Business Ethics 621 Year 2 Semester 1 (1)

COMMERCIAL SCIENCES

Business Ethics 621

Year 2

Semester 1

Previously

BUSINESS ADMINISTRATION, MANAGEMENT &

COMMERCIAL SCIENCES LEARNER GUIDE

MODULE: Business Ethics 621

(1 st SEMESTER)

written permission of the Institution.

TABLE OF CONTENT

Topics Page No Section A: Preface

4 2.Title of Modules

1. Welcome

5 3.Purpose of Module

5 4.Learning Outcomes

5 5.Method of Study

6 7.Notices

6. Lectures and Tutorials

6 8.Prescribed & Recommended Material

6 9.Assessment & Key Concepts in Assignments and Examinations

7 10.Specimen Assignment Cover Sheet

10 11.Work Readiness Programme

12 12.Work Integrated Learning

Section B: Business Ethics TOPIC 1: INTRODUCTION TO BUSINESS ETHICS

1.2 What is Business Ethics

1.3 The Difference between a Code of Ethics and a Code of Conduct

1.4 Ethics and the Law

1.5 Ethics and Values

1.6 Business Ethics as a Management Discipline

1.7 The Myths about Business Ethics

1.8 The Benefits of Managing Ethics in the Workplace

Assessment Questions

TOPIC 2: KEY CONCEPTS AND DISTINCTIONS IN ETHICS

2.3 Business Ethics

2.4 Right, Wrong and dilemmas

2.5 Ethics and the Law

2.6 Ethics and Values

Assessment Questions

TOPIC 3: ETHICS ON THE MACRO LEVEL

3.2 The Free Market System

3.2.1 Property rights

38 3.2.3Competition

3.2.2 The marvel of the pricing system

39 3.2.5The joint stock, Limited Liability Corporation

3.2.4 Profit and Personal Motivation

3.2.6 Justification of the Free Market

3.2.7 Equity and Equality

Assessment Questions

TOPIC 4: CLASSICAL ETHICAL THEORIES

4.1.1 Justice and Fairness

4.1.2 Command systems

4.1.3 The Socialist State

4.1.5 The Moral Dimensions of Different Economic Systems

4.1.6 Critiques against communism

4.1.7 Critiques against the socialist state

4.1.8 Macro-ethics and moral challenges to the enterprise

Assessment Questions

TOPIC 5:ETHICS IN THE ORGANISATION

5.2 Business without Ethics

5.3 Motives and Ethical Neutrality

5.4 Amoral Managers

5.5 Amoral beliefs and Business language

5.6 stereotyping in advertising

Assessment Questions

TOPIC 6: THEORIES OF THE MODERN CORPORATION

6.2 Corporate Social Responsibility

6.3 Corporate Moral Agency

Assessment Questions

TOPIC 7: ADDENDUM 621 (A): CASE STUDY FOR TUTORIAL

DISCUSSION TOPIC 8 :ADDENDUM 621 (B): SELF ASSESMENT QUESTIONS

TOPIC 9: ADDENDUM 621 (C): EXAMINATION QUESTIONS

SECTION A: PREFACE

1. WELCOME

Welcome to the Faculty of Business, Economics & Management Sciences. We trust you will find the contents and learning outcomes of this module both interesting and insightful as you begin your academic journey and eventually your career in the business world.

This section of the study guide is intended to orientate you to the module before the commencement of formal lectures.

The following lecturers will focus on the study units described.

SECTION A: WELCOME & ORIENTATION Study unit 1: Orientation Programme

Introducing academic staff to the students by academic head.

Lecture 1

Introduction of institution policies.

Study unit 2: Orientation of Students to Library and

Students Facilities

Introducing students to physical structures

Lecture 2

Issuing of foundation student guides and necessary learning material

Study unit 3: Assignments and tests –Importance, submission Lecture 3

dates, penalties Study unit 4: Discussion on the Objectives and Outcomes of

Lecture 4 Business Ethics

Study unit 5: Orientation and guidelines on completing

Assignments Lecture 5

Review and Recap of Study units 1-4

2. TITLE OF MODULES, COURSE, CODE, NQF LEVEL, CREDITS & MODE OF DELIVERY

2 Semester Title Of Module:

Business Ethics

NQF Level:

Mode of Delivery:

Contact

3. PURPOSE OF MODULE

The purpose of this module is to give students a thorough understanding of the basic business ethics required to enter the business/employment world. Naturally the module is only an introduction to what the working environment is all about, but we trust that students will gain sufficient knowledge about the various business functions to enable them to choose possible areas of work preference and further study and articulation.

