.org/wiki/File:Smartestguysintheroom.jpg)

       "Business is very risky." This is what my dad told me when we talked about business. This is true especially when people allot a huge sum of money and do not monitor their business well. Some companies tend to do everything just to maintain/keep the business. But it was different for the company that we discussed in class, which is Enron. 

       Enron :  Former energy corporation that is considered the staple example for corporate corruption and accounting fraud. In 2001 it was uncovered that the company had position itself as a leader in the industry by falsifying accounting records company wide. The company filed for bankruptcy after the revelation and as of 2007 has sold the majority of its remaining assets. A number of company executives were also forced to pay stiff fines for their involvement in the accounting scheme. (businessdictionary.com, n.d.)

    Enron was able to continue its success by becoming one of the companies to survive the dot-com bubble burst in 2000, and it was named as the most admired corporation by Fortune magazine. However, Enron was questioned by investor Jim Chanos and Fortune reporter Bethany McLean because of the irregularities about the company's financial statements and stock value. This started the divulgence with what was happening with Enron and its real status.

      In the film, people would be able to see what they consider as one of the greatest corporate disasters in history. The top executives of Enron walked away with over a billion dollars and they left the investors and employees with nothing. The never before seen/heard evidences such as insider accounts, corporate audio and video tapes were also revealed in the film. Many people were involved with the company and the problem with Enron produced a tragic domino effect especially to the shareholders and employees. They say that what happened with Enron could shape the economy and ethical code for the years to come.

      There are a few things that I learned after watching the film. Enron's downfall was because most of them focused on greed. It was individual to collective greed which was in the atmosphere of what they call the market euphoria and corporate arrogance. For a lot of people, the company was too good to be true but many still believed. Many were encouraged to buy stocks so that they could be part of the corporate mantra and fulfill their dream. Through time, the company made different deals including high-risk ones even if it was outside the company's typical asset control process. This was the start of their downfall because there was a loss in investor and creditor trust. The financial statements/books were falsified to disclose the complicated financial dealings. From this situation, we were able to see that the company also lacks transparency especially in reporting its financial status.

      Enron wanted to portray itself as profitable and stable. In their TVC, it ended with a phrase: "Ask why, why, why" and this is what everyone did when they learned about what happened with the company. I think that the people in the company especially the ones in the top positions lack virtues. They focused on greed and they also lack moral compass. This is what happened with Andrew Fastow. He created a network of shell companies that were designed to do business with Enron. He did this so that there would be a dual purpose, first was sending money from Enron and second was hiding its increasing debt. He vested financial stake in these venture and used it to defraud Enron. He also takes advantage of the greed of Wall Street investment banks, wherein he pressured them to invest in his shell companies which would result to conducting business deals with himself. During his last visit in the country, miss asked him if he thought of the things he did, but what he said was that he was given permission by the other officers in Enron. He didn't really pray or asked for guide and last, he didn't consider what was ethical.

    Based on what we learned in CSRGOVE, Enron officers should have practiced good corporate governance. This could have been their guide in managing the business/company. They need to learn that good corporate governance ensures that the business environment is fair and transparent and that companies can be held accountable for their actions. What Enron had was weak corporate governance which led to waste, mismanagement, and corruption. Only good governance can deliver sustainable good business performance. There are properly designed rules of governance that focus on implementing the values of fairness, transparency, accountability, and responsibility to both shareholders and stakeholders. This is what the company lacked which caused their downfall.

      I think Enron should have stayed firm by taking things step-by-step. In my opinion, the company wanted an overnight success which was ineffective. They didn't do things properly and didn't follow the right steps. One of the biggest mistakes they did was lose the trust of everyone including their investors. Enron would have been a great company if only the people behind it followed good corporate governance and didn't think about themselves.

Sources:
http://www.businessdictionary.com/definition/Enron.html
http://www.imdb.com/title/tt1016268/plotsummary

WEEK 12

(image source: http://vapresspass.com/2013/09/18/ethical-dilemmas-

challenges-when-to-speak-up-why-how/)

        For this week,  we had two groups for our Good News Monday. For the first group, they reported about how the mangroves were able to help the people during typhoon Yolanda. Mangrove is good: it's not only under philanthropy but it also considered to be under risk management. These mangroves have multifunctions. People don't only get shrimps and crabs, etc. but these mangroves also acted as a barrier during the typhoon. Planting mangroves would be a good idea/move because we would get a lot of benefits from it especially protection. For the second group, miss told us that it is important that Corporate Social Responsibility can address social issues like education. Education is very important because everything starts from learning. People often say that education holds the key to our future. Education can develop generations of responsible individuals and can make them successful.

         For this meeting, we watched a video about corporate governance and we related this talk with Enron. The speaker focused on rewards. He said that rewards motivate people but there is an argument that it does not apply every time. I think that I learned most of what he was talking about in my HUMANBE class wherein we also discussed about how rewards can affect motivation. The speaker gave a case to the audience called the candle problem. I think that it was a very interesting experiment wherein people would be challenged to fix the candle on a wall in a way so that the candle wax won't drip onto the table below. There was only the candle, a book of matches and a box of thumbtacks in the room. The solution to this was to empty the box of thumbtacks and put the candle in the box, then the thumbtacks should be used to attach the box to the wall. This experiment was a test because most of the participants weren't able to see the box as a holder for the candle. He told the audience that this was the concept of functional fixedness.  Also, when there was a reward being offered the participants took longer to do the task because they focused more on the rewards they could receive afterwards. I think that this experiment is very effective in determining some things. First, how people would think of a solution to the case given? Second, how fast would they be able to do it? Third,  will rewards affect them? Will it be faster if the thumbtacks were not placed in the box?   

