E he edge, D. A.
A icle
'We a e no a socie y o sain s'
Sou h A ican Jou nal o Business Managemen
P o ided in Coope a ion wi h:
Uni e si y o S ellenbosch Business School (USB), Bell ille, Sou h A ica
Sugges ed Ci a ion: E he edge, D. A. (1983) : 'We a e no a socie y o sain s', Sou h A ican Jou nal
o Business Managemen , ISSN 2078-5976, A ican Online Scien i ic In o ma ion Sys ems (AOSIS),
Cape Town, Vol. 14, Iss. 3, pp. 125-129,
h ps://doi.o g/10.4102/sajbm. 14i3.1157
This Ve sion is a ailable a :
h ps://hdl.handle.ne /10419/217838
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s.
A .
J.
Bus.
Mgm .
1983, 14(3)
/n e
ace
I Koppel lak
'We
a e
no
a socie y o
sain s'
D.A.
E he edge
Ins i u e
o
In e nal Audi o s, Sou h A ican Chap e ,
P esiden ,
S.A . Ins i u e
o
Managemen
AC(Cl)led
May
1983
In
his
a icle, he au ho illumina es he phenomena
o
co up-
ion
In
he Sou h A ican socie y. No only does he illus a e
ha
co up ion needs
o
be con ained, bu he also sugges s
ha
companies, la ge and small, public and p i a e
a e
no do-
Ing
enough
o minimize he incidence
o
co up ion.
The
au ho hen p oceeds
o
sc u inize ou ways
o
es ic -
ing
co up ion:
-Legisla ion. Al hough he does no a ou he op ion
o
legisla ion.
he
demons a es ha he in oduc ion in he
USA
o he Fo eign Co up ion P ac ices Ac led
o
subs an ial changes in company beha iou and p ac ice.
-
Beha iou .
The
au ho sugges s ha companies spell ou in
clea
e ms wha
is
conside ed accep able and legi ima e
beha iou and wha
is
no . These policy guidelines mus
hen
be
implemen able in p ac ice.
-Educa ion.
In
he long e m, he au ho sugges s, socie y
mus
be educa ed and e-educa ed in business e hics.
Clea ly,
business schools would be he ideal ins umen o
ca y
he awa eness
in o
he business communi y.
-
Audi .
The
au ho p oposes ha he audi is he bes way
o
dealing wi h co up p ac ices. Mangemen mus ins all
he
sys ems and in e nal con ols; and mus ensu e ha
he
in e nal audi eam is composed
o
high quali y people
who
will no de ia e om hei ask objec i e. In his
espec he compu e -despi e I s own secu i y p oblems
-could
be
o
g ea impo ance.
S.
A .
J.
Bus. Mgm . 1983, 14:
125-129
In
hie die a ikel wo d die phenomeen an ko upsie in die
Suid-A ikaanse besigheidswA eld on bloo . Die sk ywe s e
di
da
maa skappye en ins ansies nie genoeg doen om die p o-
bleem
e bekamp nie .
.
Die
sk ywe s el basies ie wyses oo waa olgens ko up-
sie
~hee
kan wo d, nl. We gewing, Ged agskodes, Op oeding
en
die
ln e ne Oudi . Die sk ywe slaan die laas e wyse
hoog~ e
aan
en
b ei daa op
ui
- e al en opsig e
an
die
geb u1k
an
die ekenaa .
S.-A .
Tydsk . Bed yls/. 1983, 14: 125 -129
Time
magazine ecen ly
nomina ed
he
Compu e
'Man
o
he Yea
o
1982'
hus
con i ming
an
uneasy eeling
amongs i s
eade s
ha
he
compu e
has
become
a domi-
nan ea u e in
ou
li es
and
is displaying e e inc easingly
human cha ac e is ics.
This g owing humani y is
no
necessa ily a
ma e
o
joy
as
he p e ious
'Man
o
he
Yea '
was
Aya ollah Khomeini.
Some
o
he
le e s
in
he
ollowing issue
o
Time (24
Jan.
83)
. e~ealed
he
conce ns
abou
he
compu e :
I
1s
app op ia e
ha
a
machine
should
eplace
he
~an
o
he
Yea
in
I 982, especially
when
one
con-
side s
he
colossal
absu di y
o
he
imes in which
we
li e.'
'I
am
dismayed
ha
he
compu e
alone
is
Man
o
he Yea .
The
i le
should
be
sha ed
equally wi h
unemployed
Ame icans.
The
compu e
is
he
big
eason
why
so
many
Ame icans
a e
jobless.'
_'I
ea compu e s will s a Wo ld
Wa
III by
mlS ake. They now make e o s
on
income ax bank
s a ~en s
and
u ili y bills. These machines h~ e
no
conscience.'
'Y_o~
ha e only encou aged
hem_
he ju enile
adm1ms a ~ s who a emp
o
sol e
managemen
p oblems wi h echnological oys a he
han
s udy
analysis
and
wisdom.' '
'Cong a ula ions on you choice
o
he compu e .
You
_ha e
selec ed my li elihood, my iend and, ac-
co ding
o
my wi e, my cons an companion.'
