BUSINESS ETHICS IN A GLOBAL ECONOMY
DEFINITION OF BUSINESS ETHICS
 The study of the general nature of morals and of specific moral choices; moral
philosophy; and the rules or standards governing the conduct of the members of a
profession (The American Heritage Dictionary)
 Etika = ilmu tentang apa yang baik dan apa yang buruk dan tentang hak dan kewajiban
moral (akhlak) (KBBI)
 Moral = (ajaran tentang) baik buruk yang diterima umum mengenai perbuatan, sikap,
kewajiban, dan sebagainya; akhlak; budi pekerti; susila (KBBI)
WHY STUDY BUSINESS ETHICS
 There are many crisis in business ethics
 Business ethics is not merely an extension of an individual’s own personal




ethics
Professional in any field, must deal with individual’s personal moral dilemmas
A business doesn’t establish rules or policies on personal issues
A person’s experiences and decisions at home, in school, and in the
community may be quite different from his/her experiences and decision at
work
Studying business ethics will help you begin to identify ethical issues when they
arise and recognize the approaches available for resolving them
Global Trust in
Industry Sectors
Source: Edelman Global Deck: 2013 Trust Barometer, http://www.edelman.com/trust-downloads/global-results-2/ (accessed January
30, 2013).
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Timeline of Ethical and
Socially Responsible Concerns
1960s
1970s
1980s
1990s
2000s
Environmental
issues
Employee militancy
Bribes and illegal
contracting
practices
Sweatshops and unsafe
working conditions in
third-world countries
Cybercrime
Civil rights issues
Human rights
issues
Influence peddling
Rising corporate
liability for personal
damages (cigarette
companies)
Financial
misconduct
Increased
employeeemployer
tension
Covering up
rather than
correcting issues
Deceptive
advertising
Financial mismanagement
and fraud
Global issues,
Chinese product
safety
Changing
work ethic
Disadvantaged
consumers
Financial fraud
(savings and loan
scandal)
Organizational ethical
misconduct
Sustainability
Rising drug use
Transparency
issues
Intellectual
property theft
Source: Adapted from “Business Ethics Timeline,” Ethics Resource Center , http://www.ethics.org/resource/business-ethics-timeline
(accessed June 13, 2013). Copyright © 2006, Ethics Resource Center (ERC). Used with permission of the ERC, 1747 Pennsylvania
Ave. N.W., Suite 400, Washington, DC, 2006, www.ethics.org.
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ORGANIZATIONAL
ETHICAL CULTURE
ETHICAL CULTURE: ACCEPTABLE BEHAVIOR AS
DEFINED BY THE COMPANY AND INDUSTRY

CREATES SHARED VALUES AND SUPPORT FOR ETHICAL
DECISIONS – DRIVEN BY TOP MANAGEMENT
GOAL:
 Minimize need for enforced compliance
 Maximize utilization of principles/ethical reasoning in
difficult or new situations
© 2015 CENGAGE LEARNING. ALL RIGHTS RESERVED. MAY NOT BE COPIED, SCANNED, OR DUPLICATED, IN WHOLE OR IN PART,
EXCEPT FOR USE AS PERMITTED IN A LICENSE DISTRIBUTED WITH A CERTAIN PRODUCT OR SERVICE OR OTHERWISE ON A PASSWORD-PROTECTED WEBSITE FOR CLASSROOM USE.
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Role of Organizational
Ethics in Performance
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ETHICS CONTRIBUTES TO
EMPLOYEE COMMITMENT
COMMITMENT COMES FROM EMPLOYEES
WHO ARE INVESTED IN THE ORGANIZATION
AND WILLING TO MAKE PERSONAL
SACRIFICES FOR THE ORGANIZATION
 The more company dedication to ethics, the greater the
employee dedication
 Concerns include a safe work environment, competitive
salaries and benefits packages, and fulfillment of
contractual obligations
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ETHICS CONTRIBUTES TO
INVESTOR LOYALTY
 INVESTORS ARE INCREASINGLY INTERESTED IN A
COMPANY’S REPUTATION AND RECOGNIZE
HOW:

ethical culture provides a foundation for efficiency,
productivity, and profitability

negative publicity, lawsuits, and fines threaten a company’s
long-term viability
 GAINING INVESTORS’ TRUST AND CONFIDENCE
IS VITAL TO SUSTAINING FINANCIAL STABILITY
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ETHICS CONTRIBUTES TO
CUSTOMER SATISFACTION
 CUSTOMER SATISFACTION IS AN
IMPORTANT FACTOR IN A SUCCESSFUL
BUSINESS STRATEGY

Companies seen to be socially responsible increase customer trust and satisfaction

Trust is essential for long-term customer relationships

A strong organizational ethical climate places customers’ interests first
 ETHICAL CONDUCT TOWARD
CUSTOMERS BUILDS A STRONG
COMPETITIVE POSITION SHOWN TO
POSITIVELY AFFECT PERFORMANCE AND
INNOVATION
© 2015 CENGAGE LEARNING. ALL RIGHTS RESERVED. MAY NOT BE COPIED, SCANNED, OR DUPLICATED, IN WHOLE OR IN PART,
EXCEPT FOR USE AS PERMITTED IN A LICENSE DISTRIBUTED WITH A CERTAIN PRODUCT OR SERVICE OR OTHERWISE ON A PASSWORD-PROTECTED WEBSITE FOR CLASSROOM USE.
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ETHICS CONTRIBUTES TO
PROFITS
 COMPANIES NEED PROFITS IN ORDER TO
MEET THEIR RESPONSIBILITIES
 CORPORATE CONCERN FOR ETHICAL
CONDUCT IS BEING INTEGRATED WITH
STRATEGIC PLANNING

Maximizing profitability
 ETHICS HAS MOVED FROM BEING A
COMPLIANCE STANDARD TO BECOMING
AN INTEGRAL PART OF ACHIEVING A
COMPETITIVE ADVANTAGE
© 2015 CENGAGE LEARNING. ALL RIGHTS RESERVED. MAY NOT BE COPIED, SCANNED, OR DUPLICATED, IN WHOLE OR IN PART,
EXCEPT FOR USE AS PERMITTED IN A LICENSE DISTRIBUTED WITH A CERTAIN PRODUCT OR SERVICE OR OTHERWISE ON A PASSWORD-PROTECTED WEBSITE FOR CLASSROOM USE.
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