the importance of business ethic

THE Importance of Ethics in BusinessPresented by: Helen, Steven and William

Good Business consists of:

Macro and Micro Perspectives of Business Ethics

What are thedifferences?

Micro VS MacroMacro Perspective Micro Perspective

• Values/norms & principles for organizational decisions

• Codes, standards of conduct, & compliance systems for organizations

• Referred as the business ethics conduct of individual units

• Norms & principles and a fair economic system, i.e. distribution justice

• Public policy & the legalization of Business Ethics

• Refers to the impact of business decisions on the 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


Coercion Controls people by force or threat• Higher prices• Poorer products and services• Lower buyer satisfaction


DeceptionManipulating people and companies bymisleading them

• False impressions• Leads buyers to select lower

quality products


Theft• Increases the cost of providing products or

services• Higher margin → higher price


Unfair discriminationUnfair 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/

Documents/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