ethical behaviour

Meaning of ethical behaviour

• Refers to acting in ways consistent with what society and individuals think are good values.
• Ethical behavior is expected from every employee in the business.
• It means that the highest legal and moral standards are upheld when dealing with stakeholders
• Meaning of ethics
• Set of standards of expected behavior between the employer/ employee/business partners.
• Set of values that are morally acceptable when conducting business.
• Business practices that are acceptable to society/group/ community.
• Inherently forms part of the employees' code of conduct.
• The focus is on developing a moral compass to use in decision-making.
• Seeks to avoid harm while promoting benefit to others.

Examples of ethical and unethical business practice

• Ethical business practices
• Using fair advertising
• · Not using child labor
• · Treating all employees equally
• · Paying fair wages
• · Operating within the law
• · Business deals are conducted openly
• · Not engaging in illegal business practices
• · Ensuring that the environment is not polluted.
• Unethical business practices
• Unfair advertising
• · Pricing of goods in rural areas
• · Taxation/Tax evasion
• · Paying employees unfair wages
• · Disobeying the law
• · Using bribery to gain business
• · Engaging in illegal business practices
• · Polluting the environment
• · Starting a venture at the expense of someone else

Meaning of professional behaviour

• Professionalism is the term used to describe a certain standard of behaviour/ a specific level of competence and adherence to an ethical code of conduct.
• It is a behaviour suitable for a job/profession done for payment.
• It includes showing respect for others/take responsibility for your work/performing according to a job description etc.
• Meaning of professionalism
• Refers to what is right/wrong/acceptable in a business
• Set of standards of expected behaviour.
• Applying a code of conduct of a profession or business.
• Focuses on developing a moral compass for decision making
• Includes guidelines on employees’ appearance/communication/attitude/responsibility, etc

Examples of professional and unprofessional business practice

• Professional business practice
• Good use of work time
• · Treating all people the same.
• · Using polite language to colleagues.
• · Keeping clients details confidential/Not using clients’ information for personal gain.
• Unprofessional business practice
• Using rude/impolite language
• · Abuse of work time.
• · Giving some people special favours.
• · Overstating the number of hours worked.
• · Unauthorised use of business resources.
• · Discussing clients’ information/using clients’ information for personal gain.

Differences between ethical behaviour and professional behaviour

• Ethical behaviour
• Refers to the principles of right and wrong/acceptable in society.
• Conforms to a set of values that are morally acceptable.
• Forms part of a code of conduct to guide employees to act ethically.
• Focuses on upholding the reputation of a business/profession.
• Involves following the principles of right and wrong in business activities/practices/dealings.
• Professional behavior
• Refers to what is right/wrong/acceptable in a business.
• Set of standards of expected behaviour.
• Applying a code of conduct of a profession or business.
• Focuses on developing a moral compass for decision making
• Includes guidelines on employees’ appearance/communication/attitude/responsibility, etc.

Ways in which businesses can apply King Code principles for good corporate governance

• Transparency
• Decisions/Actions must be clear to all stakeholders.
• Staffing and other processes should be open and transparent.
• Employees/Shareholders/Directors should be aware of the employment policies of the business.
• Auditing and other reports must be accurate/ available to shareholders/employees.
• Regular audits should be done to determine the effectiveness of the business.
• Business deals should be conducted openly so that there is no hint/sign of dishonesty/corruption.
• Accountability
• There must be regular communication between management and stakeholders.
• Businesses should be accountable/ responsible for their decisions/actions
• Company should appoint internal and external auditors to audit financial statements.
• The board should ensure that the company's ethics are effectively implemented.
• Businesses should present accurate annual reports to shareholders at the Annual General Meeting (AGM).
• Responsibility
• The business/ board should develop and implement programmes that should be aimed at protecting the communities in which they operate.
• The business/ board should develop remedial programmes to protect the environment for example, reduce air and water pollution.

Ways in which professional, responsible, ethical and effective business practice should be conducted

• Mission statement should include values of equality/respect.
• Treat workers with respect/dignity by recognising work well done.
• Treat all their employees equally, regardless of their race/colour/age/gender/disability etc.
• All workers should have access to equal opportunities/positions/resources.
• 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.
• Ensure that employees work in a work environment that is conducive to safety/ Fairness/free from embarrassment.
• Refrain from starting a venture using other businesses' ideas that are protected by law.

Types of unethical business practices and examples

• Type of unethical/business practices
• Unfair advertising
• Examples
• Giving goods deceptive names/False labeling.
• Selling second-hand goods as new goods.
• Exaggerating the merits of the product/False promises
• Using fine print to conceal important information.
• Type of unethical/business practices
• Taxation/Tax evasion
• Examples
• Businesses that do not declare all their income to SARS.
• Falsifying the business financial statements.
• Type of unethical/business practices
• Pricing of goods in rural areas
• Examples
• Inflating prices
• Charging higher for goods of inferior quality in rural areas.

Challenges posed by the above-mentioned types of unethical business practices

• Unfair advertising
• Challenges posed by unfair advertising as an unethical business practice:
• Unfair advertisements could be harmful to consumers.
• The use of false or misleading statements in advertising leading to misrepresentation of the concerned product, which may negatively affect consumers.
• Businesses can make unwise advertising choices when they are under pressure to increase their profits.
• Some advertisements may be regarded as discriminatory because they exclude/target some sections of the population.
• Strategies to deal with unfair advertising in the workplace:
• 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.

