Some Ethical Issues in the Corporate World

2.Some Ethical Issues in the Corporate World

2.1 Conflict of interest

A conflict of interest is a situation in which an individual or business is involved in multiple interests and serving one interest could involve working against another. For example, someone who is in the position to make decisions on granting tenders has a family member who is submitting tenders for a project.

More examples on conflict to interest:

○ A supervisor has a relative or close friend who reports to them which affects their job responsibilities, salary, and promotions.

○ A manager dating an employee who reports to him or her.

○ An employee works part-time in the evening for a company that makes a product that competes with the products of his full-time employer.

○ A member of the company board of directors accepts fees and provides advice to a company that is in direct competition with the company on whose board of directors he sits.

○ A purchasing agent accepts trips and gifts from a supplier and then selects that supplier's products for purchase by the company.

○ An employee sets up a personal website on which he sells his employer's software products.

2.2 Bribes, Corruption and Inappropriate gifts

○ When a gift is inappropriately large and given to persuade someone to act in one’s favour, it is seen as a bribe.

○ Corruption is the misuse of public power (by elected politicians or appointed civil servants) for private gain.

○ Inappropriate gifts may be linked to sexual harassment; for example, a senior manager giving junior employees jewelry, perfume or other gifts of that nature.

2.3 Sexual Harassment

It may be defined as unwelcomed and uninvited sexual advances, both physical or verbal; normally from an authority figure to a subordinate.

Sexual harassment is not confined only to giving inappropriate gifts or other overt sexual behaviour, but may include sexually explicit comments, signs, innuendos, phone calls, emails, SMSs, voyeurism, intrusion of privacy and any other act that makes the recipient feel uncomfortable.

2.4 Unauthorised use of funds may include, but are not limited to:

○ Fraudulent invoices or payment requisitions.

○ Forged signatures (a huge issue when it comes to encrypted and electronic signatures).

○ Unauthorised electronic payments.

○ Skimming accounts (transferring small, seemingly insignificant amounts from customers’ accounts on the assumption that they will not notice).

2.5 Tax Evasion

Tax evasion is when a person does not disclose all income or lies about income to SARS. This differs from tax avoidance where one applies legitimate tax deductions.

2.6 Unfair Advertising

Examples of unfair advertising:

○ False labeling – When incorrect information is put on product labels, such as claims that products are ‘MSG free’ when they are not.

○ Hidden fees – These are extra fees which are not specified in the advertised price, such as activation fees for cell phones or pre-delivery inspection charges on a new car.

○ Misusing the word "free" – When the sale is "Buy one. Get one free," the second item is not really free because you have to buy the first one.

○ Fillers – Food often has fillers to increase its weight, like meat injected with broth or brine.

○ Misleading illustrations – An example is showing the product in a picture as being bigger than it actually is, something which is often a problem in fast food advertising.

○ Bait and switch – This is advertising one product and substituting a similar product at a higher price, claiming that the advertised product is unavailable or sold out.

2.7 Employment/labour issues

○ Internet, email and cell phone issues.

With modern communication methods, come modern moral dilemmas ranging from employees visiting pornography and other questionable websites to forwarding morally corrupt or damaging emails and WhatsApps (e.g. spreading false rumours, forwarding compromising photos or confidential information). Twitter, Instagram and Facebook (and the countless others) also have the potential to destroy reputations and disseminate damaging information. ○ Stealing from the company.

There is the old ‘joke’ about a father being called by the police after his son was caught shoplifting in a stationery shop. On arrival the father wanted to know why his son had not told him he needed

Tippex because he would have brought him some from work. Do you see the irony? And what about padding expense accounts to obtain reimbursements for questionable business expenses; for example, personal meals, golf rounds etc. If the employee uses company property for personal use without proper authorisation, is he stealing from the company?