      After watching the video, we went back to discussing about Enron. Miss said that we need to ask: "How much does the CEO earn?" and "Does it match with his earnings?" From this, we talked about risk management as an important component of CSR. There are some companies that would work in crisis because of the negative perspectives about them. An example would be Malaysian Airlines, when MH370 was lost, it caused panic and a negative image against the company. People worried and they were not sure if they could still trust the airline company. A local example would be Cebu Pacific, one of its plans crashed on a mountain and this was when the airline was just new probably 2-3 years only. They were just beginning when this accident happened and this caused them a negative image. However, it was good to know that the top management were visible when this happened. This shows how the managers care for the customers and the company. From this, we could determine that the relatives of the victims were more relieved. 

      I remember the talk that we attended which was ADX: Limitless which was an advertising conference. One of the speakers, Ms. Amor Maclang is a risk/crisis/reputation strategist. She focused her talk on risk management and she told us the rules on how risk/crisis should be approached. I think business people should know and understand risk management. When organizations deal with crisis management, it is important to know the important steps. Knowing what to do would be really helpful, because there we could avoid the threat to the organization, stakeholders and general public. 

        Similar to the previous blog, we need to have sustainability. It is important to have sustainability because all the choices we pursue and all the actions that we make today will affect everything in the future. We need to make the right decisions today so that we could avoid limiting the choices of the future generations. 

           We also talked about the performance of the 2009 best companies in the country. We analyzed the results based on the report presented. It might be threatening that one person might own most of the companies in future. This would result in a negative effect because these companies would then be considered a monopoly.  If this would happen, there would be no control and people could not do anything if the companies would say that they would raise prices of the basic commodities like water, electricity, and communications line. 

       This would be the last meeting wherein we had our lecture. Learning about Corporate Social Responsibility and Corporate Governance made me more conscious/concerned about the things happening around me especially in the business world. I think that some of my perspectives/ideas changed because of this subject. The different theories and situational examples that we had made me understand that corporate social responsibility is not just about giving back. It is more than that because people/organizations that do CSR become an instrument by helping the community and changing their their lives. While for corporate governance, I think that companies need to become organized, follow the rules and build good relationships especially with the shareholders and managers.  

WEEK 11

(image from: http://www.atlasgenetics.com/corporate-governance.htm)

      For this week, the tenth group presented their Good News Monday. It was about a fashion event which will support/help the community. This campaign was compared with the Rags2Riches story, wherein the community was taught on how to create quality bags using their skills in making rags. The R2R bags are now very popular not only because of the nice designs but it is because of how  people could help the community when they purchase a bag. This is what CSR is all about because even if R2R is not present anymore, the community could still sustain their business or livelihood. I think that it was a good step for the company to help the community and at the same time earn profit. This is what people should do so that the people and the country could progress/succeed. If we share our knowledge about business to most of the people, they would be able to understand/apply this in their lives. They would also become successful which would be beneficial for everyone. 

       For the governance part, miss gave us a brief introduction and she made us watch a film about Enron- The smartest guys in the room. Enron corporation operated as one of America's largest energy, commodities and services company. However, Enron was considered as an example of corporate corruption and accounting fraud.  It was uncovered in 2001 that the company was a leader of the industry because it falsified its accounting records. The company filed for bankruptcy after the revelation. I think that Enron would be a great company if they became truthful. The company would have succeeded until now if they did things slowly but surely. It's true that most of the people behind Enron lacked virtues and moral standards. Most of them focused on greed which put the company down. 

       For our second meeting for the week, we talked about ethics. It is important to know what is right from wrong because with the decisions that we make, there would always be an impact on everyone. For this session, we focused on Governance.  We learned that organization and leadership of a company is important. Also, we need to give shareholders a fair return on their investments.

      Corporate governance involves a lot of stakeholders. There are two sides based on the diagram, first would be the shareholders, board and executive management. Second would be the managers employees, customers, suppliers, community at large, government, financial markets, and environmentalists. Corporate governance has many links since many people and things are involved.

       If the CEO and the chairman of the board are the same person, it would be bad since there is a conflict of interest. There needs to be a separation because the job of the chairman of the board is to look out for the shareholders while the CEO needs to manage and report to a board that sets policies and priorities. If this happens, one who is a chairman would basically be reporting to himself or herself. Conflict of interest is the heart of the matter in corporate governance. There is what we call the principal-asset dilemma and asymmetrical information. In typical agency costs, it was mentioned that the main role of corporate governance is to reduce total agency costs in order to maximize shareholder value.

       There are four basic values of corporate governance. First would be transparency, this would apply with Enron which lacked transparency especially in the financial aspect. Second would be accountability, wherein the management should be accountable to board and the board is accountable to the shareholders. Third would be fairness, this would apply to the woman in court that spilled pie over Enron's representative. The goal of the company is to protect shareholders rights, treat all shareholders equitably, and provide effective redress for violations. Fourth would be independence, it is important to be free from the influence of others to minimize/avoid conflicts.

       There are different types of board. Some examples in the presentation would be rubber stamp, yes-men, good old boys, country club, phantom, trophy and the real thing. A trophy board would be the committee wherein they want to use the name only. The members would usually consist of celebrities, politicians, etc.While an operating board sets an example and this is what the board should be. Miss told us a story about being a member in a board. An example would be Lani Mercado who was assigned by the Philippine government to be the representative for San Miguel, she might not be qualified since there was no basis/standard on why she was chosen to become the representative.

