ASSESSMENT COVER SHEET LOCATION: ONLINE LEVEL 7 FINAL ASSESSMENT MBA ODL SEPTEMBER 2021 MODULE CODE: MBOE7183 BUSINESS ETHICS AND CORPORATE RESPONSIBILITY ANSWER ALL QUESTIONS INSTRUCTIONS The questions must be completed and submitted electronically via Turnitin using word processing software

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ASSESSMENT COVER SHEET LOCATION: ONLINE LEVEL 7 FINAL ASSESSMENT MBA ODL SEPTEMBER 2021 MODULE CODE: MBOE7183 BUSINESS ETHICS AND CORPORATE RESPONSIBILITY ANSWER ALL QUESTIONS INSTRUCTIONS The questions must be completed and submitted electronically via Turnitin using word processing software. No images allowed on answers. All writing should be academic in style, formal, focused, concise and subject specific. It should use a font of Times New Roman 12 with 1.5 paragraph. The questions will be posted via Google classroom on 18 September 2021 at 9.30 am Submission deadline is on 19 September 2021 before 9.30am Submission must be completed via Turnitin.com All submissions will be checked via the Turnitin report in relation to unfair practice for similarity, potential collusion and contract cheating (that is buying from essay mills etc) You may provide citations in the answers (minimum 1 citation per question). Word Count preferably not more than 500 words on each part. No penalty on word count, as long as the question is answered. Please reference any materials obtained from internet or any other sources Equipment or materials required – None Page 1 of 7 2020/2021 Turn Over ANSWER ALL QUESTIONS Question 1 James who works for Fresh Supplies Bhd, is a newly appointed junior employee of the largest food processing company in the region. Fresh Supplies, a renowned household label specialises in high quality meat processing, The company enjoys the trust and confidence of its customers because of its reputation for high quality products. On his second week at work, James noticed some inferior meat being mixed with the normal product in one of the processing plants. He felt this must be unauthorised so he informed the factory manager, who told James that this was in fact a necessary cost reduction measure because company profits had been declining in recent months. James later found out that all stages of the production process, from purchasing to final quality control, were adapted in order to make the use of the inferior meat possible. The factory manager told James that the inferior meat was safe for humans to eat and its use was not illegal. However, he told James that if knowledge of the use of this meat was made public, it would mean that customers might stop buying the products. Many jobs could be lost, probably including James’s own. The factory manager ordered James not to disclose to anyone about the inferior meat and to conduct his job as normal. James later discovered that the main board of Fresh Supplies was aware of the use of the inferior meat and supported its use in seeking to reduce costs and maintain profits. In covering up the use of the inferior meat, the factory produced a fraudulent quality control report to show that the product was purely based on high quality meat when the company knew that this was not so. When James heard this, he was very angry and considered telling an external source, such as the local newspaper, about what he had seen and about how the company was being dishonest with its customers. Required: Page 2 of 7 2020/2021 Turn Over a) Explain how James might act, in each case, if he were to adopt either conventional or postconventional ethical assumptions according to Kohlberg’s definitions of these terms. Your answer should include an explanation of these two terms. (15 marks) b) Construct an ethical case for James to take this matter directly to an external source such as a newspaper. (10 marks) [Total 25 marks] Question 2 Marine Recovery System (MRS) was recently shortlisted for a high value contract for the development of a coastal defence system for another country. This was contingent on the payment of a facilitation fee to an official in the defence ministry. Despite being an unusual request, it was made very clear that MRS would not be awarded the contract, worth $2 billion over 10 years, unless the relatively modest sum of $1 million was paid immediately. Recently, MRS has been facing very low level of business activities, and is about to announce around 500 staff redundancies. Therefore, news that this contract was about to be awarded came as a great relief to the board of MRS, as the jobs would now be secured. However, only the chief executive officer (CEO) and operations director knew about the facilitation fee, so an emergency meeting of the board was convened with only one item on the agenda. Due to the very sensitive nature of the matter at hand, it was decided not to make a formal record of the discussions at the board meeting. This was more likely to result in a frank exchange of views and encourage all directors to express their opinions openly. The CEO, Ray explained the dilemma to the board, making it very clear that without this contract there would be no way to protect jobs. The finance director, Nelson, said that he was personally very uncomfortable with the idea of paying a facilitation fee, which was in effect a ‘bribe’. As a professional accountant he was bound by a code of ethics which strictly prohibited making such payments, therefore he could not sanction the payment under any circumstances. Page 3 of 7 2020/2021 Turn Over The HR director, Sue, took a far more pragmatic stance. She acknowledged that any form of corruption was utterly deplorable; however, it was a fact of life in many countries. She asserted that if the board of MRS decided not to make the payment and forego the contract, then it could be assured that a competitor would not adopt such a high-minded position. The net effect was that by avoiding a relatively small payment, the firm would be doing a disservice to both its employees and its shareholders, who would undoubtedly suffer a reduction in their shareholder value. She maintained that sometimes it is necessary to take difficult decisions in business that are for the greater good, and so suggested that the payment to the official should be made. Required: a) Compare relativism and absolutism and explain the significance of individual or personal differences in guiding ethical behaviour under each