Presentation on theme: "Business Studies Grade 12"— Presentation transcript:
1Business Studies Grade 12 HEAD FOR SUCCESSBusiness Studies Grade 12
2Topic 3: Ethics and Professionalism TERM 1Topic 3: Ethics and Professionalism
3ETHICS AND PROFESSIONALISM INTRODUCTION:Ethics refers to conduct we perceive as right and wrong.Business ethics refers to accepted principles of right and wrong that direct the behaviour of business people, employers and employees.Business ethics involve:Corporate social responsibility.Issues regarding the rights and duties of a company and its shareholders.Issues concerning relations between different companies, e.g. takeovers and industrial espionage.Leadership issues, e.g. corporate governance.Political contributions made by business enterprises.The misuse of corporate ethics policies as marketing instruments.
4ETHICS AND PROFESSIONALISM ETHICAL BEHAVIOUR AND ETHICAL BUSINESS PRACTICE:Ethical behaviour goes beyond obeying laws, rules and regulations and involves doing the right thing.In simple terms, ethics means the moral principles that serve as a guide between right and wrong.Ethical business practices refer to honest when doing business, safety in the workplace and social and environmental issues, for example.It should also be borne in mind that what is ethically for one culture / population group it is unethical for another group.Ethical codes have been developed for industries, companies, managers and employees because the cost of white collar crime is high – both for businesses and society.
5ETHICS AND PROFESSIONALISM ETHICAL BEHAVIOUR AND ETHICAL BUSINESS PRACTICE:A code of ethics is a document which explains a business’ values and principles.Businesses should have a strict code of ethics for their employees and this code must be strictly enforced.White collar crime refers to crimes such as fraud and money laundering.The nature of ethical decisions and actions can be measured against the following questions:Do the decision / action comply with the company’s code of ethics?Are the decision / action within the framework of the law?Are the decision / action fair to the company’s stakeholders?Do I feel positive about my decision / action?
6ETHICS AND PROFESSIONALISM ETHICAL BEHAVIOUR AND ETHICAL BUSINESS PRACTICE:The King Code (King III)Business entities should act as responsible corporate citizens.But issues like ethics and corruption challenge responsible citizenship.The King Code of corporate governance provides a framework for dealing with issues such as corporate governance, ethics and corruption.Corporate governance refers to the way in which a company is governed and it explains the relationship between the company and its stakeholders (e.g. shareholders, customers, directors, managers)The Code was developed by Judge Mervyn King and the third version of the King Code (King III) was released early in 2009.Retired Judge Mervyn King was chairman of the first committee on Corporate Governance in July 1993.
7ETHICS AND PROFESSIONALISM ETHICAL BEHAVIOUR AND ETHICAL BUSINESS PRACTICE:The King Code (King III)The Code applies to all entities.The reason for the development and implementation of the Code was the occurrence of corruption in businesses.King III focuses on:ResponsibilityAccountabilityDisciplineFairnessLeadershipIndependenceTransparencySocial responsibility
8ETHICS AND PROFESSIONALISM ETHICAL BEHAVIOUR AND ETHICAL BUSINESS PRACTICE:The King Code (King III)The Code provides detail on:The boards and directors: role, composition, appointment process, director development, remuneration of directors.Audit committeesRisk managementManaging stakeholder relationships.Internal auditsIntegrated sustainability reporting and disclosureCompliance with laws, regulations, rules and standards.Compliance and enforcementFundamental and affected transactions
9ETHICS AND PROFESSIONALISM ETHICAL AND UNETHICAL BUSINESS PRACTICE:Criteria of ethical and professional behaviourBusinesses are operating in an ethical and professional manner if the following criteria are met:The business must create benefits for society.The business must be sustainable.The business must not be harmful to society.Business operations must take place within the boundaries of the law.Business operations must be carried out responsibly.
10ETHICS AND PROFESSIONALISM ETHICAL AND UNETHICAL BUSINESS PRACTICE:Unethical business practicesUnethical business practice does not comply with the above criteria.Examples of unethical business practice includes:BUSINES PRACTICE:UNETHICAL:ETHICAL:AdvertisingUnfair advertising refers to practices like exaggerating the abilities of a product, or marketing second-hand goods as new goods. It implies that consumers are being misled on purpose.Fair advertising implies that a product is advertised for what it really is.
