Apply the principles of
ethics to improve
organisational culture
US ID 252042
Learner Guide
Table of Content
Table of Content ................................................................................................ ii
UNIT STANDARD 252042 ....................................................................................... 1
SECTION 1: VALUES ETHICS & ORGANISATIONAL CULTURE ............................................ 4
1.1 What Is Corporate Culture? .............................................................................. 4
a.
Values ............................................................................................................. 4
b.
Norms .............................................................................................................. 5
C. A definition of ethics................................................................................................ 6
1.2 Triple Bottom Line......................................................................................... 6
1.3 Personal Value And Belief Systems ..................................................................... 7
a.
What are values? ................................................................................................ 8
b.
Belief system ..................................................................................................... 8
c.
Source(s) of values and belief systems ...................................................................... 9
d.
Change your belief or value system .......................................................................... 9
1.4 Conflict Between A Value System And A Code Of Ethics.......................................... 10
a.
Introduction .................................................................................................... 10
b.
Property rights ................................................................................................. 10
c.
Sexual harassment at work .................................................................................. 11
d.
Non-payment of wages or salary............................................................................ 11
e.
Conflict of personal and organisational value systems ................................................. 12
SECTION 2: APPLY CORPORATE ETHICS .................................................................. 13
2.1 Business And Ethics ...................................................................................... 13
a. Business ethics ..................................................................................................... 13
b. Unethical practices in the workplace .......................................................................... 14
c.
Good work ethics .............................................................................................. 15
d.
Cost of poor ethics ............................................................................................ 16
e.
Contributing to an ethical work environment ............................................................ 16
f.
Moral choices ................................................................................................... 16
2.2 Work Ethic ................................................................................................ 17
a. General code of ethics and conduct ............................................................................ 17
2.3 The Code Of Conduct In The Workplace ............................................................. 19
a.
Professional behaviour ....................................................................................... 20
2.4 Ethics And The Law ...................................................................................... 24
a.
Defining law .................................................................................................... 25
b.
The relationship between ethics and law ................................................................. 25
c.
The South African Constitution ............................................................................. 25
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d.
Introduction .................................................................................................... 25
e.
Protection ...................................................................................................... 26
f.
Constitutional court ........................................................................................... 26
g.
Batho Pele ...................................................................................................... 28
2.5 Public Finance Management Act No1 Of 1999 ...................................................... 30
a.
Responsibilities of accounting officers .................................................................... 30
2.6 King Report ............................................................................................... 31
2.7 Acts, Regulations And Codes Governing A Sector Or Specific Industry ......................... 33
2.8 Corporate Governance .................................................................................. 35
a.
Principles of corporate governance ........................................................................ 36
b.
Controls needed for corporate governance ............................................................... 37
2.9 Business Ethical Practices .............................................................................. 38
a. Sales and marketing ethics ....................................................................................... 38
b. Bid (tender) rigging................................................................................................ 40
c.
Ethics of accounting information ........................................................................... 40
d.
Ethics of human resource management ................................................................... 41
e.
Ethics of intellectual property, knowledge and skills................................................... 42
f.
Ethics and Technology ........................................................................................ 43
g.
Ethics of production .......................................................................................... 43
SECTION 3: ANALYSE A UNIT ................................................................................ 44
3.1 Compliance Programme ................................................................................ 44
3.2 Measuring Program Performance...................................................................... 45
a.
Analyse conduct ............................................................................................... 45
b.
Surveys .......................................................................................................... 45
c.
In-depth interviews ........................................................................................... 51
d.
Observation ..................................................................................................... 51
3.3 Evaluate The Conduct ................................................................................... 52
a.
Analyse the data ............................................................................................... 52
b.
Describing data ................................................................................................ 53
SECTION 4: STRENGTHEN ORGANISATIONAL ETHICS .................................................. 55
4.1 Effective Program Implementation ................................................................... 55
a.
Implementation plan.......................................................................................... 56
b.
Communication activities .................................................................................... 57
c.
The role and responsibilities of the manager ............................................................ 57
d.
Procedures ...................................................................................................... 58
e.
When the code of ethics is breached ...................................................................... 58
4.2 Monitoring And Evaluating Improvements ........................................................... 59
Bibliography ................................................................................................... 59
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UNIT STANDARD 252042
Unit Standard Title
Apply the principles of ethics to improve organisational culture
NQF Level
5
Credits
5
Purpose
This Unit Standard is intended for managers in all economic sectors. These managers would
typically be second level managers such as heads of department, section heads or divisional
heads, who may have more than one team reporting to them. The qualifying learner will be
able to analyse the application of corporate ethics in the unit and formulate strategies to
promote the organisational code of conduct and application of ethics in the unit.
Learning assumed to be in place
It is assumed that learners are competent in:

Communication at NQF Level 4.

Mathematical Literacy at NQF Level 4.

Computer Literacy at NQF Level 4
Unit standard range

The learner is required to apply the learning in respect of his/her own area of
responsibility.

Unit refers to the division, department or business unit in which the learner is responsible
for managing and leading staff.

Entity includes, but is not limited to, a company, business unit, public institution, small
business, Non-Profit Organisation or Non-Governmental Organisation.

Corporate ethics includes business ethics and the ethical norms and standards of public
sector entities
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Specific Outcomes and Assessment Criteria
Specific Outcome 1: Demonstrate understanding of the relationship between values, ethics and
organisational culture and its impact on achieving goals and objectives.
Assessment Criteria

The relationship between personal values, organisational ethics, and the entity's culture
is demonstrated through examples from the South African workplace

The complexity of the conflicts between personal values and the entity's values and
ethical codes is illustrated with examples from the South African workplace

The potential impact of organisational values and culture on the entity's triple bottom
line are analysed and described
Specific Outcome 2: Apply the concept of corporate ethics to a unit
Assessment Criteria

The imperatives for ethical conduct in South African organisations are explained with
reference to acts, regulations, codes and other documents relevant to the entity.
Relevant documents include the South Africa's Constitution, the King Report, PFMA, the
principles of Batho Pele, as well as acts, regulations and codes governing the sector or
specific industry

The role of corporate governance within an entity is analysed to determine the
contribution of a unit in promoting internal organisational codes and ethical practices

The specific ethical practices of a unit in different areas are analysed with examples.
Areas include accounting information, marketing, sales, production, intellectual
property, tendering processes, Information Technology and Human Resources
Specific Outcome 3: Analyse a unit in relation to the principles of corporate ethics
Assessment Criteria

An instrument is selected for analysing individual and organisational conduct in respect of
organisational values, codes of conduct and corporate ethics

The instrument is applied to gather and record information within a unit in respect of
organisational values, codes of conduct and corporate ethics

The instrument is applied to evaluate the current state in a unit against the desired state
in respect of organisational values, codes of conduct and corporate
Specific Outcome 4: Formulate recommendations for strengthening shared organisational
values, the code of conduct and ethical practices
Assessment Criteria

An implementation plan is prepared that described the strengthening of the entity's
values, code of conduct and ethical practices in the unit

The role and responsibilities of the manager are described in terms of decision making to
strengthen the values, code of conduct and ethical practices in a unit and the entity

The communication activities for promoting the entity's values, code of conduct and
ethical practices are outlined in the plan, with role allocation and time frames
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
The process for monitoring and evaluating improvements in relation to the entity's
organisational values, code of conduct and ethical practices in a unit is described with
role allocation and time frames
Unit Standard Essential Embedded Knowledge

The South African Constitution.

King Report on Corporate Governance.

National and international best practices in respect of business/corporate ethics.

Personal and organisational values.

Principles of business/corporate ethics
Critical Cross-field Outcomes (CCFO)

Identify and solve problems using critical and creative thinking processes in applying ethical
principles in the unit

Work effectively with others as a member of a team, group, organisation or community to improve
the culture of the unit

Organise and manage oneself and one`s activities responsibly and effectively in order to
demonstrate ethical conduct

Collect, analyse, organise and critically evaluate information in order to identify areas of
unethical conduct in the unit

Communicate effectively using visual, mathematical and/or language in the modes of oral and/or
written persuasion to promote ethical conduct in the unit

Use science and technology effectively and critically, showing responsibility to the environment
and health of others in promoting ethical practices in the unit and entity

Demonstrate an understanding of the world as a set of interrelated systems by recognising that
mathematical problem-solving contexts do not exist in isolation to demonstrate how personal,
social, organisational and national values and beliefs impact on the entity's culture

Participating as responsible citizens in the life of local, national and global communities by
promoting ethical practices in the unit and entity
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SECTION 1: VALUES ETHICS & ORGANISATIONAL
CULTURE
Specific Outcome 1
Demonstrate understanding of the relationship between values, ethics and organisational culture
and its impact on achieving goals and objectives.
Assessment Criteria

The relationship between personal values, organisational ethics, and the entity's culture
is demonstrated through examples from the South African workplace

The complexity of the conflicts between personal values and the entity's values and
ethical codes is illustrated with examples from the South African workplace

The potential impact of organisational values and culture on the entity's triple bottom
line are analysed and described
1.1 What Is Corporate Culture?
It is important to understand corporate culture and the elements that make up corporate
culture, as this is unique to each organisation.
Corporate culture might be best summarized in the often heard statement:;
“ It might not make much sense to you, but that’s the way we do things around
here!”
Corporate culture is the pattern of shared beliefs, attitudes, assumptions and values in an
organisation which you probably won’t find written down anywhere, but still dictates the way
people act and interact and strongly influence the ways in which work is carried out.
Corporate culture reflects what has worked in the past and can work for an organisation by
creating an environment which is conducive to performance improvement and the management
of change.
It can also work against an organisation when barriers are erected which prevent employees
from doing the work in such a way that the goals set by top management are met. Barriers
would include resistance to change and lack of commitment.
Corporate culture is determined by the values, norms and ethics of the organisation.
Employees see corporate culture as organisational climate, and it will influence and be
expressed by management style.
a. Values
Values refer to what is regarded as important. They are expressed in beliefs of what is best or
good for the organisation and what sort of behaviour is desirable. You will find corporate values
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in the mission and vision statements of an organisation and typically includes what the company
commits to regarding the following:

Care and consideration for people and the environment

Care for customers

Competitiveness

Equity in the treatment of employees

Excellence of products and service

Company growth

Innovation

Market/customer orientation

The performance orientation of the company

The commitment to productivity of the company

Provision of equal opportunity for employees

Quality

Social responsibility
b. Norms
Norms are the unwritten rules of behaviour that apply in the company. These rules will provide
employees with informal guidelines on how to behave.
Norms tell people what they are supposed to be doing, saying, and believing, even wearing.
They are not expressed in writing – if they were, they would be policies or procedures. They are
passed on by word of mouth or behaviour and can be enforced by the reactions of people if they
are violated. Norms can exert very powerful pressures on behaviour because of these reactionswe control others by the way we react to them.
Norms refer to such aspects of behaviour as:

How managers treat subordinates and how subordinates relate to their subordinates

The prevailing work ethic, e.g. ‘Work hard, play hard’, or ‘Come in early, stay late’, or
‘If you cannot finish your work during the business hours you are obviously inefficient’, or
‘Look busy at all times’, or ‘Look relaxed at all times’.