       There are benefits of good corporate governance. First would be basic legal compliance that would improve the company reputation. Second is improved corporate governance structure lowers cost of capital. Third, public recognition results to better access to finance. Fourth, there is improved operational efficiency increases competitiveness. Fifth would be the shareholder wealth creation is assured. When there is good corporate governance, everything would follow. It is important the company gains the trust of the investors and customers so that business would be smooth. There should be good corporate governance because it allows easy access to capital, it stimulates firm performance, lowers the cost capital and raises the value of the firm, and increases long term performance.

      Building the business case for good corporate governance- if the company is governed well you will attract people. Companies well governed would result to good impact which means it can attract more investors. Like businesses, when investors/customers have a good impression about the product it would be easier for them to trust and purchase it. 

WEEK 10 (PART 2)

(image source: http://paradigms4progress.wordpress.com/2008/06/05/go-leed-leadership-in-energy-and-environmental-design-is-a-no-brainer/)

       For the second meeting of the week, we discussed about companies and businesses hitting the earth's limit. Most of the people, companies and businesses are fighting for the available resources. We also learned about the triple bottom line. Which was about economy, equity and ecology. 

          As mentioned in part 1 of this blog, "People. Planet. Profit." We need to be in the middle so that there would be a balance and this would result to sustainability. The question is, "Why should we be concerned?" I think that we need to be concerned because we all live in one planet and this is where we get all our sources. An applicable example would be the Pasig River, it was very beautiful and pleasant before it was polluted. There were ferries that pass by and people would bathe and catch fish from the river. However, people became careless and they polluted the river which killed the fishes and the businesses. Although I think that the Pasig River is improving now because of the organizations that help in cleaning and maintaining it. I came across an article saying that 2 companies are interested in reviving Pasig River ferry service. I think this would be helpful in raising awareness that the river is now safe to use. 

       Miss told us about how Boracay was 30 years ago, she defined it as beautiful. It was not polluted because there were only a few people who knew about the place. Today, Boracay could still be defined as beautiful since it is considered as a tourist destination. However, I think that the island has been to commercialized. There are too many establishments like hotels, restaurants, etc. Most of these establishments contributed to the pollution in the place since most of them do not filter their wastes. These wastes would go straight into the ocean, which affected the water over time. The ocean/water already has algae because of the bacterias but it was a good thing that they came up with a law to preserve the waters by filtering the wastes from the establishments. I think that it is very important that we preserve and care for these important destinations because through these, we are able to attract tourists and earn income especially for the locals. 

       Another topic that we discussed was business ethics and environmental values. An example of this would be the people/business vs spotted owls. A company in the America did logging for business, but after a while the spotted owls that resided in the area became endangered and this affected their business. Although there was a rule that you need to replace trees once you it down, this would not be effective. Trees would take years for the trees to grow and the spotted owls would only nest on old trees. This became a problem because some people would complain that the owls were given more priority than humans. The company would also loose some money since they will not be able to do business/get supplies. However, the owls were considered to be important since they are endangered and this would be a bigger loss if they become extinct. It was a good thing that there are people guarding/protecting the place so that we could still see the spotted owls. 

       Another example we had was McDonald's demand for supplies. The burger meat was outsourced from Brazil because of the huge demand. What they did was to cut down rainforest to produce grasslands for the cows so that they could reach their target/quota. This is a negative thing because there are many bad effects when rain forests are cut down. First, it changes weather patterns. Second, deforestation leaves poor soil for grass production. Third, carbon sequestration is reduced, the topsoil washes away, and less oxygen is produced. This increases carbon dioxide, which is a greenhouse gas. Theoretically, this increases the greenhouse effect, causing an increase in global temperature, resulting in global warming. I think that what the company could do is to outsource it from other countries to be able to meet their demand. If they would consider this, they do not need to cut down rainforest and leave a negative impact. 

     Saving resources. This is what the vegetarians and vegans want to do. But first, what is the difference between the two? Vegetarians do not eat meat, fish or poultry but they tend to consume dairy products and eggs. Vegetarians also do not eat products that contain gelatine or other meat-based products. While vegans eliminate all animal products from their diet, including dairy and eggs. While those following a vegan lifestyle generally do not wear leather and avoid products made from animals such as wool, silk and down. Vegans' tremendous compassion for animals is an abiding, overriding conviction in their lives. The vegan point of view is that animals are not here to be exploited by man, and that commercialization of animals necessarily involves a fundamental, inhumane component and lack of respect for basic life.

        We also discussed the Clean Air Act, which I think is very relevant for us because we need to comply with this so that we will be able to make our planet sustainable. We need to start with simple things like reducing our wastes or by recycling them. There is a project in DLSU called "No Impact Experiment" which is a one-week carbon cleanse program wherein people are encouraged to take small steps and perform small acts to reduce environmental impact, protect our plant and enhance the quality of our life. I really like their tagline that says: "Take the challenge. One step at a time. For Planet Earth."I think that this experiment/project would be effective since it shows us that we could help save the environment by starting with small steps with a big impact.

WEEK 10 (PART 1)

   

(image source: http://www.metrogreenbusiness.com/save-green-by-going-green/)

      For this week, our group was assigned for Good News Monday. We reported 5 articles about companies giving back to the community and the environment. First was about the Tiger Energy Playground which helped communities have electricity. The children that used the playground would help transmit energy/electricity to the houses in the community. Second was Pealing on the Road to Recovery wherein companies gave some of the Yolanda victims a new livelihood which was Pedicabs. This would be a big help to them to start a new life and help them recover faster. Third would be the 'Happy Walk' for Down Syndrome wherein SM Cares arranged a walk to raise awareness and to recognize the rights of persons with disabilities (PWD). Fourth would be about the 10 firms getting a DENR seal for environmental practices. Fifth would be about Peninsula raising funds for the victims of Yolanda through Filipino halo-halo. All the Peninsula hotels served halo-halo and were able to raise a big amount of money. I think that it was a good move to introduce the halo-halo to the other countries because they became aware about the special Filipino dish and at the same time, they were able to help the victims of Yolanda. These companies should become examples of businesses should do or should be. They should not only think about earning profit, they should also give back by helping the community  and saving the environment. 

