This research examined the state of business ethics between Prospecton Brewery and its suppliers. The perceptions suppliers have of the level of business ethics practiced by Prospecton Brewery.
Research Objectives
The extent to which poor ethical practices occurred in suppliers' interactions with the brewery was not clear. Deficiencies in compliance with the ethics policy needed to be identified and the underlying reasons for any non-compliance understood in order to effectively manage improvements in Prospecton Brewery's ethical performance.
Importance And Benefits Of The Research
A better understanding of the factors affecting ethical performance in the brewery and the issues that required attention. The implementation of this study, with the support of Prospecton's brewery management, was in itself an indication of commitment and due diligence in relation to sound business ethics.
2 LITERATURE REVIEW
What Is Business Ethics And Why Is It Important?
The King 11 Report on Corporate Governance in South Africa (2002) has extensively researched and documented best corporate governance practices for businesses in South Africa. These authors leave no doubt that sound ethical behavior is critical to the long-term survival and prosperity of modern businesses.
Illustrative Ethical Cases
- Deontological Theories (Kantian Ethics)
The idea of justice can conflict with teleological theories in that society usually expects justice to be done regardless of the consequences. As an example, deontological theories would view bribery as wrong regardless of its consequences.
Evaluating Business Decisions for Ethical Acceptability
The problem is classified into the context of the first type or the second type depending on whether the moral and legal acceptance of the practice in the host country is related to or independent of the relative level of economic development of the host country. It is possible to do business successfully in the host country without doing an internship.
Why Does Illegal and Unethical Conduct Occur in Companies?
King 11 Report on Corporate Governance in South Africa
South African Breweries' Ethical Codes
Other Research Done On Ethical Attitudes and Perceptions
Top management should pay more attention to establishing the state of ethical behavior in their organizations. These recommendations strongly suggest that top management is key to the ethical performance of a company and must actively drive good ethical practices.
Exploratory Study
After the eight interviews were completed, the interview notes were scrutinized and important points/problems related to the subject of the research were highlighted.
Design And Pilot Testing Of The Measurement Instrument
- Suppliers Perceptions of Ethical Behaviour at Prospecton Brewery
Baumhart's statements were verbose, and many focused on clergy participation in business (not relevant to this research). The interactions described in the statements were devised by the author based on the issues that emerged from the exploratory study.
Sampling
Each vendor was then alternately assigned an index of one or two, starting with the lowest vendor number. Each vendor was then alternately assigned an index of one, two, three, or four, starting with the lowest vendor number.
Data Collection
No adverse follow-up action was taken against any SAS employee or supplier as a result of any information obtained by the researcher during the course of the study. An investigation is unlikely to reveal serious and willful dishonesty or fraud. Individuals who might engage in such behavior are unlikely to disclose it in a survey.
Suppliers who were motivated to respond to the survey would most likely have been those with good ethical performance.
Data Coding And Validation
Survey Response Rate Evaluation
The low response rate was disappointing given that the questionnaires were aimed at "well-known" respondents closely associated with Prospecton Brewery and whose response rate was above the normal 30%. This occurred despite significant efforts to confirm the supplier contact names and addresses of key supplier users at Prospecton Brewery. It appears that many users of the suppliers did not provide the correct supplier contact details to the researcher.
In total, responses from nine percent of the supplier population were received and included in the analysis.
Biographical Overview
- Company Size
- Respondents Age and Gender
- Suppliers Main Contact with SAB
The majority of Prospecton brewery suppliers (57.1 %) were experienced businesses that had been in operation for sixteen years or more. New businesses with less than five years of experience were less than five percent of suppliers. Private limited companies and related corporations made up the vast majority of suppliers to Prospecton Brewery (87.5.
A little more than half of the total number are middle-aged and three-quarters of the total number are men.
Evaluation of Suppliers Ethical Knowledge and Attitudes
- Knowledge and Attitudes
- Familiarity with King 11 Report
Statistically significant variations between the average scores of the questions were found as shown in Figure 11. The use of the SAS ethics policy guideline by suppliers for guidance when dealing with SAS was found to be very low. However, it is reassuring that all the JSE-listed companies that took part in the survey are familiar with the report.
However, using ANOVA, no statistically significant differences could be found in the grand mean scores for supplier ethical knowledge and attitude questions 8 - 20 regarding suppliers who consider past ethical performance in recruitment and promotion.
Suppliers Perceptions of Ethical Behaviour at Prospecton Brewery
- Perceptions of Prospecton Brewery Employees
- Familiarity with the SAB Ethics Policy
- Supplier Perceptions about Prospecton Brewery Overall
- Existence of Unethical Practices at Prospecton Brewery
Of the remaining respondents who felt knowledgeable about this topic, a majority agreed or at least partially agreed that Prospecton staff was sufficiently familiar with the ethics policy. Of those respondents who did have an opinion on this issue, approximately 90% agreed or partially agreed that Prospecton employees were skilled in dealing with ethical dilemmas. However, suppliers' perceptions of the impact Prospecton Brewery has on the environment can be seen as only mediocre in terms of the rating scale.