Status- how much importance is attached to it; the existence or lack of obvious status
symbols

Ambition- naked ambition is expected and approved of, or a more subtle approach may
be the norm

Performance- exacting performance standards are general; the highest praise that can be
given in the organisation is to be referred to as very professional

Politics- rife throughout the organisation and treated as normal behaviour; not accepted
as overt behaviour

Loyalty- expected, a cradle-to-grave approach to careers; the emphasis is on results and
contribution in the short term

Anger- openly expressed; hidden, but expressed through other, possibly political, means

Approachability- managers are expected to be approachable and visible; everything
happens behind closed doors
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
C.
Formality- a cool, formal approach is the norm; forenames are/are not used at all levels;
there are unwritten but clearly understood rules about dress.
A definition of ethics
Ethics is also called moral philosophy.
How should we live? Shall we aim at happiness or at knowledge, virtue, or the creation of
beautiful objects? If we choose happiness, will it be our own or the happiness of all?
And what of the more particular questions that face us: is it right to be dishonest in a good
cause? Can we justify living in opulence while elsewhere in the world people are starving?
Is going to war justified in cases where it is likely that innocent people will be killed? What are
our environmental obligations, if any, to the generations of humans who will come after us and
to the nonhuman animals with whom we share the planet?
Ethics deals with such questions at all levels. Its subject consists of the fundamental issues of
practical decision making, and its major concerns include the nature of ultimate value and the
standards by which human actions can be judged right or wrong.
Therefore, we can say that ethics concerns itself with what is morally good or
bad and what is right or wrong.
The word ethics is derived from the Greek word ethos. Ethics deal with the morality of persons
as individuals and also that of groups of individuals. Ethics assess not only what people are seen
to be doing, but also examines what they think is right, fitting and just.
People are often judged by what they do or are seen to be doing, but their actions do not
necessarily reflect their thoughts or feelings, or what they are often saying.
People often act within the context of traditions and customs, but, and this is important,
ethics always involve 'reflective evaluation', that is, a serious thought process takes place before
action takes place. In other words, individuals like to feel that what they do is right, just
and/or accepted as correct.
The concept of ethics remains the same, whether it is applied in your personal
life or in the workplace, because it is a choice you make and you know what is
right and what is wrong.
1.2 Triple Bottom Line
The triple bottom line (abbreviated as "TBL" or "3BL", and also known as "people, planet, profit")
is used to explain the values and criteria for measuring organisational (and societal) success:

Economic (profit)

ecological (planet)

social (people)
In practical terms, triple bottom line accounting means expanding the traditional reporting
framework to take not only look at the financial aspects of an organisation but also at the
organisation’s ecological and social performance.
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The concept of TBL states that a company's responsibility should be to stakeholders as well as
shareholders. In this case, "stakeholders" refers to anyone who is influenced, either directly or
indirectly, by the actions of the firm.
People, planet and profit describe the triple bottom lines and the goal of sustainability.
 People
"People" (human resources) refers to fair and beneficial business practices toward labour, the
community and the region in which a corporation conducts its business.
A triple bottom line enterprise seeks to benefit many constituencies and not to exploit or
endanger any group of them
 Planet
"Planet" (environment or natural capital) refers to sustainable environmental practices. A TBL
company seeks to benefit the natural order as much as possible, or at the least to do no harm
and limit environmental impact. A TBL organisation reduces its ecological footprint by:

carefully managing its consumption of energy and non-renewable resources

reducing manufacturing waste

rendering waste less toxic before disposing of it in a safe and legal manner.
Currently, the cost of disposing of non-degradable or toxic products is borne financially by
governments and environmentally by the residents near the disposal site and elsewhere. In TBL
thinking, an enterprise which produces and markets a product which will create a waste problem
should not be given a free ride by society. It would be more equitable for the business which
manufactures and sells a problematic product to bear part of the cost of its ultimate disposal.
Ecologically destructive practices, such as overfishing or other endangering depletions of
resources are avoided by TBL companies.
Often environmental sustainability is the more profitable course for a business
in the long run
 Profit
"Profit" is the economic value created by the organisation after deducting the cost of all inputs,
including the cost of the capital tied up. It is the real economic impact the organisation has on
its economic environment. Therefore, an original TBL approach cannot be interpreted as simply
traditional corporate accounting profit plus social and environmental impacts unless the "profits"
of other entities are included as a social benefits.
1.3 Personal Value And Belief Systems
Culture can be defined as anything that is learnt in the interaction
process in human society. This is a very broad definition and
includes such learnt aspects of human social life as language,
customs, norms, values and also symbols. Symbols denote
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characteristics and meanings people give to them, as for example, a flag is a piece of cloth
arranged in one manner or another. However, for nationals of a state, the flag indicates several
important factors. These may include the identification of a nation, a political party, a
company, a team, or any other group that it may represent. The flag could indicate a group of
people living within a defined geo-political area, with a distinct language and unique customs
related to the region. It is important to remember that culture is both material and nonmaterial.
No human being is born with culture. All human beings learn their culture through a process of
socialisation and interaction with other individuals in society and also with the physical
environment. Culture is learnt by individuals as well as being taught by others. The learning of
language is one of the most important aspects of culture. It is through language that ideas,
values, norms and other facets of culture are transmitted and communicated to others.
Culture involves values and beliefs. In most societies today, and especially in Western
society, romantic love is the. basis of marriage rather than the arranged form of marriage.
However, all societies do place some restrictions on the choice of a marriage partner, although
these may differ in intensity from society to society. One of the most universal restrictions is the
incest taboo.
Culture is therefore the way of life of a human group, it includes all the learned
and standardised forms of behaviour which one uses and which others in one’s
group expect and recognise.
a. What are values?
Values are collective standards whereby right and wrong, good and bad and
pretty and ugly are separated.
Values are essentially general in nature and provide broad guidelines to groups or peoples.
For example, a value may be held by a group or people that negotiation and clear debate is the
correct manner to resolve differences or conflict. It would therefore be below the collective
standard of this group of people, to solve a problem using violent means.
Of course the opposite will also be true; it may the accepted standard of a group to immediately
solve conflict through the application of violence.
Values have always shaped a person's beliefs, and ethics should be concerned with moral rights
and wrongs -particularly in the context of a person's obligations to the society in which he lives.
Ethical rights and wrongs cannot be regarded as inflexible from age to age, because they have a
tendency to change with the passing of time. It was accepted as morally defensible to own and
treat slaves as commodities just on 200 years ago. Today slavery in nearly all countries in the
world does not exist it is looked upon as morally wrong.
An individual, belonging to different cultural group, finds it very difficult to determine another
person's ethical code. First and foremost, it is a personal thing, and we tend not to discuss it
until some or other crisis demands that we nail our colours to the mast, to show where we
personally stand.
b. Belief system
Taken together, your ethics and values form your belief system. Ethics are what you as a person
believe and values are what the group believes is right and wrong and, because you are part of
that group, you also believe in those values.
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Beliefs indicate the manner in which people, think about Divinity (God), the nature of human
life, the spirit world, forms of magic, ancestral spirits and generally the nature of life after
death.
Belief systems are important because they influence people's behaviour, hence it is critical to
understand these beliefs and values.
c. Source(s) of values and belief systems
The main source of values and belief systems are the people around you for example your
parents, family, peers and co-workers. The environment you grew up in plays a very important
role. It is unethical to steal something from someone, but wouldn’t be a very strong notion with
you if you weren’t taught that it is wrong while growing up.
The community that you group up in, the people that you and your parents associated with, the
belief system of these people and your parents are what shaped your values and belief systems.
This is why different cultures have such vastly different belief systems.
Our ethics are constantly changing. Not in a sense that for example one day you believe it is
wrong to lie and the next day you think it is ok, they simply grow stronger and new ones are
added.
Your values directly affect your behaviour. If you believe in something you will either do certain
things and others not at all, for example if you believe it is wrong to steal you will never take
anything from someone else, or at least not without asking. If you believe it is good to help
others in need, you will help where you can instead of turning your back.
d. Change your belief or value system
Changing your belief is not an easy thing! It takes quite some time and practice.
 The first step
is to make a decision
You have to decide that you want to apply a certain belief in your life and then you have to
stick to it. A belief is not something that you want to do one day and not the next. It is
something that is embedded within you as a person. Someone who has broken the law and is in
jail for stealing has to make a decision never to steal again for them to have a new belief.
 The second step
is to apply your decision
After you have decided to implement a new belief in your life you have to apply it and practice
it at every occasion that is presented to you regarding your new belief. Like in the example
above of the person in jail; once that person is out of jail the opportunity to steal something will
present itself to him or her and they then have to take that same decision again and say no to
themselves. They have decided not to steal again and have to decide on that moment not to do
it for the initial decision to be affective. After some practice doing thing this, your belief grows
stronger.
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 The third step
is to keep implementing your belief for the rest of your life
Once you have some practice with your new belief it starts to become part of you. Eventually
you won’t even have to think about it anymore, it will always just be there. Like the example,
if that person has decided not to steal on every occasion that they’ve been presented with for
ten years they probably won’t even think about stealing when they see something they want
that is not theirs.
The only way that a belief can disappear from your life and who you are is if you decide not to
believe in it anymore and automatically you won,t apply it in your life anymore. Depending on
the belief, it can never really be a good thing to take away some of your beliefs unless it was a
bad one.
If you are someone who doesn’t steal or lie, you would apply the same in the workplace and
wouldn’t steal from co-workers or lie to them. At the end of the day, beliefs and ethics aren’t
something you can switch on or off. This part of you will show at work and at home.
Formative Assessment 1: SO1
1.4 Conflict Between A Value System And A Code Of
Ethics
a. Introduction
In the workplace, we have to cope with the values and ethics of the organisation as well as our
own personal value systems. The challenge to managers is to manage the conflict that can
result due to

differing value systems and ethics of employees

the difference between the value system and ethics of the organisation and those of
employees

abiding by the value system and ethics of the organisation as well as those expected by
the concept of the triple bottom line
Conflict occurs in our daily lives and is nothing new to us. The chances are good that an
individual’s personal value system may be in conflict with the corporate code of ethics.
In other words, an employee may view an action at work as cruel, due to his or her upbringing or
past experiences, while the corporate environment may see the action as dishonest.
In the workplace and in life in general, we have certain rights. These include the rights to
property, the right to be paid for labour and the right not be harassed. We will discuss some of
these rights and suggest actions to take if your rights conflict with the personal value systems of
other employees or the organisation’s value system.
b. Property rights
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 Property Rights Of The Individual
Every person shall have the right to acquire and hold rights in property and, to the extent that
the nature of the rights permits, to dispose of such rights. No removal of any rights in property
shall be permitted otherwise than in accordance with a law.
This means that other people do not have the right to take your property (steal from you),
provided you have paid for the property in full.
If you have not paid in full, the
person/organisation that you still owe money to has the right to repossess the property.
In all other instances, you have the right to take steps to either get your property back or to
have the person punished, as long as you act within the law.
 Property Rights Of The Employer
Employers have the right to manage their businesses. In order to manage businesses they have
the right to take action when employees deviate from the set rules and regulations.
In other words, when unethical behaviour occurs, e.g. damaging, or misusing the property rights
of the owner (employer), the employer has the right to take action. This action will usually be
in the form of disciplinary steps.
c. Sexual harassment at work
 Case study 1

You have been harassed by your co-worker on three occasions. This is the fourth time
and he/she claims they touched your bum by accident. The first three times were
uncomfortable but now it is becoming obvious.

The first time this happens, you should tell the person that you don’t like being touched
in that manner.

By the fourth time it is obvious that this person is not doing it by accident. You should
pose yourself and report this to your and his/her superior.

Make sure that there is someone who can corroborate your story.

You will then most probably have to write a report on the incidents and hand it over to
your superior.

Your superior will then take the complaint up with the relevant parties and a disciplinary
hearing will be held.

(This process differs from organisation to organisation)
d. Non-payment of wages or salary
 Case study 2
You have been working for an organisation for two months and still haven’t been paid. You can

Go to the Department of Labour

They will give you a form to fill in with your complaint

The department will then phone your employer and ask them if the allegations are true
and if they are aware that the employee is unhappy about the mentioned complaint.
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
The department will then send the employer a formal complaint on which they have
seven working days to respond.

Next a hearing will be scheduled at the department of labour to see if the two parties
can come to an agreement.

If the two parties cannot come to an agreement, a court hearing will be scheduled and
the employer will stand trial.
e. Conflict of personal and organisational value systems
 Case study 3
John was hungry and ate the left over rolls in the bakery. This behaviour is
unethical and is seen as “dishonesty”.
Mary, John’s supervisor, grew up in poverty and knows how it feels when
one is hungry.
The personal value system is higher than the corporate
code of ethics.
It is important for an organisation to implement a value
system that suits the need and the culture of the
organisation! This should be included in the code of ethics.
In all the situations above the manager should

exercise discretion

consider all the value systems

try to find a solution where every party wins
Formative Assessment 2 : SO1
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SECTION 2: APPLY CORPORATE ETHICS
Specific Outcome 2
Apply the concept of corporate ethics to a unit
Assessment Criteria

The imperatives for ethical conduct in South African organisations are explained with
reference to acts, regulations, codes and other documents relevant to the entity.
Relevant documents include the South Africa's Constitution, the King Report, PFMA, the
principles of Batho Pele, as well as acts, regulations and codes governing the sector or
specific industry

The role of corporate governance within an entity is analysed to determine the
contribution of a unit in promoting internal organisational codes and ethical practices

The specific ethical practices of a unit in different areas are analysed with examples.
Areas include accounting information, marketing, sales, production, intellectual
property, tendering processes, Information Technology and Human Resources
2.1 Business And Ethics
a. Business ethics
A company’s ethics refers to the norms and principles of the company. This promotes a culture
in an organisation where unethical conduct is not tolerated and unacceptable behaviour
eliminated.
Positive business ethics include the following organisational norms and principles
Ethics
Mission statement
and company values
Code of Conduct
Business ethics is about a business doing business in a fair and just way, without lying, cheating,
bribing, or hiding information from customers.
Business ethics examine ethical principles and moral or ethical problems that
arise in a business environment in an attempt to do business in a fair and just
way.
13 | P a g e
It applies to all aspects of business conduct and takes into account and applies to the conduct of
all the employees of a business and the business as a whole. Many organisations therefore have
an official code of ethics.
A code of ethics typically sets out what behaviour is acceptable, for example are employees
allowed to receive gifts from suppliers or give gifts to customers, as well as the punishment of
employees who violate the code.
Historically, there are several examples of codes of ethics being set for professional groups.
Some such examples include medical doctors, lawyers and other legal professionals, ministers of
religion and accountants.
An old example is the application of the Hippocratic Oath to doctors. This code was first
administered during the time of the Greek physician, Hippocrates, and requires all doctors
to pledge themselves to the preservation of human life and the service of humanity on the
whole.
Apart from the medical profession, several other organisations today prescribe a code of ethics
and professional conduct in order to enhance the prestige of the organisation and to preserve
honestly and good service.
Society is now expecting more from organisations, so an organisation’s ethics will reflect a code
of behaviour which will be in line with what the public expect of the organisation. Society
expects business to show

social responsibility,

show that it cares for the environment and is protecting the environment

show that it cares for consumers
Organisational ethics demand that companies:

Be more honest and less secretive in their dealings with society. The consumer must be
provided with more and better information regarding the total market offering. By an
increased emphasis on communication, the organisation can provide the consumer with
useful and reliable information, thereby ensuring that the consumer is better informed.