approach in a given scenario such as the situation at MRS. (7 marks) b) Explain the ethical theories of deontology and teleology or consequentialism, and analyse which of the approaches have been adopted by Sue and Nelson. (9 marks) c) The involvement of directors in bribery and corruption can seriously undermine the relationships of trust upon which corporate governance is based. Required: Describe best practice measures which could be employed by MRS to combat bribery and corruption. (9 marks) [Total 25 marks] Question 3 Jessy is the executive director and qualified accountant of a large public listed company. Jessy was recently in charge of awarding large outsourcing contracts for her company, without inviting an open tender. When her family fell into heavy debt, she looked for a way to make some additional income. Her company was seeking to place a contract for a large outsourced service. Out of desperation she accepted a bid from one supplier who said it would pay her $50,000 as a ‘thank you’ once the contract was awarded. Page 4 of 7 2020/2021 Turn Over She justified her behaviour by reminding herself that she obtained her job partly because she was an accountant and that she had worked extremely hard to obtain her accounting qualification. She believed she was entitled to make a ‘higher personal return’ on her investment of time and effort in her accountancy training and through successful qualification as a professional accountant. Her act was in violation The IFAC code of professional ethics. The IFAC code of professional ethics (2009), relevant to accountants, contains the following advice. ‘A professional accountant in business or an immediate or close family member may be offered an inducement. Inducements may take various forms, including gifts, hospitality, preferential treatment, and inappropriate appeals to friendship or loyalty. Offers of inducements may create threats to compliance with the fundamental principles [of professionalism].’ Required: a) Briefly describe the five types of ethical threats in the IFAC code of professional ethics (2009) and discuss how accepting excessive ‘gifts’ or ‘hospitality’ can give rise to some of these threats within this case. (9 marks) b) Criticise Jessy’s beliefs and behaviour, and explain why accepting the $50,000 conflicts with her duty to uphold the public interest. (10 marks) c) There are ethical issues, legal restrictions and other regulations around potential insider trading.’ Required: Explain what ‘insider dealing/trading’ is and why it is an unethical and often illegal practice. (6 marks) [Total 25 marks] Question 4 Raymond is currently serving as a non-executive director on the board of a nationalised concern, The Electricity Board (EB), in a developing country in Asia. EB operates a number of coal-fired power stations and transmits energy through a national grid which it controls. The Page 5 of 7 2020/2021 Turn Over electricity generated is then sold to the general public by private sector electricity distribution companies. Raymond is concerned about the ethical implications of a couple of issues that were discussed at EB's most recent board meeting which was held yesterday. As a non-executive director, he believes he has a particular responsibility to consider ethical issues carefully. (1) A general election campaign has recently begun in this country. The governing party has indicated that it intends to maintain EB as a nationalised industry if it wins the general election, although it will be seeking efficiency improvements. The opposition party has indicated that it intends to privatise all industries that are currently nationalised. Early yesterday morning before the board meeting, EB's Managing Director was suddenly asked by senior civil servants in the Ministry of Energy to provide a major commitment to cost cutting in the next ten days. The Managing Director is aware that the Minister of Energy will be making a major election speech in a fortnight's time. (2) A recent United Nations report ranked EB's home country in the Top 10 of its worst polluters, as measured by CO2 emissions per head of population. This report has been seized upon by environmental groups who have called for a month of action during the general election campaign. They wish to highlight the environmental damage being caused by the government's environmental policies and to highlight the need to switch to alternative technologies such as wind power generation. In the last few days small groups of protestors have broken through perimeter fences at two of EB's power stations and managed to delay deliveries of coal by chaining themselves across railway tracks. There have been some reports in the press of heavy- handed treatment being meted out by the security firm hired by EB to deal with the protests. EB's Managing Director has dismissed these reports, saying the protestors' solutions are impractical, they have no rights of access, and that EB is entitled to take whatever action is required against the protestors to protect its property and maintain electricity supplies. In addition, extracts from the discussion on social responsibility at the last board meeting are as follows: Page 6 of 7 2020/2021 Turn Over Extracts from board meeting minutes The Managing Director commented that a key element of good corporate citizenship was managing the company's relationship with the natural environment. He therefore regarded it as top priority for the company to introduce an effective environmental management system. However, he was unclear of the exact meaning of the term corporate citizenship. The Finance Director was more sceptical of the concept of corporate citizenship, claiming that staff co-operation would be necessary if the company was to act as, and be perceived as, a good corporate citizen. She suspected that this would depend on the factors in their background that determined their ethical approaches: 'We ourselves can't teach our employees to be good citizens'. Required: a) Using Tucker's model for decision-making, assess the factors that EB's board should consider when dealing with the current protests by environmental groups. (15 marks) b) Explain the concept of corporate citizenship and describe the issues that influence an organisation's position on corporate citizenship (10 marks) [Total 25 marks] [Total: 100 marks] ** END OF QUESTION PAPER ** Page 7 of 7 2020/2021 Turn Over