Challenges posed by the above-mentioned types of unethical business practices

• Pricing in rural areas
• Challenges posed by pricing in rural areas as an unethical business practice:
• Some businesses in the rural areas exploit their customers by adding much more than necessary to their prices.
• Some consumers in rural areas have little economic power and are vulnerable to exploitation.
• Business may form monopolies in rural areas and increase their prices unilaterally.
• It may be common practice to pay higher prices for goods of inferior quality in rural areas.
• Business may form monopolies in rural areas and increase their prices unilaterally.
• Strategies to deal with pricing in rural areas in the workplace:
• Work together with suppliers to share delivery costs to remote rural areas.
• Businesses can buy in bulk to get a discount to avoid charging high prices.
• Charge fair/market related prices for goods and services.
• Avoid unethical business practices to attract customer loyalty.
• A business may lobby with other businesses in the area to convince government to improve infrastructure in the rural area
• Investigate cost-effective ways of transporting products/Hire a large truck to combine deliveries to shop-owners in the same area.

Challenges posed by the above-mentioned types of unethical business practices

• Taxation/tax evasion
• Challenges posed by taxation/tax evasion as an unethical business practice:
• Businesses may pay heavy fines for evading tax.
• Tax evasion may negatively impact the business image.
• The accountant may charge high fees for falsifying financial statements.
• Businesses may lose key stakeholders if the act of tax evasion is reported.
• Some businesses submit fraudulent/incorrect returns to SARS resulting in penalties
• Businesses may not be familiar with the latest changes in tax legislation.
• Strategies to deal with taxation/tax evasion in the workplace:
• VAT needs to be charged on VAT-able items.
• Submit the correct tax returns to SARS on time.
• All products should be correctly invoiced and recorded.
• Disclose all sources of income for tax payment purposes.
• Keep abreast with the latest SARS regulations and tax laws.
• Businesses that have evaded tax should apply for amnesty and declare their income.
• Effective systems to determine the appropriate amount of tax be paid should be in place.
• Businesses should keep an accurate record of income statements/financial transactions.

Type of unprofessional business practices and examples

• Type of unprofessional business practices
• Sexual harassment
• Examples
• -Manages who promise employees promotions if they agree to have a relationship with them.
• Type of unprofessional business practices
• Abuse of work time
• Examples
• -Making personal calls during work hours.
• -Taking extended lunch breaks
• -Doing personal business during work hours
• Type of unprofessional business practices
• Unauthorized use of workplace funds and resources
• Examples
• -Employees who download music and movies using the business’s resources
• -An employee who uses business resources for his/her own personal gain.

Challenges posed by the above-mentioned types of unprofessional business practice

• Sexual harassment
• Challenges posed by sexual harassment as an unprofessional business practice:
• The affected party may stay away regularly from work.
• Businesses could lose female employees and attract/retain less female applicants.
• Sexual harassment causes discomfort/humiliation and negatively affects work relations in the workplace
• A victim may be severely traumatised and this may affect other employees' emotionally.
• The affected party is normally reluctant to report the incident due to fear of victimisation which can reduce productivity.
• Strategies to deal with sexual harassment in the workplace:
• Provide a framework for corrective action.
• Educate employees on sexual harassment matters.
• Formulate a policy regarding sexual harassment
• Implement internal complaints and disciplinary procedures.
• Ensure compliance with the law/business code of conduct
• Ensure that all employees are familiar with the code of ethics of sexual abuse.
• Create a good working environment where all employees' rights and dignity are respected.
• Internal investigation should be done 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 South African Police Services (SAPS).

Challenges posed by the above-mentioned types of unprofessional business practice

• Unauthorised use of workplace funds and resources
• Challenges posed by unauthorised use of workplace funds and resources as an unprofessional business practice:
• Fraud increases the cost of doing business and undermine the competitiveness of a business
• Discourages investors as fraud and corruption increases the risk of investment.
• The business can experience substantial loss if it goes unchecked.
• Strategies to deal with unauthorised use of workplace funds and resources:
• Conduct regular audits.
• Identify risk areas/ vulnerable areas
• Educate employees about the impact of fraud
• Implement/Introduce fraud prevention strategies
• Limit the number of employees having access to business funds/assets.
• Fraud prevention should be a collective responsibility of business and workers.
• Clear policies should be in place so that employees are aware of what is considered to be fraud.
• Set up systems in the organisation for the reporting of fraud and corruption.

Challenges posed by the above-mentioned types of unprofessional business practice

• Abuse of work time
• Challenges posed by abuse of work time in the workplace:
• It may result in employees' often abusing work time.
• Abuse of work time could result in losing customers or not meeting deadlines.
• Wasting time costs the business money and affects productivity.
• Abuse of work time results in a decline in profits which could damage the financial wealth of the business.
• Strategies to deal with abuse of work time:
• Speak directly to those employees who abuse work time.
• Monitor employees to ensure that tasks are completed on time.
• Remind employees that profit will decrease resulting to less incentives/bonus pay-outs.
• Code of conduct/ethics should contain clear rules about abuse of work time.
• Conduct training on the contents of the code of conduct/ ethics.
• Code of conduct/ethics should be signed by all employees so that they are aware of its contents.
• Structure working hours in such a way that employees have free/flexible time for personal matters.