3.1 Business Ethics 621

The purpose of this module is to expose the student to the subject terminology which i n c l u d e s t h e o r e t i c a l b a c k g r o u n d to business ethics, corporative governance and ethics, business and social responsibility, accountability, power and values, recent developments to corporate governance theory and the governance environment and many other issues relevant to the business ethics.

4. LEARNING OUTCOMES

On completion of this module, students should have a basic / fundamental practical and theoretical knowledge of:

 The performance dimensions of business ethics  Current issues under scrutiny in the field of business ethics

5. METHOD OF STUDY

Only the key sections that have to be studied are indicated under each topic in this study guide. You are expected to have a thorough working knowledge of the prescribed text book. These form the basis for tests, assignments and examinations. To be able to do the activities and assignments for this module, and to achieve the learning outcomes and ultimately to be successful in the tests Only the key sections that have to be studied are indicated under each topic in this study guide. You are expected to have a thorough working knowledge of the prescribed text book. These form the basis for tests, assignments and examinations. To be able to do the activities and assignments for this module, and to achieve the learning outcomes and ultimately to be successful in the tests

6. LECTURES AND TUTORIALS

Students must refer to the notice boards on their respective campuses for details of the lecture and tutorial time tables. The lecturer assigned to the module will also inform you of the number of lecture periods and tutorials allocated to a particular module. Prior preparation is required for each lecture and tutorial. Students are encouraged to actively participate in lectures and tutorials in order to ensure success in tests, group discussions, assignments and examinations.

7. NOTICES

All information pertaining to this module such as tests dates, lecture and tutorial time tables, assignments, examinations etc. will be displayed on the notice board located at your campus. Students must check the notice board on a daily basis. Should you require any clarity, please consult your lecturer, programme manager or administrator of your respective campus.

8. PRESCRIBED & RECOMMENDED MATERIAL

8.1Prescribed Material

Naidoo, R.(2002). Corporate Governance-an essential guide for South

African companies. Cape Town

Rossouw, D. & Van Vuuren, L. (2010). th Business Ethics. 4

ed. ABC Press, Cape Town.

Smith, P.J. & Cronje, G.J. (2002). Management Principles- A contemporary

Edition for Africa. 3 rd ed. Cape Town, Juta.

Business Ethics 621 has a well balanced approach in that it is structured such that it not only informs and educates you about the theoretical back-ground required in the business world, but also has a powerful practical element / component. Our practical syllabus follows strongly in line with that of strong management principles and standards currently employed by many enterprises today.

8.2Recommended Material

Economic Commission for South Africa. (2002). Guidelines for Enhancing Good Economic and Corporate Governance in Africa- Final Draft, May 2002.

Gatamah, K.( 2004). The corporate enterprise in Africa: governance, citizenship and social responsibility. Corporate Ownership & Control

Okeahalam, C. C. & Akinboade, O.A. (2003).

A Review of corporate governance in Africa: literature, issues and challenges.

8.3Independent Research:

The student is encouraged to undertake independent research with emphasis on the value of strategic thinking in companies and the business ethics.

8.4Library Infrastructure

The following services are available to you:  Each campus keeps a limited quantity of the recommended reading titles and

a larger variety of similar titles which you may borrow. Please note that students are required to purchase the prescribed materials.

 Arrangements have been made with municipal, state and other libraries to stock our recommended reading and similar titles. You may use these on their premises or borrow them if available. It is your responsibility to safe keeps all library books.

 RGI has also allocated one library period per week as to assist you with your formal research under professional supervision.

 RGI has dedicated electronic libraries for use by its students. The computers laboratories, when not in use for academic purposes, may also be used for research purposes. Booking is essential for all electronic library usage.

9. ASSESSMENT

Final Assessment for this module will comprise two Continuous Assessment Tests, an assignment and an examination. Your lecturer will inform you of the dates, times and the venues for each of these. You may also refer to the notice board on your campus or the Academic Calendar which is displayed in all lecture

9.1 Continuous Assessment Tests

There are two compulsory tests for each module (in each Semester).

9.2 Assignment

There is one compulsory assignment for each module in each semester. Your lecturer will inform you of the Assignment questions at the commencement of this module.

9.3 Examination

There is one two hour examination for each module. Make sure that you diarize the correct date, time and venue. The examinations department will notify you of your results once all administrative matters are cleared and fees are paid up. The examination may consist of multiple choice questions, short questions and essay type questions. This requires you to be thoroughly prepared as all the content matter of lectures, tutorials, all references to the prescribed text and any other additional documentation/reference materials is examinable in both your tests and the examinations.

The examination department will make available to you the details of the examination (date, time and venue) in due course. You must be seated in the examination room 15 minutes before the commencement of the examination. If you arrive late, you will not be allowed any extra time. Your student registration card must be in your possession at all times.

