ADDENDUM 621 (C): EXAMINATION QUESTIONS

6. ADDENDUM 621 (C): EXAMINATION QUESTIONS

RICHFIELD GRADUATE INSTITUTE OF TECHNOLOGY

HIGHER EDUCATION AND TRAINING DEPARTMENT OF BUSINESS, ECONOMICS & MANAGEMENT SCIENCES

BUSINESS ETHICS 621

2 ND SEMESTER NATIONAL FINAL EXAMINATION

Duration: 2 Hours

Date: 23 November 2011 Examiner: Mr Raymond Moyo

Marks: 100

Moderator: Mr A Msomi

This paper consists of 3 questions and 5 pages including this page. PLEASE NOTE THE FOLLOWING:

1) Ensure that you are writing the correct Examination paper, and that there are no missing pages.

2) You are obliged to enter your student number and centre name on all answer sheets. The answer sheets provided are the property of the Business College and all extra sheets must be handed to your invigilator before you leave the examination room. Number your answer sheet and ensure that they are stapled in the correct sequence.

3) If you are found copying or if there are any documents / study material in your possession, or writing on parts of your body, tissue, pencil case, desk etc, your answer book will be taken away from you and endorsed accordingly. Appropriate disciplinary measures will be taken against you for violating the code of conduct of the Business College Examinations Board. Therefore if any of these materials are on your person, you are requested to hand these over to your invigilator before the official commencement of this paper.

4) You are required to answer all questions. Rule off after each question.

SUGGESTED TIME REQUIRED TO ANSWER THIS QUESTION PAPER

Number

Time In Minutes s

Questions

Marks

10 15 2 Question Two

1 Question One

65 70 3 Question Three

Question One [10 Marks]

Briefly explain the following terms:

1.1 Agency Costs [2] 1.2 Code of Conduct

[2] 1.3 Unitary board model

[2 1.4 Corporate Governance

[2]

1.5 Social Responsibility [2]

Question Two [65 Marks]

Answer the following questions: 2.1 Explain the historical perspective of Business Ethics

[10]

2.2 Enumerate the focus areas of the King II report. [7]

2.3 Identify five myths of business ethics. [10]

2.4 Explain the relationship between law and ethics [8]

2.5 “Business ethics is a matter of the good guys preaching to the bad guys” Critique this statement.

[5] 2.6 Discuss elaborately one international system of corporate governance.

[15]

2.7 State five South African legislations that deal directly or indirectly with corporate governance issues.

[5] 2.8 The Agency theory raises a fundamental problem in organizations - self-interested behaviour. State the arguments which support this theory.

[5]

Question Three [25 Marks] Read the case study below and answer the questions that follow.

BUSINESS ETHICS AND SUSTAINABILITY IN THE STEEL INDUSTRY: TATA STEEL

From buses to buildings, canned food to computers, much around us is either made of steel or using steel. Tata Steel is the second largest steel producer in Europe with its main steelmaking plants in the UK and Holland. It is committed to tackling the challenges of sustainability. It takes its environmental responsibility seriously, balancing it against the need to be profitable. Business ethics means ‘taking the right course’. Acting ethically takes into account all the factors of doing business. With its high ethical standards, Tata Steel aims to go beyond the minimum required by law, making a positive contribution wherever possible. This focus on

sustainability is part of its Corporate Social Responsibility (CSR) strategy. Steel is one of the best materials for sustainability. Steel is unique because it is truly recyclable – it recycles as new steel not an inferior product. Steel is the most recycled material on Earth, making steel a very ‘green’ material. Tata Steel builds ethical and sustainable practices into all areas of its operations. Steel has the benefit of being truly recyclable but is produced by a process that produces CO2 emissions. Sustainability is about much more than CO2, but one of the major challenges of sustainability is to reduce CO2 emissions which may contribute to climate change. Tata Steel is working to reduce these emissions using new technology and practices. For example, it has introduced technology to re-use gases produced at its Port Talbot plant to create electricity equivalent to 10% of its needs. This has reduced the need for natural gas for power and helped reduce its CO2 emissions by nearly 300,000 tonnes. Tata Stee l’s work on reducing CO2 emissions is demonstrated through its climate change strategy. It has set itself specific goals, for instance, to reduce CO2 emissions to less than 1.7 tonnes per tonne of crude steel by 2012.

Steel making produces CO 2 emissions. Tata Steel uses new technology to reduce them. It

invests effort and resources in five key priorities: • emission reductions

• new technologies for low-carbon steels • new products that lower CO 2 emissions through the life cycle

• keeping its workforce engaged in this challenge • leading by example globally.

It is vital that balanced decisions are taken. This means taking a ‘life-cycle’ approach to decision-making – assessing how products are not just made, but also used and disposed of. Often, just one phase is considered. Life cycle assessments (LCA) assess the true environmental impact of a product over its full life. LCA helps Tata Steel to promote the ethical and sustainable use of steel:

Cars.-CO 2 emissions are measured from ‘tailpipe emissions’ - this occurs during the ‘use phase’ of cars. However, lighter weight cars use less fuel, so have lower emissions. Using LCA

steel has been shown to be the best material to decrease CO2. Tata Steel and other steel- makers have produced the ‘Future steel vehicle’ which showcases the latest advances in steel technology.

Construction. Timber is perceived as being a sustainable resource. When Tata Steel looked at the LCA of timber, it found that carbon emissions were similar to a typical steel-framed Construction. Timber is perceived as being a sustainable resource. When Tata Steel looked at the LCA of timber, it found that carbon emissions were similar to a typical steel-framed

• an enhanced reputation for the business • greater customer loyalty

• a better motivated workforce. Workers see they are part of a business which is ‘doing the right thing ’, working to help achieve environmental targets.

Tata Steel has shown that it is committed to sustainable and environmental practices. The key to the success of this approach is to recognise the unique properties of steel as a recyclable material and to ensure that measurements of sustainability are taken using LCA, not just in the use- phase.

Questions

3.1 Describe what is meant by ‘ethical business practice’. [3] 3.2 Explain how sustainable practice can help a business to compete.

3.3 Evaluate the contribution of Tata Steel to sustainable and ethical business

practices. [6] 3.4 Identify four work values displayed by Tata Steel in the case