Ethics and Social Responsibility
Domain 12: Ethics and Social Responsibility. Tests the difference between legal and ethical, the main ethical risks in business, and how corporate social responsibility is argued and evaluated.
Ethics in practice
Ethics are the principles guiding right and wrong conduct beyond legal minimums. Typical issues: truthful advertising, fair pricing during shortages, product safety, honest tax reporting, fair treatment of staff, avoiding bribes and conflicts of interest (the Anti-Corruption Commission Act 8 of 2003 makes offering or receiving gratification corruptly an offence), protecting customer data and reducing environmental harm. Tools include a code of conduct, whistle-blowing channels, disclosure of conflicts and the public-defence test: would I defend this decision openly?
Social responsibility
Corporate social responsibility is a business's obligation to stakeholders: owners, employees, customers, suppliers, community, government and environment. The triple bottom line measures profit, people and planet. Responsibility may be philanthropic (donations, sponsorship), operational (safe production, fair wages) or strategic (local sourcing). Benefits: reputation, customer loyalty, staff retention, easier licensing and finance, fewer disputes. Costs: money and time diverted from operations.
Worked example
A supplier offers a shop's buyer N$2 000 to accept overpriced, short-dated stock. Reasoning: those affected are the owner (loss), customers (spoiled goods), other suppliers (unfair competition) and the employee (job and prosecution). The payment is illegal under anti-corruption law and breaches the duty to act in the employer's interest. Correct action: refuse, disclose the offer in writing and record the decision, then review purchasing controls.
Traps
- Equating ethical with legal; something can be legal and still unethical.
- Treating social responsibility as charity only, ignoring conduct towards workers and customers.
- Claiming responsible practice always pays; costs and greenwashing must be evaluated.
- Ignoring whistle-blower protection and the effect of unethical conduct on morale.