Important information

Mark Breakdown for course:

Written business report: 15% weighting towards semester mark
Semester test (1 in total) 30% weighting towards semester mark
Gr8 Deb8 presentation 50% weighting towards semester mark
Class attendance 5% weighting towards semester mark

Examination 50% weighting towards exam mark

Examination (50%) + semester mark (50%) = Final mark for the

module
 Structure of course
Unit 1: Introduction to business ethics
Unit 2: Foundations of ethics and plagiarism
Unit 3: Resolving ethical dilemmas and referencing
Unit 4: Corporate moral obligations
Unit 5: Managing ethics
Unit 6: Corporate governance
 Topics covered today
25 July 2018

• Key concepts in business and professional ethics (Chapter 1)

• Religious and secular moral value systems for professionals in
South Africa (Chapter 2)
• Myths (from slides)

Chapter 1 and 2 in prescribed textbook: Ethics for Accountants and

Auditors
Key concepts in business and professional ethics (chapter 1)
Learning Outcomes:
• Define ethics, business ethics and professional ethics
• Explain the relationship between ethics and values
• Distinguish between personal and social moral dilemmas
• Explain the three levels of ethics in economic activity
• Indicate why ethics should be addressed at both the personal
and organisational levels
• Make a clear distinction between morality and legality
• Demonstrate why professionals need both professional ethics
and professional virtues
 Something to ponder
Is it important for you to be ethical? Why?

Do you see yourself to be an ethical person? How so?

Will you benefit from being ethical?

Personally Business
• Valued employee with • lack of trust in many organizations
promotion opportunities slows down their decisions, their
• Consideration for executions –Speed of Trust
management roles (Covey)
• Gain trust and respect of • Market/Investors value and support
people socially responsible behaviour
• Etc. • Etc.
 Ethics vs Morality
• Ethics : Originates from the Greek word “Ethikos”
• When translated into Latin the word is “Moralis”
Thus
Ethics = Morality (used interchangeably)

• The Greek and Latin version above both refer to character (the
kind of person someone is) and how they interact with others
(manner or behavior of a person)
• In English, unacceptable and irresponsible behavior is referred to
as Unethical or immoral behavior (The words are used as
synonyms)
 What is ethical behaviour?
The criteria for considering ethical behavior:

OTHER

SELF GOOD
Meaning:
Actions can be considered as ethical when they are not only
good for the self but good for the other
Note: Being ethical does not mean totally disregarding your
own interests but when considering what is good for you, you
should also consider what is good for others
 What is values?
Values can be defined as: “Convictions about what is good and desirable”
Thus there is a close relationship between values and ethics
Q: Do people share the same values
A: No
Q: Why
A: The values people have are influenced by:
• Culture
• Religion
• Climate
• Social and economic status
• Personal experiences
• Age
• Gender etc.
 Ethical/Moral dilemmas
Q: What is a moral dilemma?
A:When an ethical evaluation of a situation produces
conflicting judgements (more than one outcome)

It divides opinion on whether something is right or wrong

Q: are there different types of moral dilemmas?

A: Yes, moral dilemmas can be split into:
1. Personal moral dilemmas (within a person)
2. Social dilemmas: (Conflicting ethical judgement between
people or groups)
 Ethical/Moral dilemmas
Important: Not every situation results in a “moral dilemma”
Some ethical consideration are just “right” or “wrong”

Right Dilemma Wrong

• Protect life • Gray area • Kill/Lie
• Tell the truth • Abortion • Theft of
• Privacy in e-mail company
• Complex property
business issues

√ ? x
 Business ethics
ECONOMIC ACTIVITY ALWAYS HAS AN ETHICAL DIMENSION

Q: What is business or economic activity?

A: A system where goods and services are exchanged for money.

Q:What is business ethics?

A: The focus on what is good and right in economic activity
It refers to the principles, norms and standards that guide an
organisation’s conduct of its activities, internal relations and
interactions with external stakeholders
 Dimensions of Business Ethics
Entails a moral analysis of economic practice on 3 levels:
Macro/Economic level
Framework within which economic exchange occurs

Meso/ Institutional level Micro/Intra-organizational level

Relationship between
organizations and others Relationship between individuals
It becomes important to understand the context, thus society:

State/Economy Civil society Private life

 Macro-economic dimension:
economics and ethics
A Macro economic system refers to the policy framework within
which economic exchange occurs.
Q: how is this framework determined?
A: It can be determined at:
• National level: political power of state
• International level: international trade agreements
These frameworks may be positive or negative for people

Q: How does business ethics apply to the macro level?

