Ideas for Leaders #319

Changing Attitudes to Business Ethics: Insights from South Africa

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Key Concept

The past 20 years or so have seen a marked change in attitudes towards ethics among South African business-school students. Recent MBA graduates have stronger opinions on what is ‘wrong’ and what is ‘right’ business behaviour and are more likely to think in terms of moral absolutes. This has significant implications for business schools and educators — and for companies and employers.

Idea Summary

Recent decades have seen increased focus on corporate governance and business ethics — and an increased number of ethics-based courses at business schools. While this is true of countries across the world, South Africa can be considered a special case.

In South Africa, dramatic changes to the corporate governance regime have coincided with — and, indeed, reflected — dramatic political, social and economic change. The seminal King Report on Corporate Governance, first published in 1994, when South Africa was re-admitted to the global ‘economic system’, and last revised in 2009, has been accompanied by Affirmative Action and Broad Based Black Economic Empowerment (BBBEE) initiatives to transform the demographic make-up of management teams.

Business ethics in South Africa are, then, worthy of special study.
A recent paper from the Gordon Institute of Business Science (GIBS) addresses two key questions: “How have attitudes towards business ethics of business students changed between the early 1990s and 2010?” and “What aspects of business ethics need to be addressed the most urgently by business schools and business practitioners?”

The authors, Gavin Price and Andries Johannes van der Walt, look at two student cohorts, one from Rhodes University and one from GIBS, separated by a gap of more than 16 years. Their main research instrument is the Attitudes Towards Business Ethics Questionnaire (ATBEQ), an assessment tool developed in 1989. Based on the Likert scale (the five-point scale that usually ranges from ‘strongly agree’ to ‘strongly disagree’), ATBEQ includes some 30 statements that test not only for attitudes towards business ethics in general but also for personal moral values.

Comparing the two samples, they find significant changes in responses. The ‘centre of gravity’ shifts radically from ‘generally agree’ to ‘generally disagree’ for two key statements: “As a consumer when making an auto insurance claim, I try to get as much as possible regardless of the extent of the damage” and “Employee wages should be determined according to the laws of supply and demand”.

Many other responses also show a strengthening of attitude: people from the later sample, from GIBS, tended to agree more or disagree more with the questions than people in the earlier sample of Rhodes graduates.

Underlying this shift, what’s more, is something more fundamental. Further analysis finds evidence for two other changes: a move towards utilitarianism (the belief in the ‘greatest good for the greatest number’) and a strong trend towards teleological moral philosophy, which focuses on the end result of an action, rather than its intrinsic virtue. Put very simply, the GIBS students seemed more inclined towards absolutism and they also seemed to resist the ‘virtue-is-its-own-reward’ approach that characterises deontological (duty-focused) philosophy.

The results may be described as ‘mixed news’. While they bode well for the implementation of new business-oriented legislation and codes such as the 2009 King Code, which require companies, as corporate citizens, to commit to and follow socially acceptable practices, they also point to potential risks. The move towards utilitarianism could result in a compliance-driven approach in which what’s legal is mistaken for what’s ethical. The move towards a more absolutist attitude, meanwhile, could suggest a naive or simplistic approach to complex and subtle moral issues and dilemmas.

Business Application

Answering their second research question, the authors say it is important for business schools and educators to “reinforce their focus on two of their goals”.

Firstly, they must ensure they “create an effective level of understanding of a broad range of ethical philosophies and approaches, both relative and absolute, that may be applied in the ever-changing complex business context.”

Secondly, they must take what could be termed a ‘principles-based’ approach, ensuring that the reasons for any rule or regulation are understood and considered in the ethical decision-making process, and that students progress beyond rudimentary levels of ‘cognitive moral development’.

From this, we can infer a golden rule for the design of business courses and executive development programmes: know your students and the context they work in. Companies will want to check that ethics courses offered by external providers — and their own training and mentoring schemes — follow this rule.

More broadly, the research has implications for the recruitment and retention of employees. It’s further evidence that the ‘brightest and the best’ won’t want to work for a company that flouts best-practice codes or has a bad reputation. The expectations of employees have been raised — and companies are under increasing pressure to meet them. 

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Idea conceived

  • March 2013

Idea posted

  • February 2014

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