11ETHICS AND PROFESSIONALISM ETHICAL AND UNETHICAL BUSINESS PRACTICE:Unethical business practicesExamples of unethical business practice includes:BUSINES PRACTICE:UNETHICAL:ETHICAL:Selecting, appointing and promoting employeesNepotism – appointing or promoting family members even if they are not best qualified for a job.Selecting and appointing employees based on fair selection criteria such as qualifications, skills and experience
12ETHICS AND PROFESSIONALISM ETHICAL AND UNETHICAL BUSINESS PRACTICE:Unethical business practicesExamples of unethical business practice includes:BUSINES PRACTICE:UNETHICAL:ETHICAL:PricingPrice fixing – competitors agree to sell their products at the same prices. Usually competitors agree on selling goods at a high price to secure maximum profit.Determining prices of goods by taking into account market related factors like supply, demand and the state of the economy.
13ETHICS AND PROFESSIONALISM ETHICAL AND UNETHICAL BUSINESS PRACTICE:Unethical business practicesExamples of unethical business practice includes:BUSINES PRACTICE:UNETHICAL:ETHICAL:Applying for a tenderBribing officials to ensure a tender.Applying for a tender in the prescribed manner by meeting deadlines and tender requirements.Dealing with wasteDumping waste in places where it is not permitted, for example in a river.All companies generate waste in their operations. This waste should be dealt with and disposed of responsibly and legally.
14ETHICS AND PROFESSIONALISM ETHICAL AND UNETHICAL BUSINESS PRACTICE:More examples of ETHICAL and UNETHICAL behaviour Examples of ETHICAL behaviour:Objective and impartial action.TransparencyConfidentiality of information.Caring for the environment.Avoid conflicts of interest.Stay within legal provisions.Committed and responsible.Take reasonable steps to ensure that employees behave correctly, etc.
15ETHICS AND PROFESSIONALISM ETHICAL AND UNETHICAL BUSINESS PRACTICE:More examples of ETHICAL and UNETHICAL behaviour Examples of UNETHICAL behaviour:Dishonesty, fraud and lack of transparency: for example: the truth about the origin of the product is fabricated, forged products are marketed under a well-known brand, not honest when information is provided.Maximum profit at the expense of customers: price of products continues to rise while the purchase price was reduced.Falsification of documents: ‘creative accounting’ to keep shareholders happy or to evade income taxes.Infringement on other people’s privacy: use of confidential information of stakeholders for personal benefits.
16ETHICS AND PROFESSIONALISM ETHICAL AND UNETHICAL BUSINESS PRACTICE:More examples of ETHICAL and UNETHICAL behaviourExamples of UNETHICAL behaviour:Sexual discrimination: favouring certain genders in the appointment of employees to fill vacant positions.Business espionage: illegally obtain information about the business of a competitor or new products developed by competitors.Emotional manipulation of people: encourage people to buy products now because a scarcity in the future will be encountered or that prices will be increased.Tax evasion: do not declare all income that the business has earned, etc.Bribery: e.g. pay someone or give the person an asset such as a vehicle to receive certain favours in return.
17ETHICS AND PROFESSIONALISM THE DIFFERENCE BETWEEN ETHICS AND PROFESSIONALISM:ETHICS:PROFESSIONALISM:To do the right thing.Certain behaviour expected from a professional job.
18ETHICS AND PROFESSIONALISM PROFESSIONAL AND UNPROFESSIONAL BUSINESS PRACTICES:A professional person is someone who is paid to perform specialised tasks, e.g. doctors, pharmacists.Nowadays, the term is applicable to a broader career span to include highly qualified professions and skills e.g. professional artists, football and rugby players, etc.Professional business practice describes appropriate behaviour for an occupation.Doctors, accountants and teachers, for example, all havetheir own rules of professional conduct.Professional behaviour involves doing what you are supposed to do while you are at work.
19ETHICS AND PROFESSIONALISM PROFESSIONAL AND UNPROFESSIONAL BUSINESS PRACTICES:Criteria for professionals:Exceptional and specialised knowledge in the professional fieldExcellent skills in the professionGood quality performanceHigh standards of professional ethics, behaviour and work activitiesGood motivation and work moralMaster in his / her areaAny person can be professional in his / her work. It is no longer just about qualifications and university degrees, but also about hard work, honesty, attitude and values and social responsibility.Work should be dealt with, with pride and dedication to maintain high standards of performance.