A: by evaluating economic systems, policies and trade agreements
to determine whether they are fair and just

Capitalism and socialism resulted from a concern about what would

be GOOD for the citizens (OTHER)
 Meso-economic dimension:
business and society
Business’ moral responsibility towards organizations, society, government and
consumers:
• Wide web of relationships
• Affects and is affected by others

Ethics play an essential role in relation to business and society:

• Ethics is implied in business
• Ethics confers legitimacy
• Business survival and success depends on ethics

Q: How does business ethics apply to the meso level?

A: by evaluating the ethical impact that businesses have on society
 Micro-economic dimension:
work and ethics
The focus at this level is on economic activity with a concentration on the
moral dimension of business practices, policies, behavior and decisions that
occur within the business:
• The culture, policies or system of a business could potentially break down
trust between people.

Thus business ethics is studied at this level because work situations can impact
on people including the quality of their lives:
• Relationship between employee (SELF) and co-workers (OTHER) is always
present. Job performance is affected by how the employee is treated.
 Impact of environment on an individual’s ethical behaviour and
vice versa- Personal and Organisational ethics
Business ethics is not only about personal moral decisions and
actions but also ethics of economic systems and organizations
Individuals Organizations
Good apples Good barrel
Ethical
More Reward behavior must
sensitive ethical be addressed
upbringing behaviour at both the
individual and
Bad apples Bad Barrel organizational
Defective Unethical level
moral behaviour the
upbringing norm
Unethical people can be restrained by ethical organizations and vice versa
 Ethics and the Law
• Both strive towards what is right
• Law uses power of state – external pressure
• Ethics emantes from personal values – internal pressure
 Professional ethics
A profession is characterized as a group of people who adhere to a set of
ethical standards

These ethical standards ensure members act in accordance with the

spirit and purpose of the profession to benefit the client and community
they serve. An example of an ethical standard for accountants is the
Code of Professional Conduct (CPC)

A professional has at least three sets of ethical standards to comply with:

1. Personal ethics
2. Organizational ethics
3. Professional ethics
 Professional virtues
A virtue can be described as a character trait that predisposes one
to doing the right thing. (The opposite would be a vice)

It is a learned form of behavior that becomes second nature to us

When training to be a professional, the virtues of the profession are

acquired. E.g.) in the case of accountants, the virtues of integrity,
objectivity etc. are acquired
 Religious and secular moral value systems for
professionals in South Africa (Chapter 2)
Learning Outcomes:
• Examples of unethical behaviour in SA
• Explore and explain the value systems in South Africa as you
may encounter this among colleagues and clients.
• Enhance sensitivity towards other practices and people from
other cultures.
• Summarise and interpret the reasons for the neglect of ethics in
business in the South African context.
 Unethical behavior in South Africa
Examples include:
• Corruption
• Fraud
• Nepotism
• Unfair dismissal
• Discrimination
• Tax evasion
• Intimidation of employees
 Different religions and values
“Comparative Ethics”

Religions Ethical Views

• Christianity • Traditional African ethics
• Judaism • Secular humanist ethics:
• Hinduism o Worldwide moral values
• Islam o Comes from nature - human nature
• Other o Absence of supernatural sources
• Human rights
• Feminist ethics
 Overall summary of religious views
Respect the individual
Accommodate all
There are various ethical similarities in all religions
 Myths
Learning Outcomes:
• Examine the myths that exist about business and ethics and
suggest ways in which myths can be dispelled
 Myth
Q: What is a myth?
A: It is a widely held but false belief or idea

In Africa: business ethics are not seen as integral to business?

Myth: dog-eat-dog world
Myth: Survival of the fittest
Myth: Nice guys come second
Myth: It is not serious
Myth: When in Rome, do as the Romans do or when
you can’t beat them join them
Myth: All that matters is the bottom line
 Class Example
The future of innovative business consulting available today:
Note from the CEO

Our goal as the leadership of Katiso Inc. is to create an organisation

that is able to provide leading edge solutions in our chosen areas of
business to the Public and Private sector. In doing so, develop, train
and empower the most disadvantaged individuals in our community,
black women, by creating employment opportunities and the
execution of valuable Corporate Social Responsibility Initiatives. We
passionately aspire to utilize and plough back a percentage of
profits made into underprivileged communities at large.
Mr T: No ways, all that matters is the
bottom line in business
 Question
• Discuss the myth evident from the scenario above
• challenge the myth to show that it does not make business
sense.
 Something to think about….

“ Play fair, be prepared for others to play dirty, and don’t let them
drag you into the mud” Richard Branson
And
“Ethics is knowing the difference between what you have a right to
do and what is right to do” Potter Stewart
Questions or comments
 Thank you
Ngiyabonga
Ke a leboga
Dankie