9.4 Final Assessment The final assessment for this module will be weighted as follows:

Continuous Assessment Test 1 Continuous Assessment Test 2

9.5 Key Concepts in Assignments and Examinations

In assignment and examination questions you will notice certain key concepts (i.e. words/verbs) which tell you what is expected of you. For example, you may be asked in a question to list, describe, illustrate, demonstrate, compare, construct, relate, criticize, recommend or design particular information / aspects / factors /situations. To help you to know exactly what these key concepts or verbs mean so that you will know exactly what is expected of you, we present the following taxonomy by Bloom, explaining the concepts and stating the level of cognitive thinking that theses refer to.

Competence

Skills Demonstrated

Observation and recall of information

Knowledge of dates, events, places

Knowledge of major ideas

Mastery of subject matter

Knowledge

Question Cues list, define, tell, describe, identify, show, label, collect, examine, tabulate, quote, name, who, when, where, etc.

Understanding information Grasp meaning Translate knowledge into new context Interpret facts, compare, contrast Order, group, infer causes

Comprehension

Predict consequences Question Cues

summarize, describe, interpret, contrast, predict, associate, distinguish, estimate, differentiate, discuss, extend Use information

Use methods, concepts, theories in new situations Solve problems using required skills or knowledge

Application

Questions Cues apply, demonstrate, calculate, complete, illustrate, show, solve, examine, modify, relate, change, classify, experiment, discover Seeing patterns

Organization of parts

Recognition of hidden meanings

Identification of components

Analysis

Question Cues analyze, separate, order, explain, connect, classify, arrange, divide, compare, select, explain, infer Use old ideas to create new ones

Generalize from given facts

Relate knowledge from several areas

Predict, draw conclusions

Synthesis

Question Cues combine, integrate, modify, rearrange, substitute, plan, create, design, invent, what if?, compose, formulate, prepare, generalize, rewrite Compare and discriminate between ideas

Assess value of theories, presentations Make

choices based on reasoned argument Verify

value of evidence recognize subjectivity

Evaluation

Question Cues assess, decide, rank, grade, test, measure, recommend, convince, select, judge, explain, discriminate, support, conclude, compare, summarize

RICHFIELD GRADUATE INSTITUE OF TECHNOLOGY

HIGHER EDUCATION AND TRAINING

FACULTY OF BUSINESS, ECONOMICS AND MANAGEMENT SCIENCES

10. ASSIGNMENT COVER SHEET 2015

Name of Campus:

Qualification:

Semester:

Year of study Module Name:

Name & Surname:

ICAS No:

Specialization:

Date Submitted:

Question Number

Mark Allocation

Examiner ’s Mark

Moderat or’s Marks

Total

Examiner ’s Comments:

Examiner ’s name & signature: Moderator ’s Comments:

Moderator ’s name & signature:

Verifiers name & signature:

Date:

NB: Assignments are compulsory as it forms part of Continuous Assessment that goes toward the final mark. ASSIGNMENT GUIDELINES

The purpose of an assignment is to ensure that the Student is able to:

1. Use methods of enquiry and research in a disciplined field as well as interpret and evaluate text. 2. Have a sound understanding of key principles and theories, rules and awareness. 3. Solve unfamiliar problems using correct procedures as well as investigate and critically analyse information and report thereof. 4. Present and communicate information reliably, coherently

Instructions and guidelines for writing assignments

1. Use the correct cover page provided by the institution. 2. All essay type assignments must include the following:

2.1 Table of contents 2.2 Introduction 2.3 Main body with subheadings 2.4 Conclusions and recommendations 2.5 Bibliography

3. The length of the entire assignment must have minimum of 5 pages, preferably typed with font size 12 3.1 The quality of work submitted is more important than the number of assigned pages. 4. Copying is a serious offence which attracts a severe penalty and must be avoided at all costs. If any student transgresses this rule, the lecturer will retain the assignments and ask the affected students to resubmit a new assignment which will be capped at 50%. 5. Use the Harvard referencing method.

ASSESSMENT CRITERIA When the final mark is calculated the following criteria must be taken into account:

1. READING AND KNOWLEDGE OF SUBJECT MATTER

 Wide reading and comprehensive knowledge in the application of theory

2. UNDERSTANDING, ANALYSIS AND ARGUMENT

 Complete and perceptive awareness of issues and clear grasp of their wider significance. Clear evidence of independent thought and ability to defend a position logically and convincingly.

3. ORGANISATION AND PRESENTATION

 Careful thought given to arrangement and development of material and argument.  Good English with appropriate referencing and comprehensive bibliography.

