THE SIGNIFICANCE OF ETHICAL BEHAVIOUR IN THE AUTOMOTIVE CO

-OPERATIONS: VOLKWAGEN NTT (POTCHEFSTROOM)

BY
TSHIDISO KALAMORE
STUDENT NO: 21300585

Mini- dissertation submitted in partial fulfilment of the requirements for the

Post Graduate Diploma (Operations Management) at the (Mafikeng) of the
North West University.

SUPERVISOR: MR. D. SEBOLAI

SEPTEMBER, 2016

Literature Review
1. Defining business ethics
According to Lewis (2012:381) business ethics is system, principles, symbols or
values which offer rules for ethically accurate behaviour and faithfulness definite
situations. According to Rossouw and Van Vuuren(2013:5) Business ethics is
regarded as recognizing and applying principles of behaviour in and for company
that will guarantee that the security of stakeholders are appreciated. Business ethics
is concerning an idea of what is excellent (principles and values) that lead the
company (identity) in its relations with others (stakeholders).
Business ethics refers to the skill to distinguish accurate from mistaken and to decide
to do what is correct in expressions of behaviour and choices (Zgheib, 2012). The
results entail captivating performance which can lead to the advantage or damage
different stakeholders, provided they are shareholders, workers, clients, providers or
the society at large in which the organisation functions (Gandz & Hayes, 2013:657).
Business ethics relates to workers, executive and the entire organisation;
consequently it can be private or institutional in nature (Gruble,2012; Pattan, 2012).
At a macro stage, business ethics focus more on the functions of company in
society and its ethical and lawful responsibility to abide by the rule, whereas at a
business stage it relates to principled matters facing individual company elements
when preparing and applying different approaches, and, at the individual
point, it entails the standards, actions and performance of employees inside
company (Fieser, and Josephson, 2012).When applying company principles,
business can accept whichever a stockholder/shareholder-focused or stakeholderfocused approach (Freeman, 2013; Freeman & Reed,2012).
In terms of shareholder focused approach, the concentration is on the comfort of the
proprietors and the focus is on making returns. In the stakeholder-focused approach,
businesses takes actions and come to a decision with the security of all stakeholders
in mind, as well as workers, clients, providers and the community at large. The moral
expectations that people has of current businesses has moved and transformed in

modern period, and corporations are all the time more being known as essential
players in the interests of civilization (Rossouw & Van Vuuren, 2013:99).
This is particularly applicable in the South African framework where original
corporate symbols of behaviour legislation such as the King Report on Corporate
governance 2012 set an smooth superior load on an organisations board of
directors and leading supervision to take all stakeholders into consideration when
creating ethical decisions (Barnard, 2012:10). Moreover, there is an increasing
acknowledgment, supported by the study, that superior principles can have a
constructive profitable impact on the performance of organisations and that excellent
principles is superior business (Joyner & Payne, 2012:297).
Organisations that execute to ethical behaviour to their stakeholders or highlight
fulfilment with their code of conduct achieve superior financially than those that do
not (Chauhan & Chauha 2012, Barnard, 2012; Verschoor, 2013). several
organisations recognize that the protection of corporate status, admiration for morally
discriminating customers and the safety of business possessions aligned with
deception and dishonesty, result in shareholder assurance and superior business
(Van Vuuren, 2013:21).
In addition, being seen to be principled can comprise the subsequent reward for the
organisation: better trademark and industry alertness and appreciation, easier
admission to resources, lesser value of resources and recent sources of money from
principled shareholders, improved workers dedication and clients faithfulness, and
the employment of top ability for workers and the panel (Riley,2012; Schoeman,
2012b). Therefore the profit of making a principled organisation compensate
prospective difficulties such as: higher expenses of
utilising ethical providing series co-workers unlike those that offer the least costs
and advanced spending incurred in educating, communicating and observing of
moral policy(Riley, 2012).

2. Recent studies
A summary of the literature would not be complete without looking briefly at modern
studies in business ethics.
2.1 Ethics Resource Centre national business ethics survey of Fortune 750
companies
In the study conducted in June 2012, connecting 3712 workers from American
Companies with the utmost annual profits, the ERC established that principles
programmes of fortune 750 companies are all-inclusive and successful and moral
dedication is tough in similarity to other American businesses. Fortune 750
businesses experience an elevated danger of pressure and bad behaviour than
other businesses. Reporting of bad behaviour is also high at these businesses with
workers choosing to account within but leaving external if the business does not take
action. Furthermore the study reveals the importance to develop compensation
methods so that high-quality behaviour is remunerated and unprincipled actions is
eradicated.
2.2 Ethics Institute of South Africa (EISA) South African Corporate Ethics
Indicator (SACEI)
In similarity, the study by EISA performed in 2013 had the subsequent key findings:
the majority South African businesses have a policy of principles, nonetheless, it is
not adequately exchange few words to workers; principles organization construction
and procedures require additional improvement; disbelief survive amongst workers
concerning principled management and the flexibility of the decent surroundings
surrounded by the businesses to survive principled cooperation and, also, that
workers are not satisfied with feedback they get from their businesses when they talk
up about bad behaviour.
The recommendation of the study comprise the following: the necessity to develop
communication and guidance on policy of moral principles as well as principles
guidelines and supervision of principles; and the necessity for managers to place the
quality by obviously and noticeably executing themselves to the businesss ethical
values. The study also reminds businesses to practice ethical behaviour as element
of their individuality and to display to employees of the company that feedbacks of