20ETHICS AND PROFESSIONALISM PROFESSIONAL AND UNPROFESSIONAL BUSINESS PRACTICES:Examples of professional and unprofessional behaviour:BEHAVIOUR:PROFESSIONAL:UNPROFESSIONAL:Use of work timeAppropriate use of work time involves working productively during the time an employee spends at work.Abusing work time for personal use, e.g. making personal telephone calls, wasting time, spending hours surfing the internet on the employer’s expense.
21ETHICS AND PROFESSIONALISM PROFESSIONAL AND UNPROFESSIONAL BUSINESS PRACTICES:Examples of professional and unprofessional behaviour:BEHAVIOUR:PROFESSIONAL:UNPROFESSIONAL:Dealing with clients and customersBe honest and realistic. Refrain from saying only what a client or customer wants to her, but say things as they are.Overpromising – making promises you know you won’t be able to keep.DressDress appropriately, especially when dealing with clients or customers.Avoid inappropriate dress, e.g. clothes that are to casual for work – people won’t take you seriouslyBeing on timePlan your time so that you are always on time. Arriving on time shows respect for other people’s time.Being late for appointments shows lack of respect for other people’s time.Conduct towards colleagues and employeesTreat employees and colleagues with respect.Avoid gossiping at the office.
22ETHICS AND PROFESSIONALISM PROFESSIONAL AND UNPROFESSIONAL BUSINESS PRACTICES:Examples of professional and unprofessional behaviour:BEHAVIOUR:PROFESSIONAL:UNPROFESSIONAL:Pursuing personal gain at the employer’s expenseEverything in an employer’s office should be used for work purposes.For example, using and employer’s computer and internet service to trade shares while you are supposed to be working.
23ETHICS AND PROFESSIONALISM PROFESSIONAL AND UNPROFESSIONAL BUSINESS PRACTICES:More examples of unprofessional behaviour:Professional misconduct on social media / websites / blogs, etc.Discuss work problems with other people in person or through on-line talks.Hate speech.Use of foul language.Rudeness.Poor telephone etiquette
24ETHICS AND PROFESSIONALISM PROFESSIONAL AND UNPROFESSIONAL BUSINESS PRACTICES:Principles for professional behaviour:PRINCIPLE:EXPLANATION:RespectRespect the rights of others and the image of the profession / business.IntegrityHonest behaviour within the law and the norms of the profession / business.CompetenceApply skills to the benefit of the business, community and environment.ConfidentialityDo not submit customer information to anyone else or use it for own gain.ObjectivityAct objectively without bias and prejudice but fair towards others.DevelopmentTry to continuously improve their own skills and encourage others to do the same.
25ETHICS AND PROFESSIONALISM THE RELATIONSHIP BETWEEN ETHICAL AND PROFESSIONAL BEHAVIOUR:Personal ethics refers to an individual’s conscience, while professional ethics refers to the adherence to a professional code.The two roles can sometimes be in conflict with each other:The difference between ethical and professional behaviour is based on cultural, religious and community norms.An auditor audited his friend’s books. It is found that the accounting was irregular and there was tax evasion over a period of time. His personal ethics will be loyalty to his friend but professional ethics require him to report the irregularity.
26ETHICS AND PROFESSIONALISM THE RELATIONSHIP BETWEEN ETHICAL AND PROFESSIONAL BEHAVIOUR:ETHICAL BEHAVIOUR:PROFESSIONAL BEHAVIOUR:Refers to a set of values that are morally acceptable in society.A set of desired practices, e.g. treating people with respect.Businesses develop their own codes of ethics for best practice.Specific occupational groups have developed their own codes of professionalism.
27ETHICS AND PROFESSIONALISM THE RELATIONSHIP BETWEEN ETHICAL AND PROFESSIONAL BEHAVIOUR:ETHICAL BEHAVIOUR:PROFESSIONAL BEHAVIOUR:Ethical conduct is a pre-requisite for being professional.Being professional means:Demonstrating appropriate behaviour towards colleagues and clients or customers.Performing tasks to the best of one’s abilities.Not pursuing personal agendas as the company’s expense.Representing your employer with dignity.Keeping work-related promises.
28ETHICS AND PROFESSIONALISM THE RELATIONSHIP BETWEEN ETHICAL AND PROFESSIONAL BEHAVIOUR:The link between ethical behaviour and professionalism is clear.Unethical behaviour almost certainly also constitutes unprofessional behaviour.However, being unprofessional doesn’t always involve unethical behaviour, for example:BEHAVIOUR:UNETHICAL:UNPROFESSIONAL:Stealing money from an employer.√Arriving late for an appointment.x
29ETHICS AND PROFESSIONALISM WAYS IN WHICH RESPONSIBLE, ETHICAL AND EFFECTIVE BUSINESS PRACTICES SHOULD BE CONDUCTED?:Although the main purpose of business is to make profits for the owner(s) / shareholders, there is increasing pressure on businesses to provide professional, ethical and responsible business practices.It requires that businesses always have to find ways to strike a balance between profit and the application of ethical and professional business practices.The provisions of the King Code should be applied.