11.WORK READINESS PROGRAMME (WRP)

In order to prepare students for the world of work, a series of interventions over and above the formal curriculum, are concurrently implemented to prepare students. These include:

 Soft skills  Employment skills  Life skills  End

–User Computing (if not included in your curriculum)

The illustration below outlines some of the key concepts for Work Readiness that will be included in your timetable

SOFT SKILLS

LIFE SKILLS

 Time Management  Manage Personal Finance  Working in Teams

 Driving Skills

 Problem Solving Skills

 Basic Life Support &

 Attitude & Goal Setting

First Aid

 Etiquettes & Ethics

 Entrepreneurial skills

 Communication Skills

 Counselling skills

WORK READINESS PROGRAMM

EMPLOYMENT SKILLS  CV Writing  Interview Skills  Presentation Skills  Employer / Employee Relationship  End User Computing

 Email & E-Commerce  Spread Sheets  Data base  Presentation  Office Word

It is in your interest to attend these workshops, complete the Work Readiness Log Book and prepare for the Working World.

12. WORK INTEGRATED LEARNING (WIL)

Work Integrated Learning forms a core component of the curriculum for the completion of this programme. All modules which form part of this qualifation will be assessed in an integrated manner towards the end of the programme or after completion of all other modules.  Completion of all tests & assignment  Success in examination

 Payment of all arrear fees  Return of library books, etc.  Completion of the Work Readiness Programme.

Students will be fully inducted on the Work Integrated Learning Module, the Workbooks & assessment requirements before placement with employers. The partners in the Work Integrated Learning are the same as the Work Readiness Programme (WRP):

Good luck and success in your studies …

TOPIC 1

1. INTRODUCTION TO BUSINESS ETHICS LEARNING OUTCOMES

On completion of this topic the student should be able to:

 Understand the concept ethics  Understand the difference between a code of ethics and a code of conduct

 Be able to discuss the 10 myths of business ethics  Understand the benefits of business ethics in detail

STUDY : Chapter 1 in

Rousseau & Van Vuuren (2010: 3-10)

1.1 INTRODUCTION

Ethics involves learning what is right or wrong, and then doing the right thing. Most ethical dilemmas in the workplace are not simply a matter of "Should John steal from Charles?" or "Should John lie to his boss Charles? ”(Many ethicists assert there is always a right thing to do based on moral principle, and others believe the right thing to do depend on the situation -- ultimately it is up to the individual). Many philosophers consider ethics to be the "science of conduct Philosophers have been discussing ethics for at least 2621 years, since the time of Socrates and Plato. Many ethicists consider emerging ethical beliefs to be "state of the art" legal matters, i.e. what becomes an ethical guideline today is often translated to a law, regulation or rule tomorrow. Values which guide how we ought to behave are considered moral values, e.g. values such as respect, honesty, fairness, responsibility, etc. Statements around how these values are applied are sometimes called moral or ethical principles.

1.2 WHAT IS BUSINESS ETHICS

The term ‘business’ has several meanings. It is therefore important to clarify what is meant by ‘businesses prior to defining ‘business ethics.’ ‘Business’ is therefore, any situation where individuals or parties voluntarily enter into transactions of economic exchange for goods or services. Such goods and services can be provided by the state, public or private enterprises, and The term ‘business’ has several meanings. It is therefore important to clarify what is meant by ‘businesses prior to defining ‘business ethics.’ ‘Business’ is therefore, any situation where individuals or parties voluntarily enter into transactions of economic exchange for goods or services. Such goods and services can be provided by the state, public or private enterprises, and

1) What is ethics? What are some common ethical types? Why do business people need it? Can ethics be taught to people?

Answer : Ethics is a study of morality, stems from the ancient Greek “ethos” meaning custom or habit. It is a study of theories concerning what is good and evil in human conduct. There is no particular set of laws defining what is ethical and what is not, because there is no right or wrong answer. The second sense of ethics speak of “codes of ethics”, which are a set of rules serve as guidance to people, often in fields of professions such as business or medical. Ethical contrasts with unethical, which goes against the codes of ethics. There are several ethical theories in Western philosophy. Many of them look at the fruits of one’s action – categorized under Consequentialism, while other theories uphold one’s right and duty, which is Deontology. Consequentialism pertains to cost and benefits. It deals with the results and consequences of performing or not performing an action. For example: If war brings more good (money, oil, labor) than bad (casualties) then it is ethical. Some consequentialist theories are utilitarianism and ethical egoism. Utilitarianism, according to Bentham and Mill, the right action is which creates the greatest good for the greatest number. People should ask what action would promote the greatest amount of happiness for people who are affected. For example: a utilitarian would say euthanasia is ethical if that would bring satisfaction to the suffering patient and financial relief to the family. Ethical egoism, according to Ayn Rand, says we

should do what is purely in our best interest, as opposed to altruism. It promotes one’s wellbeing above others. Meanwhile, deontology pertains to rights, duties or obligations. It concerns the morality of the action that is being performed (or not performed) rather than the results deriving from said action. In Kantian deontology, he promotes the olden rules (don’t steal, don’t lie, don’t commit suicide) which are absolute rules that one must follow no matter what. Therefore it would be unethical to steal food even if it is for a dying person. In Lockean deontology, John Lock believes each individual is entitled to natural rights, such as right to live, right to freedom, right to pursue happiness, etc.

