Enterprises agree that ethical and professional behaviour are important aspects of the business environment. | Describe the principles of ethical and professional behaviour. Evaluate the issues that pose challenges to the business environment in terms of ethical/professional behaviour and comment on its application in the business enterprise Introduction – Enterprises realise that they cannot exist in isolation, but interact with the various environments. – Many institutions in South Africa have their own code of conduct and a commitment to ethical and professional behaviour. v – Codes of practice have been developed to ensure that these issues are being addressed. Description of concepts: Ethics Ethics refers to a set of values that are morally acceptable in society which define right, good and fair actions. vv Business ethics refers to rules and principles which influence the best business practice. vv Businesses develop their own code of ethics for best practice. vv
Professional behaviour This is a set of standards of expected practices eg. treating people with respect vv Specific occupational practices have developed their own code of professionalism. vv Practical examples to explain the various issues: Taxation vv The government needs revenue from taxation to provide essential services such as housing, education, infrastructure development and medical care. vv Professional behaviour for businesses in this regard would be for businesses not to evade tax by falsifying financial records. v Company tax, VAT and personal income tax are some of the main sources of income for the government. vv Tax evasion is illegal in South Africa and is regarded as a crime punishable with a fine or even a prison sentence. vv The SARS oversees the collection of tax. vv Comment Recently tax collection in South Africa have exceeded budget expectations. vv This has been streamlined with the introduction of the SAP system. vv Sexual harassment vv This is any sexual advance, gesture or remark that causes a person to feel ntimidated and threatened. vv Sexual harassment is prohibited by labour legislation and companies must educate its employees on this issue. vv Sexual harassment is a basic violation of human rights which usually happenswhen someone has power over another person and abuses his/her position. vv Sexual harassment occurs when a superior offers a promotion or a raise in salary in return for sexual favours from the subordinate. vv The affected party is usually afraid to report it because of victimisation. vv Comment Increase in the number of sexual violations and the courts are addressing these issues. v Pricing of goods in rural areas vv It is good business practice and professional behaviour to have the same price for goods in urban and rural areas. vv Big businesses are reluctant to open outlets in rural areas because of poor returns on their investment. vv It is common practice for people in rural areas to pay higher prices for goods which in most cases are of inferior quality. vv Prices of goods in these areas are generally based on the personal characteristics of the consumers. vv Comment Government is focusing on infrastructure development in rural areas. v This includes shopping centres. vv Unfair advertising vv The Advertising Standards Authority (ASA) regulates advertising and protects the interests of the public. vv Advertisements should be honest and should not abuse consumers’ trust or lack of knowledge. vv Some businesses use misleading advertising to consumers so that they can get more value for their money by supporting their products. vv Consumers are encouraged to lodge written complaints to the ASA regarding unethical advertising practices. vv Examples of unethical practice: advertising second-hand goods as new. v Comment The ASA is the watchdog and several advertisements have been withdrawn. vv Unauthorised use of funds vv Fraud is the theft or misuse of money that belongs to the employer. vv Fraud increases the cost of doing business, affects competition and discourages investors by adjusting prices upwards to absorb the losses. vv Business must conduct educational work amongst employees about the impact of fraud and understand that fraud prevention is a collective responsibility. vv Systems must be in place to reduce fraud, for eg. y internal audit and risk management. vv People who are entrusted with the collection of large amounts of money have misappropriated money for personal gain. vv Comment: Fraud cases have been highlighted in the media. vv Several cases have been heard in court regarding fraud. vv Abuse of working time vv Many businesses are faced with the dilemma where employees are using workingtime for their personal activities. vv The business must have a policy in place for employees on the abuse of work time e. g. aking personal calls, sending personal e-mails and browsing through websites, unrelated to their work duties during work time. vv Businesses must implement time monitoring systems and time recording procedures. vv – There should be some flexibility when dealing with workers who are conscientious, work long hours, and miss official work breaks when there is urgent work to be done. vv Comment: Many of these issues have been addressed through grievance procedures. v Conclusion: – Policies and legislation which have been implemented must be continually monitored and improved to lead to a successful business. v – Profitability is regularly affected by each of the above issues. In South Africa, ethical and professional behaviour in the corporate business world involves more than just principles of honesty and integrity. Ethical codes of best practice is based on core values such as integrity, dignity, social justice and competence. Most business organisations find it a challenge to meet standards of ethical and professional behaviour. With reference to the above statement, explain the differences between ethical and professional behaviour. Discuss fully how issues such as taxation, pricing of goods in rural areas, unauthorised use of funds and abuse of work time, could challenge the ethical and professional behaviour of businesses and their workers Introduction : Businesses are regularly checked to determine whether they conduct themselves in a professional and ethical way. v Public sector which include government officials are also under scrutiny for fraud, corruption and unethical behaviour. To be successful in business you have to know and apply acceptable business practice or code of ethics Differences between ethical and professional behaviour. Ethical behaviour Set of values that are morally acceptable in society which displays good, right and fair actions. vv These are rules and principles which influence the best business practice. vv Ethical behaviour is a requisite for professionalism. vv Businesses develop their own code of ethics. vv Professional behaviour Set of standards of expected practices. vv Various occupational practices e. . doctors , develop their own code of professionalism. vv It means: Representing your employer, co-workers and yourself with dignity. vv Demonstrating appropriate behaviour towards colleagues, superiors, subordinates and the public at large. Taxation Tax evasion (company and personal income tax) is a criminal act. vv There are many businesses that do not declare all their received income to the Receiver of revenue. vv Professional behaviour in this regard would be to pay the due tax to the Receiver of revenue. vv Evasion is punishable by law. vv
Government need the all tax to provide for services such as education, housing, health, etc. vv Pricing of goods in rural areas. Manufactured products in rural areas are much higher than the national Average prices. vv Most shops in rural areas are located considerable distances away from major towns. vv The lack of infrastructure in rural areas results in monopolising of some of the goods. vv This leads them charging higher prices to these poor communities. vv As a result the businesses lose loyalty of their customers. vv Unauthorised use of funds
Some workers have access to business funds without authorisation. vv It includes unauthorised use of funds for personal gain eg :vv Using company petrol card to fill up your car to go on a personal trip. vv A partner who earned money for the partnership, but who does not declare to other partners. vv An employee that takes business supplies like paper, stationery computers for personal usevv Abusing work time Workers receive wages and salaries for time they spend at work. vv Therefore workers can not use work time for private and personal issues. v Personal telephone calls in working hours is an example of work time abusing. vv Using internet for personal purposes during working hours is abuse of working time. vv Extending your lunch hours time for personal issues. vv . Conclusion From the above discussion it becomes clear that for each challenge businesses have to provide solutions. v Businesses have to apply a code of Ethical and professional conduct. v Businesses have to conduct themselves in an acceptable way so as to gain the loyalty of customers and clients. v
