BUSINESS STUDIES
Grade 11
TERM 2
Business ventures and
Business roles
PROFESSIONALISM
AND ETHICS
DEFINITIONS AND DIFFERENCES
Definition:

Ethics and professionalism are two concepts often
used in the same context.

Ethics has a wider definition than professionalism
which is more specific.

Ethics refers to doing the right thing in general, while
professionalism refers to a set of behaviour.
DEFINITIONS AND DIFFERENCES
Definition:
Professionalism:
 Professionalism in the workplace refers to the way business
managers and employees conduct themselves when dealing
with stakeholders within a specific work environment.
 It includes compliance with the generally accepted manner of
doing business – ethical conduct, appearance, communication,
attitude, responsibility, knowledge, skill, integrity, respect,
etiquette and loyalty.
Ethics:
 Ethics refers to the moral values set mostly by society and by
the business as a standard for correct behavior.
 It is a moral code based on set values.
 In the business, a code of ethics describes the appropriate
behavior that is expected from employees in the workplace.
 It focuses on the difference between right and wrong, good and
bad.
DEFINITIONS AND DIFFERENCES
Differences:
Ethics
Professionalism
Doing the right thing.
A set of behaviour for a
particular occupation.
DEFINITIONS AND DIFFERENCES

Most occupations have their own codes of Ethical
and Professional conduct.

Ethical behaviour refers to generally doing the right
thing.

Unethical behaviour can take a variety of forms, for
example accepting a bribe, using time at work for
personal interests, making personal telephone calls
from work.

Professionalism is about how to behave in a certain
occupation.
DEFINITIONS AND DIFFERENCES

In general, being professional means to:
•
Do what is expected for a particular occupation.
•
Dress appropriately.
•
Be on time.
•
Avoid making promises that cannot be kept.
•
Use appropriate language.
•
Avoid gossip about colleagues.
THEORIES AND PRINCIPLES
Ethics involve doing the right thing, but how do we
differentiate between right and wrong?
 The laws of the country define illegal behaviour but
every one has to decide what is right and wrong for
themselves and which guidelines to use to make this
decision.
 Example:

Consequences • Some people make decisions based on the
consequences of a decision.
• A decision is based on the answer to the question
“what if I get caught”
Belief
Opinion of
other
• Some people make decisions based on their beliefs.
• A decision is based on what a person is taught to
believe, or what a person chooses to believe.
• Some people make decisions based on the opinion
of others
THEORIES AND PRINCIPLES



Ethics theories can be grouped into ethics theories that guide
conduct and ethics theories that guide character.
Ethics theories that guide conduct:
Utilitarian theory:
Is linked to consequence-based theory, which focuses on the
consequences of an action.
 According to this theory, something ‘useful’ needs to come from an
ethical action.
 If the action results in pleasure for the majority of people, it is seen as
right.
 If the action results in pain for the majority of people, it is regarded as
wrong.


Deontological theory:
States that an action is morally right if it does not deviate from the rule.
 An example is that a businessman could set himself a rule always to be
dressed in a suit and to wear a tie to make a good impression.
 All the employees at the business decide to wear World Cup T-shirts on
Fridays for the duration of the World Cup, but he continues wearing a
suit and a tie rather than breaking his own rule.

THEORIES AND PRINCIPLES
Ethics theories that guide character:
 Virtue-based theory:

Focuses on a person’s character rather than that person’s
actions.
 This theory suggests a balance between two extremes.
 For example, an accountant needs to find a balance between the
two extremes of working fast or being accurate.


Care theory:
Suggests that ethics should relate to the situation.
 In order to decide what is good or bad in a certain situation, you
need to place yourself in someone else’s position.

PROFESSIONALISM AND ETHICS RELATE
TO THE BUSINESS ENVIRONMENT

Profit is the reason for the existence of most
businesses to make profit.

Competition in the market is tough.

In order for a business to be successful it needs to do
well in many areas, for example good pricing and
excellent service delivery.

A business will only be able to achieve these goals if
employees are professional and hard working.
PROFESSIONALISM AND ETHICS RELATE
TO THE BUSINESS ENVIRONMENT

Unprofessional employees will only harm a business’s
image and reputation.

