Question: Use examples from the extract to distinguish between the amoral, the survival and the reactive mode modes of managing ethics as illustrated in at least one of the organisations and the implications of this on organisational growth
case Study -
Corporate corruption — as seen at Steinhoff, one
of South Africa’s largest companies, which announced in December 2017 that it had committed
“accounting irregularities” — are, for many citizens, not isolated incidents, but reflect a culture of systemic
corruption in the private sector. The roll call of corruption in the private sector almost mimics that in the
public sector. In 2017, three South African banks were implicated among 17 banking groups of collusion
to fix the price of the rand, after an investigation by the Competition Commission since 2015.
In November 2017, the department of water affairs and sanitation revealed that 36 mines operate without
water licences, in violation of the National Water Act. They use water and waste and pollute without being
monitored by the department. In five case studies on mines ranging from platinum to coal by the Centre
for Applied Legal Studies (at the University of the Witwatersrand in 2018 found that very little of the social
and labour plans mining companies signed up to were implemented. The study found that mining
companies have spectacularly failed to build houses, provide childcare and bursaries as well as training.
In most cases the companies also did not tell employees and local residents about their promised social
and labour plan commitments.
Residents have chased mining companies away from setting up operations even if such investments
would create jobs, business opportunities and infrastructure locally. Yet, local and foreign company
executives are often perplexed about why they are rejected by local residents or why they are criticised
when they supposedly create jobs and bring new investments and opportunities. For example, people
increasingly fear mining companies will destroy the environment, strike black economic empowerment
deals with dodgy traditional leaders and politically connected cadres, who would b e expected by the
companies to shield them from citizens’ pressure when they damage the environment, fail to adhere to
mining licence conditions of providing social housing and supplier opportunities for local small business.
The residents surrounding Lonmin have, since 2016, embarked on protests against the company’s
alleged failure to build promised low-cost housing, which forms part of the company’s obligations under
its mining operating licence condition.
Legal action by citizens against errant companies are also on the increase. Last year law firms launched
class action lawsuits totalling R400-million against Tiger Brands over the deadly listeriosis outbreak of
2017, in which 200 people died. Aaron Motsoaledi, the health minister at the time, said in 2018 that the
outbreak of listeriosis had been traced to an Enterprise Foods facility in Polokwane. Many black South
Africans were, in the past, critical of businesses for their active collaboration with apartheid practices such
as racial divisions of labour in the workplace, which deprived generations of black people of opportunities,
skills and benefits. Others have been critical of business based purely on ideological reasons, arguing
wrongly that only the state can deliver on inclusive development.
Companies — especially mining companies or those that produce goods intended mainly for black
people, but now increasingly other companies — are being asked to fulfil a “social licence” to
operate. Such a licence is seen as “having the approval, the broad acceptance of society, to conduct its
activities”. Corruption, ethical breaches and behaviour inconsistent with declared organisational values
undermine the companies’ credibility and erodes trust, public approval and, ultimately, social
commitments.
Corporate democratic citizenship means companies that behave — pursue growth and profit and work
with the external environment, stakeholders and society — according to the values of South Africa’s
democratic Constitution. The traditional corporate social responsibility programmes won’t do anymore.
Neither will token black economic empowerment, affirmative action and taking customers for granted.
Democratic corporate citizenship is not only reflected in the way a company works with its external
environment, but also its internal corporate culture. It means within the company it must strive for gender
equality, non-racialism, diversity and ethical decision-making. They should behave ethically, be socially
responsible and safeguard the natural environment. Democratic corporate citizenship is crucial for a
company if it is to secure the “social licence” to operate from society.
Question:
Use examples from the extract to distinguish between the amoral, the survival and the reactive
mode modes of managing ethics as illustrated in at least one of the organisations and the implications of
this on organisational growth
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