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Ethical business actions and poverty reduction

Poverty alleviation is the main concern of many countries. Poverty is said to be an economic, social, cultural, political and moral phenomenon. Like the issue, its solutions are multi-faceted. It requires a collective action from governments, corporations, citizens, consumers, workers, investors and educators.

In the Philippines, poverty prevails in 25.8 percent of the population, and 80 percent of whom reside in the countryside. Experts refer to poverty as an agriculture phenomenon which is caused by low farm productivity, poor diversification of the sector and limited value-adding in the agri-food chains.

A shameful condition

The country’s poverty is more of a shameful condition than a pitiful one. It has not substantially improved since the 1990s. There are lessons to be learned from the past experiences and current examples of its Asean peers who have been successful in reducing poverty through  an inclusive strategy, responsive research and development, clear and consistent policies, quality rural infrastructure and sound resource allocation based on a recent book of University of Asia and the Pacific.

What can business do? The business sector is the main source of economic activity that aids reduction in poverty. According to UN Global Compact, business activity must be sustainable – “delivering value not just financially, but also in social, environmental and ethical terms.”

The part of ethics that has to do with business actions or practice “involves concern about the acceptability, or lack thereof, of business practices subject to what society considers as right or wrong at a particular time” as cited by Benjamin Maturu of UN Development Programme.

Pros and cons of ethical practices.

Ethical practices are commonly thought to be costly but in the long run, boost business profitability and growth. On the other hand, unethical business practices are instantly rewarding but have dire repercussions on the cost, reputation and competitiveness of the business. It also weakens the economy and in turn, impedes poverty reduction.

By and large, business actions are guided by sound vision, mission and goals but how they are carried out is the bone of contention. This is because moral constructs tend to the personal well-being rather than the common good.

Serving the general welfare

Relatedly, there is need for ethical business actions in the aspects of labor hiring, employee treatment and compensation, working conditions as well as business procedures.  It is one of the key holes to resolve the mother of all crimes that afflict our society. The book Ethics, the Heart of Leadership, cited R. Edward Freeman’s, an American philosopher and professor of business administration at the Darden School of the University of Virginia, assertion that “the purpose of all business, labor and work is to make life more secure, more stable, more equitable. Business exists to serve more than itself. It cannot view itself as an isolated entity, unaffected by the demand of individuals and society.”  As Henry Ford said, business is not making profit but serving the general welfare.

In the end, it always takes two to tango. The private sector can perform at its best when the public sector is in the same beat. The full potential of business is achieved with supportive policies, quality infrastructure and strong institutions. It is only fitting that government serve as a strong, capable and pro-active ally to achieve sustainable development.

Ms. Dacul is a Doctor of Business Administration student at De La Salle University.  She is an Agribusiness Specialist at the University of Asia and the Pacific. She conducts research on food and agribusiness and teaches Business Statistics to undergraduate students. She obtained her BS and MS Agricultural Economics and BS Statistics at University of the Philippines Los Baños.  

The views expressed above are the author’s and does not necessarily reflect the official position of De La Salle University, its administration, and faculty.

Topics: Ethical business actions and poverty reduction
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