       For this week, we also discussed about companies going green. The dilemma: does going green mean companies have to be less competitive? There are two opposing views. First is that companies would have higher costs because they need to consider preventive measures, implementation costs and noncompliance costs. Second would be responsibility. Companies need to know that they have social responsibility,  social benefits, and sustainable growth. An example of this would be human nature that uses organic/natural ingredients for their products. The products that they offer is more expensive compared to other products because it considers the effects of using chemicals. 

       We always hear the line "People. Planet. Profit." Companies should not only think about earning profit and selling the products to people. They need to consider the effects of the product to the people and also to the environment. We want our planet to become sustainable for future generations and to be able to do this, we should start now. We think about the consequences of our actions especially when we do something bad to the environment. I am glad that the no plastic policy is being implemented in different cities in Manila such as Muntinlupa, Las Pinas, Pasig, Quezon City, Pasay and Makati. In Muntinlupa, they came up with posters saying: Paper bag is good. Reusable bag is better. Bring your own bag is best. I think that this is an innovative step in encouraging the people to use eco bag/ reusable bag. It is beneficial because of different reasons. First, we reduce the use of plastic bag/paper bags and lessen the waste. Second, companies are advertised. When the shoppers carry/use the bags around the mall or supermarket they are carrying the brand/name of the product which raises awareness. Third, using reusable bag is sustainable because it can be used many times. I think that we could relate this topic with the project we made for the community assigned to us which was Kapit Bisig Para sa Ilog Pasig. We sold shirts to raise funds for the river warriors that help in maintaing Estero de Paco clean. We came up with a shirt design that says #ThinkGreen. We think that this tagline would help people become aware the environment. Think Green meaning think about the environment, do your part.

       Companies think that going green means higher costs but they need to know that they would still benefit from this because they will able to convince people. According to the survey, 58% say green issues have become important to their organization strategy. 47% believe that employees prefer to work for firms with a strong green stance. 44% of the companies have an environmental policy in place. This proves that people are really concerned with the environment which is a good thing.

       Solar power would be a free source and it would be very helpful, however it is costly to have the solar panels. It would be applicable in a tropical country like the Philippines but not everyone could afford this kind of power source.  Companies could try this but they should think longterm. Miss had a friend in the US that installed solar powers in her home. It cost her around $30,000 but she thinks that it was a good investment her electricity bill went down and the excess power that the panels produced were stored. I think that people should consider this source of energy because it would not only help them, but it also has a good effect on the environment since there would be less energy that is needed to produce.

       In terms of geothermal energy, the country places second compared to the US. This is what Electric Development Company (EDC) by the Lopez Company is doing. While hydroelectric power maybe cheaper but it is damaging to the environment. In China, they have dams which had bad effects to the people and nature. They had to relocate the people and flood the ancestral lands. The wildlife in that area was also affected since they cut down most of the tress. 

       The question is why should companies go green? There are 6 factors on why they should do this. First would be their costs would go down. If they use solar panels, they could save money for electricity. Solar panels would usually cost around 30,00 and companies could use this for a long time. Second is capital.  Miss mentioned that there is a loan allotted for green/environmental projects (from banks) and I think this is a good way of encouraging most of the companies to go green. Fourth would be China. We should see/watch what China is doing since there are a lot of factories that could affect the environment due to the large amount of wastes. Fifth would be the consumers. There is what they call the Eco Store which is a growing business that caters organic products. There is also early adapters who are the risk takers who are willing to pay more to be able to get better products. An example would be Body Shop soap, compared to other stores/brands, their soaps are natural and they also try to help the communities that help them with business. Sixth is climate. Organizations need to know more about it because this might also affect their business. An example would be the US, wherein most of the cities were frozen. Another example would be Baguio when the climate affected business/products since most of the crops were frozen, the farmers lost a lot of money. What they need to do, is to help care for the environment so that we could lessen the effect of climate change. 

       Going green has a lot of advantages. We could generate cost savings, promote innovation, command premium pricing, enhance the brand image and differentiate from competitors. CSR is about strategy and we could use the competitive environmental strategy for this.

Strategy 1 : Eco-efficiency
Example:
Bulb:                                      Traditional light bulb         vs.             Led lightbulb
Cost:                                                30 pesos                                       300 pesos      
Sustainability:                          few months/ 1 year                                 5 years

       Through time, the cost of using traditional lightbulb vs led lightbulb would be the same/lesser since the traditional bulb need to be replaced once in a while. I think that the led lightbulb is better to use since it is cooler compared to the traditional light bulb which produces more heat. There could be over 50% of savings by changing form incandescent bulbs to energy saving light bulbs.

Strategy 2: Beyond compliance and leadership. 
     
     Through this strategy, public and customers would acknowledge the company for their efforts. Companies that practice this can give suppliers an edge over others.

Strategy 3: Eco branding

       Most of the companies today are following this. Companies are now selling/producing organic and natural products or are complying with the environmental rules. In this strategy, consumers must be willing to pay or the ecological differentiation. There should be reliable information about the products and this differentiation should be difficult to imitated. An example of this would be the Toyota Prius and it was hailed as the world's greenest car which sold over 1 million units worldwide. I think that people are now aware about the things that are happening in the environment and they would want to do their part by simply buying products that offer/do these.