125
I suppose my main conce n
as
a businessman si ing
on
~p
o
a la ge gold mining ope a ion which makes con-
side able use
o
he
compu e , is whe he his ha dwa e
makes
up
o he ail ies
o
man
o
simply compounds
hem.
The
ac
ha
we
now ha e
o
ha e a con e ence
on
he
compu e
and
in e nal audi seems
o
sugges
ha
he
compu e se es
o
mul iply
ou
capaci y o mis akes
and
malp ac ices!
Bu
o
be mo e se ious, he compu e
is
ob iously an im-
po an
ocus o in e nal audi and can also be i s bes al-
ly. This in ol es howe e no only an unde s anding
o
he
compu e by hose esponsible o in e nal audi bu also
an
unde s anding
o
in e nal audi by he compu e people.
I
he
audi p ocess
is
o
be eally e ec i e, aining
o
hose
in ol ed wi h he compu e mus begin
a
he sys ems
de elopmen le el. While he compu e is now
an
in eg al
ea u e
o
business li e, in e nal audi has only ecen ly
begun
o
be p ope ly app ecia ed in Sou h A ica. This is
pa ly because
o
he a i al
on
he
scene
o
he
compu e ,
bu
also because
o
he g owing complexi y
o
business
and
he
el de e io a ion in supe iso y
and
manage ial alen
which is a quali a i e as well as a quan i a i e p oblem.
I belie e
ha
an
inc easing numbe
o
execu i es unde -
s and
ha
in e nal audi has gone a beyond
he
'policeman'
o
'spy' ac i i y and a beyond he simple p o-
cesses
o
icking
and
coun ing. I hink also
ha
i is mo e
eadily unde s ood ha in e nal audi
is
no
an
ex ension
o
ex e nal audi
and
ha
while he unc ion
o
he la e
is
o
epo
o
he membe s
o
a company who a e, in a
sense, ou side i ,
he
unc ion
o
in e nal audi is
o
sa is y
and
assu e
he
managemen . Inc easingly, in e nal audi is
being used
o
iden i y p oblems,
o
es sys ems
and
o
e alua e in e nal con ols. I is
he
C.E.O.'s
al e ego -
i ells him how well his objec i es, policies, plans
and
in-
s uc ions a e being ca ied
ou
and
how e ec i ely
and
e -
icien ly his con ols
and
ope a ions a e wo king.
Hugh
Ma sh
o
ALCOA
USA, said
o
in e nal audi :
'I
belie e
ha
he mos impo an bene i
o
be p o-
ided by in e nal audi
o
managemen is p o iding
com o .
And
ha
com o
can
be di ec ly ela ed
o
he
audi o 's
scope
o
wo k: i s ,
ha
I, as a
manage , ha e been wo king wi h eliable da a;
secondly,
ha
my
employees a e complying wi h
policies, plans, p ocedu es
and
go e nmen laws
and
egula ions; hi dly
ha
my asse s a e being p ope -
ly
sa egua ded; ou hly,
ha
I
am
using esou ces
economically and e icien ly; and inally, ha my ob-
jec i es
and
goals a e uly being achie ed.'
The
A o ney Gene al
o
Canada
calls in e nal audi :
'One
o
he
sha pes
and
mos e ec i e ools
a ailable
o
managemen
o
ensu e
ha
i manages
he esou ces o which i
is
accoun able economical-
ly, e icien ly
and
e ec i ely.'
126
we
a e
pe haps
lagging
behind
in
Sou h A ~ca
in
so
~-
p ehensi e
an
unde s anding
o
in e nal audi
bu~
I
be~1e~e
his
is
g owing
and
will
become
common p ac 1~ wi hm
a
ew
yea s.
Few
big
o ganiza ions a e
~ hou
1
~ough
one
la ge
ins i u ion
wi h
which
I am assoaa ed ou side
h_e
mining
houses
is
only
now
ins alling an i~ emal audi
sys em.
Ou
need
is
as
g ea
as
anywhe e m he ~o~ld
because
ou
socie y
is
equally impe ec and human ail ies
no
less
e iden
-'We a e no a socie y
o
sain s'.
I
is
nea ly
ou
mon hs
ago
ha ,
in
my
capaci y
as
P esi-
den
o
he
SAIM, I said
in
he cou se
o
a speech
in
Po
Eliz.abe h
ha
business
and public adminis a ion
in
Sou h
A ica
we e
sho h ough
wi h
dishones y. This s a emen
caused
qui e a s i a he ime and o a couple
o
weeks
he ea e and, apa
om
he
news
i ems, edi o ials and
le e s
in
he
newspape s,
I
was
bomba ded
wi h
phone
calls
and le e s, anonymous and open.
I
ha e
no
wish
o
become
mo e deeply emb oiled
in
his
ma e bu
eel
he
need
o make u he e e ence o i -
and
his
add ess p o ides a be e
ehicle
han mos .
My
pu pose
is
o
acknowledge
ha many people
o
all
so s and
anks in
socie y
ha e
gone
ou
o
hei
way
o hank
me
o aising he ma e and con ibu ed u he o ou
knowledge
o
i . I
wish
I could
say
ha I
now
eel
ha I
exagge a ed he p oblem back
in
No embe . Some
o
my
iends
in
chie
execu i e
posi ions
ha e
sugges ed
o
me
ha
I did exagge a e he p oblem. They a e
men
o
g ea pe -
sonal in eg i y unning la ge o ganiza ions employing
housands
o
people.
