Ethics, Professionalism and Social Responsibility
Professional Codes
• Aim to regulate the behaviour of people practicing a particular profession.
• Profession: occupation/job that requires specialised tertiary training.
• If someone is registered with a professional body, they need to abide by the professional code. If they don’t
they can face suspension, nes or being disbarred.
• Examples: Nursing, teaching, engineering, architecture etc.
Good business practice
• Standards of professionalism, accountability, ethics and e ective business practice that should be conducted.
• Professional behaviour is guided and prescribed by Professional Codes that stipulates predetermined
consequences for bad behaviour.
• Unethical actions are not always illegal BUT every illegal act is seen as unethical.
• There are three ethical theories:
Principle-based theory
• A person’s principles, values, morals or ingrained set of rules about what is right and wrong will determine if
the person sees an action as ethical or unethical.
Consequence-based theory
• The outcome of the action will determine if it is ethical or not.
Utilitarian theory
• The decision of ethical or unethical is based on what is best for the greatest number of people.
Unethical practices in Business
Conflict of interest
• Someone in a position of authority has the opportunity to make a decision that will bene t them and not the
business.
• People in the business need to remain independent when making decisions and all decisions should be made
in the best interest of the business.
Bribes and Corruption
• Bribe: someone is o ered a reward to give a third party an unfair advantage that they aren’t entitled to.
• A bribe doesn’t have to be in the form of money, it can be a gift or favour.
• Corruption: someone in a position of power abuses their power for personal gain.
Unauthorised use of funds
• Same as theft.
• Can include employees using a company card for personal reasons.
• This is a white collar crime.
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, Inappropriate gifts
• Most businesses expect employees to declare all gifts received.
• A gift can be interpreted as a bribe.
• Some businesses have a limit of how much a gift can cost to determine if it is unethical or not.
Sexual harassment
• The Code of Good Practice on Handling Sexual Harassment was issued and stipulates that sexual harassment
is a criminal o ence.
• Forms of sexual harassment are:
A senior
employee asking
Unwelcome Non-verbal
Verbal conduct for sexual favours
physical contact conduct
from a
subordinate
• Employees cannot engage in any of the abovementioned activities with customers, suppliers or any person
that deals with the business.
• A clearly de ned policy on sexual harassment must be drawn up. It should include what is seen as sexual
harassment, what the consequences are and how a victim can report any harassment.
Unfair advertising
• Please see the section on unfair advertising in the marketing chapter.
Employment/labour issues
• Employees abusing sick leave.
• Employees abusing the internet or email, in the following ways:
Making Spreading Spending time
Being on
Visiting porn sites con dential rumors or on personal
Facebook at work
information damaging emails
public information
• Taking business stationery home for private use.
• Verbal abuse of sta members.
Pricing of goods
• Price xing: when competitors agree to charge buyers a predetermined price for goods. This goes against the
principles of a free market.
• The Consumer Protection Act makes it illegal to charge more for products in rural areas than urban areas
without good reason.
Insider trading
• When someone trades shares on the JSE based on knowledge that is con dential.
• It is a criminal o ence.
Piracy
• Illegal use or reproduction of someone’s work if it is protected by a patent.
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Professional Codes
• Aim to regulate the behaviour of people practicing a particular profession.
• Profession: occupation/job that requires specialised tertiary training.
• If someone is registered with a professional body, they need to abide by the professional code. If they don’t
they can face suspension, nes or being disbarred.
• Examples: Nursing, teaching, engineering, architecture etc.
Good business practice
• Standards of professionalism, accountability, ethics and e ective business practice that should be conducted.
• Professional behaviour is guided and prescribed by Professional Codes that stipulates predetermined
consequences for bad behaviour.
• Unethical actions are not always illegal BUT every illegal act is seen as unethical.
• There are three ethical theories:
Principle-based theory
• A person’s principles, values, morals or ingrained set of rules about what is right and wrong will determine if
the person sees an action as ethical or unethical.
Consequence-based theory
• The outcome of the action will determine if it is ethical or not.
Utilitarian theory
• The decision of ethical or unethical is based on what is best for the greatest number of people.
Unethical practices in Business
Conflict of interest
• Someone in a position of authority has the opportunity to make a decision that will bene t them and not the
business.
• People in the business need to remain independent when making decisions and all decisions should be made
in the best interest of the business.
Bribes and Corruption
• Bribe: someone is o ered a reward to give a third party an unfair advantage that they aren’t entitled to.
• A bribe doesn’t have to be in the form of money, it can be a gift or favour.
• Corruption: someone in a position of power abuses their power for personal gain.
Unauthorised use of funds
• Same as theft.
• Can include employees using a company card for personal reasons.
• This is a white collar crime.
ff fi ff fi
, Inappropriate gifts
• Most businesses expect employees to declare all gifts received.
• A gift can be interpreted as a bribe.
• Some businesses have a limit of how much a gift can cost to determine if it is unethical or not.
Sexual harassment
• The Code of Good Practice on Handling Sexual Harassment was issued and stipulates that sexual harassment
is a criminal o ence.
• Forms of sexual harassment are:
A senior
employee asking
Unwelcome Non-verbal
Verbal conduct for sexual favours
physical contact conduct
from a
subordinate
• Employees cannot engage in any of the abovementioned activities with customers, suppliers or any person
that deals with the business.
• A clearly de ned policy on sexual harassment must be drawn up. It should include what is seen as sexual
harassment, what the consequences are and how a victim can report any harassment.
Unfair advertising
• Please see the section on unfair advertising in the marketing chapter.
Employment/labour issues
• Employees abusing sick leave.
• Employees abusing the internet or email, in the following ways:
Making Spreading Spending time
Being on
Visiting porn sites con dential rumors or on personal
Facebook at work
information damaging emails
public information
• Taking business stationery home for private use.
• Verbal abuse of sta members.
Pricing of goods
• Price xing: when competitors agree to charge buyers a predetermined price for goods. This goes against the
principles of a free market.
• The Consumer Protection Act makes it illegal to charge more for products in rural areas than urban areas
without good reason.
Insider trading
• When someone trades shares on the JSE based on knowledge that is con dential.
• It is a criminal o ence.
Piracy
• Illegal use or reproduction of someone’s work if it is protected by a patent.
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