Challenges in the Era of Globalization - iaabd

Challenges in the Era of Globalization
Edited by Emmanuel Obuah
o to consider the short-and-long term impacts of the strategy on the economy, society and
the environment;
o to do business ethically;
o not to compromise the natural environment and;
o to take account of the company’s impact on internal and external stakeholders (IoD:
2009: 19).
The code further recommends certain responsibilities to the board in this regard. These relate to the
following:
o set the values to which the company will adhere formulated in its code of conduct,
o ensure that its conduct and that of management aligns to the values and is adhered to in all aspects
of its business and,
o promote the stakeholder-inclusive approach of governance (IoD: 2009: 20).
There is also an element of Ethical foundation entrusted to the board. The board in this regard should:
o ensure that all deliberations, decisions and actions are based on the four values
underpinning good governance and;
o ensure that each director adheres to the duties of a director (IoD: 2009: 20).
The aspects outlined above can be summed up as the Ethical Infrastructure of an organization. These
include basic values/principles, processes, procedures, organizational / business culture and practices of
how an organization deals with its employees, managers, and various stakeholders both within its internal
and external environment. These and other business practices can be advanced as ingredients and integral
components necessary to build organizational integrity (the subject of the paper) for sustainable business.
In describing the phenomenon of Organizational Integrity, Palazzo (2007: 114) refers to the ethical
integrity of individual actors, the ethical quality of their interactions as well as that of the dominating
norms, activities, decision-making procedures and results within a given organization. Much as ethical
make-up of an organization depends on organizational managers as the key drivers of ethical behavior
and practices within an organization, as well as the presence of ethical individuals, organizational
integrity goes beyond the two aspects, instead as Kayes et al (2006) indicate, building integrity within an
organization will require changing key processes across all functions of the organization, progressing
beyond compliant corporate culture to a culture that encourages exemplary behavior. Exemplary behavior
should begin with a comprehensive approach to ethics that emphasizes integrity. The key characteristics
that indentify the integrity of the organization are: (1) The language of ethical decision-making is used;
(2) Structural supports and procedures that facilitate ethical-decision-making have been developed; (3) A
culture of openness, responsibility, and commitment to multiple business goals has been created and
sustained and; (4) Employees development is valued (Kayes et al, 2006, 3; Palazzo, 2007, 118-123). The
expression thus far provided is used as a framework to analyze the essence of the paper. The following
section is a summary on the two selected cases.
CASES OF CORPORATE AND ETHICAL GOVERNANCE INFRINGEMENTS – Dilemmas for
South African Organizations
The following is a summary of the two (2) cases selected for the purpose of illustrating the gist of the
paper. These organizations appeared before the Supreme Court of Appeal and the Competitions Tribunal
of South Africa respectively, on allegations of contravening the Competitions Act (Act 89 of 1998) herein
referred to as the Act and; violating their own values and principles of conducting business in their
respective markets (own emphasis). The Competition Tribunal is an independent body established in
terms of section 27 of the Act with the purpose of among others; to adjudicate complaints of prohibited
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