CHAPTER 3: ETHICS AND PROFESSIONALISM
Introduction The units in this topic deal with ethical and professional behaviour and issues that could challenge such behaviour. They deal with how professional, responsible, ethical and effective business practice should be conducted in changing and challenging business environments. ,
Planning ..^^^^ .
Week Hours Resources needed
Unit 1: Ethical and 21 65-73 6 2 • Learner's Book professional business • Learner's notebook practice • People to interview
% i •
• Paper • King Code of Governance for
South Africa 2009 • School's Code of Conduct • Business Code of Conduct • Internet , , • Magazines
Unit 2: Issues that could 24 74-82 6 2 • Learner's Book challenge ethical and • Paper professional behaviour
\ • King Code of Governance for
South Africa 2009 • School's Code of Conduct • Business Code of Conduct • Internet • Magazines
Exam Practice 25 84-85 6 1 • Learner's Book
Unit 1: Ethical and professional business practice Teaching guidelines Time allocation: Weeks 6 (2 hours) Facilitate a general discussion on what is meant by the term ethical and professional behaviour. Encourage the learners to give examples.
Activity 1 : i
LB page 65
Resources Learner's Book, learner's notebook, people to interview
Teaching guidelines ; ^ ; * : Learners are to complete Activity 1 before the lesson. Divide the learners into groups of three or four to discuss and compare their findings.
Answers The answers in the grid on the following page will differ for each learner, as they are required to conduct their own interviews. Ensure that they have completed the grid and that the reasons that they provide support the answers they give in the true or false column. 1 . Code of Ethics - a guide to enable employers
and employees to make ethical decisions I within the workplace, or a broad statement of i™. values and beliefs that define the organisation.
Learners should provide a practical example. (4)
Chapter 3, Unit 1 21
2. True or False Reason for your answer 1. Are business managers and
executives greedy? answers will differ answers will differ, but must provide a
reason for the answer provided in the true/false column
2. Do business managers and executives exploit their workers?
answers will differ answers will differ, but must provide a reason for the answer provided in the true/false column
3. Do business managers and executives exploit their customers?
answers will differ answers will differ, but must provide a reason for the answer provided in the true/false column
4. Are business managers and executives trustworthy?
answers will differ answers will differ, but must provide a reason for the answer provided in the true/false column
(8)
LB page 68 ?
Resources -7 Learner's Book, paper i V - 'i-' T '
Teaching guidelines Facilitate a class discussion on the eight behaviours of ethical practice. Encourage the learners to give examples of each. Divide the learners into groups of three or four to discuss and complete Activity 2. Allow time for feedback and discussion. Question 2 can be done as a challenge in the class and posters could be displayed around the classroom.
Answers 1. • Investors: Feel confident investing; money
safe; kept informed • Employees: Organised work atmosphere;
not kept in the dark; know what is expected of them Customers: Pleasure to do business; treated with respect and dignity
• Competitors: Find them open and honest; no shady deals
• Government: Feel secure that laws are ''• being followed; honest accounting and
tax returns ; • Environment: Benefits because there is
respect for environmental laws. (Any other relevant answers.) (12)
2. Use the rubric below as a guide to assess the poster. (20)
Poster rubric
Poor 1
Needs Improvement
Planning and layout of poster
Learner has not planned and no effort has been taken to establish the criteria.
Some planning is evident, however learner needs to improve on layout.
Some planning, but could be planned better and layout could be improved.
Learner has planned and concentrated on the layout. This adds to the content and understanding of concepts.
Learner has been very creative in planning layout and composition. This adds much appeal. ;:?r5';
22 Term 1
Learner has not covered all of the content required.
Only some content has been covered, and not always in the most comprehensive way.
Most content has been included and discussed.
All content included and comprehensively explained.
All content included in a very comprehensive way making it very easy to understand and enjoyable to read.
Understanding of concepts
Poster does not indicate that the learner has full understanding of the concepts.
Poster indicates that the learner has some basic understanding of the concepts.
Poster, layout and design shows that learner understands the concepts.
Structure and layout show that the learners understand the concepts well.
Creativity used adds to the posters and indicates the extensive understanding that the learner has for the concepts.
Design and creativity
Very little care and creativity were put into the design.
Some creativity used.
A fair amount of creativity used.
Creativity is obvious and makes the poster stand out from the others.