30ETHICS AND PROFESSIONALISM WAYS IN WHICH RESPONSIBLE, ETHICAL AND EFFECTIVE BUSINESS PRACTICES SHOULD BE CONDUCTED?:Not starting a venture at the expense of someone elseAn enterprise should not exist at the detriment of employees, the community or the environment.The enterprise should make a positive contribution towards alleviating poverty, creating employment and uplifting society.The management team may not take unnecessary risks with investors’ money. E.g. directors of companies should use the capital invested by shareholders in the company, wisely and transparently.Examples of this unprofessional business practice were Master Bond in the nineties and Fidentia in the 2000s.
31ETHICS AND PROFESSIONALISM WAYS IN WHICH RESPONSIBLE, ETHICAL AND EFFECTIVE BUSINESS PRACTICES SHOULD BE CONDUCTED?:Not starting a venture at the expense of someone elseMaster Bond, as a business, stole over R600 million of pensioners’ savings and retirement money invested in the business. This business pretended that they were a registered bank, whose deposits from pensioners are protected by the SA Reserve Bank.They received deposits as investment, especially from pensioners and these deposits would be used to buy real estate on which dwellings and shops would be built.Most of these developments had never existed and some of the land Master Bond indicated they have bought was in the sea and not on land.Documents were falsified to indicate that it seems that the deposits (investments) were used to develop property.While the investors lost their money, the owners and managers of Master Bond lived in luxury
32ETHICS AND PROFESSIONALISM WAYS IN WHICH RESPONSIBLE, ETHICAL AND EFFECTIVE BUSINESS PRACTICES SHOULD BE CONDUCTED?:Not starting a venture at the expense of someone elseIn the Fidentia scandal, the owner and executive management of Fidentia took R694 million form the pension fund of the “Living Hands – trust” for widows and orphans to reinvest it.While the vulnerable persons (widows and orphans) were waiting for monthly payments (interest) on the investment, the executive management of Fidentia never reinvested the money, but it was used to pay themselves huge salaries.
33ETHICS AND PROFESSIONALISM WAYS IN WHICH RESPONSIBLE, ETHICAL AND EFFECTIVE BUSINESS PRACTICES SHOULD BE CONDUCTED?:Payment of fair wagesEmployees must be compensated for their contribution towards the enterprise.The efforts of employees contribute to the enterprise’s profit and employees should be compensated accordingly.The salaries of executives and employees should be in proportion to the position the employee held.In some businesses (such as Master Bond and Fidentia) the executives received exorbitant salaries while employees received meagre salaries.Employees may not be exploited by giving them minimum salaries just because jobs are scarce and that they feel that they need to work for a wage / salary that the employer offer.Compensation and working conditions may not be weaker than the BCEA specified for the specific industry.Provision must be made for fair performance appraisal and promotion possibilities. This appraisal should be agreed between the employer and employee. The evaluation of ethical behaviour should be part of the performance appraisal system.Nepotism should be avoided.
34ETHICS AND PROFESSIONALISM WAYS IN WHICH RESPONSIBLE, ETHICAL AND EFFECTIVE BUSINESS PRACTICES SHOULD BE CONDUCTED?:Regular payment of taxLegislation compels businesses and individuals that generate income, to pay tax.“Creative accounting” where some income is not recorded, may not e applied as business practice “.If people or businesses evade tax, it is unfair to all people and business enterprises that regularly pay tax.Tax returns should be submitted in time (before the annual deadline) at the South African Revenue Service (SARS).These returns must have a fair statement of revenue and expenditure.Information technology may not be used to manipulate income or to make transactions’ data to occur complex in order to make inspection difficult.