A business with a professional image will enjoy the
following benefits:




A professional image which leads to customer satisfaction.
A professional image which attracts customers to a business.
A business with a professional image which attracts good
employees.
Ethics in the business environment refers to principles of
right and wrong, regulating the conduct of business people
and business enterprises.
PROFESSIONALISM AND ETHICS RELATE
TO THE BUSINESS ENVIRONMENT
The topic of ethics is very wide and can be applied in all
sections of a business.
 Look at the following examples:

Ethics and
production
• Avoid unethical behaviour such as dumping waste in
rivers.
• Avoid unethical production processes, especially
processes that harm people, for example expecting
employees to work without safety gear.
Ethics and public • Press releases about a business should be true.
relations
Ethics and
purchasing
• Buy from suppliers who adhere to ethical codes of
conduct, for example do not support a meat supplier
who is cruel to animals.
PROFESSIONALISM AND ETHICS RELATE
TO THE BUSINESS ENVIRONMENT

Look at the following examples:
Ethics and
general
management
Ethics and
marketing
• Avoid unethical behaviour like lying to employees and
shareholders about the financial position of the
business.
• Sometimes, managers grant themselves excessive
bonuses while employees only receive small increases
– this is also unethical.
• Avoid exploiting people, for example people with
disabilities.
Ethics and
• Recruitment and selection should be fair.
human resources • Avoid unethical behaviour such as nepotism.
Ethics and
administration
• Avoid leaking confidential information.
Ethics and the
financial
function
• Avoid unethical behaviour such as tax evasion, fraud
(also unlawful) and bribery.
PROFESSIONALISM AND ETHICS RELATE
TO THE BUSINESS ENVIRONMENT

The following four principles of ethics relate to business
and could be helpful in the organisation:
1. Be trustworthy
Customers want to do business with an
organisation they can trust. If the organisation
can prove it is worthy of the customers’ trust, the
customers will give their loyalty in return.
2. Meet obligations
Honour all commitments and obligations. For
example if an insurance agent promises a
prospective customer that he will phone back, he
needs to keep the promise or the customer will lose
trust in the company.
3. Community
involvement
Remain socially responsible to the community in
which the business operates. Community
involvement requires businesses expend financial
and other resources. In return, this could lead to
positive publicity, loyalty and respect from the
community.
PROFESSIONALISM AND ETHICS RELATE
TO THE BUSINESS ENVIRONMENT

The following four principles of ethics relate to business
and could be helpful in the organisation:
4. Accounting control
Managers have to gain control of record keeping to
avoid fraudulent acts and corruption. The legal
way of reducing the amount of tax due is called tax
avoidance. A business should not practise tax
evasion. It is the illegal way of reducing the tax
liability by deducting questionable expenses or just
not paying tax at all.
THE DIFFERENCE BETWEEN GOOD
AND BAD DECISIONS

All decisions have consequences.

The consequences of a decision should be determined
before a decision is made.

From a business enterprise’s perspective, decisions
should be assessed against criteria such as:
the financial implications of the decision.
 the legal implications of the decision.
 the ethical implications of the decision.
 the effect the decisions will have on employees.

PRINCIPLES AND SKILLS OF PROFESSIONAL,
ETHICAL AND RESPONSIBLE BUSINESS PRACTICE
Each business enterprise determines its own set of
principles of professionalism.
 Examples of principles include:

Maintaining high
• Do not accept any form of bribery.
levels of professional • A person should act within his/her area of
integrity
professional competency.
• Avoid actions which could be perceived as
a conflict of interest.
Honouring
• Adopt an attitude of lifelong learning.
professional business • Honour all promises and agreements,
practices
oral and written.
• Ensure that confidential information
remains confidential.
Respecting diversity
• Show respect towards all people.
• Avoid any kind of discrimination.
DIFFERENT PERSPECTIVES
People hold different values and beliefs – this means that
what one person regards as wrong, another person could
regard as right.
 Different ethical perspectives:

•
Some people believe cloning animals or people is wrong,
other people believe cloning is inevitable scientific
development.
•
Some people believe bribery is wrong, while other people
think bribery creates a “win-win” bookkeeping.
•
Some people believe tax evasion is wrong, others believe
tax evasion indicates creative bookkeeping.
ETHICAL BUSINESS VENTURES
Ethical business ventures are ventures that firstly abide
by all laws and, secondly, look for opportunities to do the
right thing.
 Examples of ethical business behaviour:

Not starting a
business venture
at the expense of
someone else
Payment of fair
wages
• Business operations should not harm the
community, or employees.
• Before an entrepreneur starts a business, the
entrepreneur must consider the effects of the
enterprise on the community and its employees.
• Fair remuneration should be paid to all employees
because employees help to create wealth for the
business enterprise.
• Employers must make sure that wages paid to the
workers are in accordance with the minimum wages
as determined by The Basic Conditions of
Employment Act (No 75 of 1997)
• Underpaid workers will feel unhappy and will be
unproductive.
ETHICAL BUSINESS VENTURES

Examples of ethical business behaviour:
Not
discriminating
against
employees
• All employees must receive equal opportunities and
equal treatment.
• It is both unethical and unfair to allow privileges to
some employees and not to others.
• Unfair treatment influences employee morale
negatively and creates disloyalty among employees.
Regular payment • Some people and business enterprises view tax
of tax
evasion as a way to save money.
• Tax evasion is not only illegal, it is unfair towards
all people and enterprises that pay their taxes
regularly.
• If all people and business enterprises pay their tax
regularly, authorities will probably consider
decreasing tax rates.