That they go beyond their legal obligations. Another dimension is the authority within
which the organisation operates. Should it try to evade its responsibilities by, for
example, disregarding prevalent moral and ethical values, it may provoke a reaction in
the form of legal or legislative action.

That they do not market products which contain an unknown degree of risk,

And that they refrain from activities which waste scarce resources, or pollute or
irreparably damage the environment.

These days organisations must accept responsibility for the welfare of society. In other
words, it must accept greater responsibility for possible harmful effects of its products.
This is called corporate social responsibility. (refer to TBL in the previous section)
Consequently, it can happen that a manager's code of ethics can have a considerable influence
on many aspects of the organisational life of a business - from making decisions on internal
matters to his behaviour outside, with clients especially, and also with other members of his
community.
b. Unethical practices in the workplace
Unethical behaviour in the workplace is common and should be managed on a continuous basis.
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There are more and more opportunities for unethical people to manipulate various systems in
the workplace. Typical examples which can be added to the statistics are hackers who steal
information from the software on computers.

The one that is most prevalent in South Africa today is bribery.

Industrial espionage where information is leaked to competitors in return for payment

Invoice fraud - the amounts which are owing to the creditors are fictionalised or they are
inflated. This would fall under accounting ethics.

Product fraud - poor quality products are released on to the market. When this happens,
the company is acting unethically in its production, marketing and social responsibility

Advertising fraud - misleading or invalid claims are made for the products.

Favouritism - the staff are promoted on the basis of favours, gifts and nepotism.

Contracts and tenders are fraudulently granted.

Stealing of computer time for one's own benefit.

Discrimination in any form

Conflict of interest – where employees engage in outside employment and private
practice by stealing the company’s customers and doing work for them privately

Accepting gifts and benefits from suppliers in return for the allocation of contracts or
tenders

Misuse of company equipment and assets.
From the above it can be seen that the greatest threat to the organisation comes from within
when the conditions are supposed to be normal. Waste, accidents and errors take a large bite
out of the profits of the organisation.
c. Good work ethics
These elements of the work ethic apply to all those working within an organisation and this ethic
must be witnessed by that organisation’s clients.

Employees must be honest with and loyal to clients.

Total quality management would result in sub-standard products not being released
onto the market

Be on time for work, as arriving late or leaving early means you are stealing from your
employer

Do not accept bribes and gifts from suppliers

Do not use company equipment for your own benefit

Loyalty. Successful organisations have loyal employees. These employees are motivated
to always carefully consider the interests of the organisation. This loyalty should not
however be a blind loyalty and employees should still be free to question decisions.

Honesty. Someone who is honest is truthful, law abiding and incorruptible. Dishonest
people lie, cheat and steal.

Do not commit accounting fraud in any form

Avoid favouritism

Make sure advertising is truthful

Do not abuse company property and machinery
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
Be proud of your work and do your best every day
d. Cost of poor ethics

Loss of trust which leads to poorer relationships and less effective team work

Loss of confidentiality,

Limited communication,

Lack of self-esteem, of commitment and less loyalty

Loss of your/the organisation’s good name

The organisation can be blacklisted, meaning that no contracts or tenders will be
allocated to it

Customers can lose faith in the organisation, leading to a loss of customers to
competitors

Organisations can be fined for certain unethical practices
e. Contributing to an ethical work environment

Make the decision to commit to ethics

Recognise that you are a role model by your actions and values

Assist others by instilling ethical behaviour

Discuss ethical practices

Articulate your values

Talk to people

Be consistent
f. Moral choices

Ethics is about moral choices.

It is about the values that lie behind them, the reasons people give for them, and the
language they use to describe them.

It is about innocence and guilt, right and wrong, and what it means to live a good or bad
life.

It is about the dilemmas of life, death, sex, violence and money.

In studying ethics, you are challenged to examine what it is that you want in life and
what you believe to be worth doing.
From what has been said above, the following is evident and the writing is on the wall for those people
who continue with unethical behaviour:
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
Good ethics go beyond the issue of what is legal or illegal.

Ethics is strongly influenced by what people consider right and wrong.

Ethics is determined by the conduct of people.

Ethics can be identified in a system or code.

Ethics can be identified in individuals and a group.
 Make an ethical decision
Typical moral choices and or decisions may concern, for example, the questions or issues listed
below:
Formative Assessment 3: SO2
2.2 Work Ethic
a. General code of ethics and conduct
As in introduction to this section, we will discuss a general code of ethics and conduct that
should apply to workplaces throughout South Africa.
Although many more things than are highlighted here have changed for the better in the New
South Africa, this is a summary of ethics applicable to the workplace that should be in place in
all businesses.
The general code of ethics is done in line with the Constitution
 Equality
The state may not unfairly discriminate directly or indirectly against anyone on one or
more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social
origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture,
language and birth.
We all know that in the old South Africa, discrimination on the basis of race and sex was
practiced in all aspect of the working world. This is no longer allowed and people should be
appointed, promoted and remunerated according to their capabilities.
 Human dignity
Everyone has inherent dignity and the right to have their dignity respected and protected.
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Non one may make fun of you because you are a woman or of a different race and your
employers must respect your dignity as a human being. Telling racist or sexist jokes in the
workplace is no longer acceptable. You must also respect the human dignity of others, including
women, children and even people whose political or religious beliefs differ from yours!
 Freedom and security of the person
to be free from all forms of violence from either public or private sources;
not to be treated or punished in a cruel, inhuman or degrading way.
When disciplinary action is taken, you may not be treated in a cruel, inhuman or degrading way
and no violence is allowed when disciplining is applied. Police may not resort to brutality when
they arrest you or when you are in custody. Similarly, you may also not attach someone else,
resist arrest by violent means or treat anyone else in a cruel, inhuman or degrading way. This
includes women and child abuse.
 Slavery, servitude and forced labour
No one may be subjected to slavery, servitude or forced labour.
Your employer may no longer expect you to work for food and a place to stay. It may be part of your
salary or wage package but you must also be paid money for your work.
 Privacy
Everyone has the right to privacy, which includes the right not to have their possessions
seized
This means that no one may take what belongs to you – not in the workplace, not at home. Your property
is your property and no one else may claim it or steal it.
 Freedom of religion, belief and opinion
Everyone has the right to freedom of conscience, religion, thought, belief and opinion.
Everyone has the right to freedom of expression, which includes freedom of the press and
other media;
The right in subsection (1) does not extend to
a. propaganda for war;
b. incitement of imminent violence; or
c. advocacy of hatred that is based on race, ethnicity, gender or religion, and that
constitutes incitement to cause harm.
You are allowed to the religious belief of your choice. In the old South Africa, when you applied for a job,
you were questioned about your religious beliefs. Employers are no longer allowed to ask you about your
religious beliefs.
 Labour relations
Everyone has the right to fair labour practices.
You are allowed to join trade unions and seek legal advice regarding labour matters. Of course, the
employer also has this right. You have to be treated fairly and the correct procedures have to be followed
18 | P a g e
in case of disciplinary action. You have the right to view the disciplinary code of the organisation and you
have the right to institute grievance procedures. Your employer has the right to expect you to treat his
property with respect, to do your job as laid down, to follow orders relating to the job and not to steal
from him, be it goods or time. the employer has the right to institute disciplinary action against you if
you do not abide by the rules.
 Environment
Everyone has the right to an environment that is not harmful to their health or well-being
Organisations should not dump potentially hazardous waste of any kind in areas not designated for such
waste products.
 Children
Every child has the right not to be required or permitted to perform work or provide
services that are inappropriate for a person of that child's age; or
place at risk the child's well-being, education, physical or mental health or spiritual, moral
or social development
Employers may no longer make use of child labour or force parents to send their children to
work. Similarly, parents may not force their children to go to work if the above conditions are
not met.
 Just administrative action
Everyone has the right to administrative action that is lawful, reasonable and procedurally
fair.
People in positions of power may not ask for a bribe or some other form of remuneration in
order to award contracts or do their jobs that they are paid for. When you are stopped by a
traffic officer, he may not accept a gift from you in order not to give you a ticket. When you
are in a position of power, you may not solicit bribes, gifts or any other form of remuneration
with which you can enrich yourself, in exchange for favours, awarding contracts, etc.
In general, your employer may not expect you to do something that is against your religion and
your own personal code of ethics, such as: lying to clients, industrial espionage, dump hazardous
waste in inappropriate places, etc. Similarly, you may not damage your employers good name,
business relationships, property, etc. due to your lack of ethics.
2.3 The Code Of Conduct In The Workplace
The Code of Conduct will set up agreed rules about how employees in the organisation must
behave. Even cabinet ministers have a code of conduct that they must adhere to.
The Code of Conduct is a declaration of the ethical principles, organisational values and
acceptable behaviour expected from all employees and managers in the workplace.
Most organisations implement mission, vision and value systems to reinforce positive behaviour
and to create a sense of belonging for the workforces. Examples of company values are:
openness, fairness, accountability and responsibility, honesty etc.
This Code of Conduct is intended to assist employees and managers to identify and resolve ethics
in the workplace.
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Most organisations are diverse workforces with different relationships to one another. These
relationships may be based on power or status and it is therefore imperative that all employees
and managers respect the rights and responsibilities of others.
The relationship between accountability, responsibility and business ethics in the business
environment is usually encapsulated in the business’s Code of Conduct, a document outlining
the core values and practices that the business ascribes to:
Examples of topics usually addressed by codes of conduct:
Preferred style of dress
Avoiding illegal drugs
Following instructions of superiors
Being reliable and prompt
Maintaining confidentiality
Not accepting
stakeholders
Avoiding racial or sexual discrimination
Avoiding conflict of interest
Complying with laws and regulations
Not using the business’s property for
personal use
personal
gifts
from
Not discriminating against race or age or sexual Reporting illegal or questionable activity
orientation
Abiding by working hours
The code of conduct of a company may be stated very simply. The former aircraft
manufacturing giant McDonnell Douglas had a corporate ethics policy which simply stated that
employees should be honest and trustworthy in all relationships. Other organisations have
highly complex codes of conduct which address many areas of possible employee behaviour.
a. Professional behaviour
Things that are not included in a Code of Conduct, but are expected from anyone working with
customers and regarded as professional behaviour include:
 Maintaining a positive attitude while you are at work
Your attitude is the way you look at things mentally. It has to do with how you think and what
you believe about yourself and your situation. Your attitude affects your relationships.
When you are optimistic and hopeful you transmit a positive attitude, which makes people
respond positively. When you are pessimistic and expecting the worst, your attitude is usually
negative, and people respond negatively to you.
Your attitude will affect the way you respond to people and situations.
By controlling what we think and say to ourselves, when confronted by a given situation, we can
influence our attitudes positively. Practising positive self-talk will ensure that we handle things
well and encourage a positive response.
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Moaning about your job or your boss to other employees or customers is VERY unprofessional and
creates a bad image of the company. If someone is moaning all the time, it also makes other
employees negative – so be positive, smile and look on the bright side.
When you are provoked by a client or
sometimes difficult to keep your
of the day it is best to maintain your
positive attitude, no matter what the
a
co-worker
it
is
composure, but at the end
composure and keep a
situation.
It is a fact of life that during
in the business environment in
another there is going to be some
be due to a variety of reasons.
interaction with clients or
general, at some stage or
sort of conflict. This may
When dealing with any client it is
important to adjust your
own tone, pitch and volume of your voice to reply to both verbal and nonverbal messages in such
a way so as not to offend the client in any way.
A satisfied client thanking you for going the extra mile will normally speak in a relaxed and
friendly manner, using warm tones and speaking at a moderate pitch and pace. It is easy and
pleasant to reply to this client’s messages as there is no aggression or threatening behaviour
from his side and there are not many variations in the verbal and nonverbal messages he is
communicating and therefore you can conduct a relaxed conversation.
Dealing with an irate client is slightly more complicated as he is upset about something and his
emotional state can change at any time.
Keeping a positive state of mind during these types of situations will help you keep the situation
under control and as calm as it can be. It will also help give you perspective on the situation.
In general a positive attitude is enjoyed by everyone around you in a business environment and
can only benefit your career.
 Keep other departments informed
Another aspect of professional behaviour is keeping your colleagues, supervisor and other
departments informed about what you are doing, especially regarding work in progress. If
another employee or department is waiting for you to finish your job, TELL THEM about the
progress and how long it will take. They cannot read your mind and if you don’t tell them, they
will not know. For example, If the job is going to take another 3 hours or 2 days, tell the people
who need to know. This way, they can plan and schedule their own work rather than wait for
you to finish, because they do not know that there is a delay.
 Working hours
If your working hours require you to start work at 08:00, this means that you should arrive at
work at about 07:45, to give you time to use the toilet, get some coffee and greet your
colleagues before you start work. This way, you can actually start at 08:00.
Only unprofessional and lazy people arrive at work at 08:15, then wander around getting coffee,
greeting colleagues and using the toilet and eventually start work at 08:30. You have just stolen
30 minutes from your employer, and I suppose you now want to take your full lunch hour as well!
The same applies to returning late from your lunch break, or leaving early – you are a criminal,
stealing from your employer.
Furthermore, because you are not doing a full day’s work, your colleagues have to do more work
in order to meet production targets and meet deadlines – so you are also stealing from your
colleagues.
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 Absenteeism
Staying off work when you are not really ill is also unprofessional. When you are not at work,
someone else has to do their own work as well as yours and this is unfair.
Professional people do not stay away from work unless they are really ill or to take their annual
leave. What would happen if doctors, pharmacists, lawyers, dentists, nurses and other
professional people just stay away from work? It would inconvenience you, would it not?
Obviously, the same applies to you. Sick leave should not be taken if you are not ill. One day,
when you are really ill and need to use more than your allocation of sick leave, your employer
will look at your sick leave record and will not accommodate you. You could end up losing your
job or having to take unpaid leave.
Years ago, long before you were born, employees fought hard for the right to be paid when they
were sick, so don’t abuse the privilege.
 Leaving your workstation
You should only leave your workstation when you absolutely have to. Do not leave your
workstation to chat to someone else or to do private business – that is what lunch hours are for.
When you leave your workstation you disrupt the workflow of the entire department and this
could lead to losses for the company, less increases or even job losses – hopefully you will be one
of the first to lose your job if this happens, since you are the cause of the mess.
All professional people and people who make it to the top have excellent work ethic – they will
do more than is required, work longer hours than required in order to get to the top – you should
do the same.
Take pride in your work, even if you don’t like your work very much. Remember, if you don’t
work, you don’t eat – it’s as simple as that.
No successful person ever reached the top without working very hard to get there. If you want
to reach the top, you have to do the same.
 Leave
As is the case with sick leave, you must not abuse your leave. The purpose of leave is to give
you a decent rest period before tackling work again for the next year. If you abuse your leave,
you will not have this rest period and you may even get to the point where you have no leave
left and any days off will be taken as unpaid leave.
 Confidentiality
Every organisation has matters that are confidential, such as your salary, client’s details and
information of their transactions. Do not gossip about confidential matters – you could lose your
job if you are found out.
Another confidential matter is an organisation’s production processes, what their products are
made of, what their turnover and profits are, etc. Other companies would like to know, but it is
not their business is it? Don’t share this information with others, it could lead to the closing
down of your company and you could lose your job.
Gossiping about confidential matters of other employees such as marital problems, their HIV
status, etc. is also not done by professional people.
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 Accountability and responsibility
Responsibility - duty to perform the task or activity an employee has been assigned
Accountability - the fact that the people with authority and responsibility are subject to
reporting and justifying task outcomes to those above them in the chain of command
You are responsible for doing your job right the first time – this is what you are paid for. Do not
blame others when you make a mistake – take responsibility for your actions, because you are
accountable to management for what you did wrong.
All successful people take responsibility for their actions and are willing to be held accountable
for mistakes. This is one of the reasons that they are successful, because they don’t hide from
their mistakes or blame someone else. Only politicians do this, but we can vote them out if we
choose.
 Receiving and giving gifts and favours in a business context
A gift in the workplace is something quite sensitive. It is sometimes hard to know when a gift is
appropriate and when not. Here are some guidelines of when it is safe to assume receiving or
giving a gift is 100% appropriate:

When it is your or a co-worker’s

When
birthday

a member of the organisation is
retiring or resigned

When someone’s years of service with
being celebrated
an

When the gift is for thanking someone
for hard work
organisation
is
With clients, mostly the only gift that is
appropriate is a corporate
gift. Many organisations have corporate gifts such as a pen with their logo on, files with their
logo on, some organisations even have soap made with their logo on it.
When receiving a gift from a client you should also be very careful. First find out exactly what
the reasons are for the client wanting to give you this gift (in a tactful manner) and what the
gift is.
Here is a list of gifts that are totally improper to give or receive in a corporate
environment:

Underwear (or anything that has a “sexual vibe” connected to it)

Really expensive gifts such as jewellery

Clothing for example an evening gown, the list goes on and on.
Here are some things that are appropriate:
If you’d like to give someone such as clothing, a scarf is appropriate for a lady and a tie for men

Mugs are very popular corporate gifts

A pen

Chocolates or sweets

On birthdays, flowers are appropriate for ladies

Golf balls
The list once again goes on and on but you can see that none of the gifts above has any strings
attached. It is best to always give someone a gift that is neutral yet practical. (Something the
person can use)
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 The importance of honesty in business dealings
Honesty in business dealings can’t be stressed enough. You should never tell a client that you
can deliver something when you know you can’t! It will reflect badly at the end of the day.
It is important to make a distinction between confidentiality and honesty here. If, for example,
the price your organisation pays for a product is confidential then you shouldn’t tell the client
how much the organisation pays for the product; however you shouldn’t lie to the client and add
another R10 to the price for your own gain.
If a client finds out that you or someone in the organisation has lied they won’t be happy and
might take their business somewhere else. Be careful of this!
Someone once said: “if you are a liar you have to have a brilliant memory to remember what you
lied about and what you said”.
This is very true because one lie brings on another and eventually you will be caught.
 The deliverables in own work situation
Lazing about at the workplace is not only unethical but also impacts negatively on your fellow
employees and the organisation. It will also reflect badly on you in the end.
What is more satisfying that delivering work that has been done correctly and on time?
If you stay away from work for no reason or because you just didn’t feel like going, don’t hand
work in on time and is generally unproductive your superior is guaranteed to be unhappy.
It is very important to be consistent with your work. You should try to work at the same
(reasonable) pace so you are a productive worker, and when there is a bit more you have to put
in a little more effort so that you deliver your work on time.
You can be sure that your superiors will be happy with your work if
you

always do your best finish your work on time,

always arrive at work on time,

don’t stay away from work unless you are really ill or have a
real emergency

and are dependable.
If a worker has been fired or resigns because s/he stayed away from work often, was not
productive and did not finish their work on time s/he will need references to find another job.
This will be difficult as the supervisor will not be able to give a good reference.
2.4 Ethics And The Law
Good ethics include the following 1. Ethics are strongly influenced by what people consider right and
wrong.
2. Ethics are determined by the conduct of people.
3. Ethics can be identified in a system or code.
4. Ethics can be identified in individuals and a group.
5. Good ethics go beyond the issue of what is legal or illegal.
24 | P a g e
a. Defining law
This is significant, as the laws, rules and regulations which govern our everyday lives provide a
substantial guideline for right and wrong behaviour. The laws
of our country
forbid stealing, corruption, fraud and doing harm to one’s
fellow
man.
These laws are supported by the vast majority of South Africans
because they
reflect the general values held by South Africans and indeed all
peoples
throughout the world. It would be a difficult task to isolate or
identify
a
tribe, people or nation on earth who regard stealing, murder or
kidnapping as
the correct way to behave.
b. The relationship between ethics and law
We have defined ethics and law and now we have a better understanding of the different terms.
The question still remains “What is the relationship between ethics and law?” In other
words, how do they relate to each other? Let’s view the relationship in the form of a table!
Law
Ethics
In a society there may be some laws, however,
which honest, upright and generally law abiding
people will refuse to obey, even if they face
punishment. This is so because a particular law is
regarded as being immoral (bad or wrong).
On the other hand, certain values in
a society may not be addressed by
the law.
Empirical research in South Africa has
conclusively shown that almost 75 %
In South Africa the example of abortion may be of the population wants the reused.
introduction of the death penalty as
a punishment for certain forms of
Abortion is legal and according to the law,
violent crime.
medical staff are compelled to assist those
requesting abortion within certain time frames. However the government of the day
What if a certain doctor or nurse regards refuses to bring back the death
abortion as murder? What should they do? This penalty.
is a classic case of certain people experiencing
a “moral dilemma”.
c. The South African Constitution
“Fight for Human Rights”
d. Introduction
The South African government has committed itself to
the protection of the rights of victims of sexual violence
through policies.
A need is identified to develop a legal framework for
addressing sexual offences one of the main priorities of
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the South African government is to put laws into place and to focus on law improvement.
e. Protection
The South African government is implementing measures against gender-based violence,
including penal sanctions, civil remedies and compensatory provisions to protect women against
all kinds of violence
Formative Assessment 4: SO2
f. Constitutional court
In relation to the duties imposed on the South African state our Constitutional Court has held
that to the extent that violence against women is recognised as a denial of human rights such
as:
 Human Rights

The right to life

The right to equality;

The right to liberty and security of person;

The right to equal protection under the law;

The right to be free from all forms of discrimination;

The right to the highest standard attainable to physical and mental health; and the
right not to be subjected to torture,

Or other cruel, inhuman or degrading treatment or punishment
 Personal Rights
People have the right to exercise their beliefs, religion, opinions etc...
different rights in detail: - See the table below.
Let’s discuss the
Rights
Religion, belief and opinion
Every person shall have the right to freedom of conscience, religion, thought, belief and
opinion, e.g. educational freedom, freedom of association (religion and union), freedom of
opinion without victimisation etc.
Privacy
Every person shall have the right to his or her personal privacy, which shall include the right not
to be subject to searches of his or her person, home or property, private possessions or the
26 | P a g e
violation of private communications.
Freedom of expression
Every person shall have the right to freedom of speech and expression, which shall include
freedom of the press and other media, expression of a diversity of opinions.
Assembly, demonstration and petition
Every person shall have the right to assemble and demonstrate with others peacefully and
unarmed, and to present petitions
Freedom of association
Every person shall have the right to freedom of association.
Freedom of movement
Every person shall have the right to freedom of movement anywhere within the national
territory.
 Human dignity
“Every person shall have the right to respect for and protection of his or her
dignity.”
Is the
Constitution
only there for
the rights of
women????
No, it is also
there to
protect all
human rights
At the moment the emphasis is on violence against woman, especially nowadays where they are
seen as a threat in the business environment. Violence is a form of aggression and should be
dealt with immediately!
Formative Assessment 5: SO2
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g. Batho Pele
Putting people first
The Batho Pele initiative aims to enhance the quality and accessibility of government services by
improving efficiency and accountability to the recipients of public goods and services.
Batho Pele requires that eight service delivery principles be implemented

