Ethics and Business Ethics

This article discusses a case study involving ethical, corporate governance, and legal issues. It also provides frameworks for resolving ethical dilemmas. The case study involves the hiring of an individual with fake certificates who later faced charges of sexual harassment. The article also discusses frameworks provided by ICAEW and the National Association of Social Workers for resolving ethical dilemmas.

Running Head: ETHICS AND BUSINESS ETHICS
Ethics and business ethics
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Part A
Case Facts
In this chosen case study it can be stated that after the retirement of Emanuel Philander,
the managing director of Mnandi, the sub-committee of Human Resource staff at Mnandi
decided to place an advertisement in order to replace Emanuel. The Committee had shortlisted
three applicants who were worthy and qualified for the position. However, the application of
Ghundle Meterr was selected as he possessed the degrees of B.Com (Law) CA(SA) and had
the experience of working as the head advisor of an investment advisory company in the Annual
Financial statements of the company. There were rumours circulating in the social media about
the validity of the certificates produced by him.
However, sub-committee of Mnanadi decided to ignore such rumours and hired him. It
can be said that after being hired Ghundle faced charges of sexual harassment and it was also
discovered later that the signatories of his degrees had been appointed after the after the date of
the signatures made by them. However, the chairperson of Gargoyle, the holding company of
Mnandi Insurance Company limited seemed to be satisfied and took no further action.
It is to be stated that in the chosen case study there are ethical, corporate governance and legal
issues involved.
Ethical Issues
Firstly, it can be noted that it was unethical on the part of the sub-committee to hire
Ghundle without inspecting the validity and authenticity of the certificates produced by him prior
to hiring him. Further it is to be stated that the act of sexual harassment committed by Ghundle

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was unethical. According to the theory of Virtue Ethics it can be said that the actions of a person
reflect his virtues and moral character (Peters, 2015). It is different from the theories of
Utilitarianism and Deontology. Utiltitarianism focuses on the maximum benefit for the most
number of people (Westermarck, 2017). The deontology theories focus on the duty and
responsibility of individuals (Vaughn, 2015). Thus by applying the principles of the theory of
Virtue ethics it can be stated that the act of producing fake certificates and the act of sexually
harassing a person were unethical as they reflected poor moral character on his part.
Corporate Governance Issues
It can be stated according to the stakeholder theory of corporate governance that
corporate entities are accountable to a broad number of stakeholders (Du Plessis, Hargovan, &
Harris, 2018). It is to be stated that the Stake holder theory is defined as any group of individuals
who can affect or are affected by the activities of the business and the fulfillment of the
objectives of the organization (Bosse & Phillips, 2016). This theory states that managers of an
organization share relationships with suppliers, employees and business partners. It can be stated
that the stakeholder theory focuses on the outcomes of business operations which affect the
stakeholders (Hörisch, Freeman, & Schaltegger, 2014). Applying the principles of this theory to
the chosen case study it can be stated that it was the duty of the sub-committee to inspect the
authenticity of the certificates produced by Ghundle.
According to the agency theory of corporate governance it can be stated that the
shareholders are the main owners of the company and the managers of the company are merely
the agents who have been delegated the responsibility to perform the operations of the company
on behalf of the shareholders (Bosse & Phillips, 2016). Thus according to this theory it can also
be stated that it was the duty of the Human Resources sub- committee to inspect the certificates

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of the applicants and interview them in order to hire one of them as the managing director. They
had been delegated this responsibility by the shareholders of the company Mnandi which they
failed to perform.
Leal Issues
The legal issues that can be identified in this chosen case study are forgery and sexual
harassment in the workplace. It is to be stated that Forgery, fraud, theft and extortion are all
broadly classified under the term corruption. According to chapter 2 of the Combating Corrupt
Practices Act 2004 it can be stated that any person who offers or accepts any gratification which
amounts to improper and unauthorized inducement to act or not act in a certain way would be
considered to be guilty of corruption.
To be more specific the common law defines Forgery to be any activity which is involves
intentionally and unlawfully producing false document to the actual prejudice of another
document.
Sexual Harassment in the workplace is prohibited in South Arica by the Labor laws of
South Africa. It is to be stated in accordance with The Code of Good Practice on the Handling of
Sexual Harassment Cases that any unwanted conduct which is sexual in nature and which
violates the rights of the employee and also creates a barrier in the achievement equity n the
workplace is defined sexual harassment. It can be stated sexual harassment can include physical
conduct, verbal and nonverbal conduct. Sexual Harassment is also prohibited under the
Protection from Harassment Act No. 17 of 2011.

