BUSINESS STUDIES
ETHICS, PROFESSIONALISM AND
SOCIAL RESPONSIBILITY
THE RELEVANCE OF PROFESSIONAL CODES
● Professional codes aim: regulate the behavior of people practicing a particular
● profession.
● Some professionals have to register with a professional body and abide by the
professional code of the organization.
○ law, education, CA, medicine, nursing, engineering, architecture, actuary etc.
● If a professional code is broken, the person may be fined, suspended or even expelled
from ever practicing in that professional field.
GOOD BUSINESS PRACTICE
● Concept of good business practice refers to the standards of professionalism,
accountability, ethics and effective business practice that should be conducted.
● Professional codes stipulate predetermined consequences for professionals that do not
act in accordance with the specific professional codes.
● Ethical behavior is also part of an individual’s values and morals.
● Unethical actions are not necessarily illegal but illegal acts will be seen as unethical.
ETHICAL BEHAVIOUR IN PRACTICE
● Issues that may be seen as unethical, include (amongst many others):
○ Conflict of interests
○ Bribes and corruption
○ Unauthorised use of funds
○ Inappropriate use of funds
○ Sexual harassment
○ Unfair advertisements
1
, ○ employment/labour issues
○ Pricing of goods
○ Insider trading
○ Piracy
○ counterfeiting/bootlegging
○ Taxation
○ Whistle blowing
CONFLICT OF INTERESTS
● May occur on many levels such as:
○ Moral conflict (medical personnel being required to do an abortion when it is
against their religious or ethical belief
○ Conflict of interest (granting tenders to family/friends)
● In the case of conflict of interest the person making the final decision about allocating
tenders or recruitment or selection of new employees should disclose that it is a
friend/family and then withdraw from the allocation process.
BRIBES AND CORRUPTION
● A Bribe:
○ offering someone a reward to give a third party an unfair advantage to which
they/the business is not entitled.
○ Bribes do not have to be money, it may be an inappropriate gift, offer of
employment, promotion or any other favour.
● in the form of money: referred to as a smoothing payment or a facilitation payment.
● Corruption:
○ when someone in a position of power abuses this power for personal gain.
○ This may include receiving a bribe, giving an indirect bribe to a supplier,
misappropriating funds or abusing an official position for personal gain.
UNAUTHORISED USE OF FUNDS
● Considered theft and usually occur amongst white collar workers (white collar crime).
● Claiming for business expenses when it was actually for private use is unauthorized use
of business funds.
● Unauthorised payments
○ fraudulent invoices; forged signatures, unauthorised electronic payments;
skimming accounts (transferring small amounts form customer’s accounts on the
assumption that they will not notice).
2
ETHICS, PROFESSIONALISM AND
SOCIAL RESPONSIBILITY
THE RELEVANCE OF PROFESSIONAL CODES
● Professional codes aim: regulate the behavior of people practicing a particular
● profession.
● Some professionals have to register with a professional body and abide by the
professional code of the organization.
○ law, education, CA, medicine, nursing, engineering, architecture, actuary etc.
● If a professional code is broken, the person may be fined, suspended or even expelled
from ever practicing in that professional field.
GOOD BUSINESS PRACTICE
● Concept of good business practice refers to the standards of professionalism,
accountability, ethics and effective business practice that should be conducted.
● Professional codes stipulate predetermined consequences for professionals that do not
act in accordance with the specific professional codes.
● Ethical behavior is also part of an individual’s values and morals.
● Unethical actions are not necessarily illegal but illegal acts will be seen as unethical.
ETHICAL BEHAVIOUR IN PRACTICE
● Issues that may be seen as unethical, include (amongst many others):
○ Conflict of interests
○ Bribes and corruption
○ Unauthorised use of funds
○ Inappropriate use of funds
○ Sexual harassment
○ Unfair advertisements
1
, ○ employment/labour issues
○ Pricing of goods
○ Insider trading
○ Piracy
○ counterfeiting/bootlegging
○ Taxation
○ Whistle blowing
CONFLICT OF INTERESTS
● May occur on many levels such as:
○ Moral conflict (medical personnel being required to do an abortion when it is
against their religious or ethical belief
○ Conflict of interest (granting tenders to family/friends)
● In the case of conflict of interest the person making the final decision about allocating
tenders or recruitment or selection of new employees should disclose that it is a
friend/family and then withdraw from the allocation process.
BRIBES AND CORRUPTION
● A Bribe:
○ offering someone a reward to give a third party an unfair advantage to which
they/the business is not entitled.
○ Bribes do not have to be money, it may be an inappropriate gift, offer of
employment, promotion or any other favour.
● in the form of money: referred to as a smoothing payment or a facilitation payment.
● Corruption:
○ when someone in a position of power abuses this power for personal gain.
○ This may include receiving a bribe, giving an indirect bribe to a supplier,
misappropriating funds or abusing an official position for personal gain.
UNAUTHORISED USE OF FUNDS
● Considered theft and usually occur amongst white collar workers (white collar crime).
● Claiming for business expenses when it was actually for private use is unauthorized use
of business funds.
● Unauthorised payments
○ fraudulent invoices; forged signatures, unauthorised electronic payments;
skimming accounts (transferring small amounts form customer’s accounts on the
assumption that they will not notice).
2
