Chapter 3 Flashcards
(32 cards)
Meaning of Ethical Behaviour
*Businesses always have the responsibility to do the right things and do things right.
*Businesses always have the responsibility to do the right things and do things right.
*Businesses always have the responsibility to do the right things and do things right.
Examples of ethical business practice
*Businesses always have the responsibility to do the right things and do things right.
*Businesses do not make use of child labour
*The business operates within the law and other restrictions.
*The business shows fairness when it exercises its power justly to all its stakeholders.
Examples of unethical examples
*Deliberately falsifying information on
tax returns.
*Classifying an employee as a
contractor to reduce payroll taxes and
avoiding other compulsory deductions.
*Using bait and switch or false
advertising tactics to lure customers in
or convince them to buy a product.
Meaning of Professional Behaviour
● It includes issues such as appearance, communication, responsibility, knowledge, skills, etc.
● An example of professionalism is a business person who is dressed in a suit and tie, has good
manners, and shows good business sense.
● A professional person will also make good use of work time, treating all people with respect, and keeping the business’s and client’s information confidential.
Examples of professional business practice
● Treating all colleagues and clients the same.
● Taking responsibility for your actions, for
example, admitting your mistakes.
● Exercising reasonable work morale and self-motivation.
● Using polite language with colleagues and
clients.
Differance of professional behavior
● Set of standards of expected behaviour.
● Applying a code of conduct of a profession or business.
● Focuses on upholding the reputation of a
business/profession.
●Refers to what is right/wrong/ acceptable
in a business.
Difference of ethical behaviour
● Involves following the principles of right
and wrong in business activities/practices/dealings.
● Forms part of a code of conduct to guide
employees to act ethically.
● Conforms to a set of values that are
morally acceptable.
Refers to the principles of right and
wrong/acceptable in society.
Examples of unprofessional business practice
● Giving some people special favours.
● Overstating the number of hours worked.
● Being unprepared for assignments or
tasks.
● Creating false impressions and providing
misleading information.
● Unauthorised use of business resources.
meaning of king code principle
The King Code was developed by the former Judge of the High Court, Mervyn King and by the King Commission. The King Code aims to set a code for ethical and effective leadership by the board of directors.
Ways in which businesses can apply the Three King Code principles for Good
Corporate Governance
(TRANSPARENCY)
● Decisions/Actions must be clear to all stakeholders.
● Staffing and other processes should be open and transparent.
● Employees/Shareholders/Directors should be aware of the employment policies of the
business.
● Auditing and other reports must be accurate/available to shareholders/employees.
● Regular audits should be done to determine the effectiveness of the business.
Ways in which businesses can apply the Three King Code principles for Good
Corporate Governance
(ACCOUNTABILITY)
● There must be regular communication between management and stakeholders.
● The company should appoint internal and external auditors to audit financial statements.
● The board should ensure that the company’s ethics are effectively implemented.
● Businesses should be accountable/responsible for their decisions/actions.
● Businesses should present accurate annual reports to shareholders at the Annual General Meeting (AGM).
Ways in which businesses can apply the Three King Code principles for Good
Corporate Governance
(RESPONSIBILITY)
● The business/board should develop and implement programmes that should be aimed at protecting the communities in which they operate.
● The business/board should develop remedial programmes to protect the environment, for example, reduce air and water pollution.
Ways in which Professional, Responsible, Ethical and Effective business practice
should be conducted
● Business decisions and actions must be clear/transparent to all stakeholders.
● Businesses should be accountable /responsible for their decisions and actions/patent rights.
● The business should hire honest/trustworthy accountants/financial officers with good credentials to ensure transparent recording and financial statements.
● The payment of taxes must be regular/timeous, and the business must disclose all needed information to SARS and not find loopholes to avoid paying taxes.
● The business should draw up a code of ethics/conduct. This document must state acceptable behaviour in the business.
● There must be ongoing development and training for all employees of the business.
Meaning of Types of Unethical Business Practices
● Unethical behaviour on the part of the company and its management creates a situation where employees feel ashamed or embarrassed by their company, its product or service, or their role in it.
● It is as if they are doing something wrong by association.
Types of Unethical business Practices and Examples
(Pricing of goods in rural areas)
● Businesses often charge high/exorbitant prices for goods in rural areas.
● People in rural areas are often not able to compare prices of different retailers.
● They are forced to buy from one local store, placing them at the mercy of greedy shopkeepers who inflate prices.
Types of Unethical business Practices and Examples
(Unfair advertising)
● Unfair advertising is also known as false or deceptive advertising.
● This refers to the use of false or misleading statements in advertising, leading to the misrepresentation of the concerned product, which may negatively affect consumers.
● Examples of unfair advertising can be a false claim about the characteristics of the goods or service, such as if a product is a
different colour, size or weight compared to what is being advertised.
Taxation/Tax
evasion
● Tax evasion is an illegal activity in which a person or entity deliberately avoids paying a true tax liability.
● Those caught evading taxes are generally subject to criminal charges and substantial penalties.
● To wilfully fail to pay taxes is an offense.
Challenges posed by Unfair Advertising as an unethical business practice:
(Unfair Advertising)
● Deceptive advertising can violate the trust of consumers and destroy business relationships.
● Businesses can make unwise advertising choices when they are under pressure to increase their profits.
● Unfair advertisements could negatively affect consumers.
Strategies to deal with Unfair Advertising in the workplace
● Businesses should be encouraged to keep their advertising fair and in line with the constitution.
● Businesses must make sure not to omit key information from the advertisements.
● Advertisements should be honest/legal and not abuse consumer’s trust/lack of knowledge.
●Businesses must report unfair advertisements by competitors to the Advertising Standards Authority (ASA).
Challenges posed by pricing in rural areas as an unethical business practice
(Pricing in Rural Areas)
● Some businesses in rural areas exploit their customers by inflating their prices, and this could lead to disloyalty from their customers.
● Businesses may experience decline in sales due to high cost added into the price of the final product.
● Businesses may form monopolies in rural areas and increase their prices unilaterally which may result in heavy fines.
Strategies to deal with Pricing in Rural Areas in the workplace:
● Businesses must charge fair/market-related prices for goods and services.
● The business must be willing to avoid unethical business practices to attract customer loyalty.
● They must investigate cost-effective ways of transporting products/Hire a large truck to combine deliveries to shop-owners in the same area.
● The businesses must work together with suppliers to share delivery costs to remote rural areas.
Strategies to deal with Taxation/Tax Evasion in the workplace:
● Value Added Tax/VAT needs to be charged on VAT-able items.
● Submit the correct tax returns to SARS on time.
● All products should be correctly invoiced and recorded.
● Disclose all sources of income for tax payment purposes.
● Keep abreast with the latest SARS regulations and tax laws.
Challenges posed by Taxation/Tax Evasion as an unethical business practice
(Taxation/Tax Evasion)
● Businesses may pay heavy fines for evading tax.
● Tax evasion may negatively impact on the business image.
● The accountant may be charged high fees for falsifying financial statements.
● Businesses may lose key stakeholders if the act of tax evasion is reported.
Types of unprofessional business practices and Meaning
(Sexual harassment)
● Involves unwanted and unwelcome attention of a sexual nature from
someone at work.