Another theory is virtual ethics, which is similar to Confucianism, in that a person’s virtues are habits and characteristics that one exhibits.

Business people need ethics because it helps prevent malpractices and corruptions. Business practitioners should refer to business codes of conduct as a guide to maintain good business practices that help safeguarding customer confidence.

THREE BROAD DIMENSIONS OF BUSINESS

 The macro or system dimension – the economic system or the wider socio-political framework within which business is conducted. The framework is determined at national level by political decisions, laws and regulations as well as social norms that determine the contours of the economic playing field and the rules that govern economic play. The macro- economic framework determines to a large extent what freedoms and responsibilities economic players will have and also which economic priorities will be pursued.

 The organisational dimension – this relates to the role and responsibilities of business organisations. Business organisations developed their own systems of governance according to which they direct and control their own internal activities. The organisational dimension of the business thus encompasses the collective behaviour of the business organisation towards both its internal and external stakeholders.

 The micro or individual dimension – This concentrates on the economic actions and decisions of individuals interacting with the business organisation. Although the structures, policies and culture of a business organisation pose distinct constraints within which employees, suppliers, contractors and other stakeholders have to operate, they never totally constrain the freedom and responsibility of these individuals.

Business ethics involves understanding how values – our standards of right, good and fair conduct – shape the decisions and actions of organizations and individuals making decisions on its behalf. The actions of organizations and their internal and external stakeholders (for example employees and suppliers, respectively) need to conform to a set of ethical standards as defined by society, by laws and regulations, and by organizations own internal policies and procedures.

Ethics concerns itself with what is good or right in human interaction. It revolves around three central concepts: ‘self’, ‘good’ and ‘other’. Ethical behaviour results when one does not merely consider what is good for oneself, but also considers what is good for others. It is important that each of these three central concepts be included in a definition of ethics.

Should the concept ‘good’ be neglected, the unique nature of ethics collapses: ethics is not merely concerned with the interaction between a ‘self’ and an ‘other’, but with the quality of interaction. It wants to determine whether the interaction between the self and the other is good or bad for one or both of the parties. A similar distortion occurs when the ‘self’ is excluded from the definition of ethics. Then the concern is merely about what is good for others, Should the concept ‘good’ be neglected, the unique nature of ethics collapses: ethics is not merely concerned with the interaction between a ‘self’ and an ‘other’, but with the quality of interaction. It wants to determine whether the interaction between the self and the other is good or bad for one or both of the parties. A similar distortion occurs when the ‘self’ is excluded from the definition of ethics. Then the concern is merely about what is good for others,

Equally, the ‘other’ cannot be excluded from the definition of ethics, as this will result in selfishness. A concern merely for what is good for the self neglects the very nature of ethics, which is to ensure the interests of both oneself and others.

QUESTIONS AND ANSWERS

What relevance does ethics have to business?

Operating according to ethical values is playing an increasingly important role in business today. Companies do not operate in a vacuum, but are part of a society which expects a certain standard of behaviour from businesses. Companies require what is often called 'a license to operate'.

Stakeholders want to be associated with responsible organisations. Being treated fairly, honestly and consistently is of value to a business’s customers, suppliers, investors and employees. It builds trust.

According to global Ipsos MORI research in April 2013, 74% of the public within the 24 countries surveyed say that a company's social responsibility is an important factor when deciding which product or service to purchase. 84% believe that companies should do more to contribute to society.

At the same time, employers cannot take for granted that their staff understand what ethical standards are expected of them in carrying out their work on behalf of the company. Provision of guidance is therefore essential for creating and sustaining an ethical culture and avoiding misconduct.

Avoiding costly crises and scandals is of value to businesses. Reputation hits can be hard to recover from without a foundation of trust. Furthermore, having clearly articulated values and an ethics policy is seen to be good governance practice; it is one of the hallmarks of a well-run business.

How do you know you have made the right ethical decision?

Operating with integrity is then a key part of sustainable success for business.

Organisations often articulate a set of values that aim to guide staff on "the way things are done around here”. Some companies provide employees with 'ethical tests' to help them to make decisions in line with those values.

These might involve a series of questions to ask yourself, such as: is it legal? Is it consistent with the company's code of business ethics? What would my mother think? How would I feel about it being on the front page of tomorrow's newspapers?

