South African Journal of Economic and Management Sciences
On-line version ISSN 1015-8812
LLOYD, Hendrik R; MEY, Michelle R and RAMALINGUM, Koman. Ethical business practices in the Eastern Cape automotive industry. S. Afr. j. econ. manag. sci. [online]. 2014, vol.17, n.5, pp. 569-583. ISSN 1015-8812.
High profile scandals have brought about a renewed interest in business ethics and, in particular, in understanding the factors that promote ethical behaviour. Business ethics is about identifying and implementing values, rules and standards of conduct for guiding morally right behaviour in an organisation's interaction with its stakeholders. Against this background a quantitative analysis of the ethical practices of 46 companies operating in the Eastern Cape automotive industry was conducted to determine the extent to which ethics-related interventions contributed to establishing and maintaining an ethical organisational environment. A structured online questionnaire was used to collect the data. The data collected was subjected to extensive statistical analyses, including Cronbach Alpha coefficients and item total correlations, and various descriptive statistics were included as a quantitative summary of the data. A constant reference value for the study was also calculated to allow inferences regarding the significance of the tested variables to the study. The results revealed that the organisations in the sample are highly ethical due to the presence of ethics-related interventions, including a code of ethics, committed leadership, adherence to internal and external governance requirements, compliance with legislation and encouragement and disclosure of unethical behaviour. In light of the high number of ethical scandals internationally, this study will add to the empirical body of business ethics research, as it provides organisations with a framework to establish and maintain an ethical business environment.
Keywords : business ethics; automotive industry; South Africa; Eastern Cape Province.