Module 3 • Ethics and social responsibility


Enforce the code fairly and consistently You, as the manager, must take action when you discover ethical violations. Employees must know that ethical code violations will be punished. This should preferably also form part of the disciplinary code of the business.


Other steps are: • Hire the right people • Conduct ethical training • Set an impeccable ethical example • Involve employees in establishing ethical standards


Establishing a workable ethical programme is no easy task and will take time to develop. The aim should be to create an ethical culture in your business.


Activity 4 Draw up an ethical chart for your business given your own values, nature of your business and the environment within which you are doing business.


4. Social responsibility


In its most basic form, social responsibility refers to an obligation that a person or business has towards other individuals or communities. However, many questions need to be asked, such as: • Who is to benefit? • Who is responsible for that? • Is it small businesses, bigger business, only those that makes a profit or is it the government’s responsibility?


• Is that not why we are paying taxes? • What type of responsibility is this and who determines that? • How far does this responsibility go?


4.1 Views on social responsibilities


A popular belief is that a business’s only social responsibility is to a make a profit – to use its resources and engage in activities designed to increase its profits. This means that there are not many people around that start a business out of a humanitarian approach. Businesses argue that although it is not a person’s intention, his/her actions mean that the economy is growing, employment is created and taxes are paid.


A second approach is the regulation-imposed view. It claims that the only way to ensure that companies act in a socially responsible manner is through government regulation.


The third approach is the benefit view. The belief is that long-term benefits that a business will receive from a social responsibility programme outweigh the costs incurred. However, this must be pointed out to them. What follows is written from this mutual benefit or a win/win point of departure.


It must be accepted that in most cases where people start a business, they are acting in their own interest. The reasons for starting a business were discussed in the previous course but could be the following: • To make money • Want to prove to yourself that you can make a success • Current position is not challenging enough • Want to get away from a bad boss


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