Strategy 4: Cost leadership

       This want companies should consider/offer. Better product packaging or design results in more efficient use of resource which translates to lower price. An example would be restaurants would use reusable tupperware for the food that customers would take-out.  Also, most of the packaging of the gadgets are now smaller so that it would consume less space and less paper/resource would be used.

       The conclusion is that being green can be a competitive advantage, he change factors have increased attention on environmental practices and firms can adopt different strategies to gain the green advantage. Companies should practice this and they should start now. It is a good thing to know that more and more people are now considering the environment when they make a purchase of the products they need/want.

WEEK 9

(image from: http://www.taclobanhotels.com/CORRUPTION-IN-THE-PHILIPPINES.htm)

       For this week, we had our second quiz which was The Case of the Sole Remaining Supplier. We had to make a decision based on the given situation and other factors. The situation was our company was the last remaining supplier for the transistor for Pacemaker company. The other companies backed out in supplying the transistor because of the incidents that happened to the patients. However, Pacemaker company told us that if we don't sell the product, they'll go out of business. Also, without the pacemaker, people don't even have a chance. The decision is up to the company and we need to make a decision if we will supply the transistors or not.

      The quiz was similar with what we did with the Parable of the Sadhu, the group followed the same process wherein we determined the facts, identified the issues involved, identified the stakeholders and considered the situation in their point of view, considered the available alternatives, evaluated the options, and made a decision. We determined the things needed and came up with the decision to continue supplying the transistors to the pacemaker company with a higher price so that we could help the patients and earn more.

       For the second meeting for the week, we discussed about corruption which is a very relevant topic or issue today. As defined, Corruption is the lack of integrity or honesty. Another definition would be: Abuse of public power for private gain. An example that miss told us would be: when a parent offers to donate a playground worth 10,000 pesos because his son was not able to make it to a school,  he/she talks to the president of the school and makes this offer. Maybe the president would say that yes, and will consider his/her child to have a slot in that school.

       I think that there are many people that use this kind of strategy to get the things they need and want. Most of the people also agree to do and approve these strategies because they are given something in return. I think that it would be better if everyone will be fair and think of the welfare of other people. It's a nice thing to know that you have accomplished your goals by doing things the right way. People would be happy to know about your achievements especially when you did your part.

       I also learned that there are many forms of corruption, and in our country we witness this. It could start from small things such as bribing a traffic officer when caught on the road. People would just talk or communicate and make excuses so that the officers would not give them a ticket that would cost them a lot of money and time.  It could be through overpricing some items or products that would be used in a government project such as materials for repairing the road, etc.  

      There are a lot of consequences of corruption just like other things. As stated, Corruption is anti-democratic which is against the beliefs of the people in the Philippines since we are a democratic country. We would usually see this especially after voting or electing government officials. People would believe in the qualities of these leaders not knowing that they will not keep the promises they said during their  campaign. There is also a possibility of corruption leading to revolt and the outright destruction of democracy. An example of this would be parking lot of the senate.

      There are different causes of corruption such as lack of transparency and free flows of information, lack of free press, lack of government accountability, inability of civil society or NGO's to monitor the government, weak rule of law, incentives, unclear rules of behaviour for government officials, and "old boy networks." There are many causes of corruption and it can be found in politics, law enforcement, and businesses. An example would be low salary of employees, it may be because of the lack of budget for the family especially for the education of their children. The practice of corruption violates human rights, causes prices to rise, and affects human health and welfare around the world.

       Transparency International published the Corruption Perception Index, which is an annual ranking of countries by their perceived level of corruption as determined by expert assessments and opinion surveys. The CPI ranks 176 countries on a scale of 100 which means very clean to 0 which means highly corrupt. I think that CPI is an important survey because we would have an idea about the situation of corruption in the country. We can see that there is Transparency: Improving the ranking. As of 2013, the Philippines ranks 94 and is given a score of 36. Compared to 2011 wherein we ranked 129 and got a score of 2.6.

      We also watched a video about corruption and I think that it is interesting to know more about this issue. In our country, we are very familiar with corruption because some people are involved especially government officials, businessmen, etc. I think that we need to be aware about the things that happen around us. Many people are involved even if just one person started it, an example would be when we pay taxes and government officials use it for their personal pleasure. I believe that the people or the citizens have the right to speak and investigate on these corruption cases because we they are using the money that was supposed to be allotted for projects and the people.  

     Some suggested solutions were clear rules on what is admissible behavior, rule of law/law enforcement, eliminate incentives/ proper wages, employee training and competence, free press and democratic accountability. We should try to use or follow the proposed solutions so that the country would improve and progress. Through these solutions and discipline we would be a better country in the future. 

WEEK 8

(image from: http://en.wikipedia.org/wiki/File:Makati_skyline_mjlsha.jpg)

       For this week, we disucussed how PLDT was a monopoly during the 1970's. There was such a thing called a "party line"which was a telephone line or circuit shared by two or more subscribers. During this time, companies used to be a monopoly. Examples would be Philippine Airlines and Microsoft. If you wanted to travel to another city or country, you would only have one choice which is PAL. Airplane fare is also very expensive compared to the prices today. Some companies already have competition today, which removes the their monopoly position in the market. Customers or consumers have other choices which affected them. For PAL, the fare is now lower compared to before since other airlines lowered their prices. There are also more choices for air travel such as Cebu Pacfic, Zest Air, AirAsia and Tiger Air Philippines.

       I think that I am lucky to experience innovation and technology because based on the stories, it was hard to communicate and do things during the past because of the lack of resources and choices. Today, we are given the different privileges such as traveling  to other cities or countries for a lower cost, having faster and better communication lines, innovative transportation like cars, buses and trains.

