Chapter 3 - Ethics and proffesionalism Flashcards
Define ethical behaviour
Def: It is a set of values that are morally acceptable in society which defines right, fair, good and honest actions
- It is the responsibility you must do the right things and do things right
- Goes beyond obeying laws, rules and regulations
- Refers to values and norms of individuals
- Characterised by honesty, fairness and equity
- Respecting the dignity, diversity and rights of individuals and groups
- Includes the standards that you set for yourself and applying these standards even when it is difficult to do so
Give practical examples of ethical and unethical business practice,
Ethical Business practice
Objectivity and impartiality
Transparency and full disclosure
Confidentiality
Due care
Avoiding conflict of interest
Being committed and responsible
Care of the environment
Abiding by national and international law
Unethical Business Practice
Dishonesty, trickery, deception
Distort facts to mislead or confuse
Manipulating people by exploiting their vulnerabilities
Greed to amass excessive profit
Avoiding penalty or compensation for an unlawful act
Lack of transparency
Harming the environment
Invasion of privacy
Sexual discrimination
Give practical examples of professional and unprofessional business practices
Professional
Respect - Polite language to colleagues, helping others, listening to advice from another, respecting differences in culture, language and religion, appropriate dress code
Integrity - Looking after equipment, keeping to work hours, not bending the law to suit oneself, all dealings out in the open and honest
Competency - Doing the best job possible, staying after normal working hours, going the extra mile, helping colleagues with skills
Confidentiality - Never discusses clients with others, never criticising clients in front of colleagues
Objectivity - Treat all people the same, apply laws consistently and properly, try to see both sides of an issue
- Attend courses to up-skill, help younger workers, respect and learn from those with more experience, keep reading about your profession/occupation
Unprofessional
Respect - Using rude/impolite language, swearing at a colleague, nasty remarks about other people’s ideas
Integrity - Using photocopier for private purpose, stealing stationery and equipment, not sticking to work hours, making excuses for work not done
Competency - Taking shortcuts with tasks, not completing work as agreed, not being prepared to learn and apply new processes
Confidentiality - Gossiping about clients, discussing client information, using info for own benefit
Objectivity - Special favours given to some people, one-sided view of issues
Development - Refuse to go on up skilling course, satisfied with current knowledge, “know-it-all attitude, not prepared to help others progress, disregard the experience of older workers
Explain how businesses can apply King Code principles of transparency, accountability and responsibility for good corporate governance to improve ethical and professional business practices
Board of Directors
- The board must ensure that a business complies with legal requirements
- The board of directors must provide a business with responsible leadership
- The board of directors must protect a business’s reputation and a responsible corporate citizen
- The board of directors should provide ethical leadership
- The board of directors must appoint managers who will guide a business to achieving its goals
Audit committees
- An Audit committee must be appointed by the board of directors
- The audit committee must report to the board of directors
- The audit committee is responsible for carrying out, among others internal audits, risk assessments and other tasks delegated to them by the board of directors
- Membership of the audit committee must have the necessary qualifications to qualify them for the position
Risk management
- An internal committee must be appointed to identify risks
- The internal committee must make the board of directors aware of risks
- The board of directors, together with management are responsible for devising strategies to deal with identified risks
Compliance with laws, regulations. Rules and standards
- The board of directors is responsible for making sure a business adheres to legal requirements
- The board of directors must communicate to management regarding the measures that must be implemented to ensure compliance
Internal Audit
- Regular internal audits should take place to assess a business’s efficiency
- The result of the internal audit should be made available to relevant staff members
- Internal audits must be undertaken by an internal audit committee
Managing stakeholder relationship
- Regular communication should take place between management, the board of directors and stakeholders
- Conflict between a business and stakeholders should be resolved as a matter of urgency
Integrated reporting and disclosure
- All reports released by a business must be true and accurate
- Sustainability, environmental and social reporting should be included in a business’s financial reporting
Suggest/Recommend ways in which professional, responsible, ethical and effective business practice should be conducted
- Businesses should treat all employees equally.
- Plan properly and put preventative measures in place.
- Pay fair wages/salaries which is in line with the minimum requirements of the BCEA/Remunerate employees for working overtime/during public holidays.
- Engage in environmental awareness programmes/Refrain from polluting the environment, e.g. by legally disposing of toxic waste.
- Refrain from starting a venture using other businesses’ ideas that are protected by law.
- Business decisions and actions must be clear/ transparent to all stakeholders.
- Businesses should be accountable/responsible for their decisions and actions/ patents rights.
Describe the unethical and unprofessional practice plus what can be done:
Sexual harassment
Description
- Involves unwanted and unwelcome attention of a sexual nature from someone at work.
- The attention causes discomfort, is humiliating and interferes with the job
- It is wrong and unethical to abuse your position to take advantage of others
Solution - Remedy
- Every business should have a clear policy regarding sexual harassment
- Employees must know there rights and the rights of fellow employees
- Business must create an environment where all employees are treated with dignity and respect
- Internal investigation should be made in order to determine the seriousness of the harassment.
- Serious cases/matters on sexual harassment should be reported to the appropriate institutions such as the SA Police Services (SAPS).
Describe the unethical and unprofessional practice plus what can be done:
Unauthorised use of workplace funds and resources
Description
- Using the business’s money without permission is called unauthorized use of funds
- It is a criminal offence
- Using the organisations funds for own use is an illegal
- Example buying air time from petty cash
- Identify potential areas where unauthorised use of funds occur
- Limit the number of employees who have access to funds
- Implement a fraud prevention strategy
- Complete internal audits on a regular basis
Describe the unethical and unprofessional practice plus what can be done:
Unfair advertising
Description
-Refers to the use of false or misleading statements in advertising leading to misrepresentation of the concerned product, which may negatively affect consumers.
Solution/ Remedy
- Consumers must report unfair advertisements to the Advertising Standards Authority
- Business should be encouraged to keep their advertising fair and in line with the constitution
Describe the unethical and unprofessional practice plus what can be done:
Pricing of goods in rural areas
Description
- People in rural areas are often not able to compare prices of different retailers
- They are forced to buy from one local store
- They are at the mercy of greedy shopkeepers who inflate prices
Solution/ Remedy
- Consumers should report cases of unfair pricing
- New entrepreneurs should be encouraged so that there is competition.
- Shopkeepers and service providers should keep profits at reasonable levels
Describe the unethical and unprofessional practice plus what can be done:
Taxation
Description
- Corporate tax and personal income tax are the main source of income for the government
- Many businesses and individuals do not declare all their income to SARS
- This is called tax evasion and it is illegal and unethical
Solution/ Remedy
- Businesses should pay the correct amount of tax to SARS
- Keep financial records honestly and accurately
- Make sure that all financial records are checked and audited
- Submit all tax returns on time.
Describe the unethical and unprofessional practice plus what can be done:
Abuse of work time
Description
-Refers to activities that is not focused on the job that you are meant to do during working hours
Make personal calls during work hours.
- Take extended lunch breaks
- Use the printer and copier for personal use
- Do personal business during work hours
Remedy/ Solution
- Monitoring of employee achievements
- Including an explanation of which actions constitute wasting time in the company code of conduct.
- Creating a culture of responsibility towards the company
- Pointing out the problem to those who appear to be wasting time.
- Creating a feeling of teamwork so that all employees feel responsible for what has to be achieved