dangerous actions are acceptable and taken into consideration (Irwin, 2012). The
information on the ERC and SACEI studies demonstrate tendencies in companies
principle and recognizing approaches for advancing decent practices in companies.
This literature study has outlined certain variables that are important to create a
positive and sustain a decent organisational surroundings. A summary of the study
create in employment in this review follows, and comprise discussion of the
subsequent: research methods, sampling, data collection, collection procedures and
ethical consideration
The following should be part of your literature
Establish main communalities and differences on those definitions
Determine if the existing definitions can be grouped into different
schools of thought or if definitions changed over time
Develop or adopt a suitable definition for each variable and the construct,
and justify its appropriateness in relation to your study
c. Review theories, conceptual frameworks and/or models used to explain the
identified
variables and construct. Comment on:
The communalities and differences
The contextual boundaries
Implicit and explicit assumptions underlying theoretical perspectives
Empirical evidence available
Unresolved issues and questions
Areas of improvement

3. Research methodology
For this study a quantitative research method was selected as it is ideal and quite
easy to manage, it offers a quick method for data collection and it permit for the data
collected to be precisely and assessable. This method tries to find to comprehend a
particular research problem from the viewpoint of the local population it involves.
Quantitative research is especially valuable in acquiring culturally relevant
information about the ethics, opinions, behaviours and social contexts of particular
populations. where is research design? Clearly you are following what is required
4. Sampling method
The target population for the study comprised Volkswagen NTT Company involved in
the North West (Potchefstroom) automotive industry listed as a member of the
Automotive Industry from aspects highlighted in the literature reviewed. In order to
guarantee the trustworthiness of the questions asked in the questionnaire, they were
considered to be as straightforward as feasible and reasonable for the intended

sample. In addition, all participants are required to answer the same questions.
What is the total of your population?
Where is the sampling technique?
5. Data collection
Primary data was collected by means of a questionnaire while secondary data
sources comprised books, journals and electronic databases. A closed-ended
questionnaire was used as an indication that it took few minutes for the
participants/respondents to complete it. A pilot study will be conducted among
Volkswagen NTT Company functioning in the North West automotive industry, out of
which management accountable for business ethics and company morals inside their
organisations reply to the questionnaire. Results from the pilot study will included
into the questionnaire before it was more extensively distributed. The exact designed
stable mentioned worth, the importance of the tested variables to the research could
be inferred.
6 .Collection Procedures
The procedure will be done by issuing out the questionnaires to the populated
sample. After receiving their answers, it will take me a week or so to count them, in
order for me to can be able to check how many participants participated in the
questionnaire. The participants will be given 10 to 15 minutes to complete the
questionnaire.
Where is validity and reliability?
7 .Ethical Consideration
The study does not force anyone to participate in the questionnaire, thus, it is
essential that everyone who wants to participate in the questionnaire is entitled to do
so without any hesitation, therefore the response of everyone taking part in the
questionnaire is confidential and in that manner every individual is entitled to answer
the way he/she can without assisting one another. Moreover the study requests that
only the employees from Volkswagen NTT (Potchefstroom) in the North West
province be given a chance to complete the questionnaire and not any other
members from different companies.

Where is consent form and cover page?

Appendix A: Questionnaire for Participants
This is a questionnaire regarding VolksWagen NTTs (Potcheftroom) company
ethical behaviour concerning employees relation to customers and, the
customers relation back to the company
Start with biographical information
1. Do you have enough employee resources?
Yes
No
Comments
2. Are all staff members well trained?
Yes
No
Comments
3. Are all staff members actively involved in assisting customers?
Yes
No
Comments
4. Is the information offered to customers relevant?
Yes
No
Comments
5. Are there staff development and training programmes available?
Yes
No
Comments
6. Is there budget allocation for the training and development of employees?
Yes
No
Comments
7. Do you have enough employees to render specific services?
Yes
No
Comments

8. Is the level of support rendered by other VW companies up to the standards

which are required by the VW policy?
Yes
No
Comments
9. Does the company receive support from external stakeholders?
Yes
No
Comments
10. Are all the executive members professionally and academically qualified?
Yes
No
Comments
11. Do all employees of the company make it possible for the customers to relate
well to the companys ethics?
Yes
No
Comments
12. Are the employees payed on time in order for them to give a world class
service?
Yes

No

Comments
13. Are the customers always happy with the service that they receive from the
employees?
Yes
No
Comments
14. Does the VW policy recognize the importance of ethical behaviour for the
employees?
Yes
No
Comments
15. Do customers often face challenges with regards to the companys ethical
behaviour?
Yes
Comments

No

Make sure the above questions are sufficiently cover the following

How does unethical behaviour affect business in terms of monetary and

productivity?
What should be done to reduce fraud and corruption within the industry?
How are ethical business customs significant in automotive corporations?
What are the roles that managers play within the industry to ensure that
ethical behaviour is practiced within the organisation?

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