I
seems
ha
hey
simply
do no know
-and canno hope o
know
-wha
is
happening u he
down
he
line,
o en
in
hei
own
o ganiza ions, le alone
o he s. Reg e ably he gene al
message
is
ha co up ion
o
one so and ano he
is
indeed widesp ead in he public
se ices,
pa as a al o ganiza ions, boa ds, local au ho i ies
and
in
business,
much
mo e
so
han I
ealiz.ed.
This has been
con i med
by
chie
execu i es
on he one hand and cle ks
and junio o icials on he o he . Sec o a e sec o
o
ou
socie y
has had he inge poin ed a i by someone who
knows
his
ac s.
No
all
he accusa ions ha e su e ed om
agueness
which
o en cha ac e izes his so
o
p oblem
- a numbe ha e been p e y speci ic and de ailed. I do
no se
mysel
up
o
be
an ombudsman and he e o e ha e,
gene ally
speaking, no aken hese any u he .
I
is
abundan ly clea ha a g ea many
o
he ac ions
which
esul
in
pe sonal gain a he expense
o
he ins i u-
ion a e based on collusion be ween someone employed by
he ins i u ion and someone on he ou side, usually a sup-
plie
o
equipmen and goods o a con ac o p o iding
se -
ices,
epai s and he like.
Be ween
hem hey collude o
ob he ins i u ion
by
alsi ying he inancial a angemen s
be ween
he
wo
bodies hey ep esen wi h a e y good
chance
o
hei collusion no
being
de ec ed. The e a e, in-
e
alia,
many examples
o
ende p ocedu es -p obably
hough
by
managemen
o
be
sound and oolp oo -being
manipula ed by collusion o he bene i
o
he unsc upulous
pa ies.
I
would
like o quo e om some
o
he le e s I ha e
ecei ed,
none
o
hese being anonymous, bu being p o-
pe ly signed
by
he w i e .
The i s
is
om a managing di ec o :
'F om
my
expe ience
I ha e ound se e al eac ions:
-The e's some hing
w ong
wi h
me
o no accep -
ing "ex as";
-The e's some hing w ong wi h my company o
S.-A . Tydsk . Bed y sl.
1983,
l4(])
no o e ing
"ex as";
-Rocking he boa when I obse e
his
p ac ice
c ea es a blacklash and pe manen
damage
o
my
company.
I'm
us a ed wi h his si ua ion.
My
pe sonal
ex-
pe iences in (he men ions h ee hi d wo ld
coun ies)
has
gi en
me
an insigh in o he logical ex ension o
such
p ac ices.'
And a woman who wo ks in he husband's
business:
'I
ha e always aken he
iew
ha paymen s o
his
na u e a e no hing o he han b ibe y bu I'm
a aid
my adaman a i ude has los
my
husband a
g ea
deal
o
he mo e luc a i e ype
o
business.
When
I
see
how much he ha de he has o
wo k
in
o de
o main ain his ideal
o
hones y,
my
hea
aches
and
I don' know whe he I
am
igh o be
so
igid.'
A simila s a emen om ano he manage :
'I
has been disappoin ing in his las
13
yea s
in
Sou h A ica o ha e expe ienced si ua ions
whe eby
because
o
my
pe sonal p inciples I would
no
s oop
o g a . The consequences
o
los business
al hough
hu ul and unp o i able a he ime esul ed
in
a
clean conscience . . . Co up ion needs ha sh
ea -
men ac ioned by all . . . ou s eng h o
e adica e
g a
will
only come om uni y
o
e o .'
And inally, a man who e i ed om a senio
buying
posi-
ion a
ew
yea s ago:
'I
ha e (since e i ing) me many people
associa ed
in one
way
o ano he wi h he mining indus y
and
he s o ies I ha e hea d indica ed a se ious
wo sen-
ing
o
he si ua ion.'
I do no like anonymous le e s bu I
am
now
going
o
add some hing said by an anonymous pe son
because
i
may
be much mo e ele an o a 'wo sening si ua ion'
han
we
ealize. His
iew
was ha he In o scandal and
pa icula ly
he many aspec s
o
i le un esol ed, in ol ing
e y
im-
po an people in public se ice and in business,
c ea ed
he
en i onmen in which lesse people el ha co up
p ac-
ices
a hei
le el
we e,
i no de ensible, a
leas
no
wi hou
he p eceden
o
op-le el example. .
In ac , he mos se ious aspec
o
he
whole
ma e
1s
he
iew
ha co up p ac ices a e so widesp ead
because
hey in ol e some op le el people
in
a ious
sec o s
who
a e in one way
o
ano he shielded om public
gaze.
Al e -
na i ely ha he e a e many op people
who
appea o
know
wha
is
going
on bu a e no p epa ed o speak ou o
ake
ac ion o one
o
ano he eason.
Jus ano he wo d on anonymous le e s and
phonecalls.