regularly consult with customers

set service standards

increase access to services

ensure higher levels of courtesy

provide more and better information about services

increase openness and transparency about services

remedy failures and mistakes

give the best possible value for money.
The Batho Pele principles are as follows:
 Consultation
There are many ways to consult users of services including conducting customer surveys,
interviews with individual users, consultation with groups, and holding meetings with consumer
representative bodies, NGOs and CBOs. Often, more than one method of consultation will be
necessary to ensure comprehensiveness and representativeness. Consultation is a powerful tool
that enriches and shapes government policies such as the Integrated Development Plans (IDPs)
and its implementation in Local Government sphere.
 Setting service standards
This principle reinforces the need for benchmarks to constantly measure the extent to which
citizens are satisfied with the service or products they receive from departments. It also plays a
critical role in the development of service delivery improvement plans to ensure a better life for
all South Africans. Citizens should be involved in the development of service standards.
Required are standards that are precise and measurable so that users can judge for themselves
whether or not they are receiving what was promised. Some standards will cover processes, such
as the length of time taken to authorise a housing claim, to issue a passport or identity
document, or even to respond to letters.
To achieve the goal of making South Africa globally competitive, standards should be
benchmarked (where applicable) against those used internationally, taking into account South
Africa's current level of development.
 Increasing access
One of the prime aims of Batho Pele is to provide a framework for making decisions about
delivering public services to the many South Africans who do not have access to them. Batho
Pele also aims to rectify the inequalities in the distribution of existing services. Examples of
initiatives by government to improve access to services include such platforms as the Gateway,
Multi-Purpose Community Centres and Call Centres.
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Access to information and services empowers citizens and creates value for money, quality
services. It reduces unnecessary expenditure for the citizens.
 Ensuring courtesy
This goes beyond a polite smile, 'please' and 'thank you'. It requires service providers to
empathize with the citizens and treat them with as much consideration and respect, as they
would like for themselves.
The public service is committed to continuous, honest and transparent communication with the
citizens. This involves communication of services, products, information and problems, which
may hamper or delay the efficient delivery of services to promised standards. If applied
properly, the principle will help demystify the negative perceptions that the citizens in general
have about the attitude of the public servants.
 Providing information
As a requirement, available information about services should be at the point of delivery, but for
users who are far from the point of delivery, other arrangements will be needed. In line with the
definition of customer in this document, managers and employees should regularly seek to make
information about the organisation, and all other service delivery related matters available to
fellow staff members.
 Openness and transparency
A key aspect of openness and transparency is that the public should know more about the way
national, provincial and local government institutions operate, how well they utilise the
resources they consume, and who is in charge. It is anticipated that the public will take
advantage of this principle and make suggestions for improvement of service delivery
mechanisms, and to even make government employees accountable and responsible by raising
queries with them.
 Redress
This principle emphasises a need to identify quickly and accurately when services are falling
below the promised standard and to have procedures in place to remedy the situation. This
should be done at the individual transactional level with the public, as well as at the
organisational level, in relation to the entire service delivery programme.
Public servants are encouraged to welcome complaints as an opportunity to improve service, and
to deal with complaints so that weaknesses can be remedied quickly for the good of the citizen.
 Value for money
Many improvements that the public would like to see often require no additional resources and
can sometimes even reduce costs. Failure to give a member of the public a simple, satisfactory
explanation to an enquiry may for example, result in an incorrectly completed application form,
which will cost time to rectify.
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2.5 Public Finance Management Act No1 Of 1999
The Republic of South Africa has enacted the PFMA and this act will apply to all government
entities. The PFMA is a key element in a set of reforms to the management of government
finances. The adoption and implementation of the PFMA is the second phase of reform, and the
key objective is to modernise financial management and enhance accountability. Other reforms
include the introduction of service delivery indicators, performance budgets and generally
recognised accounting practice (GRAP).
a. Responsibilities of accounting officers
 In-year management, monitoring and reporting
Accounting officers must monitor progress on the department’s operational plan (including the
budget). While systems and processes exist to monitor monthly budgetary performance,
accounting officers will need to scrutinise these reports on the basis of the advice provided by
the person appointed as the CFO (Chief Financial Officer). These reports should enable the
accounting officer to identify any potential under or over spending.
The quality of the information available depends crucially on the accuracy and timeliness of the
data entered into the various systems, and this will improve only when accounting officers and
CFOs actively scrutinise the reports produced.
 Establish effective internal controls
Accounting officers must prioritise the setting up of audit committees and internal audit units, in
line with modern practice. They must evaluate whether the ‘blanket’ controls are appropriate to
their particular circumstances, by assessing the risks facing their department.
 Improve expenditure management and transfers
The PFMA must be read in conjunction with the Division of Revenue Act, in particular with its
reporting requirements. These new arrangements will assist accounting officers to resolve
problems with conditional grants
The PFMA also requires that, unless otherwise contracted, payments be made within 30 days of
receiving a supplier’s invoice. This will ensure that Departments do not conceal liabilities, and
will bring certainty to creditors, especially SMMEs.
 Clear up audit queries
Accounting officers must take personal responsibility to address any outstanding queries raised
by the Auditor-General or audit committee, or face strong sanctions.
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 Banking arrangements
Accounting officers must take full responsibility for ensuring that all revenue received by their
department is deposited only in the relevant revenue fund, and that all suspense accounts are
allocated to the relevant cost centres each month.
 Complete financial statements on time
The Act requires annual financial statements to be submitted to the Auditor-General within two
months of the year-end, and this will be difficult to achieve unless the routine month-end
procedures are completed systematically during the year.
2.6 King Report
 King Committee
The first King Report on Corporate Governance for South Africa was released in 1994. Since then,
the report has been updated twice - once in 2002 (King II), and again in 2009 (King III).
Each new draft has placed an increasing importance on the interrelationship between ethics and
corporate governance. For King III, an ethics sub-committee was constituted to advise on good
practice in the governance (and management) of ethics.
 King 1
King I is the abbreviated name for the King Report on Corporate Governance published 1994 in
South Africa. Produced by the King Committee on Corporate Governance, it included a Code of
Corporate Practices and Conduct, the first of its kind in South Africa.
It aimed to promote corporate governance in South Africa and established recommended
standards of conduct for boards and directors of listed companies, banks, and certain stateowned enterprises, with an emphasis on the need for companies to become a responsible part of
the societies in which they operate. King I advocated an integrated approach to good
governance, taking into account stakeholder interests and encouraging the practice of good
financial, social, ethical and environmental practice.
The purpose of the King Report 1994 was to promote the highest standards of corporate
governance in South Africa.
In order to operate, companies have to consider:

Industry regulations

Industry and market standards

Their reputation in the industry

The media who are continually investigating industries and companies

The attitudes of customers, suppliers, employees, investors and local as well as
international communities

Ethical pressure groups
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
Public opinion and public confidence

Political opinion
This means that the company must consider stakeholders such as the community in which the
company operates, its customers, its employees and its suppliers need to be considered when
developing the company strategy. The purpose of the company and the values by which the
company will carry on its daily life should be identified and communicated to all stakeholders.
 King 11
King II is the abbreviated name for the King Report on Corporate Governance for South Africa
published 2002 in South Africa. It followed the 1994 report commonly known as King I.
Companies listed on the JSE Securities Exchange also have to comply with King II, which itself
requires compliance with global reporting initiative guidelines. It contains a Code of Corporate
Practices and Conduct.
This report applies only to certain categories of business enterprises which are:

Companies listed on the JSE

Banks, financial and insurance entities

Public sector enterprises governed by the Public Finance Management Act and the
Municipal Finance Management Act.
It refers to seven characteristics of good corporate governance:

Discipline - a commitment to behaviour that is universally recognised and accepted as
correct and proper.

Transparency - the ease with which an outsider is able to analyse a company's actions.

Independence - the mechanisms to avoid or manage conflict.

Accountability - the existence of mechanisms to ensure accountability.

Responsibility - processes that allow for corrective action and acting responsibly towards
all stakeholders.

Fairness - balancing competing interests.

Social Responsibility - being aware of and responding to social issues.
 King 111
King 111 states the following regarding ethics in an organisation:
Principle 2.4: The board should actively manage the company's ethics performance
35. Good corporate governance requires that the board takes responsibility for creating and
sustaining an ethical corporate culture in the company
36. The establishment and maintenance of an ethical corporate culture requires the governance
of ethics, that is, that the board should ensure that the company has a well designed and
properly implemented ethics management process. The organisation should have a code of
ethics and this code of ethics should be integrated into the company's strategies and operations.
37. An ethical corporate culture will require that:

Directors should set an example by conducting ethical practices

The conduct of individuals in the organisation should be based on sound moral values and
ethics
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
The directors of the organisation should support and abide by laws regulating restraints
of trade, unfair practices, abuse or the unscrupulous use of economic power and
avoidance of collusion; and
The chapters of King 111 are:

Ethical leadership and corporate citizenship

Boards and directors

Audit committees

The governance of risk

The governance of information technology

Compliance with laws, rules , codes and standards

Internal audit

Governing stakeholder relationships

Integrated reporting and disclosure
2.7 Acts, Regulations And Codes Governing A Sector Or
Specific Industry
Many business sectors and industries have codes of conduct that applies to that specific industry
or sector. Some of these codes of conduct are also regulated by law through Acts and
regulations. We will discuss a couple of industries to illustrate this.
 Transport sector
The transport sector is governed by the following Acts:

National Road Traffic Act, 1996 (Act No. 93 of 1996)

National Land Transport Transition Act, 2000 (Act No. 22 of 2000)
The minimum requirements for a code of conduct in terms of these Acts are:
The Code of Conduct must, as a minimum, bind members of a registered association and
registered non-members to ensure that they and their drivers—
(a) treat passengers at all times with dignity, respect and courtesy;
(b) refrain from operating a vehicle on a route in respect of which no permit or operating
Iicence is held;
(c) refrain from operating unroadworthy vehicles; and
(d) refrain from infringing road traffic laws.
 Tourism sector
The tourism sector has a formal code of conduct called the Tourist Guide Code Of Conduct And
Ethics and all tour guides are required to sign this code of conduct:
A Professional Tourist Guide:

Shall be welcoming and demonstrate an enthusiasm for South Africa.
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
Shall at all times show willingness to provide optimum support and quality service to all
tourists, and will give tourists an opportunity to enjoy or visit a desired destination.

Shall in no way discriminate in rendering service to any tourist on any basis, e.g. colour,
gender, ethnicity, nationality, physical challenge, age, etc.

Shall be impartial, unbiased and positive, and represent South Africa objectively.

Shall be suitably dressed and presentable at all times.

Shall be punctual, reliable, honest, conscientious and tactful at all times.

Shall be a responsible driver, when driving as a guide.

Shall carry out the programme/itinerary of a tour to his/her best abilities and be loyal to
the company/organisation that he/she is representing.

Shall deal with conflict in a sensitive and responsible manner.

Shall report any incident of injury or death to a nearby tourist authority or police station.

Shall be knowledgeable and shall assist tourists and not provide them with misleading
information.

Shall in the event of not being familiar with, or being unable to provide information
requested by a tourist, consult with the appropriate authorities for assistance.

Shall at no time be under the influence of alcohol or a narcotic substance while on duty
and shall refrain from administering any medication to a client without proper medical
consultation.

Shall never solicit for clients or gratuities.

Shall be concerned at all times for the safety of the tourist.

Shall wear the appropriate tourist guide badge and will carry his/her registration card.

Shall treat all people, cultures and the environment with respect.
 Private security industry
The private security industry is heavily governed and the code of conduct is prescribed by law.
This is a lengthy document and only the purpose of the code of conduct as well as the layout of
the code is shown here:
Code Of Conduct Prescribed Under The Private Security Industry Regulation Act, 2001 (Act
No. 56 Of 2001)
Purpose, Application And Interpretation Of The Code
Purpose of Code
1. The purpose of this Code is to provide binding rules that all security service providers and
employers of in-house security officers must obey in order to (a) promote, achieve and maintain a trustworthy and professional private security
industry which acts in terms of the law applicable to the members of the industry;
(b) promote, achieve and maintain compliance by security service providers with a set of
minimum standards of conduct which is necessary to realise the objects of the Authority;
(c) promote, achieve and maintain compliance by security service providers with their
obligations towards the State, the Authority, consumers of security services, the public,
and the private security industry in general;
(d) ensure the payment of the applicable minimum wages and compliance with standards
aimed at preventing exploitation or abuse of employees in the private security industry,
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including employees used to protect or safeguard merely the employer’s own property or
other interests, or persons or property on the premises of, or under the control of the
employer; and
(e) provide for matters incidental to the above.
Application of Code
2. This Code applies to –
(a) all security service providers, whether registered with the Authority or not, in
practising the occupation of security service provider, in rendering a security service or
carrying on business in the rendering of a security service, or in performing any other act
or function which is subject to the Act;
(b) every person using his or her own employees to protect or safeguard merely his or her
own property or other interests, or persons or property on his or her premises or under
his or her control, to the extent provided for in the Act and this Code;
(c) every category or class of persons as contemplated in the Act, taking into account the
nature of the relevant provisions of this Code as well as the juristic nature of such
persons; and
(d) the relevant conduct of a security service provider at any place, irrespective of
whether the conduct was committed within or outside the Republic.
This code also applies to:
15. Private investigators
16. Locksmiths
17. Security consultants and advisers
18. Security service providers ensuring order and safety on premises used for sporting,
recreational, entertainment or similar purposes
19. Security service providers providing security training
20. Security service providers installing, servicing or repairing security equipment or performing
certain functions regarding monitoring devices
Chapter 4: Obligations of employers of in-house security officers
21. Effect of Code
22. General obligations
23. Specific obligations
Chapter 5: Provisions regarding improper conduct, the enforcement of the Code and other
matters relating thereto, and general provisions
24. Improper conduct by a security service provider
25. Penalties in respect of improper conduct by a security service provider
26. Improper conduct by an employer of in-house security officers
27. Penalties in respect of improper conduct by an employer of in-house security officers
2.8 Corporate Governance
Corporate governance is the set of processes, customs, policies, laws, and institutions affecting
the way an organisation is directed, administered or controlled. Corporate governance also
includes the relationships among the many stakeholders involved and the goals for which the
corporation is governed.
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The principal stakeholders are the shareholders /members, management, and the board of
directors. Other stakeholders include employees, customers, creditors (e.g., banks), suppliers,
regulators, and the community at large.
We can also say that corporate governance is a system of structuring, operating and controlling a
company with a view to achieve long term strategic goals to satisfy shareholders, creditors,
employees, customers and suppliers, and complying with the legal and regulatory requirements,
apart from meeting environmental and local community needs.
In corporations, the shareholder delegates decision rights to the manager to act in the principal's
best interests. This separation of ownership from control implies a loss of effective control by
shareholders over managerial decisions. Partly as a result of this separation between the two
parties, a system of corporate governance controls is implemented to assist in aligning the
incentives of managers with those of shareholders.
a. Principles of corporate governance
 Rights and equitable treatment of shareholders
Organisations should respect the rights of shareholders and help shareholders to exercise those
rights. They can help shareholders exercise their rights by effectively communicating
information that is understandable and accessible and encouraging shareholders to participate in
general meetings.
 Interests of other stakeholders
Organisations should recognize that they have legal and other obligations to all legitimate
stakeholders.
 Role and responsibilities of the board
The board needs a range of skills and understanding to be able to deal with various business
issues and have the ability to review and challenge management performance. It needs to be of
sufficient size and have an appropriate level of commitment to fulfill its responsibilities and
duties. There are issues about the appropriate mix of executive and non-executive directors.
 Integrity and ethical behaviour
Ethical and responsible decision making is not only important for public relations, but it is also a
necessary element in risk management and avoiding lawsuits. Organisations should develop a
code of conduct for their directors and executives that promotes ethical and responsible
decision making. It is important to understand, though, that reliance by a company on the
integrity and ethics of individuals is bound to eventual failure. Because of this, many
organisations establish compliance and ethics programs to minimise the risk that the firm steps
outside of ethical and legal boundaries.
 Disclosure and transparency
Organisations should clarify and make publicly known the roles and responsibilities of board and
management to provide shareholders with a level of accountability. They should also implement
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procedures to independently verify and safeguard the integrity of the company's financial
reporting. Disclosure of material matters concerning the organisation should be timely and
balanced to ensure that all investors have access to clear, factual information.
b. Controls needed for corporate governance
Corporate governance mechanisms and controls are designed to reduce the inefficiencies that
arise from poor ethics. For example, to monitor managers' behaviour, an independent third party
(the external auditor) attests the accuracy of information provided by management to investors.
An ideal control system should regulate both motivation and ability.
Issues that have to be addressed for effective corporate governance include:

internal controls and internal auditors

the independence of the organisation’s external auditors and the quality of their audits

oversight and management of risk

oversight of the preparation of the entity's financial statements

review of the compensation arrangements for the chief executive officer and other senior
executives

the resources made available to directors in carrying out their duties

the way in which individuals are nominated for positions on the board
 Internal controls
Internal corporate governance controls monitor activities and then take corrective action to
accomplish organisational goals. Internal controls involving corporate governance include:

Monitoring by the board of directors: The board of directors, with its legal authority to
hire, fire and compensate top management, safeguards invested capital. Regular board
meetings allow potential problems to be identified, discussed and avoided

Internal control procedures and internal auditors: Internal control procedures are
policies implemented by an organisation’s board of directors and other personnel to
provide reasonable assurance of the organisation achieving its objectives related to
reliable financial reporting, operating efficiency, and compliance with laws and
regulations. Internal auditors are personnel within an organisation who test the design
and implementation of the organisation’s internal control procedures and the reliability
of its financial reporting

Dividing the power: Balance of power: The simplest division of power is very common;
require that the President or CEO be a different person from the Treasurer. This is done
so that the same person is not in control of both the finances of the organisation and the
organisation itself. This application of separation of power is further developed in
companies where separate divisions check and balance each other's actions. One group
may propose company-wide administrative changes, another group review and can veto
the changes, and a third group check that the interests of people (customers,
shareholders, employees) outside the three groups are being met
 External controls
External corporate governance controls include the controls that external stakeholders exercise
over the organisation. Examples include:

competition
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
demand for and assessment of performance information in the form of, for example,
financial statements

government regulations

media pressure

takeovers
2.9 Business Ethical Practices
a. Sales and marketing ethics
There are many issues to consider regarding marketing ethics. We will discuss some marketing
tactics that can be considered unethical.
 Bait and switch
Bait and switch is a form of fraud in which the party putting forth the fraud (for example a store
selling electrical appliances) lures in customers by advertising a product or service at a very low
price, then reveals to potential customers that the advertised good is not available but that a
substitute is.
The goal of the bait-and-switch is to convince some buyers to purchase the substitute good as a
means of avoiding disappointment over not getting the bait
 False advertising
False advertising or deceptive advertising is the use of false or misleading statements in
advertisements. There are many types of false advertising:
Hidden fees and surcharges
Service providers often add fees and surcharges that are not mentioned to the customer in the
advertised price.
One of the most common is for activation of services such as mobile phones, but is also common
in broadband. In most cases, the fees are hidden in fine print, though in a few cases they are so
confused and obfuscated by ambiguous terminology that they are essentially undisclosed
Mail order companies often hit customers with "shipping and handling " charges not included in
the stated price, and only show at the very end of a TV commercial.
Inflated price comparison
When comparing a sale price to a "regular" price for the same product, advertisers can inflate
the "regular" price in order to create the impression that the sale price is very low.
The intent is obviously to mislead consumers into thinking that they are saving money by
purchasing the "on-sale" item or service by advertising a large-percentage "discount".
Buy x, get y free
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This type of false advertising concludes that more is better. By increasing the price of a
firecracker, for example, to five times its original marginal profit-based price, a 5-for-1 "special"
sale is offered while still keeping the same profit line.
In other cases the free product is of lower quality than the originally-purchased item, or its
value a greatly overstated.
Often, buy-one-get-one "deals" are simply an excuse to use the word "FREE" in advertising. The
item may simply be "50% off" or "half price", or the shopper may actually be forced to buy at
least two, or even in multiples of two. Because the shopper must buy something first, the "free"
item is not truly free.
Introductory offers
An introductory offer or "free trial" is an offer for an ongoing service that is valid for a limited
period. After this period, the price or terms of the agreement change, often without further
notice to any consumers which have accepted the initial offer. This differs from bait and switch
because the terms or "bait" are in fact actually delivered (making it only deceptive rather than
inherently false), but the switch still occurs later on.
The most common form of this is credit card, which offer low interest rates to start and then
rise greatly afterward
Meaningless terms
Manufacturers and sellers often use terms that sound advanced or deluxe to the average
consumer, but really mean nothing at all. Most generically, this includes words like "deluxe",
"advanced", "super", "ultra", "premium", "heavy duty" and others
Label tampering
Product labels may initially contain truthful information which is later removed or obscured.
For foods, the expiry date may be changed, which in meats can cause dangerous levels of
bacteria to grow. Other foods may simply become stale while still being safe to eat. Canned
foods may have their labels removed.
Another method of false labelling is hiding or destroying a label indicating the product's origin
(e.g. "Made in India" or "Made in Botswana").
 Greenwash
Greenwash is a term used to describe the practice of companies who claim that their products
and policies are environmentally friendly, when this is not the case. One such an example is by
stating that cost cuts are reductions in use of resources.
It is a deceptive use of green marketing.
 Price fixing
Price fixing is an agreement between business competitors to sell the same product or service at
the same price. In general, it is an agreement intended to ultimately push the price of a product
as high as possible, leading to profits for all the sellers.
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Price fixing requires a conspiracy between two or more sellers; the purpose is to coordinate
pricing for mutual benefit at the expense of buyers.
In South Africa a while ago, the manufacturers of bread were found guilty of price fixing.
 Pyramid scheme
A pyramid scheme is a non-sustainable business model that involves the exchange of money
primarily for enrolling other people into the scheme, often without any product or service being
delivered
A successful pyramid scheme combines a fake yet seemingly credible business with a simple-tounderstand yet sophisticated-sounding money-making formula which is used for profit. The
essential idea is that the mark, Mr. X, makes only one payment. To start earning, Mr. X has to
recruit others like him who will also make one payment each. Mr. X gets paid out of receipts
from those new recruits. They then go on to recruit others. As each new recruit makes a
payment, Mr. X gets a cut. He is thus promised exponential benefits as the "business" expands.
Such "businesses" seldom involve sales of real products or services to which a monetary value
might be easily attached.
b. Bid (tender) rigging
Bid rigging is a form of fraud in which a commercial contract is promised to one party even
though for the sake of appearance several other parties also present a bid. It is a form of price
fixing and market allocation, often practised where contracts are determined by a call for bids
(tenders), for example in the case of government contracts.
Bid-rigging almost always results in economic harm to the agency which is seeking the bids, and
to the public, who ultimately bear the costs as taxpayers or consumers
There are some very common bid-rigging practices:

Subcontract bid-rigging occurs where some of the conspirators agree not to submit bids,
or to submit cover bids that are intended not to be successful, on the condition that
some parts of the successful bidder's contract will be subcontracted to them. In this way,
they "share the spoils" among themselves.

Bid suppression occurs where some of the conspirators agree not to submit a bid so that
another conspirator can successfully win the contract.

Complementary bidding, also known as cover bidding or courtesy bidding, occurs where
some of the bidders bid an amount knowing that it is too high or contains conditions that
they know to be unacceptable to the agency calling for the bids.

Bid rotation occurs where the bidders take turns being the designated successful bidder,
for example, each conspirator is designated to be the successful bidder on certain
contracts, with conspirators designated to win other contracts. This is a form of market
allocation, where the conspirators allocate or apportion markets, products, customers or
geographic territories among themselves, so that each will get a "fair share" of the total
business, without having to truly compete with the others for that business.
c. Ethics of accounting information
Ethics of accounting information includes:
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
Accounting practices known as creative accounting, earnings management and misleading
financial analysis

Insider trading and forex scams that are criminal manipulation of the financial markets

Executive compensation: when excessive payments are made to corporate CEO’s and top
management

Bribery, kickbacks and facilitation payments: While these may be in the (short-term)
interests of the company and its shareholders, these practices may be anti-competitive
or offend against the values of society.
 Bribery
Bribery is an act where money or a gift is given to someone in order to influence the actions of
that person. It may be any money, property, object of value, advantage, or merely a promise or
undertaking to induce or influence the action, vote, or influence of a person in an official or
public capacity
The forms that bribery take are numerous. For example, a motorist might bribe a police officer
not to issue a ticket for speeding, a citizen seeking paperwork or utility line connections might
bribe a functionary for faster service.
Bribery may also take the form of a secret commission, a profit made by an agent, in the course
of his employment, without the knowledge of his principal. Euphemisms abound for this
(commission, sweetener, back-kick etc.) Bribers and recipients of bribery are likewise numerous
although bribers have one common denominator and that is the financial ability to bribe.
 Creative accounting and earnings management
Creative accounting and earnings management are euphemisms that refer to accounting
practices that may follow the letter of the rules of standard accounting practices, but deviate
from the spirit of those rules.
The term refers to systematic misrepresentation of the true income and assets of an
organisation.
Earnings management usually involves the artificial increase (or decrease) of revenue, profits, or
earnings per share figures through aggressive accounting tactics.
 Misleading financial analysis
When financial analysis of an organisation is used to misrepresent the organisation, its situation
or its prospects, it is misleading.
Misleading financial analysis is sometimes used to obtain money by misdirecting people to invest
in a stock market bubble, profiting (or assisting others to profit) from the increase in value, then
removing funds before the bubble collapses, for instance in a stock market crash..
d. Ethics of human resource management
The ethics of human resource management (HRM) covers those ethical issues arising around the
employer-employee relationship, such as the rights and duties owed between employer and
employee.
41 | P a g e

Discrimination issues include discrimination on the bases of age, gender, race, religion,
disabilities, weight and attractiveness..

Issues arising from the traditional view of relationships between employers and
employees, also known as At-will employment.

Issues surrounding the representation of employees and the democratization of the
workplace: union busting and strike breaking.

Issues affecting the privacy of the employee: workplace surveillance, drug testing.

Issues affecting the privacy of the employer: whistle-blowing.

Issues relating to the fairness of the employment contract and the balance of power
between employer and employee.

Occupational health and safety.
e. Ethics of intellectual property, knowledge and skills
Knowledge and skills are valuable but not easily "ownable" as objects. Nor is it obvious who has
the greater rights to an idea: the company who trained the employee, or the employee
themselves? The country in which the plant grew, or the company which discovered and
developed the plant's medicinal potential? As a result, attempts to assert ownership and ethical
disputes over ownership arise. Ethical issues include:
Patent infringement, copyright infringement, trademark infringement

Misuse of the intellectual property systems to stifle competition.

Employee raining the practice of attracting key employees away from a competitor to
take unfair advantage of the knowledge or skills they may possess.

The practice of employing all the most talented people in a specific field, regardless of
need, in order to prevent any competitors employing them.

Business intelligence and industrial espionage.
 Copyright
Copyright infringement (or copyright violation) is the unauthorized use of material that is
covered by copyright law, in a manner that violates one of the copyright owner's exclusive
rights, such as the right to reproduce or perform the copyrighted work.
 Industrial espionage
Industrial espionage or corporate espionage is espionage conducted for
commercial purposes instead of national security purposes.
Industrial espionage describes activities such as theft of trade secrets and technological
surveillance. Information can make the difference between success and failure. When a trade
secret is stolen, the competitive playing field is levelled or even tipped in favour of a
competitor.
Corporate espionage is a threat to any business whose livelihood depends on information. The
information competitors seek may be client lists, supplier agreements, personnel records,
research documents, or prototype plans for a new product or service.
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f. Ethics and Technology
The computer and the World Wide Web are two of the most significant inventions of the
twentieth century. There are many ethical issues that arise from this technology. It is easy to
gain access to information. This leads to data mining, workplace monitoring, and privacy
invasion.
Copyright and industrial espionage issues also affect the ethics of technology. The unlawful
downloading of copyrighted material and sharing of recorded music over the Internet is more
prominent now than ever.
g. Ethics of production
This area of business ethics usually deals with the duties of a company to ensure that products
and production processes do not cause harm. Some of the more acute dilemmas in this area arise
out of the fact that there is usually a degree of danger in any product or production process and
it is difficult to define a degree of permissibility.