Extremely creative, much thought and effort went into the poster. (20)
Activity 3: LB page 70
Analyse the case study
Resources •-•ws^.i'. "i-?;^^rMx'--:-^i-^:r^ Learner's Book, learner's notebook
Teaching guidelines - • Ensure that the learners can define the terms . unethical and unprofessional. Read through the case study with the learners. Divide the learners into groups of five or six to role play the case study. Allow a few groups to present their role play to the class. Divide the learners into pairs to discuss and complete Activity 3. Ensure that the learners draw up a table in their notebooks similar to the one in the Learner's Book. - ,
Answers Response: Not professional in behaviour. Learners should mention: Late-coming; missing important information at start of the day; no apologies (rude); disrespect for colleague (coffee); makes nasty remarks about her; doing own work in company time (telephone, computer, and photocopier abuse); not prepared to be up-skilled (new IT system); leaves early; using confidential client information to further own business. (16)
Activity 4:
Resources
Learner's Book, paper, wall chart ^
Teaching guidelines Discuss and explain the 12 principles of ethical business. Divide the learners into pairs to discuss and complete Activity 4. Allow time for pairs to compare their answers with other pairs (i.e. groups of two become groups of four). Display the keywords found in the Learner's Book on a wall chart in the classroom. Answers 1. Creative accounting: The process by which an
individual or business hides some of its income and/or inflates some of its expenses. Learners should provide a relevant example. (4)
2. Masterbond and Fidentia: Principles of business ethics broken by them that should be
, included in learners' paragraphs: • no business should be started at the
expense of someone else deceit and misrepresentation
• huge salaries paid to directors • poorest people lost their life savings
tax not paid regularly • tax distorted; dishonest returns
Chapter 3. Unit 1 23
• untrustworthy accountants • dealings were not open and transparent
managers did not set an honest tone • inadequate internal auditing systems. (24)
Learners should support each of these principles with an example for the Masterbond or Fidentia scandals. (24)
Unit 2: Issues that could challenge ethical and professional behaviour Teaching guidelines Time allocation; Week 6 (2 hours) Reflect on the four main constraints that affect investment in South Africa. This can be done by dividing the learners into groups of three or four to discuss these constraints, namely crime, theft and disorder, cost and reliability of electricity and infrastructure, and access to finance. Allow time for feedback and discussion.
Activity 5:
Resources < Learner's Book, paper, wall chart
Teaching guidelines Read through the scenario in Activity 5 with the learners. Divide the learners into pairs to discuss and complete the activity. Allow pairs (groups of two) to compare their answers with other pairs (forming groups of four). Display the keywords found in the Learner's Book on a wall chart in the classroom.
Answers 1. Nepotism is favouritism granted to relatives.
Cronyism means that long-standing friends are appointed to positions of authority. Learners should provide relevant examples to illustrate the difference between the two. (4)
2. Learners' paragraphs will vary. The following are model paragraphs: A Code of Ethics and a Code of Conduct for the business, which embody respect for all, should improve relationships and eliminate such issues as harassment, discrimination against people who are HIV positive, fair advertising and gender discrimination. A transparent employment policy, based on the national legislation on employment, such as the Employment Equity Act, Basic Conditions
; of Employment Act and Broad-based Black Economic Empowerment Act, will discourage nepotism, cronyism and misleading job advertisements. Internal controls within a company, such as internal audit committees, should monitor the application of the Codes of Ethics and Conduct, unfair advertising of products, pricing of goods (particularly in rural areas) and productivity issues. » : > * ^ : Extensive education programmes for the workforce on health matters (HIV, Aids and TB in particular), clinical assistance for those infected with HIV or TB, all matters of corporate governance such as the company's Code of Ethics Adult Basic Education Programmes to promote skills and knowledge and eventually, higher productivity. A social responsibility programme to help uplift the community in which the business is situated.
(max 16)
EXAM PRACTICE MEMORANDUM CHAPTERS LB page 84
Teaching guidelines Structure the assessment like an examination paper. The assessment needs to be discussed with the learners after it has been marked and any areas that have not been sufficiently understood need to be re-explained.