Mos
o
hese deal wi h a speci ic issue and o en
named
hose alleged o
be
in ol ed. One which a i ed on
my
desk
in Janua y
is
wo hy
o
men ion. While i
is
on plain
pape •
i
pu po s o come om
'an
ex emely la ge G oup
o
Com-
panies',
is
well- yped and pu po s o ha e been w i en
by
senio execu i es. I deals wi h i egula i ies wi hin ou
G oup, pa icula ly one gold mine, and says hey will
be
wa ching de elopmen s wi h in e es and 'conside
aking
o he ele an ac ion
i
his highly unsa is ac o y s a e o
a ai s be allowed o con inue'.
Should hose who w o e his le e hea
o
my
e e ence
o hem now, I us hey
will
ealize ha his
is
a
silly
way
o
'an
ex emely la ge G oup
o
Companies' o
beha e
~d
ha hei s a emen ha 'un o una ely o easons
which
will
be sel -e iden
we
mus w i e o you anonymously'
is
qui e unaccep able. One
o
he execu i es could ha e
seen
S.
A ,
J.
Bus.
Mgm .
1983, 14(3)
me
o
hey
could ha e w i en con iden ially bu openly o
me.
F ankly,
his le e
is
in i sel a o m
o
co up ion and
I
c:an
only
hope ha he au ho s a e no who hey p e end
o
be.
I
hey
a e indeed senio execu i es
o
a la ge g oup,
I
he eby
issue
hem wi h an in i a ion o
see
me
con iden-
ially
wi h
an unde aking ha i hey ha e been playing
he
game
s aigh , hey ha e no eason o ea ep isals o
wha e e
i
is
hey ea .
Pe haps
his
is
he apposi e poin a which o say ha
i
is
also
e iden ha some innocen people a e accused o
kep
unde
suspicion o p ac ices
o
which hey a e inno-
cen .
A e
all, he majo i y
o
people in all sec o s a e in-
nocen
and some ha e o su e om un ounded accusa-
ions.
This
is
one
o
he aspec s ha causes people o hold
back
in
b inging co up ion o he o e -and qui e igh ly
so.
The
legal
p inciple ha a man
is
innocen un il
he
has
been
p o en
guil y should especially apply
in
he ma e
o
business
e hics.
I
ha e
been
wa ching he newspape s o e he las ou
mon hs
o
new
e idence
o
co up ion, g a and
mis-
managemen
o
unds and his he e has been in ai abun-
dance,
wi h
a com o ing numbe
o
hese ma e s eaching
he
cou s.
In e alia, he p ess has gi en conside able a -
en ion
in
ecen mon hs o alleged accep ance
o
'gi s'
by
medical
o icials om one o mo e pha maceu ical com-
panies.
A
he
same ime, o he p ess epo s
ha e
ein o ced
he
ac
ha he p oblem
o
co up ion
is
by
no means
con-
ined
o
Sou h A ica
o
o he ee en e p ise wo ld bu
is
endemic
in
he whole
o
oday's wo ld. In ac , he
absence
o
en ep eneu ial oppo uni ies
in
socialis and
communis
coun ies appea s o c ea e
e en
wo se p oblems
in
hose
coun ies. A
new
book
by
Pa ick
Meney,
a F ench
jou nalis
who
was
a co esponden in Moscow o yea s,
says
he
So ie
Union has become a klep oc acy -'a
socie y
o
hie es,
ixe s
and conmen' (S a 8 Jan.
73).
The
highes
and
he
lowes
in
he land a e included
in
his klep oc acy
and
in
a black ma ke whe e p ices a e usually en imes
highe
han he no mal ones. He ci es he case
o
he
Minis e
o
Fishe ies who headed a ing logging ons
o
ca ia
ab oad annually by expo ing he a e
delicacy
o
ac-
complices
in Swi ze land as inned he ings. The Minis e 's
esigna ion
in
1979
led o he a es
o
200
dishones o -
icials.
He
also ells
o
he ' ac o y ha ne e was'
which
en iched
hose who conni ed o pay sala ies and subsidies
o
non
exis en o icials.
The
new
P esiden
o
Mexico, de la Mad id, whe e co -
up ion
has
long been endemic has emba ked on 'mo al
~o a ion'. In e alia he
is
seeking changes o he cons i u-
ion
ha
will
make i easie o p osecu e co up o icials.
In
an
a icle in
Time,
20 h Decembe , some doub
is
ex-
l)l'essed abou de la Mad id's abili y o b ing abou
his
mo al
~o a ion because ' he coun y's e ec i e one-pa y
sys em
Vi ually
ins i u ionalized he p ac ice (o co up ion), a
ac
ha
Mexicans
ha e ecognized wi h equanimi y'. Among
o he
hings, 'Mexicans suspec ha as many as one
million
Phony
jobs
we e
c ea ed in he coun y's economy,
while
go e nmen
o icials and o he s siphoned
o
he paycheq-
ues
o non-exis en wo ke s.'
McG aw-Hill,
he
u;
Ame ican publishing company
has
conduc ed
a su ey
o
business e hics in
16
indus ialized
coun ies.