Are business ethics, corporate responsibility and sustainability different?

There is a difference between doing things ethically and doing ethical things.

Some argue that the use of these words is just a question of terminology, and certainly in business practice and literature they can be used interchangeably and there are overlaps in the roles and job titles of people with these remits. But what they mean varies across and within sectors.

Business ethics is about the application of ethical values to all business behaviours and functions. It is about the conduct of individuals as well as the organisation –'the way we do business'. A CR agenda is often about the commitment the organisation makes to its stakeholders to increase the positive impacts and decrease the negative ones – either through core business activities or through additional, voluntary or philanthropic 18 Business ethics is about the application of ethical values to all business behaviours and functions. It is about the conduct of individuals as well as the organisation –'the way we do business'. A CR agenda is often about the commitment the organisation makes to its stakeholders to increase the positive impacts and decrease the negative ones – either through core business activities or through additional, voluntary or philanthropic 18

More recently the concept of sustainability has become important in the notion of ethical and responsible business. By definition, this adds a long term dimension. Confusingly however, in practice the term is used to imply the viability of a business, the protection of natural resources, ecological wellbeing or long term social and economic health.

What is the difference between business ethics and an ethical business?

Business ethics relates to how any organisation conducts its business in order to make profit or achieve other goals. Any organisation can seek to do what it does in a way that is guided by ethical values.

Whether an organisation is judged to be ethical however, will involve a subjective assessment of any of the following: the products and services it offers, its founding priorities, goals and values, its philanthropy, its reputation among its stakeholders, the way it treats customers and staff etc.

Rather than claiming to be ‘ethical’, the IBE would suggest that a business or other organisation demonstrates that it ‘takes ethics seriously’.

What are core values?

If an organisation wants to take ethics seriously, it needs to identify the core values or principles to which it wishes to be committed and held accountable. It then needs to translate those values into guidance for all employees so that they are helped with discretionary decisions i.e. when there are no rules or when facing an ethical dilemma. These form the foundation for a set of corporate ethical commitments and the organisation's approach to corporate responsibility.

Commonly used value words found in introductions/preambles to codes of ethics include: responsibility, integrity, honesty, respect, trust, openness, fairness and transparency. Organisations may also articulate a set of business values, such as quality, profitability, efficiency, reliability and customer service.

Can organisations achieve accreditation for their ethics? 24.

Companies are coming under greater pressure to address and be seen to be addressing social, environmental and ethical issues. In response, some look for external standards and verification.

In Living Up To Our Values: developing ethical assurance (2006), the IBE suggests that organisations begin by assuring their ethical performance against the standards set by their own code of ethics.

The IBE has developed a charter mark in association with the Chartered Institute of Securities and Investment (CISI) to help businesses and organisations know if their ethics programme is embedded throughout their organisation. The Investing in Integrity (IiI) charter mark tests an organisation’s ethical standards against its own statements of ethical values, rather than that of an external framework. It can help them identify whether or not they are truly living up to their values.

Who in a company is responsible for business ethics?

Most organisations would say that all employees are responsible for conducting their work according to ethical expectations.

However, they must be supported in this by their employer and most will have professionals dedicated to embedding ethical values and ensuring a strong ethical culture. Responsibility for the company's ethical policies and/or code of ethics may rest with a human resources department, company secretary, CSR manager, risk manager, compliance officer or internal auditor. Increasingly, organisations are establishing However, they must be supported in this by their employer and most will have professionals dedicated to embedding ethical values and ensuring a strong ethical culture. Responsibility for the company's ethical policies and/or code of ethics may rest with a human resources department, company secretary, CSR manager, risk manager, compliance officer or internal auditor. Increasingly, organisations are establishing

established profession. In the UK, the person responsible for the programme is commonly found in the Company Secretary's office.

1.3THE DIFFERENCE BETWEEN A CODE OF ETHICS AND A CODE OF CONDUCT

A Code of Ethics has two components combined in one document:

A brief values statement – A short, inspirational document listing and defining a organization ’s core ethical values, ideals or principles; and

A code of conduct – A longer, enforceable, compliance-oriented, operational document setting out policies, procedures and rules regarding best practices relating to daily operational issues affecting the organisation.

A code of conduct provides illustrations of how values (contained in the values statement) translate into concrete decisions and actions, rather than a full or comprehensive catalogue of rules or prescriptions.

1.4 ETHICS AND THE LAW

There are obvious similarities between ethics and the law, but there are also significant differences. Both ethics and the law strive towards determining what is right in human interaction and society. The law does so through a public and political process and employs the power of the state to ensure that all abide by the stipulations of the law. Ethics emanates from personal values; as such the sense of obligation to do what is right is internal as opposed to the external pressure of the law.