Section A Question 1 1.1 C 1.2 D 1.3 A (2 marks each = 6)
Question 2 2.1 A 2.2 B 2.3 C 2.4 D
(2 marks each = 8) Question 3 3.1 False 3.2 True 3.3 True
(2 marks each = 6 ) [20]
Section B Question 4 1. This implies that business must find ways to
keep the balance between making a profit while operating good business practices. (Example provided should be in context.) (4)
2. (Examples to be in context.) • • Codes and policies: Develop a Code of Conduct so that employees know what behaviour is expected from them in the workplace. For example, the Code of Conduct might stress the importance of punctuality and time keeping. Communication: Employees should be kept informed of issues that affect them. For example, employees should be informed that a new IT system is to be implemented. Training: Employees need to receive adequate training to enable them to perform their jobs. For example, employees will need to be trained on the new IT system to be implemented. Management: Managers need to lead by example. For example, with regard to the code of conduct, managers should be on time and not leave early(8)
3. Laws protecting the outside environment (e.g. against pollution of water and air) should be taken seriously. Businesses have a responsibility to protect the environment, as the depletion of our natural resources will have devastating results on our economies. Businesses need to focus on the sustainable use of resources to ensure that resources are still available for future generations. Attention should also be given to the
environmental conditions under which employees work (e.g. adequate lighting, ventilation and so on). (4)
4. A social responsibility programme to help uplift the community in which the business is situated (examples may vary). For example, businesses within a community can support schools within the community by supplying a feeding scheme at
=" the schools. ,„ (4)
Question 5 5.1. Second salesman: polite, respectful despite the
mother and son's camping clothes. (4) 5.2. Did not care for the product; disrespectful to
clients; too lazy to make the effort. (6) 5.3. Saw potential customer and a possible sale;
appearance did not matter; respectful. (6) 5.4. Remind salesman of the the Code of Ethics that
guides behaviour in the workplace. (Any other logical suggestions mentioned by learner.) (4)
[20]
Section C Questions i':^':,:-','^ . Marking the essay: There are many issues learners could list. The example of an essay given below illustrates what they could include. Learners should include both an introduction i and conclusion in their essays. Learners should include a list of ten issues that they think are the greatest , - challenges to conducting ethical and professional businesses in South Africa. After each issue, they should include a brief example and explanation as to why they feel that this impacts on SA businesses. Allocate 2 marks for each issue and 2 marks for each explanation and example. Extra marks can be given for creative and original ideas. Any ten of the following issues can be included, and examples need to be in context. Learners should discuss hindrances and provide relevant examples and explanations for the context.
Here is an example of what the learners could ; ^ include in their essays. ,,,
Example essay Challenges to conducting ethical and professional business in South Africa
Example introduction Companies in South Africa face many different challenges to conducting ethical and professional business. These challenges can hinder business, : ; productivity and access to finance.
Exam Practice Memorandum 25
There are many factors that contribute to this ranking, including the lack of regulations that govern transparency in business dealings, and an inefficient legal system. While these factors hinder investment, they are also challenges to the ethics and professionalism of South African businesses. (Any other relevant introduction related to the challenges to conducting ethical and professional business.) ^ ij'-r:-' 1. (any 3 x 1 = 3)
Taxation / / ' Double taxation with respect to companies and close corporations is challenging to business. / • This implies that profits are taxed in the company or CC and taxed again when dividends and payments are distributed to shareholders. / / Another taxation problem is the number of fraudulent declarations or incorrect returns submitted to SARS. • /
Sexual harassment • / In any of its forms, sexual harassment shows disrespect / / and could lead to the loss of female employees or the company employing fewer females. / / Victims are often not willing to report sexual harassment for fear of further victimisation or even dismissal. / / Whistle blowers are often not adequately protected in sexual harassment cases. / /
Pricing of goods in rural areas - sfji People in rural areas do not have the means to check and compare prices (via the internet) / / and are often forced to buy from the one and only local store. / / Not only are the people often unemployed with no prospect of work in the area, but they are also at the mercy of unscrupulous shopkeepers who inflate the prices of basic goods. / /
Unfair advertising / / Biased advertisements are unethical. / / When it comes to advertising positions, advertisements are not supposed to have any discriminatory conditions that would exclude some sections of the population. / / For example, a job advertisement that says: 'This work is not suitable for women' is not acceptable. / /
False/deceptive advertising / / Customers have the right to know what they are buying / / and all necessary information should be displayed on the label. / / However, advertisers still find ways to deceive consumers with misleading statements and in other ways that may be technically against the law. / / Misleading advertising is difficult to enforce, though, because it is subtle. • /
Unauthorised use of funds - • • Buying goods or equipment without authorisation or buying goods for personal use with company money are both theft. / / Taking money from the cash register is a more obvious form of stealing, / / but theft can take many f o r m s . / /
Abusing work t ime / / - This can take numerous forms and refers to any activity that is not focused on the job you are meant to be doing, except during tea or lunch breaks. / / Examples of this are doing one's own private work, / / chatting for long periods around the kettle or water cooler; / • taking lengthy tea or lunch breaks; coming late and/or leaving early, / / and spending work time on social networking sites. / /
Tenderpreneurs • / This term has been created to refer to individuals who enrich themselves though government tender contracts, / / mostly based on personal connections and corrupt relationships. / / Outright bribery could take place in these cases / / and tenders that are 'won' in this way are often accompanied by overcharging and sub-standard workmanship. / /
Nepotism / / This is favouritism granted to relatives, regardless of whether they are suited to the position or not. Nepotism can take place when an employee is appointed or when there is an opportunity for promotion.
