Professionalism and Ethics
04 May 2022 9:32 AM
1. Relevance of Professional codes:
• Aim to regulate the behaviour of people practicing a particular profession
• Profession-------> an occupation/job, requiring specialised tertiary education that qualifies someone to practice as a professional in a particular field.
• Not all tertiary qualifications will enable a graduate to register with a professional body
• If someone is registered with a professional body, that person had to abide by the professional code of the organisation
• If contravened, person may be fined, suspended or even disbarred from ever practising in that professional field
2. Good Business practice:
- Refers to the standards of professionalism, accountability, ethics and effective business practice that should be conducts.
⚫ If an employee does not belong to a professional organisation ----> it is sometimes not clear what is regarded as unethical behaviour.
⚫ Ethical behaviour is also part of an individual's values and morals.
⚫ Not all unethical actions are illegal but all illegal actions are unethical
Ethical theories:
1. Principle based-theory:
• A persons principles, values, morals or ingrained set of rules about what is right/wrong will determine if person sees the action as ethical/unethical
2. Consequence based-theory:
• The outcome of the action, will determine if the action is ethical/unethical
3. Utilitarian theory:
• Decision based on what is best for the greatest number of people
4. Narrative theories:
• Use stories, folklore, organisational culture (common beliefs) to illustrate to people what is acceptable behaviour or not
5. Virtue-based theory:
• Judges a person by an his/her character and reputation rather than on an individual action
6. Deontology:
• States that if a person upholds his/her obligation towards another person or society, the action will be ethical
3. Ethical behaviour in practice:
• 3.1. Conflict of interest:
- if a person awarding a tender knows the person who is submitting the tender, he/she should not make the final decision about who will get the tender----> should
disclose that it is a friend/family member submitting the tender and withdraw from the tender allocation process.
• 3.2. Bribes and corruption:
- when someone is offered a reward to give a third party an unfair advantage to which he/she/the business is not entitled, it is a bribe.
- Bribe does not have to be in the form of money, may be a gift, offer of employment, a promotion, or any other favour.
- if it is in the form of money , it sometimes referred to as a smoothing payment or facilitation payment
- when a person in a position of power, abuses this power for personal gain ---> it is known as corruption
- This may include receiving a bribe, a kickback (indirect bribe) to a supplier, misappropriating funds or abusing power for personal gain
• 3.3. Unauthorised use of funds:
- Using business funds that are not authorised, is the same as theft.
- While collar crimes ( people working in offices more prevalent than workers in manufacturing department)
- E.g. expense account, petrol card for private use.
• 3.4. Inappropriate gifts:
- Most businesses expect employees to declare all gifts that they have received
- May even stipulate that no employee may receive a gift greater in value than R…. ( a certain value)
- REASON: could be interpreted as being a form of bribery
• 3.5. Sexual harassment:
- May include:
► Unwelcome physical contact
► Verbal conduct ( sexual advances, sex-related jokes, unwelcome enquiries about a person's sex life, unwelcome whistling/body language)
► Non-verbal ( sexual gestures, indecent exposure, display of sexually explicit pictures and objects).
• 3.6. Unfair advertising:
- Will be discussed more in detail In Chapter 7.
• 3.7. Employment/ labour issues:
-Employees abusing sick leave
-Abuse of internet/ email:
► Visiting porn sites
► Disclosure of confidential information
► Spreading of rumours or damaging information about business/ fellow employee
► Spending time on Facebook and other social media sites during work
► Spending time on personal emails/emails that could bring business in disrepute
• 3.8. Pricing of goods:
- Price fixing occurs when competitors agree to charge buyers a predetermined price
Professionalism and Ethics Page 1
, - Price fixing occurs when competitors agree to charge buyers a predetermined price
- Free market system----> competition keeps prices low and quality low
- Unethical and illegal and competition Board may impose hefty fines
- Consumer production act (CPA) makes it illegal to charge more for products in rural areas than in urban areas without goof justification
• 3.9. "Insider trading":
- Refers to a situation where someone trades shares on the JSE based on knowledge that is confidential.
- E.g. something that only an insider ( or his/her friend/family) in the business will know
- This is a criminal offence
• 3.10. Piracy:
- The illegal use or reproduction of somebody's work is it is protected by a patent or copyright
• 3.11. Counterfeiting/ Bootlegging:
- Counterfeiting can be described as someone fraudulently imitating another's work and pretending it is the original
- E.g. Designer clothing, shoes, handbags
- Bootlegging is the illegal production and/or redistribution of a product
- E.g. Shebeen selling alcohol without a liquor licence, selling cigarettes in the black market to avoid paying import duties or other taxes
• 3.12. Taxation:
- Tax evasion vs. tax avoidance
- Tax avoidance: legal and ethical, because the business finds legal ways to reduce the tax burden. E.g. deducting legal expenses before taxable income is calculated
- Tax evasion: illegal and unethical because business does not declare all income and lies about expenses in order to pay less tax
• 3.13. Whistle-blowing:
- Someone who exposes unethical behaviour, fraud, health and safety violations, or the violations of the law
- Can have a severe impact on the business
- Whistle-blowers in SA are protected by law, because it is an illegal to fire an employee for whistle-blowing.
4. Ethical/unethical behaviour in different spheres of society
⚫ In the world of business and finance:
- Code of ethics NB and will be based on the business' core values-----> this will serve as a set of guidelines and rules that will enhance the business' honesty and integrity
- Why NB?
- Communicates ethical vision of business also conveying specific issues that govern daily behaviour
- Creates common framework for all business decisions
- Sets out correct and desired behaviour employees in different situations
- Will spell out consequences of unethical behaviour- reinforces accountability
- Protects business if employee breaches the code
- Will help new employees to understand what acceptable behaviour is and what will not be tolerated
- Should stipulate what is acceptable behaviour when conflict of interest arises in the work situation
- Global arena- helps management and employees to understand acceptable practice within the organisation, regardless of where in the world it operates (NB- ethical
standards and values may differ between countries-eliminates confusion)
- Gives the business the opportunity to create positive image- potentially giving a competitive advantage
- Guid business and employees regarding importance of CSR
⚫ Ethics in government:
- Gov implements appropriate policies to prevent corruption (National Anti-corruption Forum)
- national crime prevention strategy- code of conduct for the public service that governs behaviour of all civil servants
- Parliament- ethics sub-committee: developed a code of conduct for members of parliament
- Daily misappropriation of funds and other corrupt activities by officials continue to occur - stigma had developed
⚫ Ethics in international market:
- Ethical standards between different countries differ drastically ( some countries allow child labour and salve labour are acceptable)
- Too easy for businesses operating in countries where these issues are not common occurrence to look the other way and claim "we are not guilty"
6. JSE social responsibility index (Johannesburg Stock exchange)
• Launched in 2015
• Identify companies listed in JSE that focus on good governance and use triple bottom line principles in reporting
• Measure policies and procedures of listed companies against global CSR standards
• Give investors non-financial standard to use as a tool when making an investment
• Promote responsible business practice in SA
• Environment:
- Reduce negative environmental impact
- Promote awareness of environmental impact
- Working to use natural resources sustainably
• Management of climate change:
- Reduce carbon emissions and climate change
• Society:
- Demonstrate a commitment to social sustainability
- Treat all stakeholders with dignity, fairness and respect
- Develop and empower employees and community
• Governance:
- Maintain good corporate governance practices
- Aim for long term growth sustainability by managing risks in macro-economic environment
- Promote positive social, environmental, ethical and economic activities
• Benefits:
Professionalism and Ethics Page 2
