An analysis of the ethical attitudes of South African business managers with regard to ethical business decision-making: Trends from 2007 to 2019

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Abstract 

This study reports on a decade’s trends (2007 to 2019) of South African managers’ ethical predispositions about business decisions. The literature basis of the study deals with defining business ethics in South Africa from the recent past, up to 2019; with the contentious issue of using student groups as populations; and then also particularly ascertained the suitability of experienced part-time managers in training (or retraining) as a population for business studies. Here, sufficient evidence cleared the population for a focused study such as this. The empirical study analysis data were collected annually over the 13-year period from managers who enrolled at a South African business school. These managers aimed to further improve their managerial qualifications by studying towards an MBA degree, or entered into executive education programmes on the South African National Qualification Forum at level 6 or higher; typically, students attending the Advanced Management Programme qualify. A total of 1 929 managers formed part of this longitudinal study. The questionnaire postulated 14 questionable company business decisions, and the respondents had to evaluate each decision along ethical lines. Their ethical predispositions towards the questionable business decisions were recorded on a balanced 6-point scale, where 3,5 served as the neutral predisposition. A Cronbach alpha coefficient of 0,895 ensured high reliability and internal consistency which shows that the data could be analysed confidently. The American questionnaire designed by Fullerton in 1993 was used because this questionnaire has been internationally validated on six continents and in 12 countries while it was also independently revalidated for use in South Africa in 2010 and 2019 to collect business ethics data. The data were captured and analysed by the Statistical Consultation Services at the North-West University. The trend analysis shows that, in general, a total of nine business scenarios displayed unacceptable ethical attitudes by the managers in 2007, while five business scenarios displayed acceptable ethical attitudes. Two scenarios were marginal and the managers could not make up their minds whether they were acceptable or unacceptable. (This is still true for these two scenarios in 2019.) Regarding analysis of the individual scenarios, four different classifications were applied. These are: (1) unacceptable in 2007, but acceptable in 2019; (2) acceptable in 2007, and remaining so in 2019; (3) unacceptable in 2007 and remaining unacceptable in 2019; and (4) acceptable in 2007, but unacceptable in 2019. A total of six scenarios were characterised as belonging to the first category. All of these scenarios improved. Trendwise they are similar and show an improvement of ethical attitudes among managers with regard to their ethical business decision-making. Regarding the second category, only one scenario indicated acceptable ethical attitudes by managers back in 2007, which remained so. They deal with “dodging tax by using creative accounting”. This scenario shows that managers deem this behaviour to be acceptable; however, they seem to find this much more acceptable in 2019 than they did in 2007! This means the attitudes of the managers at present towards this scenario are pointing towards acceptance of such actions, and consequently more towards unethical business practices. Although only one scenario applies, it is still categorised as an unethical practice and this is cumbersome. The third category presents unacceptable ethical attitudes in 2007, which remained unacceptable in 2019. Two scenarios fall into this category, namely “false reference pricing” and “advertising out-of-stock products cheaply to draw customers into the shop”. The final category is cumbersome as it presents scenarios that were acceptable in 2007, which are now deemed to be unacceptable. This shows that there is a deterioration in ethical business attitudes. A total of five scenarios turned to the dark side in the past 13 years. Here, the results show that the practice of “withholding to launch new products in the market until the inventory of the old model is cleared”, “advertising to children”, “moving a factory to a low-cost country to save on production cost”, “using selective distribution to protect large retailers” and “using sports stars to endorse products” are all now deemed to be acceptable. Interestingly, the results also show that the 2007 managers are an inverse mirror image of the 2019 managers with regard to their attitudes towards ethical business dealings. The 13-year longitudinal study measures the ethical predispositions of managers over time with regard to companies’ business decisions. This provides a trend of what managers deem ethical business behaviour to be, and consequently provide an insight into their business decisions as company representatives. This means that business decisions can be positively influenced ethically if the predispositions of managers show an inclination towards ethical business practices. To do so, the quantification of ethical predispositions provides a baseline or barometer of the business ethical decision-making by South African managers when they have to make a business decision on behalf of their company. The study comes to the following conclusions on the business ethics scenarios based on the longitudinal analysis of 13 years: (1) Nine of the ethical scenarios improved over the 13 years, but (2) five of the scenarios deteriorated; (3) two scenarios remained an uncertainty for managers. After 13 years these scenarios still have scores close to the midpoint (3,5). This means that in 2007 more of the scenarios were deemed acceptable business practices and this points towards a more questionable ethical attitude in 2007 than in 2019. This view is quantitatively supported by the mean scores of the managers in 2007 (3,7), which is higher than the mean score of the managers in 2019 (3,0). 

Regarding the overall study, the following conclusions are reached: (1) The managers of 2019 are more critical than their 2007 counterparts regarding what acceptable business practices are. (2) The results of 2016 deviate from the rest of the longitudinal data; political constraints and the economic situation in South Africa could have played a part in this deviation. (3) All in all, the country has made progress in terms of managing towards more ethical and acceptable business practices.

Keywords: attitude; business; decision-making; ethical; ethics; longitudinal; managers; scenarios; trend; unethical

 

Lees die volledige artikel in Afrikaans

’n Ontleding van Suid-Afrikaanse sakebestuurders se etiese besigheidsbesluitneming: Tendense van 2007 tot 2019

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