Defective, addictive and inherently dangerous products and services (e.g. tobacco,
alcohol, weapons, motor vehicles, chemical manufacturing, bungee jumping).

Ethical relations between the company and the environment: pollution, environmental
ethics, carbon emissions trading.

Ethical problems arising out of new technologies: genetically modified food, mobile
phone radiation and health.

Product testing ethics: animal testing, use of economically disadvantaged groups (such as
students) as test objects.
Formative Assessment 6: SO2
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SECTION 3: ANALYSE A UNIT
Specific Outcome 3
Analyse a unit in relation to the principles of corporate ethics
Assessment Criteria

An instrument is selected for analysing individual and organisational conduct in respect of
organisational values, codes of conduct and corporate ethics

The instrument is applied to gather and record information within a unit in respect of
organisational values, codes of conduct and corporate ethics

The instrument is applied to evaluate the current state in a unit against the desired state
in respect of organisational values, codes of conduct and corporate
3.1 Compliance Programme
In order to ensure that the organisation as a whole complies with the ethics as laid down, a
compliance program should be put in place. Such a program can be challenging, but it is also an
opportunity to establish and promote operational excellence throughout the entire organisation
and in this way improve the overall operational performance. Monitoring and maintaining
compliance through a compliance program is one of the most important ways for an organisation
to maintain its ethical health, support its long-term prosperity, and preserve and promote its
values. A compliance and ethics program supports

Supports effective governance

Supports the organisation’s business objectives

Identifies the boundaries of legal and ethical behaviour

Establishes a system to alert management when the organisation is getting close to (or
crossing) a boundary or approaching an obstacle that prevents the achievement of a
business objective
The compliance and ethics program should deliver tangible benefits and outcomes to the
organisation.
Every organisation is unique and has its own objectives, however, there are a few universal
program outcomes/objectives that a compliance and ethics capability should deliver. These
include

an enhanced culture of trust, accountability and integrity

prevention of noncompliance

preparation for when (not “if”) noncompliance occurs

protection (to the extent possible) from negative consequences

detection of noncompliance

response to noncompliance

improvement of the program to better prevent, protect, prepare, detect and respond to
noncompliance.
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Once an issue is detected, management must be prepared to respond quickly and appropriately
to minimise the impact on the organisation.
3.2 Measuring Program Performance
An organisation’s compliance and ethics program should be measured like any other critical
capability. By using accurate, timely data on the unit’s performance, you will know whether
your team/section/department is moving closer to your objectives.
There are many benefits and challenges to measuring the performance of a program. A wellknown maxim is "what gets measured gets done.” The compliance and ethics program is no
different.
The measurement system and approach should be simple, cost-effective and
elegant to ensure sustainability
a. Analyse conduct
The first step in measuring and monitoring the ethics compliance program is to analyse the
behaviour of people in your team to find out if they are complying with the ethics as laid down
by the organisation.
The dictionary defines analyse as follows:

To study or determine the nature and relationship of the parts of by analysis

A means to divide a complex whole into its parts or elements. Analyse suggests
separating or distinguishing the component parts of something (as a substance, a process,
a situation) so as to discover its true nature or inner relationships ‹analysed the collected
data›
In order to analyse the program, you have to use an instrument. There are various instruments
available: you can
Conduct an internal survey, using interviews and questionnaires
Conduct an external survey, for example amongst suppliers and customers, also using interviews
and questionnaires
Observe the behaviour of employees: This involves looking at what people do and how they
behave and then recording the findings
b. Surveys
When you do a survey, you gather data by using a standardised questionnaire and sometimes also
conducting structured interviews.
The basic process of conducting a survey is as follows:

Determine the aim of the survey (also called research)

Identify the population and sample: from which population group will you gather the
information?

Decide how to collect replies: how will you get their replies to your questionnaire: by
phone, mail, verbally, etc.?

Design your questionnaire: the questions you will ask in order to collect the information
45 | P a g e

Run a pilot survey: a test survey to check the process, the questions, the aim and the
information

Carry out the main survey: the actual research

Analyse the data: now you will analyse the data in order to find out what it tells you.
It is important that the questions in your questionnaire asks questions that relate to the
aim of the survey in the first place.
This is why you must first determine the aim and identify the population sample and also decide
how you will collect the replies before you draw up the questionnaire.
You must also carefully think about how you will analyse the data
before you start collecting the data. You should actually know before
you even do the questionnaire how you will analyse the data.
 Step 1: determine your research aims
Start your survey by setting sown the aims for the survey. Why are you
doing research and what do you want to achieve? What do you want to
know? If we use Markinor as an example, they want to determine before the election who is
going to win in which area, and how the other political parties will do during the elections.
In terms of an ethics programme, it can be that you want to find out:

Whether employees understand the code of conduct and its implications

Whether employees are accepting gifts from suppliers

Whether employees are giving customers gifts in order to obtain business

Whether employees treat all customers equally, etc.
 Step 2: identify the population and sample
Sampling is a basic concept used in statistics and is used to try to estimate what the parameters
of a population are. For example, I may want to estimate how tall South African men are on the
average. Perhaps I will measure a few hundred men and calculate their average. The men
chosen for measurement are the sample. The parameter I am looking for is the average height of
South African men.
One sip of milk is sufficient to let you know that the milk is sour. This is what sampling is all
about. In order gain information about the whole you only need to examine a part. On the other
hand, sipping a glass of water tells me nothing about the milk.
Here are a few definitions that statisticians use when dealing with samples:

A ‘population’ is the entire group of objects about which information is wanted.

A ‘unit’ is any individual member of the population.

A ‘sample’ is a part or subset of the population used to gain information about the
whole.

A ‘sampling frame’ is the list or units from which the sample is chosen.

A ‘variable’ is a characteristic of a unit that is to be measured for those units in the
sample.
The distinction between population and sample is extremely important to statistics. First, we
look at a population then quote some examples to make the distinction clear.
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A population is defined in terms of our desire for information about that population. For
example, if I want information about all high school students in South Africa, then the
population is all high school students in South Africa. Even if I can only choose one high school
and its students, the population remains all high school students in South Africa.
It is extremely important to define clearly the population of interest.
If you want to determine how many South Africans are in favour of gun control laws, you must
define the population precisely. Are all South African residents included, or only citizens? What
is the minimum age you require? Are individuals imprisoned for violent crimes allowed to be
included, or just those with minor offences, or none at all?
The following examples are presented to give an understanding of population, sample and
variables. Data (numbers) used in most examples are completely fictitious as you have been
warned.
Example 1
The national census attempts to collect basic detailed information from each household in the
country.

Population: all South African households

Sample: the entire population, as far as possible.

Variables: the number of occupants, age, race, gender, family relationships, access to
electricity, water and telephone services.
Example 2
You want to do market research to find out your customers’ preference and usage of various
products or services. Undoubtedly you have heard radio or TV announcers state that their station
is listened to or watched by 80% of South African while their competitors only make up the
remainder.

Population: all South Africans who have either a radio or a TV.

Sample: about 1500 residents of South Africa

Variables: gender, racial group, age, residential area, income category and the answers
to the specific question or questions.
When Markinor does a survey before an election, they do not ask every person in the country for
their views or opinions, they choose a number of people from the various population groups.
The number of people they choose is called a sample: a sub-set of the population, while the
population is the members of the group you are interested in.
When you choose the sample for a countrywide survey, you have to make sure that your sample
represents the entire population. Usually the sample will then be chosen from a list that
contains all the members of the population, such a list is called a sampling frame.
This is probably what Markinor does when they do surveys before elections. Luckily, for most of
the research we want to do we do not have to go countrywide: We can usually choose from our
community or customers or the customers of our competitors.
So, you have to decide if you want to include all the employees of the team/section/department
in your survey, of if you will focus on people working with the public, for example.
Design the survey
There are three general forms of surveys: questionnaires, interviews and network analysis. This
manual introduces questionnaires and only briefly describes interviews.
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In addition to surveying with questionnaires and interviews researchers may make direct
observations.
 Step 3: decide how to collect replies
Now you have to decide
the following:

Are you going to
mail the questionnaire

Are you going to
send the questionnaire by e-mail

Are you going to
phone customers

Are you going to
question customers face-to-face
If you are going to conduct the survey by means of telephone or face-to-face
interviews, you have to decide who will do the interviews and how you will
control the quality of the interviews. Remember, if you do not do this yourself,
people can lie about how many interviews they conducted and what the response
of the people they interviewed were.
It will also be important for the interviewer to explain to the potential respondent why they
should answer the questions. They should persuade people to take part in the survey, not force
them.
 Step 4: questionnaire design
Most researchers make the mistake of asking too many questions. Your greatest enemy in survey
research may well be poor response rate. Clear and concise questionnaires
can help get the best response.
Design of the questionnaire can be split into three elements:

Determine the questions to be asked

Select they question type for each question type and specify the
wording

Design the question sequence and overall questionnaire layout
Determine the Questions to be Asked
Obviously, your questions should relate directly to the aim of the survey and to the specific
information that you will require.
Question types
Open-ended Questions:
appropriate)
E.g.
Do you think football hooliganism is caused by:
(tick if
Lack of discipline at home
Players’ behaviour on pitch
Family breakdown
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Youth unemployment
Poor schooling
Violence on T.V.
Other (please specify)
Single vs. Multiple Response: E.g. What is your most usual means of travelling to college?
Bus
Car
Bike
Rated Response: A popular approach in the social science is to use Likert scales such as the
example below.
Please state how often you use the following: (Please circle the numbers as appropriate)
Very often
Often
Occasionally
Never
Newspapers
1
2
3
4
Books
1
2
3
4
Periodicals
1
2
3
4
Questionnaire instructions
Questionnaire instructions should help respondents by explaining how they should answer
questions. Instructions must be clear and should explain to people how they are to complete the
questionnaire. As a matter of routine, many researchers find it useful to provide a category
where the respondent can indicate ‘no response’ or ‘not applicable.’ This strategy is useful since
researchers can separate incomplete responses from thoughtful refusals to respond. The table
on the next page shows some typical methods used for questions.
Wording of questions
When you compile a questionnaire, think carefully how you phrase the questions that you are
going to ask the people out there. You have to phrase the questions in such a manner that the
people who complete them must:

Be able to understand the question

Be able to answer the question

Be willing to give you the information you need
You also have to ensure that the questions and the way you ask them cannot be constituted as
biased in any way, e.g. biased based on race, gender, age, religion, culture, etc.
Decide on layout and sequence
49 | P a g e

Do not clutter up the form with unnecessary headings and numbers.

Include the contact and return information on the questionnaire, irrespective of whether
addressed return envelopes are provided, these can easily become separated.

Identify individual questions for reference purposes.

Be careful not to overfill the page.

Avoid using lots of lines, borders and boxes since these can make the page look too
‘dense’.

Small fonts may put people off, especially people with bad eyesight.

Use a good legible font.

Make good use of italics and bold types, think of using italics consistently to give
instructions.

Consider using bold for the questions themselves or for headings. Symbol fonts may also
be useful.

Begin with questions that will raise interest.

You should try to keep the flow through the questionnaire logical and very simple, i.e.
avoid any complex branching.
 Step 5: run a pilot survey
Test the questionnaire on a small sample of your subjects first. If this is not possible at least
test it on some colleagues or friends. The aim here is to detect any flaws in your questioning
and correct these prior to the main survey.
Having done your pilot survey, you can make amendments that will help to maximise your
response rate and minimise your error rate on answers.
 Step 6: carry out the main survey
The purpose of doing a pilot survey is to find out if you have to change anything in the
questionnaires or in your population sample or even the aim of your survey.
If you are using fieldworkers, you have to ensure that they are well trained to minimise errors in
the collecting of data.

Errors when choosing respondents

Interviewer dishonesty

Misinterpreting or misreporting of information

Non responses: where people are not at home or
refuse to answer questions
For the process of actually doing the survey, you also have
to

Set deadlines: start on a specific day and end on a specific day

Determine the number of questionnaires you want to complete by that day

If you employ field workers, how many questionnaires every day and how many at the
end of the period
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
You have to put an administrative process in place: who is going to collect the completed
questionnaires?

