Chapter 2: The Purpose of Business
Chapter 2: The Purpose of Business
Chapter 2: The Purpose of Business
Desire for more income for oneself and his or her family
Want more independence
Continuing the legacy of the family business
Want to try a unique and novel idea
Desire for competition
Genuine desire to help people in the community/country
You like it and you are attracted to the prospect, of interacting
with people
Friedman
An executive manager's role is to make the firm more profitable
It is not the manager's moral responsibility to help other people
outside the firm (government)
If you want to help others, do it on your own capacity as a private
individual and not as an employee of the firm
If the owners expressed that they want to help others, then you
can use their money for such
Fiduciary duty to have an intention that is in congruence with the
intention of the owners
“ There is one and only social responsibility of business – to use its
resources and engage in activities designed to increase its profits
so long as it stays within the rules of the game, which is to say,
engage in open and free competition without deception or fraud.”
Paul F. Camenisch
Professor of Religious Studies at De Paul University in
Chicago
Graduated summa cum laude with a degree in English from
Centre College in 1962
The National Alumni Association awarded him as a
Distinguished Alumnus of Centre College in 2012.
CAMENISCH
Published an essay, "Business Ethics: On Getting to the Heart of
the Matter"
CAMENISCH
1. provision of goods and services
2. profit-making intention
Ronald F.Duska
An American Professor and scholar in the field of business ethics
Member of the board and past president and executive director of
the Society for Business Ethics, the publisher of Business Ethics
Quarterly.
Author of numerous books on philosophy and business ethics
DUSKA
Distinction between purpose and motive
DUSKA
The purpose of teaching vs the motive of the person who enters
the teaching profession
The purpose of the medical profession vs the motive of the
individual doctor
The purpose of the law profession vs the motive of the law
student
The purpose of business is to respond to society's needs for goods
and services
The goals of the national economy are a more equitable distribution of
opportunities, income, and wealth; a sustained increase in the amount
of goods and services produced by the nation for the benefit of the
people; and an expanding productivity as the key to raising the quality
of life for all, especially the underprivileged.
"I don't believe we should make such an awful profit on our cars. A
reasonable profit is right, but not too much. I hold that it is better to
sell a large number of cars at a reasonably small profit... I hold this
because it enables a larger number of people to buy and enjoy the use
of a car and because it gives a larger number of men employment at
good wages. Those are the two aims I have in life."
Sari-sari stores
Food kiosks
Street food vendors
Accountants and Tax Preparers
Bakers and Chefs
SINGLE PROPRIETORSHIP
Must be registered under the Department of Trade and
Industry (DTI) and the Bureau of Trade Regulation and
Consumer Protection (BTRCP)
PARTNERSHIP
Governed by the Civil Code of 1949 (Republic Act No. 386)
Article 1767 – "two or more persons bind themselves to
contribute money, property or industry to a common fund,
with the intention of dividing the profits among
themselves"
"Two or more persons may also form a partnership for the
exercise of a profession"
Article 1770 - "must have a lawful object or purpose and
must be established for the common benefit or interest of
the partners"
PARTNERSHIP
1.2% of all legally recognized businesses in the Philippines
Must be listed under the Securities and Exchange
Commission if the capital of the partnership is P3,000 or
more
A "judicial personality separate and distinct from that of
each of the partners" once registered and even prior to
registration
Separate and independent legal personality from that of
its individual partners
PARTNERSHIP
Professional firms (law, accounting, engineering,
architecture, medical, etc)
Merchandise stores
Restaurants and cafes
PARTNER
Must have similar ideals and principles when faced with
ethical problems such as;
Issue of bribing government officials, suppliers, clients, etc
Paying the correct amount of taxes
Treatment of employees
Breach of partnership agreements (share of capital, profit-
sharing, duties responsibilities)
Decision-making disputes
CORPORATION
Governed by the Corporation Code of the Philippines, Batas
Pambansa Blg. 68 (July 21, 1980)
"A corporation is an artificial being created by operation of law,
having the right of succession and the powers, attributes and
properties expressly authorized by law or incident to its
existence. "(Section 2)
15.1% of Philippines businesses are private corporations
CORPORATION
Corporations formed or organized under this Code may be
stock or non-stock corporations. Corporations which have
capital stock divided into shares and are authorized to
distribute to the holders of such shares dividends or
allotments of the surplus profits on the basis of the shares
held are stock corporations. All other corporations are non-
stock corporations." (Section 3)
CORPORATION
Required to be registered under the SEC where its
"articles of incorporation" must be filed
The separate existence or the juridical personality of a
corporation formally begins on the very date that the SEC
releases a "certificate of incorporation"
Advantages of a Corporation
CORPORATION
Foreigners may invest in the Philippines and
may even own a business organization but with
definite restrictions and limitations
Common issues (tax fraud, irregular accounting
practices, bribery involving top government
officials, wasteful personal spending, right of
workers)
COOPERATIVE
Republic Act 6938 "An Act to Ordain a Cooperative Code of
the Philippines, which was amended and currently known
as Republic Act 9520 "The Philippine Cooperative Code of
2008"
"A cooperative is an autonomous and duly registered
association of persons, with a common bond of interest, who
have voluntarily joined together to achieve their social,
economic, and cultural needs and aspirations by making
equitable contributions to the capital required, patronizing
their products and services and accepting a fair share of the
risks and benefits of the undertaking in accordance with
universally accepted cooperative principles."
CAPITALIST ENTREPRENEUR
Passive recipient of the fruits of the toils of Contributes actively and positively for the
other stakeholders in the business activity benefit of the society
Provides capital Contributes innovation and creativity
- Alfredo took several odd jobs, which included time at a printing
press. He learned how to print cellophane wrappers for candies
and biscuits and this experience prompted him to start his own
printing business.
- His printing business was doing well but his discovery of the Doy
Packaging system from Europe was the turning point of his
entrepreneurial career.