bachelor of business administration -------------------------- business management 3a

Bachelor of Business

Administration--------------------------

Business Management 3A

Chapters

Aims of This ModuleUpon completion of this module, the learner will be able to:

Apply skills in the management of conflict within the

workplace.

Apply the principles of business ethics in the workplace.

Discuss the role of corporate social responsibility in the

business environment.

Display knowledge of industrial relations and its impact on

human resources.

Describe the legislative framework in which a business

operates.

Analyse and evaluate how skills in managing conflict,

business ethics, corporate social responsibility, industrial

relations and the legislative environment enable effective

performance within a business context of transformation.

Section 1 - Introduction

Section 2 – Managing Conflict What is Conflict? “Make no mistake about it. Conflict is an unavoidable

aspect of modern life”

These definitions highlight some important characteristics of conflict:

Goal incompatibility: this takes various forms within organisations.

Interdependency: for there to be conflict, there needs to be some degree of interdependency between parties.

Interaction: for there to be conflict, it needs to be expressed whether overtly or covertly.

Perception: it is possible for conflict to be perceived, and therefore the sources of conflict can be real or imagined.

Functional and Dysfunctional Conflict

Types of Conflict Interpersonal Conflict: This occurs between individuals

within an organisation due to differences in their goals,

values or personality.

Intragroup Conflict: This arises within a department,

team or group, and relates to differences in goals,

values, perspectives and personality.

Intergroup Conflict: This refers to conflict between

groups, teams and departments.

Interorganisational Conflict: This conflict manifests

between two or more organisations.

Sources of Conflict

Goal Incompatibility

Mutually Exclusive Goals where the achievement of one

party’s goal is viewed as threatening to the achievement

of another party’s goal.

Insufficient Shared Resources where an organisation has

a limited number of resources (money, personnel and

equipment) to distribute across the departments, each

of which have different goals.

Different Time Orientations where the goals of different

departments have different time lines.

Structural Design The Nature of the Interdependence, where the nature of

the interdependence determines the potential for

conflict:

◦ Pooled interdependence

◦ Sequential interdependence

◦ Reciprocal interdependence

◦ Lack of Substitutability

◦ Power Differentials

Different Role Expectations Role Ambiguity, which occurs when the tasks and

behaviours expected from an individual holding a

particular role are not clear, as a result of vague

communication about the role.

Role Conflict occurs where expectations by the party

holding the role are different to expectations for other

parties (such as managers, fellow employees, clients,

etc.)

Role Overload occurs when “role expectations exceed a

party’s ability to respond effectively”

Degenerative Climate A degenerative climate is one which encourages

dysfunctional conflict and where win-lose attitudes are

prevalent .

Degenerative climates usually result when there is a

clash between values and expectations of individuals or

groups. Personal Differences

We have a natural affinity with certain people and an

immediate dislike of others. Personal differences often

lead to conflict due to contrasts in values, behaviours

and perspectives

Outcomes of Conflict Functional Conflict

◦ Functional conflict has positive results for an organisation in that it

stimulates innovation and production.

◦ Intragroup Benefits

◦ Intergroup Benefits

Dysfunctional Conflict

◦ Intergroup Problems

◦ Intragroup Problems

Conflict Management Styles Competing Style

This style is assertive and uncooperative, and is evident

where an individual or group seeks to satisfy their own

interests without regard for others

Collaborating Style

This style is assertive and cooperative. Parties to a

conflict seek a mutually beneficial outcome through

cooperation

Conflict Management Styles (cont.)

Avoiding Style This style is unassertive and uncooperative. People who

adopt this style do not pursue the goals of the other party, nor do they pursue their own.

Accommodating Style This style is unassertive and cooperative. People who

adopt this style seek to put the other parties‟ interest over their own

Accommodating Style This style is unassertive and cooperative. People who

adopt this style seek to put the other parties‟ interest over their own

Conflict Management Styles (cont.) Compromising Style

This style falls between assertive and cooperative

behaviours. People who demonstrate a compromising

style are prepared to “give something up” in the

interests of reaching a comprised outcome

Strategies for the Management of Conflict

Strategies for Reducing Dysfunctional Conflict

Superordinate Goals

“One of the most effective ways to reduce conflict is to

determine an overriding goal that requires the

cooperative effort of both conflicting parties…such a

goal must be unattainable by either party alone and of

sufficient importance to supersede all their other goals”

Increased Communication

Increasing communication provides a means to address

and correct misunderstandings, diminish the prevalence

of negative stereotypes and ultimately provide for the

development of positive feelings amongst parties

Strategies for Reducing Dysfunctional Conflict

Problem Solving

Problem solving is a formal means of bringing conflicting

parties together to discuss their differences and craft a

way forward.