I ha e no seen he ac ual su ey and ha e o
e-
ly
on
a ecen p ess epo . Appa en ly he su ey showed
h~
one
senio manage in se en ge s caugh up
in
une hical
business
p ac ices, including b ibe y and alsi ica ion
o
in-
127
o ma ion.
Mo e
han hal
o
he
900
execu i es
ques ioned
had
ecen ly
been
con on ed
wi h
a
leas
one
con lic
~
w~n he dem~~s
o
hei
company
and hei pe sonal
~lie s
o
wha
IS
igh .
One
in
en
had
been
aced
wi h
ha -
mg
o
~ke
an
une hical
decision
a
leas
six
imes
du ing
~e
p e 1ou~
i e
yea s.
Thi y-eigh
pe cen
o
hose
ques-
1o~ed
admi ed
hey
had
ecen ly
ei he
made
o
ecei ed
an i egula
paymen
o
one
kind
and ano he .
Finally,
he
su ey
s a es ha wo- hi ds
o
hose
who
ac ed
acco ding
o hei
consciences
and
e used
o
comply
wi h
une hical
company dic a es su e ed
no
ad e se
consequences
a all.
These
examples
o
co up ion
in
o he coun ies a e no
gi en
o u n he spo ligh o ou
own
p oblems
and
while
i
is
a com o ,
cold
hough
i
may
be,
ha o he coun ies
ha e
e en
wo se
co up ion
and
ha
socialism
and
Ma xism
a e
mo e
co up han capi alism, he ma e o
eal
con-
ce n
is
wha
is
happening
he e
in
Sou h A ica.
The
o e all
pic u e
has
pe haps
bes
been
exp essed
in
a b ie edi o ial
in
The
S a on 9 h
No embe ,
1982,
which
is
wo h quo ing
in
ull:
'Only he
mos
nai e
would
ha e
been
su p ised
by
M
Dennis
E he edge's
lamen
ha
business
and
public adminis a ion
in
Sou h A ica a e sho
h ough
wi h
b ibe y,
kickbacks
and
plain
aud.
Co up ion
ocks
no
jus
he
capi alis
wo ld
bu he
communis
and
he Thi d
Wo ld
oo.
No
can
i
be
blamed
on
20 h
cen u y immo ali y. I
has
been
a
way
o
li e
o
many
e e
since
money
and
se ices
became
pa
o
ci iliza ion. Today
some
la ge
com-
panies
budge
o
kickbacks;
some
Thi d
Wo ld
go e nmen s
delibe a ely
unde pay
public
se an s
knowing
hey
make
up
o
i
"in o mally",
some
communis coun ies a e
c ippled
wi h
bu eauc a ic
g a . Pe haps
M
E he edge's c y
o
us a ion will
lead
o
some hing.
Bu
only
pe haps. Co up ion
is
held
in
check
only
by
he
igou
o
a socie y's
non-
ma e ialis ic alues.'
I
wan
now
o
be
cons uc i e and
sugges
wha
can
be
done o
educe
he
incidence
o
co up p ac ices
in
ou
socie y.
Some
o
he
ideas
which
ollow
ha e
o igina ed
om o he people
who
ha e
made
con ac
wi h
me
since
he Po
Eliz.a.be h
speech.
The
ideas
g oup
hemsel es
unde
ou
headings:
Legisla ion
I
am
con inced
ha no
all
p oblems a e
sol ed
by
legisla-
ion and ha ou poli icians
a e
al eady oo ond
o
ad-
ding o he
mass
o
laws
which
go e n
ou
li es.
In
ac ,
one
o
he p oblems o p i a e en e p ise
in
Sou h A ica
which
claims
o
be
a bas ion
o
his
sys em,
is
ha ou
legisla o s
ha e
w apped
i
up
wi hin
such
a
maze
o
la~,
con ol boa ds, adminis e ed
p ices
and gene al s a e
m-
e e ence ha i
is
a wonde ha i
wo ks
a all.
Howe e
we
need
o ake no e
o
he impo an impac
in he
Uni ~
S a es
o
he Fo eign Co up P ac ices
Ac
which
came
in o being in
1978
o
cope
wi h
widesp ead
ques-
ionable co po a e paymen s o
o eign
o icials and
businessmen.
I
goes
much
wide
han i s i le
sugges s
and
p o ides
comp ehensi e
accoun ing
p o isions
which
along
wi h
he an i-b ibe y p o isions ope a e ega d!~
o
whe he
a company
is
in ol ed
in
o e seas
business.
Na u ally, he ac
was
no
well
ecei ed
no
is_
i
wi hou
i s con using aspec s bu
is
has
led
o
subs an!1al
changes
in company beha iou and p ac ices and
has
em o ced
he
128
sys em
o
audi
commi ees
o
he
Boa d
o~
Di ec o s.
Th~
audi
commi ees
ope a ed
in
abou
wo- ha ds
o
compames
in
he
USA
in
he
ea ly
70s
bu
since
he
passing
o
he
Fo eign
Co up
P ac ices
Ac
he e
is
ha dly a company
which
does
no
ha e
an
audi commi ee
o
di ec o s,
in-
ol ing
he
ou side
di ec o s
o
he
company.