35ETHICS AND PROFESSIONALISM WAYS IN WHICH RESPONSIBLE, ETHICAL AND EFFECTIVE BUSINESS PRACTICES SHOULD BE CONDUCTED?:Regular payment of taxTax officers should under no circumstances be bribed to accept incorrect information.In cases where the tax officer suggests that a bribe will be accepted for incorrect tax information, that officer must be reported to SARS.Tax money is used to the advantage of everybody.Tax money is applied for the benefit of all and to keep society functioning, e.g.Funding the police serviceBuilding and maintaining prisonsBuilding public hospitalsMaintaining and building new roadsEducation
36ETHICS AND PROFESSIONALISM WAYS IN WHICH RESPONSIBLE, ETHICAL AND EFFECTIVE BUSINESS PRACTICES SHOULD BE CONDUCTED?:Use reliable / honest accountants / auditors with good reputationNo business can afford to make use of accountants / auditors who are known for their unethical and unprofessional practices.The bookkeepers of Master Bond and Fidentia has been guilty of “creative accounting” by covering large personal loans to executives because it is actually a way of stealing the money.
37ETHICS AND PROFESSIONALISM WAYS IN WHICH RESPONSIBLE, ETHICAL AND EFFECTIVE BUSINESS PRACTICES SHOULD BE CONDUCTED?:Openness and transparencyAll transactions and negotiations of the business must be open and transparent. This means no information may be withheld and there may not be hidden agendas.The business must make the employees aware of the different policies in the business, as well as legislation applicable to specific employees and ensure that employees adhere to these policies and laws.
38ETHICS AND PROFESSIONALISM WAYS IN WHICH RESPONSIBLE, ETHICAL AND EFFECTIVE BUSINESS PRACTICES SHOULD BE CONDUCTED?:Social responsibilityThe community should be involved in the decision making and implementation of plans and programs relating to social responsibility.These programs should work towards the lifting of the community in which the business operates and must be sustainable.
39ETHICS AND PROFESSIONALISM WAYS IN WHICH RESPONSIBLE, ETHICAL AND EFFECTIVE BUSINESS PRACTICES SHOULD BE CONDUCTED?:Adequate internal controlControl over the business’ ethical code and codes of conduct should be applied consistently.Corrective measures must be implemented when employees deviate, before it is too late and the company’s image is harmed.Recognition for compliance with these codes should also be given.
40ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:TaxationEXPLANATION:STRATEGY / RECOMMENDATION:The government needs revenue from taxation to provide essential services such as housing, education, and medical care.Professional behaviour in this regard would be to pay due tax to SARS.There are businesses and individuals that do not declare all income to the Receiver of Revenue.This attempt to escape tax is called tax evasion – tax evasion is a criminal act.The best way to reduce tax evasion is to reduce tax rates.As tax rates are reduced, more people will choose to pay taxes instead of risking the penalties imposed on offenders.Businesses should pa their taxes to avoid penalties and interest and even imprisonment.
41ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:Sexual harassmentEXPLANATION:STRATEGY / RECOMMENDATION:SH in the workplace involves unwanted attention of a sexual nature from someone at work, that causes discomfort, humiliation, offence or job interference.Sexual harassment includes:Unwelcome sexual advances.Requests for sexual favours in return for employment benefits.Pressure for sexual favours to clinch sales deals.It is immoral, wrong and unethical to abuse your position to take advantage of another person.Formulating a clear policy regarding sexual harassment.Making others aware of the problem, of their rights and of the rights of others.Implementing complaints and disciplinary procedures.Formulate an employment equity programme that ensures well-planned career paths, based on merit, for all employees.Cultivating a positive corporate culture, in which the rights and dignity of all employees are respected.
42ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:Sexual harassmentEXPLANATION:STRATEGY / RECOMMENDATION:Employers should be proactive and prevent the problem, rather than having to address it after the damage has been inflicted..
43ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:Pricing of goods in rural areasEXPLANATION:STRATEGY/RECOMMENDATION:Goods in rural stores are often more expensive than goods in urban stores.The Consumer Price Food Index for rural areas is considerably higher than the index for metropolitan areas.Most of the stores in rural areas are located far away from major towns; store-owners buy stock from wholesalers and pay a high price for delivery to the rural store.The lack of infrastructure in rural areas results in rural store-owners often not having any competition – this means that they are the only, or one of very few, suppliers of necessities in the area.Some rural store-owners abuse their monopolistic position by charging excessive prices to these mostly very poor communities.Attention must be given to improve the infrastructure in rural areas to address this problem.Rural store-owners can try to negotiate better prices form wholesalers.Gaining the goodwill of customers by building long-term relationships with customers.
44ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:Price-fixingEXPLANATION:STRATEGY/RECOMMENDATIONThe Consumer Protection Act prohibits this business practice. Yet there are still businesses that are guilty of this.It involves an agreement between different businesses (cartels) which ask the same price for a particular stock item.The consumer is exploited and businesses make a lot more profit than usual. Such practices can be reported to the Commission for Competitiveness.If businesses are found guilty, they can be heavily fined.Adhere to the regulations of the law.Do not use price-fixing to gain unfairly high profit.Adhere to ethical business practices.
45ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:Unfair advertisingEXPLANATION:STRATEGY / RECOMMENDATION:The Advertising Standards Authority (ASA) is a self-regulating body that was set up to regulate advertising.The National Consumer Commission (NCC) investigates deceptive advertising and has legal powers to stop deceptive advertising.Three categories of misleading advertisement practices are misleading prices; misleading promotion and misleading packaging.All advertisers must adhere to the Code of Advertising Practice as determined by ASA.According to this Code, all advertising should be legal, decent, honest and truthful.The following points summarise some of the principles of the Code:Advertisements should not show anything which may encourage acts of violence.Advertisements should not show anything which may encourage or support criminal or illegal activity.Advertisements should not use fear tactics without justifiable reason.Advertisements addressed to, or likely to influence children should not contain anything which may cause them mental, moral, physical or emotional harm.
46ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:Unfair advertisingEXPLANATION:STRATEGY / RECOMMENDATION:Unethical/unfair advertising practices include:Giving goods deceptive names.Using false/deceptive advertising.Selling second hand goods as new goods.Discouraging or criticising a competitor’s goods.Exploitation of children’s lack of understanding of a product.Misuse of people with disabilities in advertisements.Anyone can lodge a complaint over unfair advertising with the ASA.The ASA deals with all complaints, free of charge.
47ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:Unfair advertisingExamples:Prices are manipulated by “free gifts” that accompanies the product when the consumers purchase it.Businesses advertise a particular item at a very low price to attract consumers, but when consumers visit the store, the item is not available at the advertised price.Buy one and get one free, but there are hidden costs included that the consumers had to pay.Advertise e.g. a living room set with accessories such as reading lamps, etc. as shown in the illustration, without specifying that the reading lamp are not included in the advertised price.
48ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:Unfair advertisingExamples:Advertising of refurbished second hand goods as new goods is misleading and unfair.The use of a competitor’s name or trademark of a competitor in an advertisement when different products are compared.The allocation of misleading characteristics to a product, e.g. a vacuum cleaner is advertised an described as if it has excellent suction action, but the product does not have that feature.Presentation and/or wording in the advertisement amount to concealment where certain information is purposely omitted, e.g. advertising a used car, without stating the year of manufacturing or mileage.Ambiguity and exaggeration in an advertising may mislead the consumer.
49ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:Unauthorised use of fundsEXPLANATION:STRATEGY / RECOMMENDATION:Unauthorised means: “without permission” and involves theft or fraud.Some employees have access to funds of the enterprise, putting them in a position to use these funds.Unauthorised use of funds involves using the business’ money for personal gain, e.g.Using the business’ petrol card to fill up your car to go on a personal trip.A partner who earned money on behalf of the partnership without telling the other partners about the earnings.An employee who takes business supplies such as stationary, paper, or cartridges for personal use.Fraud cases have been highlighted in the media.Limit. to the absolute minimum, the number of employees who have access to funds.Formulate a fraud prevention strategy.Identify vulnerable areas.Combat fraud through internal auditing.
50ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:Abusing work timeEXPLANATION:STRATEGY / RECOMMENDATION:Employees get paid for the time they spend at work.It is unethical to use work time for personal matters.Examples of abusing work time (and money) include:Personal telephone calls during working hours.Downloading information for personal use from the internet during working hours.Wasting time, e.g. going out to meet a client for “half an hour”, returning to the office hours later.Structure working hours in such a way that employees have free time for personal matters.Many businesses are allowing their employees to work flexible working hours – e.g. an employee works from 7:00 – 16:00 or 9:00 – 18:00 instead of working from 8:00 – 17:00.An employer can allow its employees a particular number of phone calls, copies or data – once an employee has used up his / her benefits they are required to pay for further use of facilities.Employers should monitor phone calls, the number of copies made and the time employees spend on the internet.
51ETHICS AND PROFESSIONALISM ISSUES THAT COULD CHALLENGE RESPONSIBLE, ETHICAL AND PROFESSIONAL BEHAVIOUR:Abusing work timeEXPLANATION:STRATEGY / RECOMMENDATION:Employers should remind employees that profit will increase if expenses (such as telephone and paper) decreases, thus leaving more money to pay out in bonuses.