Cronyism / / Cronyism occurs when, regardless of qualifications or suitability for the position, / / friends are appointed to positions of authority. / • Often the person who makes the appointment is inadequate to hold his or her own position of authority, / / and therefore appoints individuals who will not try to weaken him or her or express views contrary to those of the appointer. / / .
fflV and A i d s / / More than one in every ten people in South Africa is infected with the Human Immunodeficiency Virus (HIV). / / Although not all people with HIV will develop the Acquired Immune Deficiency Syndrome (Aids), particularly i f they take antiretroviral (ARV) medicines, the effects of these conditions are felt by business. / /
The pool of skilled workers is getting smaller due to the high rates of HIV infection and Aids as workers are often ill or dying, / / or preoccupied
26 Term 1
with their own and their families" health and are less productive. / / The cost to business is considerable as insurance premiums, retirement fund contributions, health and safety costs and medical aid premiums have been increased as a result of HIV and Aids. / / It is costly for businesses to find suitable replacements for those who can no longer work. / / and replacements will almost always need training. / /
Productivity / / Businesses need to be efficient in converting resources into goods and services. / / The greater the efficiency, the greater the benefits for the economy, the business and the worker. / / Poor education, / / lack of skills and motivation, / / and management styles / / all contribute to poor efficiency, and there is a great need for training in efficient working methods and the best use of resources. / /
Poverty / / Crime, violence, riots and strikes often stem from the large number of people living in poverty. / / Businesses operate within a community and usually employ people from that immediate community. / / Since the people in the community are very often also the customers, it is important for business to uplift the community within which it operates. / /
Inequality • / i -^'^ South Africa has one of the most unequal distributions of income in the world. / / Most of the money is in the hands of a few. The rest has very little or none. / / Even with the introduction of Broad- Based Black Economic Empowerment (B-BBEE) legislation, little has changed significantly as only a few people have benefited and have become very wealthy. / • This creates a very difficult environment for businesses to operate in as they need to try redress inequality and yet remain sustainable. / /
Electricity / / The electricity supply in South Africa tends
to be unreliable, / / which is very disruptive to business, and rail and road transport. / / The system is old, needs maintenance and expansion of capacity. / /
Access to finance / / It is often difficult for entrepreneurs to get the
finance they need to start a business. / / Finance usually comes from banks and/or the state / / but many budding entrepreneurs have to approach private sources for their start-up money (family, friends).// = -'yA,.,--- i
Learners can add any other relevant hindrances.
Example conclusion There is no easy way to fix any of the problems that hinder ethical and professional behaviour in the business world. Some of the issues are external to the business, while others are issues arising within an organisation. There is more freedom to attend to the internal issues.
A transparent employment policy, based on national legislation on employment, will discourage nepotism, cronyism and misleading job advertisements. (Any other relevant conclusion related to the challenges to conducting ethical and professional business.) (any 1 x 2 = 2)
(Content maximum 32 marks)
CONTENTS Introduction 3 x 1 = 3
Maximum marks 32
Maximum marks 32
Analysis (A) 2 Synthesis (S) 2
Originality (O) 2 LASO (Total) 8 TOTAL 40
Additional guidelines for using L A S O when marking essay questions
For each component of LASO (layout, analysis, synthesis and originality), where all requirements are met, allocate a maximum of 2 marks. " ' ^ ' " Where some requirements are met, allocate 1 mark.
• Where requirements are not met at all, allocate 0 marks. - Marks should be awarded where a component of LASO is relevant in more than one subtopic.
TOTAL M A R K S = 100
Exam Practice Memorandum 27