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Part B
It is to be stated that people often face the ethical dilemma regarding what should be done
when they are presented with the choice of actions, where each action has a different
consequence. Ethical decision making can be a difficult task as the person presented with such a
challenge has to evaluate and assess the consequences of the decision and also whether such
decision is ethically correct. It can be said that there are several frameworks and guidelines
available and which aim to resolve ethical dilemmas of individuals.
ICAEW framework-
According to this framework individuals need to follow the steps as enumerated below for
the purpose of resolving ethical dilemmas (Shaub & Braun, 2014).
 Gathering relevant information in order to identify the problem
 Identify the parties who are affected
 Consider the ethical issues involved in relation to the ICAEW’s Code of Ethics
 Identifying the fundamental principles which are affected
 Referring to the internal procedures of the concerned organization
 Evaluating and Considering alternate courses of action.
 Implementing the course of action and monitor the progress
In relation to the aforementioned framework it can be stated that in this given case study the
information received unofficially from the friend of the admin clerk needs to be verified. To
solve any ethical dispute or dilemma it is of utmost importance to gather relevant information. In
this case the news of the huge profit made by the company and the directors and from which the
workers of the company who did not work on-site were deprived needs to verified. It is

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important to have clarity of the situation in order to remove assumption which could cloud the
judgment of an individual.
The next step is to identify the affected parties. In this case if the news as mentioned
above turns out to be true, the parties affected would be the on-site workers who worked very
hard and in adverse situations for a period of one year and were rewarded insufficiently. The
workers of the company who did not work on-site would be also affected as they were not given
any rewards out of the profits made by the company. Conflicts could arise between the directors
and employees as the directors of the company made substantial gains in spite of not working
overtime.
The ethical issue that can be identified in this case is that the profits made by the
company were not disclosed to the employees, the employees did not have transparency about
the profits made by the company.
The next step is to assess the fundamental principles that were affected. In this case the
directors acted in their self interests and did not exhibit integrity.
The next step according to this framework is determining the course of action. In this
case it can be stated that it would be in the best interest of the workers of company to disclose the
information received. However, disclosing this information would result in acting in breach of
confidentiality. However, it can be stated that this would be fair as the employees of the
company deserve to know about the operations of the company and the profits earned by such
operations
The final step is to ensure that record of the information is kept as it would be essential in
justifying the decision taken by the individual faced with the ethical dilemma.

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National Association of Social Workers framework-
The main factors that need to be taken into consideration for resolving an ethical dispute are:
 Identifying the people involved and identifying those who are likely to be affected
 Identifying the proposed action to be taken and considering the legal issues involved
 Identifying the alternative actions that could be taken
 Identifying the social values in conflict
 Identifying who has the right to make the decision (Edwards & Addae, 2015).
In this chosen case study it can be said that the people who are likely to be affected by the
decision taken are the workers who worked on-site, the workers who did not work on-site and
the directors who have unscrupulously benefited from the profits made by the company from the
deal.
In this case the proposed action would be to inform the workers about the information
received and reveal the information which the directors of the company had chosen to suppress
from the workers.
The alternate action in this given scenario would be to not reveal any information to the
workers as such information has been received in confidence from a friend who has vouchsafed
for revealing it to anyone.
The social values of fairness and maintaining transparency in the operations of the business
are involved in this scenario.

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It can be said that in this case study, it is the responsibility of the admin clerk to make the
ethical decision as the admin clerk is the only person who has received the relevant information
from his friend.

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Bibliography:
Bosse, D. A., & Phillips, R. A. (2016). Agency theory and bounded self-interest. Academy of
Management Review, 41(2), 276-297.
Broad, C. D. (2014). Five types of ethical theory (Vol. 2). Routledge.
Du Plessis, J. J., Hargovan, A., & Harris, J. (2018). Principles of contemporary corporate
governance. Cambridge University Press.
Edwards, B., & Addae, R. (2015). Ethical decision-making models in resolving ethical dilemmas
in rural practice: Implications for social work practice and education. Journal of Social
Work Values and Ethics, 12(1), 88-92.
Hörisch, J., Freeman, R. E., & Schaltegger, S. (2014). Applying stakeholder theory in
sustainability management: Links, similarities, dissimilarities, and a conceptual
framework. Organization & Environment, 27(4), 328-346.
Peters, R. S. (2015). Ethics and Education (Routledge Revivals). Routledge.
Shaub, M. K., & Braun, R. L. (2014). Call of duty: A framework for auditors’ ethical decisions.
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Tricker, R. B., & Tricker, R. I. (2015). Corporate governance: Principles, policies, and
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Westermarck, E. (2017). Ethical relativity. Routledge.