Business Studies

Professionalism and ethics

Introduction

• Enterprises realize that they cannot exist in isolation but must interact with the various environments
• Many institutions in south Africa have their own code of conduct and a commitment to ethical and professional behavior

Difference between professionalism and ethics

Professionalism

• Apply a code of conduct set by a business or a profession
• Focuses on uploading the reputation  of the profession or business

Ethics

• About the standards of conduct that are acceptable to society
• Forms part of the code of conduct

Principles of professionalism

• Objectivity

Employees should remain objective and act in a way that is fair and just to all without bias favour

• Respect

Employees should respect the dignity and rights of others and the image of profession or business

• Confidentiality

Employees should not divulge any details of the business or clients to others or use confidential information for their own benefit

Applying the principles and skills of professional, responsible, ethical and effective business practices

• Its expected of businesses to adhere to the following principles:

Offer good service

Not to harm the environment

• Businesses should have the following:

A code of conduct

A code of ethics

Ethical business venture

• Many businesses are striving to be more ethical and to be seen to be more ethical
• Businesses are also trying to improve their corporate governance
• To apply with the king code of governance  for South Africa
• Many businesses have joined business unity south Africa and ethics institutes of South Africa

Conclusion

Socio economic issues

Introduction

• Socio economic issues have a huge impact on businesses
• It is the interest of the business to try to lessen the impact by understanding each of the issues

Income

• There are huge inequalities  in the income levels of people in south Africa
• With a large portion of the people of the country living in poverty in poverty, the buying power of the people is low and businesses are unable to grow and prosper

Inflation

• As the value of money is reduced due to inflation, consumers buying power decreases  and sales of the businesses decreases
• Reduced sales figure, could lead to the business implementing cost saving methods
• Staff retrenchments is often the result, leading to high unemployment figures and further reduction in the buying power of the consumers

Social, cultural and demographic issues

• South Africa’s population is made up of diverse cultures, languages and religions
• Business must use diversity as an asset in making the business work because different people all provide different perspective s customers will have in the real world

Lack of skills

• South Africa has a serious shortage of skilled workers
• Businesses find it very difficult to recruit suitably skilled workers
• Businesses are getting more and more involved in job related education and in service training
• The SETAs where established in south  Africa to deal with the shortage of skills in the work place

Conclusion

• Business must come with possible solutions and strategies to deal with the issues

Business environments

p-

e- economic

s- social

t- technological

l- legal

e- environmental

Business sectors

Primary sector

• Obtain natural resources from nature
• Natural resources are sold to the secondary sector as raw materials

Secondary sector

• Convert raw materials into final goods for consumption by the consumer

Tertiary sector

• Refers to all the industries that offers services to other businesses and consumers
• Also known as the service industry

Dumping

• When company’s in-developed countries dump their products in the South African dumping destroys the ability of local businesses to be successful or to complete with powerful foreign businesses.
• We are unable to produce the same product at lower prices.
• Factories are closing down, it causes unemployment

Levels of control

• Micro environment

Management has full control over this environment

• Market environment

The business does not have full control over this environment but is able to influence them to a certain extent

• Macro environment
  Management has no control but is able to adjust to changes

Forward and backward linkage

1. Forward linkage

• Occurs when an enterprise sells goods and services to businesses in the same sector or businesses in other sectors
• E.g. electronic businesses making car radios, sell these radios to a car manufacturer who installs the radio into the car before selling it

1. Backward linkage

• Occurs when an enterprise buys goods  or services from businesses in the same sector or businesses in other sectors
• E.g. steel production is a backward linkage industry for a number of commodities such as corrugated iron sheet, machinery , cutlery and so on

Networking

Networking allows management to build new businesses relationship and to generate new business opportunities

Challenges in the market environment

• Competition
• Shortages of supply
• Changes in consumers behavior

Challenges in the micro environment

• Difficult employees
• Lack of vision and mission
• Strikes and go slows
• Lack of adequate management skills

Challenges In the macro environment

• Socio economic issues
• Labor restrictions
• Changes in income levels
• Political changes

Mergers

• When to businesses join together to function as a new business.

Takeovers

• The purchase of one company by another. It is a specific type of acquisition.

Alliances

• An association formed between organizations with similar interests, nature or quality for mutual benefit

Acquisition

• The purchase of a business by another business where both partners are in agreement

Lobbying

A process where a business intentionally sends out a representative to influence high level decision makers on certain aspects affecting the business

 3 Main forms of intellectual property

1. Copy right

• Is the exclusive right given to the creator of an original work

1. Patient

• Is an exclusive right granted for a new invention

1. Trade mark

• Symbol word/ combination of words legally registered or established by use as representing a company or product

NATURE AND PURPOSE OF LRA