Such
an
Audi
Commi ee
no
only
lends
weigh
o
bo h in e nal and
ex-
e nal
audi ;
i
ecognizes
he
ac
ha he p oblems
which
a ise
o en
in ol e
hose a
managemen
le els
as
well
as
hose
hey
supe ise.
Pe haps
I
ha e
pu
he las ,
i s
-legisla ion
migh
be
a oided
i
some
o
he
o he
sugges ions
which
ollow
a e
implemen ed.
No hing
should
gi e
us
g ea e pleasu e han
a oiding
he
necessi y
o
he
passing
o
ano he
law.
Beha iou
We
need
o
change
he
a i ude
in
ou
socie y
owa ds co -
up
p ac ices,
big
and
small,
especially
amongs hose
in
posi ions
o
esponsibili y.
Du ing
he
wa
'up No h'
we
used
o
alk
o
'o ganizing' hings o ou sel es -pe y
s ealing
o
make
li e
mo e ole able. Tha
migh
ha e
been
accep able
beha iou
in
he peculia ci cums ances
o
he
ime
bu
i
is
appa en ha
in
many
a eas
o
ou socie y
i
is
s ill
accep able.
Remembe
ha wha
we
a e alking
abou
is
s ealing
in
one
o m
o ano he -s ealing om
he
company,
s ealing
om
he
S a e.
We
canno educe
he
incidence
o
his
i
we
sh ug
ou shoulde s and
say
i
is
ine i able.
We
ough
in
e e y
o ganiza ion o
ha e
a code
o
p ac ice
and o
p o ide
se e e
penal ies o hose
who
ansg ess
he
code.
I
is
s ill
he
p ac ice
in
many
places
o
i e
quie ly
an
employee
who
has
been
guil y
o
aud
o
some
o he
malp ac ice;
o una ely,
in
a
g owing
numbe ,
he
ma e
is
also
handed o e o he police.
P osecu ion
o en
p esen s
di icul ies.
Many
a
man
who
will
ell
you
p i a ely
wha
he
knows
abou a pa icula
malp ac ice
amongs
his
associa es
will
no
ag ee
o make
a
swo n
s a emen
because
o he emba assmen and
pe haps
ic imiza ion
ha
will
ollow.
I
am
awa e
o
a
numbe
o
cases
whe e
he absence
o
jus one
such
s a e-
men
mean
ha a
p osecu ion
was
no
possible.
Again,
one
is
aced
wi h
a p oblem o beha iou
in
a
socie y.
Manage-
men
mus
do
all
i
can
o
inculca e an unde s anding ha
i
is
incumben
upon
employees
o
help
in
he p osecu ion
o
someone
who
is
clea ly
guil y
o
malp ac ice.
I
may
sound ha sh bu
i
is
ue ha someone
who
ails
o
do
his
is
himsel
some hing
o
an
accesso y
o
he
c ime.
o
cou se,
whe e
assu ances
can
be
gi en
ha he e
will
be
no
come-
backs
and
no
ic imiza ion hey
mus
be
genuinely
gi en.
Some
businesses
do no
spell
ou
clea ly
enough
wha
hey
accep
as
legi ima e
beha iou
and
wha
is
no .
In
No embe
las
yea ,
Assocom
helped
membe
i ms
wi h
he
issue
o
guidelines
which
include
ins an
dismissal
as
an
au oma ic
penal y
o
employees
guil y
o
g a .
This
is
a
policy
al eady
ollowed
by
a
good
numbe
o
companies bu
i
needs
o
be
uni e sally
applied -and
in
he public
se ices
as
well.
The
S.A. Ins i u e
o
Managemen 's Code
o
Conduc
which
was
issued
in
book o m o
all
membe s
in
1982
makes
h ee
e e ences
o
business
e hics:
-
'A
manage
shall
no
misuse
his
au ho i y o o ice o
pe sonal o o he gain' and,
-
:Make
imm<:<lia e
and
ull
decla a ion
o
any pe sonal
m e es s
which
may
con lic
wi h
he in e es s
o
he
o ganisa ion' and,
-'Nei he o e no accep any gi , a ou o hospi ali-
S.-A . Tydsk .
Bed y sl.
191
31
l4(
3)
y, in e?ded as, o ha ing he e ec o ,
b ibe y
and
co up ion'.
Gi s can,
o
cou se,
be
made o p i a e
and
public
employees i
i
is
absolu ely clea ha
hey
a e
no
in ended
o ha e he e ec
o
b ibe y and co up ion.
In
ac ,
in
he
same
issue
o
he Sunday Exp ess
which
e ealed
wha
was
happening
in
he
medical
wo ld, he e
was
an
a icle
'Execu-
i es
ge
gi s -no b ibes'
which
said
he
execu i e
gi s
indus y
was
booming
wi h
g ow h es ima ed
his
yea
o
be
200/o
up
in
a ma ke es ima ed a
R200m.
The
chai man
o
a g oup
in
his
ield
is
quo ed
as
saying
ha
'A i udes
ha e
changed and managemen s accep ha
i
is
now
no -
mal
p ac ice, wi hin eason, o companies
o
exchange
gi s
simply
o
say
hank you o an associa ion.' I
suppose
he
c i ical wo ds he e a e 'wi hin eason'. In he
ci cums ances
i
is
com o ing o know om
him
ha he
mos
common
gi s, anging om
SOc
o
RIOO
a e imp in ed
ones.