Expansion of Resources

Scarce resources are frequently the source of conflict

within organisations. To address this, where possible,

organisations should expand the available resources.

Strategies for Reducing Dysfunctional Conflict

Third Party Judgement

A less time consuming and less expensive approach to

managing conflict than the problem solving strategy is the

strategy of third party judgement.

Changing Organisational Structure

Conflict could be a signal that the organisation’s structure

needs to be changed, bringing about new organisation to

tasks and groupings of staff as well as new levels of

integration.

Avoidance

At times conflicting parties can ignore the dysfunctional

situation in the hope that the conflict will resolve itself.

Section 3 – Business Ethics What are “Ethics”?

Ethics are related to morality. While morality

distinguishes between right and wrong, ethics are the

guidelines as to how morality is achieved. Morality (i.e.

what is right or wrong) is determined by the community

or society in which a business operates.

Therefore, different communities and societies will have

different beliefs as to what is right and wrong. Ethics are

relative to the morals of a particular society.

For example, in Spain abortion is regarded to be “wrong”

and is therefore prohibited, while in Japan, abortion is

considered to be “acceptable” and is frequently utilised

as a means of birth control.

The Importance of Ethics in Business Ethical behaviour is imperative in business, primarily

because unethical behaviour inflicts harm on others. The

pursuit of self interest with no consideration of the

societal interest results in disaster not only for the

individual but also for the entire society as scarce

resources are wasted and destroyed.

Unethical behaviour results in the loss of a manager’s

and/or organisation’s reputation. Customers and other

stakeholders will come to view the organisation with

suspicion and mistrust, which will ultimately be bad for

business.

Resolving Ethical Dilemmas Managers and employees are presented with a range of

ethical dilemmas in the workplace. The ethical dilemmas

could include:

◦ Price fixing

◦ Favouritism

◦ Advancing within the business by „stepping on others‟

◦ Failing to inform employees of key issues in the interests of

protecting management

◦ Failing to address discrimination

◦ Abusing privileges and perks

◦ Producing products and services which are harmful to the

environment

Ethical Models

Utilitarian Model “Utilitarianism means to act in such a way that the

greatest good is achieved for the greatest number…it

guides the decision maker to choose the alternative that

produces the greatest net social good when all the

stakeholders are considered”

When confronted with an ethical dilemma, the utilitarian

model should be used as follows:

◦ Identify alternative courses of action

◦ Determine both the benefits and harms of each alternative course of

action for all groups of stakeholders

◦ Select the alternative which provides for the most benefits and least

harm to the greatest number of stakeholders

Utilitarian Model (cont.) Organisational Goals: “providing the greatest good for

the greatest number in a competitive market system

means focusing on maximizing profits”. Profits should be

kept at an optimal level which ensures the

competitiveness of the organisation.

Efficiency: In pursuing the achievement of organisational

goals, managers and employees need to be efficient.

This entails minimising inputs and maximising outputs.

Conflicts of Interest: It is important that managers and

employees do not have personal interests which conflict

with the achievement of organisational goals.

Moral Rights Model Ethical decisions and behaviours within the moral rights

framework focus on the protection of the fundamental

rights and privileges of individuals. Any decision or

behaviour that violates the rights of an individual is

therefore wrong and unethical

◦ Life and Safety

◦ Truthfulness

◦ Privacy

◦ Freedom of Conscience

◦ Freedom of Speech

◦ Private Property

Justice Model

Distributive Justice Principle

Individuals need to be treated the same, unless they

differ in ways which are relevant to the situation.

Fairness Principle

This principle emphasises that both the organisation and

employees need to fulfill their responsibilities

Natural Duty Principle

This requires that employees and organisations engage

in behaviour as responsible members of society.

How to Improve an Organisation’s Ethical Climate

Role Models

Screen Potential Employees

Ethics Training

Reinforce Ethical Behaviour

Whistle Blowing

Develop a Meaningful Code of Ethics

Gender and Ethics Research shows that while men view moral problems

from a justice perspective, women tend to view them

from a care perspective. So while men focus on “the

rules of the game”, women focus on the dynamics of the

situation and the people involved.

Section 4 – Corporate Social Responsibility

What is “Social Responsibility”?

