Week 2:- Chapter 3

COBMA3-B11: Strategic Management

Lourens Beyers
Chapter 3
NB-Learning Objectives P95
1. Why good ethics is good business (P96)
-Research has shown that companies
displaying a clear commitment to ethical
conduct consistently outperform companies
that do not display ethical conduct.
-Does it pay to be ethical in Business?
Yes it pays off in financial terms.
-The importance of business ethics is
sweeping the USA & the rest of the business
world.
-Good ethics is good business.

-NB: Table 3-1: Seven Principles of Admirable

Business Ethics (P. 98)
2. Examples of unethical business
practices:
-misleading advertising or labelling.
-Causing environmental harm.
-Poor product of service safety.
-Padding expensive accounts.
-Insider trading.
-Dumping banned or flawed products in
foreign countries.
-Not providing equal opportunities- for
women & minorities.
-Overpricing
-Sexual harassment.
-Using company funds or resources for
personal gain.
3. How to establish an ethics culture
(p99).
A new wave of ethics has surfaced regarding
the following: (P99)
 Product safety
 Employee health
 Sexual harassment
 Handling workers with Aids in the
workplace.
 Affirmative action.
 Waste disposal
 Cover ups.
 Takeover tactics.
 Conflict of interest.
 Inappropriate gifts
NB- Clear code of ethics must be developed
to establish a code of ethics in a company.
-Employees must also be punished for
violating the ethics code.
Whistle-Blowing (P100)
-Refers to an employee’s reporting unethical
violations they discover or see in the
organization.
-Organizations should have policies
encouraging whistle-blowing.
-Ethical considerations should be included in
the strategic planning process and
performance appraisal of employees.
Avoid Bribery (P101)
-Managers, organizations and organizations
should avoid primary.
-Bribery is defined as the offering, giving,
receiving, or soliciting of any item of value to
influence the actions of an official or other
person in the functioning of his/her duties.
-A Bribe is a gift bestowed to influence a
recipient’s conduct.
- The gift may be money, goods, actions,
property, and privilege, object of value, or
merely a promise or undertaking to induce or
influence the action, vote, or influence of a
person in an official or public capacity.
-In some foreign countries paying bribes and
kickbacks are acceptable.
Workplace Romance (P102)
-Workplace romance is an intimate
relationship between two consenting
employees
-Sexual Harassment is broadly unwanted
sexual advances, requests for sexual favours,
and other verbal and physical conduct of a
sexual nature.
-Workplace romance can be detrimental to
workplace morale and productivity for a
number of reasons: (P102)
 Favourism complaints may arise.
 Confidentiality of records can be
breached.
 Reduced quality and quantity of work can
become a problem.
  Personal arguments can lead to work
arguments.
 Conflicts of interest may arise

Design and articulate a social policy.

(P104)
-Social policy refers to the social responsibility
the firm has towards employees, consumers,
environmentalists, minorities, communities,
shareholders and other groups.
- Organizations should strive to to engage in
programmers that have economic benefits.
Table 3-2 Ten Best social responsibility
companies in the World (105)
Social policies and retirement (P104)
See prescribed book.
Environmental stability (P105)
--Ecological challenges are facing all
organizations
-Managers are required to formulate
strategies the preserve and conserve natural
resources and control pollution.
-Special natural environmental issues include:
ozone depletion, global warming, depletion of
rain forests, destruction of animal habitats,
protecting endangered species, developing
biodegradable products, waste management,
clean air, clean water, erosion, destruction of
natural resources, and pollution control.
-Firms increasingly develop green product
lines that are biodegradable and made of
recycled products.
- Managing environmental affairs have
become very important for a company’s
public image.
-Business must not exploit or disseminate the
natural environment.
- Consumers, governments, employees, and
societies are particularly resentful towards
companies that that harm the environment.
Which firms are the best environmental
stewards? (p106)
See table 3-3 (P106)
Sustainability Reports (P107)
- A sustainability report reveals how a firms
operations impact on the natural
environment.
- This document discloses to shareholders
information about the firms labour
practices, product sourcing, energy
efficiency, environmental impact, and
business ethics practices.
- No business wants a reputation as a
polluter.
Wildlife Welfare (P109)
-Consumers globally are becoming
increasingly intolerant of any business or
nation that directly or indirectly destroys
wildlife. Especially endangered wildlife!
Food supplies and Animal welfare (P111)
-Humane treatment of animals matters!