I
ou
p oblems
we e
limi ed o
SOc
o
RlOO
he e
would
be
li le
cause o conce n bu un o una ely
i
uns
in o
a
la ge
igu es, some imes
i e
and
six
igu es.
None
o
hose who ex ol he i ues
o
he
p i a e
en e -
p ise
sys em
he e
o
elsewhe e p e end ha
i
is
pe ec .
While
one can decla e wi hou doub ha
p i a e
en e p ise
is
he
bes
way
o b ing abou g ow h and
de elopmen
and
o mo i a e people, one
has
o admi ha
i
has
i s
blemishes
and ha unsc upulous indi iduals ha e
oppo uni ies
o
misuse
i . No only do
we
in
he p i a e sec o
unde s and
his bu I
belie e
ha much
is
being done o
make
co up
p ac ices mo e di icul and o li he
le el
o
business
e hics. I
is
no un easonable he e o e o
sugges
ha
he
Ci il
Se ice,
pa as a al bodies, con ol boa ds
and
local
au ho i ies should ha e a good look a
hemsel es,
aking
accoun
o
widesp ead allega ions
o
mishandling o
unds
in
a a ie y
o
ways.
To hose
o
us
on he
ou side,
he
much-publicized a ionaliza ion
o
he
ci il
se ice
seems
o
ha e
done li le o imp o e he
se ice
i
is
supposed
o
p o ide.
We
a e aced wi h he c y ha he
Ci il
Se ice
has se ious sho ages
o
pe sonnel -
which
is
ce ainly
ue
in
ce ain
key
a eas -bu
we
a e also awa e ha
he
S a e
employs a
e y
high p opo ion
o
he whi e
popula ion
-
abou
300/o
I hink
i
is.
Bu I am no ying o play down he
se iousness
o
s a
sho ages. The Sunday Exp ess
(23
Jan.
83)
epo ed
ha
mos senio Go e nmen and A my
men
who
appea ed
be o e
he
1982
Pa liamen
Selec
Commi ee
on
Public
Ac-
coun s complained
o
inabili y o comply
wi h
audi ing
egula ions because
o
c i ical s a sho ages. I
s ock
can-
no
be
checked, and ouche s con i med he
possibili y
o
co up p ac ices
is
g ea ly inc eased.
We
ha e also hea d
in
he p ess abou he
as
numbe
o
acancies
in
he Inland Re enue Depa men
which
in-
e i ably means some axes a e no being collec ed
and
op-
po uni ies o
e asion
a e inc eased.
Business
Times
quo ed
on
21s
Janua y a op o icial
o
Inland
Re enue
who
said:
'Don' quo e
me,
bu ou calcula ions
sugges
ha ,
as hings s and, he p o essional ax dodge
has
a
400/o
g ea e chance
o
making
700/o
mo e
money
o e
10
yea s han he hones and consis en
axpaye '.
Apa om he p oblem
o
s a sho age and
inadequa e
audi s, he public
se ices
a e missing ano he impo an
discipline. O he han
in
he
case
o
some pa as a al
bodies,
he e
is
no p o i mo i e, no bo om line and no
dange
o
'going bus '. Sloppy p ac ices a e much easie han
in
he

S.
A .
J.
Bus.
Mgm .
1983,
14(3)
p i a e
sec o whe e audi s a e egula ly and
ully
ca ied
ou
and
e e y hing has o be uned o he o e all necessi y
o
making
a p o i .
Educa ion
In
he
ong
e m,
we
mus
ely
on educa ing and e-educa ing
ou
socie y.
In he ield
o
business educa ion, 1 am pleased
o
s a e
ha he g adua e schools
o
business a e discussing
he
inclusion
o
a cou se
in
business e hics
in
he
MBA.
The
GSB
a
UCT
al eady o e s a cou se which
goes
some
way
owa ds
his
-'Business in Socie y: concep s and
alues
in
an
A ican con ex ' de eloped and augh by D James
Lea .
I app ecia e ha a g ea amoun has o be squeezed
in o
an
e ec i e business cou se bu belie e ha he e
mus
be
oom
o p epa e he po en ial senio manage and chie
execu i e
o he ac ha
we
a e no a socie y
o
sain s.
I
seems
ha he e
is
also a need o a cou se
in
medical
e hics
in
ou medical schools
i
one
is
o ake in o accoun
a
ecen
a icle by Jill Mcllw a h in he Sunday Exp ess(l3
Ma .
83).
She
epo s on he indi e ence
o
medical
s uden s
owa ds
he ecen e ela ions in ega d o he ela ionship
be ween
some
doc o s and some pha maceu ical companies.
She
says:
'The ailu e
o
many s uden s o
see
he ela ionship
wi h
comme cial in e es s as one aspec
o
he many
e hical
issues
hey
will
ace when hey p ac ice mus
be
a cause o conce n by all hose in he p o ession
who
do
wish
o sa egua d high e hical s anda ds
in
medicine
and hose in he ecei ing end
o
doc o s'
ca e,
he pa ien s.'