Nieman & Bennett (2006) expand on their definition and

identify that social responsibility includes:

Improving the quality of life of employees

Creating a social infrastructure which benefits the

community, particularly in terms of development and

educational opportunities

Fulfilling an obligation to create a better social,

ecological and aesthetic environment for the benefit of

employees, their families and the greater community

Levels of Social Responsibility

Social Obligation

Economic responsibility where the organisation is

responsible for maximising profits and providing goods

and services to the market at reasonable prices.

Legal responsibility where the organisation is required to

comply with the regulatory business framework and

labour legislation

Social Reaction

At this level it is argued that an organisation’s

maximisation of profits and provision of goods and

services does not amount to social responsibility. Rather,

focus should be given to societal, environmental and

ecological consequences of an organisation’s actions.

Socially responsible behaviour at this level therefore

involves the organisation’s voluntary participation in

projects that assist in solving societal and environmental

problems

Social Responsiveness

At this level, social responsibility involves the

organisation being proactive, and actively seeking to

prevent or find solutions to societal and environmental

problems.

At this level organisations also engage with the

government about legislation and anticipated social and

environmental problems.

Stakeholders to Whom Business is Responsible

Evaluating Corporate Social Performance

Broad performance criteria: Companies need to broaden

the focus of their organisational performance evaluation

to include a focus on social and environmental

initiatives.

Ethical norms: Companies need to advocate ethical

norms for the organisation, industry and business in

general.

Operating strategy: Organisations need to maintain and

improve current standards of the physical and social

environment.

Evaluating Corporate Social Performance (cont.)

Response to Social Pressure: Companies should

participate actively in solving existing problems.

Legislative and Political Activities: Organisations need to

work with external bodies, such as the government to

promote and facilitate the drafting of legislation and

regulations regarding the protection of the natural and

social environments in which they operate

Section 5 – Industrial Relations What is “Industrial Relations”?

Industrial relations “can be described as a complex

system of individual and collective actions as well as

formal and informal relationships existing between the

state, employers, employees and related institutions

concerning all aspects of the employment relationship”

Who are the Participants in Industrial Relations?

Labour Relations Act (Act 66 of 1995)

Unfair Dismissal

a worker intended to or did take part in or supported a protected strike or protest

a worker refused to do the work of a striking or locked out co-worker, unless his refusal will endanger life or health

a worker is forced to accept a demand a worker intended to or did take action against an

employer by - ◦ exercising a right

◦ taking part in proceedings

a worker is pregnant or intends to be pregnant an employer discriminated against a worker because of

race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or family responsibility

an employer cannot prove - ◦ a worker‟s misconduct or inability

◦ that the employer‟s operational needs are valid

◦ that the dismissal procedure was fair

Promotion of Collective Bargaining and Worker Participation

Collective Agreements

Bargaining Councils

Statutory Councils

Workplace Forums

Dispute Resolution & Labour Peace

CCMA

Labour Court

Labour Appeal Court

Basic Conditions of Employment Act (No 75 of 1997)

The Act regulates the following employment conditions:

Work time and rules

Remuneration and deductions

Termination of employment

Administrative obligations

Prohibition of the employment of children

Variation of basic conditions of employment

Monitoring, enforcement and legal proceedings

Employment Equity Act (Act 55 of 1998)

Key aspects of the Act include:

The beneficiaries of the Act are known as the

“designated group”. The “designated group” includes

African, Indian and Coloured people as well as women

and people with disabilities.

Companies that are required to comply with the Act are

known as “designated employers” A designated

employer has a workforce of 50 employees or more

(RSA, 1998a).

The Act prohibits unfair discrimination and requires that

affirmative action measures be implemented.

Failure to comply with the Employment Equity Act will

result in organisations having to pay considerable fines.

Skills Development Act (Act 97 of 1998) and Skills Development Levies Act (No 9 of 1999)

The key aspects of these Acts include:

Companies pay 1% of their payroll to Sector Education

Training Authorities (also known as Setas) as a Skills

Development Levy (RSA, 1999)

Companies are able to claim back at least a portion of

their Skills Development Levy by engaging in annual

workplace skills planning and implementation.

Companies are able to claim back further money from

their Seta by engaging in strategic skills initiatives.