You must also have a quality and cost control system in place to prevent dishonesty and
prevent fieldworkers from charging too much and wasting too much time. You could, for
example, pay per correctly completed questionnaire.
c. In-depth interviews
Questionnaires are handy but researchers sometimes find interview methods more useful for a
couple of reasons. It is easy for many people to ignore a cold questionnaire but it may be
difficult for them to ignore a live person who asks questions.
Of course, the interviewer may arouse some suspicions but this is part of the job to involve
respondents in the task. Interviews are conducted to increase the willingness of the respondent
to participate and to obtain information that may be lost with a questionnaire.
We can say that a research interview is:

a structured interaction

between an investigator (also called the interviewer) and a subject

who has been identified as a potential source of information
During a structured interview, the interviewer will initiate and control the interview. The
purpose of the interview is so that the researcher obtains information which can be compared
and contrasted with information from other interviews
In depth interviews differ from direct observation mainly in the way the interaction takes place.
In interviews you will find an interviewer and one or more interviewees. During the interview,
the interviewer will focus on the ideas and standpoints of the interviewees about the subject of
the research
The interviewer may record information (such as a respondent’s manner and body language) that
would be absent with the questionnaire method.
d. Observation
Observation usually includes a range of methods: informal interviews, direct observation of
people, objects or events, collective discussions, analyses of personal documents produced, selfanalysis, and life-histories.
You would probably use a questionnaire that you complete while observing the employee, or you
may complete the questionnaire directly after observing the employee.
Observation is usually undertaken over an extended period of time. An extended research time
period means that the researcher You) will be able to obtain more detailed and accurate
information about the people you are studying.
You will be able to observe details such as:

Daily timekeeping

Dress

Communication with team members (or lack thereof)

Meeting deadlines

And even more hidden details, such as behaviour that is not allowed
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When you observe employees over a period of time you will be able to see discrepancies
between what employees say -- and often believe -- should happen (the formal system) and what
actually does happen.
In contrast, a one-time survey of people's answers to a set of questions might be quite
consistent, but is less likely to show conflicts between conscious representations and behavior
3.3 Evaluate The Conduct
The Merriam-Webster dictionary defines evaluate as follows:
To determine the significance, worth, or condition of, usually by careful
appraisal and study estimate
When you evaluate an ethics compliance program, you determine how successful your team or
section was in abiding by the ethics and code of conduct of the organisation.
You take the original objectives of the team and compare your findings against these objectives.
In order to compare your findings, you have to be able to draw conclusions from the information.
In order to draw conclusions from our data, we have to understand it by looking at it to see what
the data is telling us.
a. Analyse the data
Now you have all the information, you have to do something
with it: analyse the information. The only reason you went
to all the trouble of conducting market research is that you
want information, so that you can analyse the information
and use it for the benefit of your new venture.
Once you have all the information, you have to organise it, summarise it and simplify the
information so that you can make sense of it.
The easiest would be to prepare a document that lists all the questions. You then count all the
answers and add the totals to the document.
Example
Do you play computer games?
Yes
1450
No
550
Now you can calculate a percentage of the sample: who plays computer games and therefore
might be interested in buying a new game.
Total questionnaires received:
2000
Total Yes
1450
percentage of sample:
72%
Total No
550
percentage of sample
18%
This means that, of the people who took part in the survey, 72% do play computer games.
Formative Assessment 7: SO3
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b. Describing data
Tables organise data and graphs present a clear overall picture of the distribution and spread
of the data.
We used tables during the formative assessment to organise data.
 Bar graphs
Bar graphs compare measurements at intervals, the bars run horizontally. Column charts
compare measurements at intervals and provide a view of data at a specific time. The bars run
vertically
The example below shows a column chart indicating how many ice creams were sold from
January to May.
If you use a bar chart, the bars will run horizontally and not vertically as with a column chart.
Number Of Ice Creams Sold
100
90
80
70
60
50
40
30
20
10
0
In a bar
chart, the
heights of
the bars are
important.
When you
draw a bar
graph, state
Jan
Feb
March
April
May
clearly
what
you
are representing on the two axes. This means that you have to label the axes. Also insert it on
the graph above.

Draw the axes at right angles to each other

Choose a scale for the vertical axis and write in the units.

Use a ruler to help you read off the height of a bar.
 Pie Charts
The pie chart shows how a whole is divided into parts. The home language distribution is shown on the
next page.
The pie chart is a good option to choose when you want to show the relationships that parts have to the
total. In this example, all the home languages are compared. They have been ordered from largest
(IsiZulu) to the smallest (Other) and are displayed in this manner in the pie chart. The legend on the right
as well as the labels and colouring of each section of the pie make the pie chart easy to understand.
Pie charts show us the parts that make up the whole but humans don’t see angles as clearly as we see
length. For this reason, the pie chart is not a good choice to compare sizes of various parts with the
whole.
A pie chart shows the breakdown of a total. A pie chart is a good way to show how a fixed number is
divided. The whole circle (360 ْ) represents the total number (or 100%) and we express each part as a
53 | P a g e
fraction or percentage of the whole. A pie chart is constructed by converting the share of each component
into a percentage of 360 degrees.
Car Sales 1996
Corolla 850 units
Ford 425 units
Nissan 250 units
Chevrolet 475 units
Formative Assessment 8: SO3
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SECTION 4: STRENGTHEN ORGANISATIONAL ETHICS
Specific Outcome 4
Formulate recommendations for strengthening shared organisational values, the code of conduct
and ethical practices
Assessment Criteria

An implementation plan is prepared that describes the strengthening of the entity's
values, code of conduct and ethical practices in the unit

The role and responsibilities of the manager are described in terms of decision making to
strengthen the values, code of conduct and ethical practices in a unit and the entity

The communication activities for promoting the entity's values, code of conduct and
ethical practices are outlined in the plan, with role allocation and time frames

The process for monitoring and evaluating improvements in relation to the entity's
organisational values, code of conduct and ethical practices in a unit is described with
role allocation and time frames
4.1 Effective Program Implementation
There are indeed several measures that can be taken to reduce or confine unethical practices in
the workplace. It is important to realise that unethical behaviour amongst employees with an
inadequate stage of moral development can be reduced by good management.
On the other hand, employees with a better developed sense of morality may fall prey to
unethical practice if there is insufficient control in the workplace.
Involve all the stakeholders: in order to effectively implement an ethics compliance
programme, it is important that all the stakeholders are involved. This means that you will have
to consult with all the stakeholders in your team/section/department about the goals,
objectives and overall purpose of the program.
Proper management: Management must set a good example and the code of
conduct should be controlled in the workplace.
Uphold democratic principles which will allow for unethical office holders to be
removed from office through the general election, or local government election,
process.
Employees must receive proper training to ensure that they are equipped with
the knowledge and skills to successfully execute their responsibilities. Specific
training in what it means to be ethical must also be included.
Get rid of excessive secrecy in the workplace. Only that information which
could threaten the security of the country needs to be kept secret. Government
must be transparent in its dealings with the people.
Demonstrate leadership - you should consistently communicate the
organisation’s values and behavioural expectations as identified in the
compliance and ethics program.
Require accountability and ownership from all the stakeholders in your
team/section/department. For the compliance and ethics program to make a
difference, it should place responsibility on individuals for their actions. You
should also ensure that employees have appropriate training and information.
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Provide an open culture: issues and problems should be investigated and proactively managed
to resolution. Make sure that unethical or illegal behaviour is addressed promptly. Employees
must be required to raise and resolve violations of compliance or ethics standards. To do so,
they must feel confident that they can take action without fear of retaliation
Measure performance and results - Compliance and ethics processes and results should be
monitored and measured. The results of evaluation should provide the basis for continually
improving the program
You will also have to integrate compliance and ethics into business procedures. For some
companies this means making a breach of company policy as serious as breaching laws, resulting
in “internal” standards being as important as “mandatory” standards. This means you have to
put procedures in place that have to be followed when the code of conduct is breached.
 Foundation for a code of ethics
The cornerstone for ethical behaviour in an organisation should include the following:
Respect other people
Equity and Equality
Ownership of professional and personal responsibility
a. Implementation plan
In the implementation plan you must specify and explain clearly WHAT has to be done, WHY it
must be done, WHEN it should be done, WHO must do it and HOW it should be done
A plan is like a map that you will use to find out if things are being done the way you want it
done.
You have to refer back to your plans regularly to find out if you are still on track. When
something on the plan is not working out the way you want it to, do not despair – there is no
failure, there is only feedback. If things go wrong, don't wait for others to change –start the
change with yourself – what can you do differently to get back on track. If what you're doing
isn't working, do something different. Learning from feedback means that you are improving
your skills, knowledge and action all the time.
So, analyse the plan, do a problem solving exercise to find out why you are not on track, take
corrective action and then change the plan to include the changes.
56 | P a g e
The plan should include:

How and when you will consult with stakeholders

How and when training will take place

Exactly what is required of employees, including values, code of conduct and ethical
practices in the unit

How the organisation’s values, code of conduct and ethical practices will be
communicated to the team/section/department, who will be responsible for the
communication as well as the time frames within which the communication will take
place

How the implementation will be monitored and evaluated

How and when feedback will be provided

How and when recommendations can be made in order to strengthen the organisation’s
values, code of conduct and ethical practices
b. Communication activities
The plan should include the communication activities that will take place in order to promote
the values, code of conduct and ethical practices required by the unit. Communication
activities could include:

Regular meetings

Performance appraisals

Training activities

Regular memo’s and/or e-mails

Reporting procedures

Feedback procedures
Make sure that you also state who will be responsible for the various communication activities
and by when these activities should take place.
c. The role and responsibilities of the manager
Your plan must also describe the role the manager will play in order to strengthen the values,
code of conduct and ethical practices, for example setting a good example and applying
democratic leadership.
Responsibilities of the manager will include:

Exercising control over the team, section or department regarding ethical business
practices

Establishing and implementing procedures for reporting of unethical business practices

Getting rid of excessive secrecy in the workplace

Requiring accountability and ownership from all the stakeholders

Providing an open culture where reporting of unethical behaviour can take place without
fear of retaliation
The manager will be required to make decisions regarding ethical practices, for example in
terms of the procedures that have to be followed when the code of ethics is breached.
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The manager will also be required to consider suggestions for improving the code of conduct and
make decisions regarding implementing these improvements.
d. Procedures
The question is how do we act towards those who are unethical in the workplace? Let’s look at
different situations. The answers are provided next to each situation.
Harassment
What do I do in a situation like this?
The organisation must have a policy against any form
of harassment. What is harassment? Harassment in
such forms as sexism, racism or bullying others. This
is also when someone denies respect for the rights of
employees or managers.
Harassment can be
harmful to organisational effectiveness and may also
be unlawful.
Go to your supervisor or manager. Ask
them to inform the Human Resource
Management Department. The Human
Resource
Management
Department
should provide you with a copy of the
policy which prohibited employees or
managers to participate in such
activities.
Discrimination
What do I do in a situation like this?
Organisations
should
prohibit
anyone
who
discriminates.
Organisations must implement
structures that are free from direct or indirect
discrimination on the grounds of sex, marital status
or pregnancy, race, age, sexual preference, religious
or political beliefs, impairment, family responsibility
or family status.
Discuss this with your supervisor or
manager first. Seek for advice from the
Human Resource Department and they
should provide you a copy of their
policies.
There has to be a procedure through which unethical behaviour can be reported:
e. When the code of ethics is breached
 The process to be followed when the code of ethics is breached
There are specific processes to follow when the code of ethics are breached in an organisation.
Each organisation or business strives to implement different codes of ethics to suite their
organisational needs.
The following steps may be followed in serious offences e.g.
Discrimination, fraud, bribery, theft etc.
1. Determine the nature and extent of the breach of ethics.
2. Determine what penalties, if any, have been incurred.
3. Decide whether the breach of ethics could constitute a criminal, delictual (Law term) or
labour offence.
4. Seek legal advice as to the best remedy for the situation.
5. Implement appropriate legal proceedings.
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 Another process to be followed BEFORE the code of ethics are
breached
Organisations or businesses should provide more ethics training to strengthen their employees'
personal ethical framework. Organisations must devote more resources to ethics training
programs to help its members clarify their ethical frameworks and practice self-discipline when
making ethical decisions in difficult circumstances. What follows is a useful seven-step checklist
that organisations should use to help their employees in dealing with an ethical dilemma
(Schermerhorn, 1989; Otten, 1986):
1. Recognize and clarify the dilemma.
2. Get all the possible facts.
3. List your options--all of them.
4. Test each option by asking: "Is it legal? Is it right? Is it beneficial?"
5. Make your decision.
6. Double check your decision by asking: "How would I feel if my family found out about this?
How would I feel if my decision was printed in the local newspaper?"
7. Take action.
4.2 Monitoring And Evaluating Improvements
Your plan should also describe how the program, as well as suggestions for improvement will be
monitored and evaluated.
Formative Assessment 9: SO4
Bibliography
www.wikipedia.com
www.saica.co.za
http://www.ethicsa.org
http://www.unisa.ac.za/contents/about/principle/docs/History%20Conference%20Address.doc
Robbins S.P, Odendaal A & Roodt G, Organisational Behavior, Global and Southern African
Perspectives
Technikon Pretoria. 2002, Certificate Programme in Public Management,
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