Although ethical and legal behaviour often coincide, they also sometimes differ, as illustrated in the following table.

Legal

Illegal

Ethical Unethical

Actions can be simultaneously ethical and legal. An example of this would be when a company publishes accurate statements of its income. This is both the right thing to do and in accordance with the law. Exceeding the speed limit in an effort to get a seriously injured colleague in time to hospital can be considered Actions can be simultaneously ethical and legal. An example of this would be when a company publishes accurate statements of its income. This is both the right thing to do and in accordance with the law. Exceeding the speed limit in an effort to get a seriously injured colleague in time to hospital can be considered

It is clear in the preceding examples that legality and morality do not always coincide. Because such discrepancies between ethics and the law exist, we cannot simply hide behind the law to justify our business actions. Acting morally responsibly might at times imply that companies need to go further than the prescriptions of the law or, in extreme cases, which they should challenge the existing laws when they are perceived to be unfair or corrupt.

1.5 ETHICS AND VALUES

Although there is a definite link between ethics and values, the two concepts are not identical. Values can be defined as relatively stable convictions about what is important. Since it is possible to have values that have either nothing to do with ethics or that run counter to ethics, values cannot be equated with ethics. It is not only individuals that have values. We also find values within organisations. Normally, three different kinds of values can be distinguished within organisations.

 Strategic values: refer to the shared conviction of the organisation about its desired objectives. As such, strategic values indicate the direction in which the organisation wishes to move. The strategic values of organisations are usually reflected in their vision and mission statements.

 Work values: In order to move the organisation in the direction indicated by its strategic values, all members of the organisation need to do their jobs in a specific manner. Work values are the priorities that organisational members should adhere to in their jobs.

 Ethical values: these include

1.6 BUSINESS ETHICS AS A MANAGEMENT DISCIPLINE

Business ethics has come to be considered a management discipline, especially since the birth of the social responsibility movement in the 1960s. In that decade, social awareness movements raised expectations of businesses to use their massive financial and social influence to address social problems such as poverty, crime, environmental protection, equal rights, public health and improving education.

An increasing number of people asserted that because businesses were making a profit from using our country's resources, these businesses owed it to our An increasing number of people asserted that because businesses were making a profit from using our country's resources, these businesses owed it to our

The emergence of business ethics is similar to other management disciplines. For example, organizations realized that they needed to manage a more positive image to the public and so the recent discipline of public relations was born. Organizations realized they needed to better manage their human resources and so the recent discipline of human resources was born.

As commerce became more complicated and dynamic, organizations realized they needed more guidance to ensure their dealings supported the common good and did not harm others -- and so business ethics was born.

1.7 THE MYTHS ABOUT BUSINESS ETHICS

STUDY : Chapter 8 in

Rousseau & Van Vuuren (2010: 100-108)

Business ethics in the workplace is about prioritizing moral values for the workplace and ensuring behaviours are aligned with those values -- its values management. Yet, myths abound about business ethics. Some of these myths arise from general confusion about the notion of ethics. Other myths arise from narrow or simplistic views of ethical dilemmas.

1. Business ethics is more a matter of religion than management.

According to Kirrane, (1990), asserts that "altering people's values or souls isn't the aim of an organizational ethics program -- managing values and conflict among them is ..."

2. Our employees are ethical so we don't need attention to business ethics.

Most of the ethical dilemmas faced by managers in the workplace are highly complex. Kirrane mentions that when the topic of business ethics comes up, people are quick to speak of the Golden Rule, honesty and courtesy. But when presented with complex ethical dilemmas, most people realize there's a wide "gray area" when trying to apply ethical principles.

3.Business ethics is a discipline best led by philosophers, academics and 3.Business ethics is a discipline best led by philosophers, academics and

Lack of involvement of leaders and managers in business ethics literature and discussions has led many to believe that business ethics is a fad or movement, having little to do with the day-to-day realities of running an organization. They believe business ethics is primarily a complex philosophical debate or a

religion. However, business ethics is a management discipline with a programmatic approach that includes several practical tools. Ethics management programs have practical applications in other areas of management areas, as well.

4. Business ethics is superfluous -- it only asserts the obvious: "do good!"

Many people react that codes of ethics, or lists of ethical values to which the organization aspires, are rather superfluous because they represent values to which everyone should naturally aspire. However, the value of codes of ethics to an organization is its priority and focus regarding certain ethical values in that workplace. For example, it ’s obvious that all people should be honest. However, if an organization is struggling around continuing occasions of deceit in the workplace, a priority on honesty is very timely -- and honesty should be listed in that organization ’s code of ethics. Note that a code of ethics is an organic instrument that changes with the needs of society and the organization.