Occupational Health & Safety Act (No 85 of 1993)

Some of the duties of employers include:

Ensuring that the work systems, plant and equipment is

safe to use

Providing instruction and training on safety issues within

the workplace

Establishing what hazards are associated with a

particular job, and take precautionary measures

Informing all employees of the danger involved in their

work

Occupational Health & Safety Act (No 85 of 1993)

Some of the duties of employees include:

Taking care of one’s own health and safety, as well as

others who may be affected by one’s actions

Carrying out orders relating to health and safety rules

Unemployment Insurance Act (No 63 of 2001)

The Act provides for the following benefits and allowances:

Illness benefits

Maternity benefits

Adoption benefits

Dependant benefits

Unemployment benefits

Section 6 – The Legislative Framework

The Constitution

The Constitution is the highest level of law; it is the

supreme Act of the country and guides all other

legislation.

The Constitution enshrines the rights of all South

Africans and focuses on addressing historical inequalities

Broad Based Black Economic Empowerment Act (No 53 of 2006)

Categories of Black Ownership

BEE Industry Charters

BEE Scorecard A company will be assessed against the above criteria

and receive a score for each category, which will be weighted according to sector guidelines. The total score which an organisation receives will be interpreted as follows: ◦ 0 – 40: the organisation is seen to make a limited contribution to BEE

◦ 40 – 65: the organisation is seen to make an acceptable contribution to BEE

◦ 65 or more: the organisation is seen to make a good contribution to BEE

Broad Based Black Economic Empowerment Act (No 53 of 2006)

Relevance of Other Legislation to the BBBEEE Act

BEE & Competitive Advantage

Given the transformation of South Africa and the

changing consumer base, it is unlikely that organisations

that fail to transform in terms of BEE will be able to

maintain their competitive advantage or even survive.

Research shows that BEE compliant organisations are on

the increase and that they have a definite advantage

over those that are not compliant

Labour Legislation There are various pieces of labour legislation which

facilitate economic and social transformation within and

outside of the workplace.

These include:

The Labour Relations Act

The Basic Conditions of Employment Act

The Occupational Health and Safety Act

The Unemployment Insurance Act

The Employment Equity Act

The Skills Development Act

The Skills Development Levies Act

Other Legislation

Preferential Procurement Policy Framework Act

Competition Act

Promotion of Access to Information Act

Environmental Legislation

Industrial and Trade Regulations

Assignment Guidelines

1.1 Explain what Corporate Social Responsibility is and

evaluate MTN’s efforts in implementing its intended

Corporate Social Responsibility drive across the globe.

(20 Marks)

Essay question i.e. Intro, Body, Conclusion.

Keep all points/arguments in body.

Firstly, explain CSR.

Secondly, apply your definition and model to MTN.

Remember to reference correctly.

Assignment Guidelines

1.2 Discuss the concept of ethics in business and comment

on MTN’s business conduct.

(15 Marks)

Firstly, explain ethics in business.

Secondly, using this, comment on MTN’s business

conduct.

Remember to reference correctly.

Assignment Guidelines

2.1 List any 5 stakeholders of MTN. (5

Marks)

Simply list 5 stakeholders of MTN.

2.2 Discuss 5 criteria that should be considered in

evaluating MTN’s approach to Corporate Social

Responsibility. (10 Marks)

Identify and discuss fully the 5 criteria that SHOULD be

considered when evaluating a firm’s approach to CSR.

Remember to reference correctly.

Assignment Guidelines

Question 3 (20 Marks)

Discuss the rights and obligations of employees, unions,

employers and employer organisations with respect to

freedom of association, organisational rights, strikes and

lockouts.

Essay question.

Focus on the rights and obligations of employees,

unions, employers and employer organisations.

Explain in light of freedom of association, organisational

rights, strikes and lockouts.

Remember to reference correctly.

Assignment Guidelines

Question 4 (15 Marks)

Differentiate between functional and dysfunctional conflict

and show how conflict can be managed.

Firstly, differentiate between functional and

dysfunctional conflict.

Secondly, elaborate on ways conflict can be managed.

Remember to reference correctly.

Assignment Guidelines

Question 5 (15 Marks)

Explain the tripartite system in Labour Relations and

describe the role of each participant in the system.

A tripartite relationship contains three parties.

With regards to Labour Relations, describe fully, the roles

of each of the three parties involved.

Remember to reference correctly.

Email: randhir@mancosa.co.za

031 300 7200 – Randhir Ramharack in academics

Examination Guidelines Your exam will be on 9th June 2011.

Your supp will be on 22nd July 2011.

You do not need to reference in the exam.

You will have three hours to answer an closed book

exam out of 100.

Typically, your exam will comprise of short question

attracting anywhere from 5 to 20 marks each.

You should also receive at least one case study

attracting between 15 and 50 marks.

You will receive further guidelines closer to the exam.