       Another topic that we talked about were the businesses that were unjust. An example of this would be San Miguel Beer, their main competitor was Beer na Beer. Both companies or brands cater the same market, they have similar products which is Pale Pilsen beer and the bottles look same. Due to this factor, the bottles were returned to the wrong company. Beer na Beer bottles would be with San Miguel and vice versa. Since San Miguel beer was the market leader or the leading brand, they had a lot of Beer na Beer bottles returned to their plant. Instead of returning or exchanging the bottles with Beer na Beer, the company broke or destroyed the Beer na Beer bottles which was unethical, because of this a law was passed stating that companies should still respect their competitors.

      I think what San Miguel did was wrong because even if Beer na Beer was their competitor, it would be better to have a healthy competition. When they broke or damaged the bottles there would be effects for Beer na Beer. Production would be more expensive and less productive since there would only be a few bottles available and the company needs to order or make new bottles.

       From monopoly companies, we also talked about some oligopoly companies. Examples would be Maynilad and Manila Waters. These two water companies cater the same market, however consumers do not have a choice between the two because the companies are available based on location. We also discussed ethical rules and watched a video about Microsoft.

      For the other meeting, we started the class by discussing the oil depots. Miss was suggesting that the oil depots be transferred to other parts of the country. However there would be effects which would be more cost, more time and less productivity.

      Another company that was mentioned is Figaro. It is a filipino company, and buys local coffee and supports the local farmers that plant the coffee beans. The company also promised to help improve the skills of the farmers and help the community. 

      For this meeting, we also watched a video about Electronic Development Corporation (EDC). It is a company that uses geothermal energy and help the community and environment. I believe that the company has a great concept wherein they would not only want to earn but they are also doing their part for the society and the environment.  

       Another company that we talked about was Diageo, which is a beverage company that provides alcoholic drinks.  The company needs clean source of water for their products, therefore they are rehabilitate places and provide economical capital. The company has a project of conserving water in Africa. Diageo is involved in critical issues such as: Environment, Human capital, and Social capital. In their website, it states that "Our sustainability & responsibility strategy, which covers our social, environmental and economic impacts, is key to living that purpose and to delivering our long-term success Key impact areas include: alcohol in society, water, environment, communities, our people and compliance and ethics."

       I think that most businesses should follow the footsteps of the companies mentioned above. These companies are not only concerned in making money or profits, instead they want to help society and the environment. As said in a Chinese proverb, "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime." This is what the companies are doing especially for the communities where their businesses or companies are based, which is a good thing because the people in the community would be able to sustain for themselves. 

WEEK 7

(image from: http://gbnbusiness.blogspot.com/2010/05/starbucks-sued-over-hot-tea.html)

       For this week, we had the debate about the Liebeck vs. McDonald's case wherein my group was the judge/jury. We started the introduction by stating the case and gave some questions. The situation was in 1992, Mrs. Liebeck bought a cup of coffee at a McDonald's drive-thru. She was with her grandson and they stopped in the parking lot of McDonald's where she bought the coffee. She had the cup between her knees and removed the lid to add cream and sugar The cup tipped over and the coffee spilled on her lap. She was wearing sweat pants, which absorbed the coffee and kept it against her skin. She suffered third-degree burns and required skin grafts. She sued McDonald's and the jury awarded her with $3 million in punitive damages for the burns she suffered.

       The debate started with the Liebeck side, they presented arguments about the burns that she suffered. About 6% of her body was damaged including her inner thighs, perineum, buttocks, genital and groin areas. She was hospitalized  for eight days and underwent skin grafting. She also underwent debridement treatments and wanted McDonald's to settle it for $20,000 but the company refused.

     The McDonald's team argued that consumers know that coffee is hot and customers want it that way. The company admitted that they were unaware that customers could suffer third degree burns from the coffee. Also, there was a reminder on the side of the coffee cup that the coffee is hot.

       The opposing parties presented different arguments and evidences. The jury decided that McDonald's won because based the convincing arguments that the group presented.

    Based on our discussion in class, McDonald's could have just paid Liebeck the $20,000 and apologized to her. There would be less cost and damages. Also, serving hot coffee is part of the menu of McDonald's however, they set the temperature of their coffee so that customers would be satisfied with it. The company thinks that when customers get the coffee through the drive-thru it would take them 5-10 minutes before consuming the coffee. While for dine-in customers they would have to wait until their coffee cools a bit or becomes warm. This would also be a strategy for the company because even if they offer refillable coffee, time would be the variable. When the customers wait for a while to cool his/her coffee and this would take up time, making them refill less.

    In reality, the jury awarded Liebeck $200,000 in compensatory damages, which was reduced to $160,000 because they found her to be 20% at fault. Liebeck was also awarded $2.7 million in punitive damages.

   Discussing and debating about this case was very challenging. We had to listen and understand the arguments of the opposing parties and decide which we think is right. Personally, I think that Liebeck is at fault in the situation because she was the one who spilled the coffee on her lap. However, I also thought about the fact that the coffee was really hot, because of the injuries she suffered. I think that Liebeck could have just held the coffee in one hand and used the other hand to add the sugar and cream.  Another option was, she asked her grandson to hold the coffee thens she'll add the sugar and creamer or vice versa. What Liebeck did was terrifying because of the burns she suffered however, she is lucky that the jury abroad was fair enough to listen and consider her case. 

