THE Importance of Ethics in Business

Presented by: Helen, Steven and William

Good Business consists of:
Macro and Micro Perspectives of
Business Ethics

What are the

differences?
 Micro VS Macro
Macro Perspective Micro Perspective

• Norms & principles and a • Values/norms & principles

fair economic system, i.e. for organizational decisions
distribution justice • Codes, standards of
• Public policy & the conduct, & compliance
legalization of Business systems for organizations
Ethics • Referred as the business
• Refers to the impact of ethics conduct of individual
business decisions on the units
various stakeholders in
society
Effects of Unethical Behavior
from Macro Perspective
Bribery
• Conflict of interest
• Used to gain sales, enter new markets, or to
change or avoid public policy
• Reduces freedom of choice
 Effects of Unethical Behavior from Macro
Perspective
Coercion
Controls people by force or threat
• Higher prices
• Poorer products and services
• Lower buyer satisfaction
Effects of Unethical Behavior from Macro
Perspective
Deception
Manipulating people and
companies by
misleading them
• False impressions
• Leads buyers to select lower
quality products
 Effects of Unethical Behavior from Macro
Perspective

Theft
• Increases the cost of providing products or
services
• Higher margin → higher price
 Effects of Unethical Behavior from Macro
Perspective
Unfair discrimination
Unfair treatment or denial treatment because
of race, age, sex, nationality, religion, political
affiliation or beliefs
• The purchase of service from less capable
people
• Misallocation of resources
 Definition of Trust

• The firm of belief in the competence of an

entity to act dependably, securely and
reliable with specified context
• Trust is related to specific context
• Trust show a level of certainty and judgment
(indicated by belief), it may depend on many
factors
 Four Types of Trust

• Blind trust
Personal judgment or in instinct (e.g. trust in friend)
• Trust based on reputation
Well known brand, recommendation of others
• Trust based on Control and Punishment
Linked to contractual agreements
• Trust based on Policy Enforcement
e.g. contractual agreement for business
 Some Trust Requirement

• R.Trust 1 Dynamic trust should be possible

• R.Trust 2 Use of Networks possible with no prior trust
relationship
• R.Trust 3 Network information should contain
information enabling its trustworthiness to be evaluated
• R.Trust 4 Anonymity of users should be supported
• R.Trust 5 Certification processes should be exist
• R.Trust 6 Audit and lawful interception should be
possible
 Importance of Build Trust with Supplier

• Both have suitability in marketing process

• It’s a way to synchronize both business plan
• Uncertain current economic climate, so it
competition level
• It’s a long term relationship
• It need a contract to bridge both relationship
 Trust and Collaboration

• How are supplier meeting our needs and expectation?

• Are they designing new product to meet our future
needs?
• Are they re-engineering their business system?
• Do they understand our market and business plan?
• Do they seek to optimize our cost?
• Are their key executive responsive and accessible?
 Performance & Value Assesment

• Accurate assessment and methodology

• Significant technological horsepower
• Rapid Feedback
• Flexible design
 Riot at Drydocks

• This was triggered by race issue

• An Indian supervisor cursed his foremen
• The Foremen got angry and punched his supervisor
• The riot occurred, 8000 workers got angry
• They ruined the office facilities and 20 vehicles
 The Main Trigger
• The bad outsourcing employment system
• Paying minimum salary, foreign workers get around
Rp 10 million, Indonesian only Rp 1,1 million
• Outsourcing workers did not receive any safety
goods like foreign and local permanent workers
• There is a very wide gap from that comparison
• The accumulation of the worker’s anger against
company perceived injustice
 Recommendation
• Give more concern to outsourcing worker in respect
with their working benefit and treatment
• Fix the outsourcing provision in order to give more
fair treatment to outsourcing worker
• Make firm rules to prevent discrimination in work
place and also strong sanction to those who break it
 Next Steps
• The minister of manpower and transmigration has
sent fact finder team to investigate
• A good concept of manpower rule need more real
application
• Stop blaming this is not only regional chase
• Impose sanctions to the defendant must be more
serious
 References
• http://www.uj.ac.za/EN/Faculties/management/departments/CSBD/Docu
ments/2010%20CSBD%20Conference%20Docs/BSBotha.pdf
• ftp://ftp.cordis.europa.eu/pub/ist/docs/dir_c/ems/trust-security.pdf
• http://news.okezone.com/read/2010/04/22/340/325338/kerusuhan-
batam-25-mobil-pt-drydock-terbakar
• http://batam.tribunnews.com/2011/03/21/kaburnya-pemicu-kerusuhan-
drydocks-batam-diduga-pengalihan