Access over 20 million homework & study documents

ACS2700 Test 2 of 2014

Content type
User Generated
Rating
Showing Page:
1/3
1
School of Business and Economics Accountancy Studies
ACS2700 Ethics and Business
Semester 2 2014
Test 2
Date: 26 September 2014 Marks: 60
Duration: 80 minutes
QUESTION 1 (20 Marks)
Capitalism operates on the basis of a market system in which production and distribution
is privatised. South Africa tends towards the Anglo-American model, especially regarding
board structure and the role played by the financial markets and banks. The European
model differs from this model and is more of a stakeholder model. Edward Freeman is
associated with the emergence of the stakeholder theory of corporations. This was
further stimulated by Immanuel Kant’s ethics of respect for persons, which states that no
person should be treated as a means to an end, but that all persons should be respected
as ends in their own right.
Despite substantial differences in the way that capitalism is, and has been, practiced, a
number of key features have nevertheless emerged over time:
The rise of the corporation;
Private Property;
The profit motive; and
Competition
REQUIRED
Answer the following instructions relating to capitalism:
1.1 Explain in your own words how the profit motive is significant in
understanding the core of capitalism. (5)
1.2 Discuss in your own words how competition is significant in understanding
the core of capitalism. (5)
1.3 Provide a summary covering the key aspects of the stakeholder theory for
corporations as defined and argued by William Evan and Edward Freeman.
Include which groups the stakeholders are. Exclude any discussion related
to Kenneth Goodpaster. (10)

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/3
2
QUESTION 2 (10 Marks)
In governing the ethical performance of a business within a triple bottom-line reporting
model there are four dimensions:
1. Determining the ethical risk of the company;
2. Codifying the ethical standards of the company;
3. Institutionalising ethical standards in the company; and
4. Reporting the ethical performance of the company.
Concerning dimension 1, when ethical risk assessment is done, it can be approached in
either a unilateral or a multilateral manner.
REQUIRED
Answer the following questions relating to ethical risk assessment:
2.1 What is meant with performing ethical risk assessment in a unilateral
manner? (4)
2.2 How does ethical risk assessment in a multilateral manner operate? (4)
2.3 Which of the two manners of ethical risk assessment (unilateral or
multilateral) would you prefer and why? (2)
QUESTION 3 (30 Marks)
You are a corporate governance expert and have recently been asked by the CEO (Chief
Executive Officer) of a private hospital, Midwest Clinic (Pty.)Ltd., to meet with him as he
has some questions regarding the company. His name is Johnny Rhodes, a respected
business person with a MBA degree. The private hospital is a private company (not
listed) where a holding company owns 60% of the shares. The other shares are held
equally by the 4 (four) doctors who started the hospital a few years ago and who still
have private practices in the hospital.
The four doctors and the CEO are the only directors of the company. Due to the more
than 5% shareholding of each doctor, they are not independent directors, although they
are non-executive directors. The chairman of the board is Dr Peterson, one of the four
doctors. The only executive director is Johnny, who owns no shares in the business. The
board meets 12 times a year and has very strict control over the financial figures, monthly
income and expense accounts and the monthly budgets. The company has a strong CFO
(Chief Financial Officer) who is a CA(SA) and who is able to prepare the annual financial
statements for the external audit by B&F, a large audit firm. She is Baby Frank.
(Question 3 continued overleaf)

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/3

Sign up to view the full document!

lock_open Sign Up
Unformatted Attachment Preview
School of Business and Economics – Accountancy Studies ACS2700 – Ethics and Business Semester 2 – 2014 Test 2 Date: 26 September 2014 Marks: Duration: QUESTION 1 60 80 minutes (20 Marks) Capitalism operates on the basis of a market system in which production and distribution is privatised. South Africa tends towards the Anglo-American model, especially regarding board structure and the role played by the financial markets and banks. The European model differs from this model and is more of a stakeholder model. Edward Freeman is associated with the emergence of the stakeholder theory of corporations. This was further stimulated by Immanuel Kant’s ethics of respect for persons, which states that no person should be treated as a means to an end, but that all persons should be respected as ends in their own right. Despite substantial differences in the way that capitalism is, an ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
Super useful! Studypool never disappoints.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Documents