WEEK 6

(Image from: http://www.beoffices.com/our-company/best-companies-3-star-accreditation)

        For this week, we learned about companies measuring themselves CSR continuum wherein there would be a rate from 0 to the highest level. We also talked about Human Right and watched a video about it.  Knowing and being aware about the human rights is important because we need to understand others. We need to understand that we are all human beings and have the same needs. The three-dimension model was also further explained. One of the statements that struck me was "It should not be State for People, but it should be People for State." This shows that that we should not rely on the state but we need to do our part as people of the State.

       Next was the topic about Employer and Employee/s relationship. The class started discussing the best companies to work with and today, Google would be top on the list. In 2012, Google was ranked No. 1 in Fortune's list of "100 Best Companies to Work For." According to an article, Google has good corporate culture. Leaders make sure that everybody has great opportunities and they feel that they're having a meaningful impact and are contributing to the good of society. I think this is important because people look for work because they want to earn but at the same time, they also want to help and make a change in peoples lives. For Google employees, they need to Work hard, Play hard. The employees enjoy the on-site perks and this makes the employees happy. Google is a great workplace because the company believes that treating people well is more important than making a lot of money. This should be case with the other companies because employees or the people working for the company would have better output and this would be an advantage because the company could have fewer turnovers. Another company that is similar with Google is SAS. It basically has the same set-up as Google and based on the video we watched, the employees are very happy and satisfied with their work. The company also has a low turnover rate which helps save money. The owner of SAS said that if you make the employees happy, they make the customers happy, the customer then makes him happy. This simple process is very effective and it would be very effective for the company, the employees and the customers.

       If there are good companies, there would also be companies that do not treat their people well. An example of this would be Foxxcon, a Taiwanese multinational electronics manufacturing company. Most of the workers are reported to work at least 35 hours, and a lot of suicide incidents have happened. Some of the employees say that it was because of the stress in work and this affected a lot of Foxxcon employees. I think that Foxxcon should be aware and do something about this because they are liable for their employees. Their employees should be given a chance to unwind and tell them what the company needs to improve so that there would be lower turnover and could maintain it's image as the company that produces quality products and has good employee benefits.

       Marketing and Advertising are fields that convince people to buy or try a certain brand or product. However, advertisements today tend to be creative and tends to be inappropriate. As an advertising major, I think that it is important to know the limitations of making or doing an ad. We could be creative but not to the point that the ad or the message could offend or mislead the consumers. An example that miss shared was a whiskey ad wherein the message was: "Nakatikim ka na ba ng 15 anyos?" The ad was asking and at the same time encouraging the consumers if they already tasted the certain brand of whisky which is already 15 years in the market.  But it also has a negative connotation for some consumers because others would think that it would refer to a 15-year old girl. Also, the ad needs to be placed appropriately. For example, an ad of a girl in a bikini holding a bottle of alcohol should not be exposed in EDSA. It would be inappropriate because many people pass by EDSA including children, but if it was in a men's magazine it would be fine because this would be the target market of the certain ad or product. 

       Another topic that we discussed was about product liability. An example would be the McDonald's coffee case and the hot coffee lawsuit. It was between Liebeck vs. McDonald's restaurants. It was a very unfortunate incident when Liebeck purchased hot coffee from McDonald's that she accidentally spilled in her lap. She suffered burns, underwent skin grafting and needed medical treatment. She won the lawsuit and received a money for damages from McDonald's. Today, we can observe that the coffee that are sold in the stores already have warnings such as warning: hot coffee. This serves as a precautionary measure for both the company and the customer, which make it easier to handle. Another example are the warnings in children's toys. Wherein it says not suitable for 3 years old below, etc. These warnings are important not only for the company but most especially for consumers because they need to know the limitations of the product.

       For this week's lesson I am happy that I was able to learn a lot about CSR and relate it to my course. I think that I would my best to become a good advertiser and apply the things I learned from this class. Balance is the key with the things we do. For example, when making an ad it needs to be creative but at the same time it also needs to be appropriate for a certain audience and place. I appreciate all the things that we have discussed in class because it is a real-life experience and this shows us that as future business people we should not only care for the welfare of the company but we also need to think about our employees and especially our customers.

Source:

http://www.ibtimes.com/top-5-reasons-why-google-best-company-work-553844

WEEK 5

      

(image from: http://annaasimon.wordpress.com/2013/06/24/parable-of-the-sadhu/)

     

       For this week, the decision-making model for business ethics was introduced to the class. The class was assigned to read the Parable of the Sadhu and apply the decision-making model. I think that the model is a helpful tool in knowing the pros and cons of a plan or decision. It also serves as a guide in trying to come up with the decision given certain situations. 

      During our brief discussion about the case, it made me think about what I would do if I were in the shoes of the hikers. The goal of the hikers was to climb Mount Everest however they encountered the Sadhu and this is where the conflict comes in. The group of hikers need to reach their goal but they need to decide on what to do with the Sadhu. There are a lot of stakeholders in the given story which are the hikers, guides/porters and the Sadhu. There are different options that can be done, first is to save him and bring him to the village. Second would be to ignore or leave the Sadhu. Third would be to give the Sadhu limited help. My group followed the different steps from the decision-making model for business ethics. We thought of different options. We think that the best based on the decision is option 2. However when we used the table, the most effective decision would be to ignore the Sadhu however, we also need to consider the other theories and models we discussed before.  First would be ethics of care and virtue, this is where we could base the decision in saving the Sadhu. Second would be utilitarian, for the decision of giving limited help. 

        Corporate Social Responsibility is CSR, which is important for businesses. Friedman's definition of Social Responsibly is “social responsibility of business is to increase its profits . . . the corporation is an instrument of the stockholders who own it. If the corporation makes a contribution, it prevents the individual stockholder himself deciding how he should dispose of his funds.”  I think that the definition of Friedman was very effective and straight to the point. Businesses are made because the owners would want to earn profit and they need to convince the stockholders that the company is doing well not only in terms of finances or money but also by image and ethics.

