Bachelor of Business Administration -------------------------- Business Management 3A

1. Bachelor of Business Administration--------------------------Business Management 3A

2. Chapters

3. Aims of This Module Upon 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.

4. Section 1 - Introduction

5. 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.

6. Functional and Dysfunctional Conflict

7. 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.

8. Sources of Conflict

9. 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.

10. 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

11. 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”

12. 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

13. 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

14. 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

15. 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

16. 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

17. Strategies for the Management of Conflict

18. 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

19. 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.

20. 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.

21. 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.

22. 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.

23. 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

24. Ethical Models

25. 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

26. 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.

27. 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

28. 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.

29. 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

30. 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.

31. 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

32. Levels of Social Responsibility

33. 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

34. 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

35. 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.

36. Stakeholders to Whom Business is Responsible

37. 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.

38. 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

39. 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”

40. Who are the Participants in Industrial Relations?

41. Labour Relations Act (Act 66 of 1995)

42. 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

43. Promotion of Collective Bargaining and Worker Participation • Collective Agreements • Bargaining Councils • Statutory Councils • Workplace Forums

44. Dispute Resolution & Labour Peace • CCMA • Labour Court • Labour Appeal Court

45. 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

46. 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.

47. 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.

48. 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

49. 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

50. 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