CGBE403 – Corporate Governance and Business Ethics Case Study
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Case Study 1: Go big or go home
Lovemore Sibanda, the director of technology procurement of a large electricity – supply organization based in Johannesburg , has just arrived at Kinshasa’s international airport. He has travelled via Nairobi from Singapore where he attended an electrical engineering conference.
Sibanda is a key decision maker in a multimillion dollar capital equipment deal. He is due to meet with potential business partners from China and France, who will be in Kinshasa for one day. Some of these business people had travelled on the same flight as Sibanda. Others had arrived earlier that morning from other destinations.
When going through customs at Kinshasa International Airport, Sibanda is informed that his yellow fever card expired a week ago. Yellow fever inoculation has a 10 year lifespan. Many African countries require tourists and businesspeople wishing to enter to show proof of yellow fever inoculation in the form of a yellow fever card. Immigration officials inspect travellers’ yellow fever cards when they present their passports upon entering a country.
The French speaking immigration official communicates with Sibanda in broken English. He is given the following choices: a) pay a yellow card fine of $500 which will permit him to enter the DRC; b) return to Johannesburg on the next flight, which leaves in 45 minutes ; or c) receive a yellow fever inoculation injection at a faculty in the arrivals hall. Leaning over a table behind the immigration officer is another official wearing a soiled white coat and with a stethoscope around his neck. On the table are several syringes filled with an amber colored fluid and some cotton balls. He notices a speck of blood on one of the cotton balls. Some of the needles are not protected by the usual plastic cover. In despair, he takes his mobile phone from his pocket. He sees that there is no signal. There are several heavily armed policemen hovering in the entrance hall. The situation is holding up the queue, and some of Sibanda’s fellow passengers are peering over his shoulder to ascertain the source of the delay.
1. Are there key ethical issues that can be identified in this case? If so , what are they? (6)
2. What are the implications of each of the three options ofered to Sibanda ? (9)
3. What advice would you give to Sibanda? (5)
4. How could organisations prepare their employees to deal with situations such as this? (5)
Case Study 2: The life of a Zama Zama
You are the general manager of a gold mine. The mining industry has for many years being plagued by the presence of illegal miners (also colloquially called Zama Zamas ). Their activities are not only illegal, but also dangerous. These miners are purported to be a “breed on their own”. They perform mining activities , usually with rudimentary equipment, in the abandoned or disused shafts and tunnels of gold mines. They sell the ore that is smuggled out of the mines to illegal gold dealers.
The Zama Zamas live underground in temperatures that often exceed 45° C. They coerce legitimate miners employed by the mining companies to acquire food and drink for them. Since illegal mining is a very lucrative enterprise, they earn enough to pay exorbitant amounts of money for basic products (e.g. R100 for a loaf of bread is not unheard of ), so they can easily tempt the legitimate miners employed to purchase food for them and smuggle it into the mines. They are also prone to violence and aggression, and have little respect for human life. Although there is an unspoken rule that the illegal miners will not interfere with you if you don’t interfere with their operations, the situation is now no longer that simple… some of them have been intimidating your legitimate workers and have threatened violence and arson in the neigbouring town.
You have just received word that there has been a rock fall at one of the shafts. An unknown number of illegal miners have been killed and 15 are apparently trapped in a position that is very difficult and dangerous to reach. They have food and water for 12 hours maximum.
Mining rescue proto teams consist of highly trained individuals who are multi skilled in performing search and rescue operations under difficult circumstances in all types of mining operations. You have two such proto teams on standby. After some discussion, one team announces that they refuse to enter the mine and descend the 1.2 km shaft to rescue the trapped illegal miners. They base their decision on the volatility and unpredictability of the Zamas, and the overall danger such a rescue operation might hold. The other proto team is equally reluctant but the team members make a unanimous decision to attempt a rescue operation. It is standard practice in mining search and rescue operations that two proto teams should be deployed at all times, where one team serves as a back up for the other. You have to make a decision within a few hours.
1. Why is this an ethical dilemma? (4)
2. Describe the nature of this (5)
3. How will you deal with the proto team that refuses to enter the shaft? (5)
4. What are the diferent options to deal with this situation in the best possible way? (6)
5. How would each of these options have an impact on the primary stakeholders who could be afected by this situation? (7)
6. What would you do? Justify your decision by using a) your personal ethics stance and b) a combination of the decision making tools you are aware (10)
Case Study 3 : CEO Qhawe Sithole and another were arrested for lootingg CEO suspended for looting appliances, booze in Durban (By Sihle Mlambo)
Johannesburg n A chief executive of a financial institution who was arrested for participating in looting has been suspended for allegedly looting booze, a washing machine and other accessories in Durban.
Qhawe Sithole, founder and chief executive of Pretorianbased Ubuntu Wealth Management, allegedly looted a washing machine, a bar stool, alcohol and other braai accessories.
Ubuntu Wealth ofers financial planning advice for wealth and investments, asset management, income solutions and equity segregated portfolio strategies.
Calls made to listed company telephone numbers were not in operation on Thursday.
Sithole was arrested by the police in uMhlanga earlier this week and was also called out publicly by a friend.
Ubuntu Wealth Management’s chief operating officer Mmangaliso Nxumalo said in a statement shared on Facebook that the board had met this week and elected to suspend Sithole.
“The board wishes to clarify that the chief executive officer has been suspended with immediate efect pending the outcome of his case and an independent investigation into the charges that have been brought to him.
“Once the board receives all facts to this case and have studied the findings, the board will take the recommended disciplinary action against the chief executive as required. The board will move swiftly to institute such disciplinary action so that the matter will be resolved as soon as possible,” said Nxumalo.
Sithole, who is also a former pupil at Hilton College in the KZN Midlands (South Africa’s most expensive school), was also called out on social media by a friend, Michael Hay.
Hay wrote on Facebook: “Qhawe Sithole I told you I was going make you famous for looting and stealing. You in your Wrangler with a washing machine, bicycle, braai stuf, bar stool and alcohol.
“It’s not acceptable, you are the problem, you are the rot.
“Ubuntu Wealth, how can you give advice when you have no values.
“You (are) a disgrace to your old school Hilton College, you (are) a disgrace to the FSCA (Financial Sector Conduct Authority), you (are) a disgrace to our wonderful country, I can’t believe you did what you did,” wrote Hay.
1. Does Sithole face an ethical issue? Justify your answer (4)
2. Was the behaviour demonstrated by Sithole ethical? (remember to give reasons for your answer) (4)
3. What are the possible implications for Ubuntu Wealth Management as a result of Sithole’s ())
4. Did Michael Hay face an ethical dilemma? Justify your (4)
5. What actions could Hay have taken? Explain his options and the implications of each option ())
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