An examination of Table 7 shows that 86.2% of suppliers disagreed that Prospecton Brewery pays more than the prevailing market price for goods and services, while only 51.7% of suppliers disagreed that Prospecton pays less than the current price.
Prospecton Brewery - Supplier Interactions
- Overall Evaluation of Interactions
- Declining Of Gifts
- Honouring the Letter and Spirit of Contracts
- Suppliers Pressurised into Sponsorships by SAB Employees
- SAB Employees Solicit Personal Favours From Suppliers
- Supplier Views on The Most Important Thing Required To Get and Keep Prospecton Brewery Business
- Supplier Views on What to Do To Improve Ethics at Prospecton
Regarding the uniform application of specifications and standards by suppliers, Figure 31 shows that one quarter of respondents do not know whether this is done, while 50% believe that it is almost always done, and a further 16.7% believe that it is often performs. . However, 58% of respondents felt that this hardly ever happens, and a further 26% do not know if it happens. 34;horse trading', about one third of the respondents did not know if it happens, one third thought that it hardly ever happens, and the remaining third think that it happens occasionally, often or almost always.
As shown in Figure 38, approximately 62% of respondents felt that improvements in ethics are needed in supplier-brewery interactions.
Correlations Between Supplier Attitudes and Their Perceptions of Prospecton Brewery
As can be seen in Table 9, there were significant correlations (albeit with fairly low correlation coefficients) between supplier perceptions of Prospecton employees and supplier perceptions of the overall ethical performance of the Prospecton brewery, as well as with perceptions of interactions Prospecton brewery - supplier. It found that respondents did not appreciate the concept that being ethical involves more than just obeying the law. Suppliers were also found not to have good ethical attitudes regarding subverting rules/laws in the course of business and conducting business dealings outside the workplace.
It was found that the female respondents had a good ethical attitude towards making deals outside the work environment compared to the men who had a bad attitude towards it.
Supplier Use of Business Ethics Codes
Similarly, when managing the appearance of business transactions outside the workplace, more vigilance appears to be required of male supplier representatives than of females. Sending out copies of the guideline to providers at their registered addresses is unlikely to lead to any significant improvements in ownership and use of the guideline. It was not possible from the study to determine the cause of the apparent ineffectiveness of ethical codes in influencing the ethical knowledge and attitudes of Prospecton suppliers.
This was considered a favorable finding in light of the importance of personal codes of conduct in good ethical behavior.
Supplier Perceptions Of Ethical Performance At Prospecton Brewery
Overall, suppliers to Prospecton Breweries were found to have good perceptions of Prospecton Breweries' overall ethical performance. Suppliers who dealt primarily with planners and supervisors at Prospecton had poor perceptions of SAS management taking ethical concerns seriously. Increased management interest and involvement in this group of employees regarding ethical matters is suggested.
However, suppliers had excellent views on the extent to which Prospecton was adhering to its own ethical policies and acting in a socially responsible manner.
Prospecton Brewery· Supplier Interactions
According to the suppliers, too tight budgets, dishonest individuals and too much internal competition among Prospecton employees contributed most to unethical behavior at Prospecton Brewery. Improvement of the questions in the series mentioned above is necessary to reduce the incidence of "don't know" answers. Ethics is the attitude towards business in the best possible way, living the values of the company, good corporate governance, respect for diversity and human rights, acting honestly and fairly.
First accept the gift on behalf of the company and then return to the donor with a polite written explanation that company policy prohibits its retention.
Bias
Affirmative action
Late Payments
Gifts and Courtesies
Conducting Business With Relatives
Other
Views On How To Improve Ethics
Suppliers Perceptions of Ethical Behaviour at Prospecton Brewery
Consider the following statements regarding Prospecton Brewery employees with whom your company typically works. Please mark in one box each statement that best describes how you feel about this statement. Please check the box for each statement that best describes how you feel about that statement.
Place a cross in the box!!!! for each statement that best matches your recent feelings about that statement.
The South Limited
African Breweries
Gray market goods are used achieve price/cost reductions. Ethical behavior is not important these days. Previous ethical behavior is taken into account in recruitment and promotion. Improvements are needed for supplier operation. Supplier has SAS ethics policy supplier guideline Supplier firm is familiar with King II report on corporate governance.
28 31 SAB employees sufficiently familiar o=not familiar with ethical policy 1=disagree 29 32 skill SAB employees skilled in 2=partially disagree.
