The ethics programme : a new competitive advantage

Adam, Hassan Ali (2011-12)

Thesis (MBA)--Stellenbosch University, 2011.

Thesis

ENGLISH ABSTRACT: In the world of business today, the reputation of an organisation matters tremendously. After the global financial crisis in 2008-2009, it has never been more difficult for organisations to maintain a positive reputation. The past decade differs from previous ones, as rules and regulations enforced by regulatory bodies are more rigid, public criticism and expectations are greater and the emotional contracts between employees and leadership are not as strong as they once were. The financial services industry, in South Africa and abroad, has been inundated by unethical behaviour and the global downturn has exacerbated this problem. In light of the revelations that have come to pass worldwide, the magnifying glass has been firmly fixed on companies operating within the financial services sector. The crisis has led to numerous companies questioning and reviewing their own compliance and organisational practices to establish whether they are ethical. In the South African financial services industry there has been a war raging among organisations fighting for market share. With the increased competition levels among businesses, there is a desire to find new and creative ways of achieving competitive advantage. Business ethics, therefore, has become essential in the conducting of any type of business. The competitive advantage of business ethics revolves around the building of relationships with organisational stakeholders based on its integrity, which will maintain these relationships. By establishing an ethics programme, an organisation could enable the management of business ethics in the workplace. Ethics programmes often convey the values of the organisation, making use of policies and codes to guide behaviour and the decision-making process of stakeholders. These programmes could be used, during turbulent times, to maintain a moral path, especially when leaders require a clear moral compass for guidance. This moral compass function is also very helpful for new employees, as they may need to be familiarised with ethically correct behaviour within the organisation that aligns with its values. If employees are satisfied with the ethics programme, it could work as a mechanism to stimulate productivity, teamwork and to motivate personnel. A study was conducted within a private sector organisation in the South African financial services industry with a focus on evaluating the effectiveness of their ethics programme. The findings from the fieldwork established that the ethics programme of the organisation was found to be highly effective, as perceived by both employees and directors. An effective ethics programme means that the ethical culture of the organisation is strong. The findings serve to confirm that, by monitoring the key variables that play an important role in predicting the effectiveness of ethics programmes, organisations can achieve a positive result by knowing what the impact of potentially harmful behaviour can have on the ethical climate and culture. The findings also serve to confirm that an effective ethics programme can become a source of competitive advantage if engaged correctly by the entire organisation. This study may be used to argue that sound business ethics and ethics programmes can be viewed as a new competitive advantage that organisations require for long-term sustainability and business success.

AFRIKAANSE OPSOMMING: In vandag se sakewêreld is die reputasie van ’n organisasie geweldig belangrik. Sedert die globale finansiële krisis in 2008-2009 is dit vir organisasies moeiliker as ooit om ’n positiewe reputasie te handhaaf. Die afgelope dekade is anders as die voriges omdat reëls en regulasies wat deur reguleringsliggame afgedwing word, meer rigied is, openbare kritiek en verwagtinge groter is, en die emosionele kontrakte tussen werknemers en leierskap nie meer so sterk is as vroeër nie. Die bedryf van finansiële dienste – in Suid-Afrika en in die buiteland – is erg geteister deur onetiese gedrag, en die globale insinking het dié probleem vererger. In die lig van onthullings wat wêreldwyd plaasvind, word die vergrootglas ferm gerig op maatskappye wat binne-in die finansiëledienste-sektor sake doen. Die krisis het tot gevolg gehad dat talle maatskappye hul eie reëlnakoming en organisatoriese praktyke bevraagteken en hersien om vas te stel of hulle wel eties is. In die Suid-Afrikaanse (SA) finansiëledienste-bedryf het daar onder organisasies ’n oorlog om markaandeel gewoed Met die toenemende vlakke van mededinging onder sake-ondernemings, is daar ’n begeerte om nuwe en kreatiewe maniere te vind om mededingende voordeel te bereik. Sake-etiek het dus noodsaaklik geword om enige soort besigheid te bedryf. Die mededingende voordeel van sake-etiek draai om die bou van verhoudings met organisatoriese aandeelhouers, gebaseer op hul integriteit wat hierdie verhoudings in stand gaan hou. Deur die vestiging van etiese programme kan ’n organisasie die bestuur van sake-etiek in die werkplek moontlik maak. ’n Etiese program dra dikwels die waardes van die organisasie oor met die gebruik van beleid en kodes as riglyne vir gedrag en die besluitnemingsproses van aandeelhouers. Hierdie programme kan in onstuimige tye gebruik word om ’n morele weg te handhaaf, veral wanneer leiers ’n helder morele kompas nodig het vir leiding. Die funksie van hierdie morele kompas is ook baie nuttig vir nuwe werknemers omdat hulle vertroud wil raak met eties korrekte gedrag binne-in die organisasie wat in lyn is met sy waardes. As werknemers tevrede is met die etiese program, kan dit dien as meganisme om produktiwiteit en spanwerk te stimuleer, asook om hulle te motiveer. ’n Studie wat binne-in ’n organisasie in die private sektor van die Suid-Afrikaanse finansiëledienste-bedryf gedoen is, het gefokus op evaluering van die doeltreffendheid van hul etiese program. Die bevindings van die veldwerk het gestaaf dat die etiese program van die organisasie hoogs doeltreffend was, soos waargeneem deur die werknemers en direkteure. ’n Doeltreffende etiese program beteken dat die etiese kultuur van die organisasie sterk is. Die bevindings dien as bevestiging dat, deur die monitering van die belangrikste veranderlikes wat ’n belangrike rol speel in die voorspelling van die doeltreffendheid van etiese programme, organisasies ’n positiewe uitslag kan bereik indien hulle weet wat die impak van potensieel skadelike gedrag op die etiese klimaat en kultuur kan hê. Die bevindings bevestig ook dat ’n doeltreffende etiese program ’n bron van mededingende voordeel kan word as dit korrek deur die hele organisasie omarm word. Hierdie studie kan gebruik word in ’n betoog dat gesonde sake-etiek en etiese programme beskou kan word as ’n nuwe mededingende voordeel wat organisasies benodig vir langtermynvolhoubaarheid en sake-sukses.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/21433
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