5. Business ethics is a matter of the good guys preaching to the bad guys.

Some writers do seem to claim a moral high ground while lamenting the poor condition of business and its leaders. However, those people well versed in managing organizations realize that good people can take bad actions, particularly when stressed or confused. (Stress or confusion are not excuses for unethical actions -- they are reasons.) Managing ethics in the workplace includes all of us working together to help each other remain ethical and to work through confusing and stressful ethical dilemmas.

6. Business ethics in the new policeperson on the block.

Many believe business ethics is a recent phenomenon because of increased attention to the topic in popular and management literature. However, business ethics was written about even 2,000 years ago -- at least since Cicero wrote about the topic in his On Duties. Business ethics has gotten more attention recently because of the social responsibility movement that started in the 1960s.

7. Ethics can't be managed.

Actually, ethics is always "managed" -- but, too often, indirectly. For example, the behaviour of the organization's founder or current leader is a strong moral influence or directive if you will, on behaviour or employees in the workplace. Strategic priorities (profit maximization, expanding market share, cutting costs, Actually, ethics is always "managed" -- but, too often, indirectly. For example, the behaviour of the organization's founder or current leader is a strong moral influence or directive if you will, on behaviour or employees in the workplace. Strategic priorities (profit maximization, expanding market share, cutting costs,

8. Business ethics and social responsibility is the same thing.

The social responsibility movement is one aspect of the overall discipline of business ethics. Writings about social responsibility often do not address practical matters of managing ethics in the workplace, e.g., developing codes, updating polices and procedures, approaches to resolving ethical dilemmas,etc.

9. Our organization is not in trouble with the law, so we're ethical.

One can often be unethical, yet operate within the limits of the law, e.g., withhold information from superiors, fudge on budgets, constantly complain about others, etc. However, breaking the law often starts with unethical behaviour that has gone unnoticed. The "boil the frog" phenomena are a useful parable here: If you put a frog in hot water, it immediately jumps out. If you put a frog in cool water and slowly heat up the water, you can eventually boil the frog. The frog doesn't seem to notice the adverse change in its environment.

10. Managing ethics in the workplace has little practical relevance.

Managing ethics in the workplace involves identifying and prioritizing values to guide behaviours in the organization, and establishing associated policies and procedures to ensure those behaviours are conducted. One might call this "values management." Values management is also highly important in other management practices, e.g., managing diversity, Total Quality Management and strategic planning

Group work:

Do you agree that there is ethics in business? Interrogate the advantages and disadvantages of ethics in business.

1.8 THE BENEFITS OF MANAGING ETHICS IN THE WORKPLACE

Attention to business ethics has substantially improved society.

A matter of decades ago, children in our country worked 16-hour days. Workers ’ limbs were torn off and disabled workers were condemned to poverty and often to starvation. Trusts controlled some markets to the extent that prices were fixed and small businesses choked out. Price fixing crippled normal market forces. Employees were terminated based on personalities. Influence A matter of decades ago, children in our country worked 16-hour days. Workers ’ limbs were torn off and disabled workers were condemned to poverty and often to starvation. Trusts controlled some markets to the extent that prices were fixed and small businesses choked out. Price fixing crippled normal market forces. Employees were terminated based on personalities. Influence

demanded that businesses place high value on fairness and equal rights. Anti- trust laws were instituted. Government agencies were established. Unions were organized. Laws and regulations were established.

Ethics programs help maintain a moral course in turbulent times.

Attention to business ethics is critical during times of fundamental change -- times much like those faced now by businesses, both nonprofits and for-profit. During times of change, there is often no clear moral compass to guide leaders through complex conflicts about what is right or wrong. Continuing attention to ethics in the workplace sensitizes leaders and staff to how they want to act -- consistently.

Ethics programs cultivate strong teamwork and productivity.

Ethics programs align employee behaviours with those top priority ethical values preferred by leaders of the organization. Usually, an organization finds surprising disparity between its preferred values and the values actually reflected by behaviours in the workplace. Ongoing attention and dialogue regarding values in the workplace builds openness, integrity and community -- critical ingredients of strong teams in the workplace. Employees feel strong alignment between their values and those of the organization. They react with strong motivation and performance.

Ethics programs support employee growth and meaning.

Attention to ethics in the workplace helps employees face reality, both good and bad -- in the organization and themselves. Employees feel full confidence they can admit and deal with whatever comes their way. Bennett (1991) explained

that a consulting company tested a range of executives and managers. Their most striking finding: the more emotionally healthy executives, as measured on

a battery of tests, the more likely they were to score high on ethics tests.

Ethics programs are an insurance policy -- they help ensure that policies are legal.

Business Ethics 621 Year 2 Semester 1 (1)

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