In
he
wide sense, educa ion in he home and he school
is
clea ly
o
he g ea es impo ance. We ha e o build up
and
en ench wha The S a edi o ial called 'socie y's non-
ma e ialis ic
alues'. We ha e o
see
ha
in
he educa ion
o
ou
child en
we
eally li e up o he claim
so
o en made
ha
we
a e
a Ch is ian socie y.
We
ha e o inculca e
in
hem
a
belie
ha good p inciples a e wo h adhe ing o and ha
co up
p ac ices a e mo ally inde ensible. Business e hics
which
e m co e s no jus he business wo ld bu
all
o he
economic
ac i i y as
well
-mus be
seen
as cen al o a
wo hwhile
socie y.
D
Lea
says
o
i in a ecen a icle:
'Business e hics
is
mo e han blowing he whis le on
dishones y
and g a . I
is
disciplined e lec ion upon
wha
cons i u es igh as opposed o w ong ac ions.
In
he business con ex , e hics can be de ined as a
conce n
wi h he way people choose be ween signi i-
can
al e na i e cou ses
o
ac ion. Nea ly
all
weigh y
decisions
in
business a e alue-laden, ha
is,
hey
in-
ol e
making judgemen s which a e no based
sole-
ly
on ac ual in o ma ion bu on wha
is
conside ed
igh
in speci ic si ua ions.'
129
Audi
I
.ha e
le audi o he end.
Clea ly
he audi
p ocess
p o-
~es
. he
bes .
means
o
dealing
wi h
co up
p ac ices.
I
am
hmkmg pa icula ly
o
in e nal
audi
in
he
e ms
o
which
I e e ed o
i
owa ds he
beginning
o
his add ess
as
he
iden i ie
o
p oblems, he
es e
o
sys ems
and he
e alua o
o
in e nal con ols. I
i
is
o
do
his,
manage-
men
mus
ins all he
sys ems
and
he in e nal con ols and
mu~
ensu e
ha he
in e nal
audi
eam
is
composed
o
high
quab y
people
and
is
no
de ia ed
om
i s
p ope ask.
As
a gene al
ule,
he
mo e
he
business
is
un on he
basis
o
clea ly de ined
sys ems
and con ols, he
less
oppo uni y
he e
is
o
employees
o
b eak
he
ules
o
ea he
hei
own
nes s.
While
I
ecognize
ha he compu e
b ings
i s
own
secu i y p oblems, i
is
undoub edly a majo
aid
in
educ-
ing
oppo uni ies
o
sel -seeking
beha iou .
One
young
cha e ed accoun an
in
Johannesbu g
who
has
bumped
agains 'mode n
business
co up ion' poin s
ou ha ex e nal and in e nal audi
only
b ing
eal
bene i s
i he
business
is
al eady
e ec i ely
managed
and ope a ed.
In
he
case
o
ex e nal
audi ,
checking
o
dishones y
among
employees
is
only
a
seconda y
unc ion
while
in e nal audi
oo
easily
'becomes a ubbe -s amping o he pape shu -
le,
combined
wi h
a
pe iodic
s ock
e i ica ion
and
so
loses
much
o
i s
c edibili y
and e ec i eness'.
He
he e o e p o-
poses
some hing
new
-
an
ex e nal
ope a ional
audi
which
he
de ines
as
' he
sys ema ic
analysis
o
indi idual
ac i i ies
a
an
ope a ional
le el
on
a ime/i em andom
selec ion
basis'. I
would
be
aimed
p ima ily a de e ing
employees
om
misusing
hei posi ions
o
pe sonal
inancial
gain.
Such
an
ope a ional audi
eam
would
no
be
composed
solely
o accoun an s
bu
would
include
enginee s
and
o he s
who
unde s and hose ope a ions
whe e
abuse and
collu-
sion
is
likely
o occu .
While
his
p oposal has
some
aul s, i
is
wo h
ollow-
ing
up
and
as
I canno
de o e
mo e
ime
o
i
in
his
ad-
d ess, I
will
p o ide anyone in e es ed
wi h
he
name
and
elephone
numbe
o
he au ho . O he audi a angemen s
ha e
also
been
sugges ed
a one
ime
o ano he .
Some
o
my
calle s
in
he las
ew
mon hs
ha e
sugges ed
ha he
ombudsman
ac i i y
should
be
g ea ly
s eng hened
so
ha
he e
is
a channel h ough
which
cha ges
o
pe cei ed
co -
up ion
can
be
di ec ed. The F.B.l.
in
Hillsbo ough Coun-
y, Flo ida,
asks
ci izens
o
dial
229
-
9241
which
is
hei
•co up ion ho -line' ins alled a e h ee
o
he
i e
coun y
commissione s
we e
cha ged
wi h
conspi ing o ex o
money
om
ci izens
seeking
app o al
o
zoning
app~ica-
ions. The ho -line ope a es
24
hou s a
day
and
ecei ed
calls
om
140
ci izens
in
i s
i s
week
o
ope a ion.
Ho lines ombudsmen, in e nal audi , educa ion,
legisla-
ion -
so
:Uany
possibili ies
and combina ions, good and
bad, bu wha
is
abundan ly clea
is
ha some hing mus
be
done.