       There are some economic models of business and the class discussed some examples. One of which was the Infant Milk that has melamine that is under the Economic Model of CSR. Another definition is "CSR is not about how you spend, but how you earn." This statement is the most basic definition of CSR because it tells us an important message that we should not think about ourselves but we also need to put others into consideration. Especially in business, many people want to earn but do not think about how they earn. Most of the business people think about putting up charities, scholarships, etc. to have good publicity. They want to show that they are giving back to others but this is not what CSR is all about. They can't just show the good side of their business or company because they have these charities and foundations because the most important thing is about how they were able to earn or gain the money that they have. It would be better if the businesses or companies would earn money in a good way and also spent it for good use. 

       The class was also able to discuss arguments for socially responsible behavior. One of the examples we had was the PASA LOAD of SMART.  This gave an opportunity for the lower class to be able to buy load and have cellphones. Also there was a project that they came up with which was the textbooks in the old/used sims. These are given out to the public school students to lessen their problem about brining heavy books to school. I think that this was a really great idea and move by SMART because they were able help the consumers and capture their trust and loyalty to the brand. In the future, I would also want to help others and give a big impact to the company that I will be working with. As an advertising student, I would try my best to think of innovative ideas so that I'll be able to help the consumers and make a good impression for the company. 

WEEK 4

(image from: http://www.fcpablog.com/blog/2012/7/24/when-good-cultures-go-bad.html)

       For the fourth week, we had a discussion about good vs. bad acts. What I learned was, there are some good people who engage in bad acts. People would tend to choose something beneficial but is unethical. Sometimes, people with good intention do not choose ethically. I also learned that not everything that is legal is ethical. 

       There are ethical frameworks that serve as a guide and would help us make the best decision. There were five ethical frameworks presented. First would be utilitarian, wherein decisions are made based on the consequences of the act. Second is rights, these are an individual's entitlement to something.  Third would be justice and fairness where there is a comparative treatment given to members of a group. Fourth is the ethics of care wherein people tend to care or favor those closer to them. Last would be virtue ethics which directs us to consider moral character of people and how these character and traits affect decisions or situations. 

       There was a discussion and comparison between utilitarian and deontology, which are the two major ethics theories that attempt to specify and justify moral rules and principle. Deontology states that the morality of our action depends on the intrinsic nature of the action.  While utilitarianism implies that the morality of an action is determined by its consequences.

          When we make decisions, there are always consequences whether good or bad. From the discussion, one of the things that I values doesn't look at consequences of the action. One of the examples we had was the dam in China. There are different factors that need to be considered whether it would be good or beneficial to build the dam. Some of the pros would be hydroelectric power, flood control purposes, provides reservoirs for water supply, provides recreation opportunities. However, there are also a lot of cons. Some things would be negatively affected like the people living in the area and their source of income. There are also lands that would be destroyed and there would be a harmful effect to the natural environment. Dams are usually built to benefit a lot of people but at the expense if the environment and a smaller and less influential group of people.

          This week we also had a related discussion in PERSEF2 class. The topic was about ethics and etiquette. During our PERSEF2 class, I was able to apply the things I learned from our CSRGOVE discussion. We were given certain situations wherein the class needed to identify whether it would be ethics or etiquette. The class was also assigned to do a skit showing ethics in workplace. For my group, we did a situation in the advertising agency. The situation was, sales are deckling and the company needs new promotional ideas for the product which was chips. A colleague suggests that the company makes a bigger packing but with the same content. Another person agrees to the idea. However, another colleague doesn't approve of the idea and suggests that the company should not do this because it seems that the company is cheating its customers. Based on the situation,  the head of the company thinks of a new way of promoting the product. 

sources:
http://www.ncbi.nlm.nih.gov/pubmed/23276267

http://prezi.com/grqb80nkbqdw/copy-of-ethical-decision-making-personal-and-professional-contexts/

WEEK 3

(image from: http://www.webgreeter.com/wp-content/uploads/2011/10/Business-Ethics1.jpg)

        For this week, the class was able to learn more about Ethics and Business. It was very interesting to know how it can affect a business. An example that we discussed was SM Supermalls. I agree with the opinions that SM needs to improve or change their system in contractual employees. There are a lot of people who need permanent jobs and if they would apply and get accepted in SM, they would just be given a job for probably six months. After their contract ends, they are not secured they need to find a new job again. 

        The class was assigned to answer an activity called the Rokeach Value Survey about terminal and instrumental values. Each of us ranked the statements according to our personal hierarchy and compared it with our groupmates afterwards. The groups came up with a list of the most common values that we ranked highest and the common values were family security and responsible. I think that this activity is very helpful because we are able to discover the values that we prioritize. Through the activity, we were able to know ourselves more and discover more about other people. In the future, we could refer to the ranking that we did because it shows how people value the different aspects of life and could serve as a guide in making decisions.

       Giving back is one of the most important things in Corporate Social Responsibility and the class was able to discuss this topic for the week. One example given was Merck Company who discovered a cure (medicine) for the River Blindness disease. The company offers free distribution of the medicines since most of the people could not afford it. However, by giving the medicines, there would be a lot of advantages to it. First would be the value of giving back, the company would be able to help the people be cured from the sickness and they would be healthier. Second, the company would be more known since they have a good reputation because people would know that they also have good corporate social responsibility. Last would be the larger market of their brand, if the people who were given the free drug would likely patronize the brand and there would be more awareness. Giving back is something important for me, I think that businesses today are more aware about the things that they could do to give back. I would try to help other people through the products or services that I would provide.