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BUSINESS ETHICS

SUPPORTING LECTURER :

ARIFMANUEL KOLONDAM S.E M.M

ARRANGED BY :

SANDY MANOPPO 23053119

BUSINESS MANAGEMENT STUDY PROGRAM

DEPARTMENT OF BUSINESS ADMINISTRATION

POLITEKNIK NEGERI MANADO

PREFACE

All praise and gratitude are due to the Lord Jesus for His blessings, which have enabled me to complete this paper titled "Business Ethics". The aim of this paper is to provide an in-depth understanding of the principles, objectives, roles, and motivating factors behind business ethics violations. The content will encompass the concepts of ethics, business, business ethics, its evolution, principles, objectives, violation factors, and its crucial role. May this paper foster a deeper comprehension of business ethics and inspire readers, especially aspiring entrepreneurs, to apply ethical principles in their business endeavors within the broader society.

CHAPTER I INTRODUCTION

1. Background In the realm of business, a variety of factors shape and influence business activities. While pursuing profit is a natural part of business, there are ethical boundaries that must not be crossed. Ethical behavior is essential for a business's long-term viability. Unethical practices can harm not only the business but also its stakeholders. Additionally, business is subject to legal regulations, although legal norms and ethical principles are not identical. In today's context, unethical business conduct is unfortunately common, often driven by unhealthy competition and a desire for market dominance and increased profits. It's important to acknowledge that in contemporary business practices, unethical behavior has become alarmingly prevalent. This unethical conduct is often witnessed among irresponsible entrepreneurs and businesses in Indonesia. It's driven by various factors, including fierce market competition, the quest for market expansion, and the pursuit of higher profits. These factors collectively contribute to the proliferation of business ethics violations. 2. Limitations and Problem Formulation Based on the background, we have formulated the following research questions and problem statements: ❖ What are the principles of business ethics? ❖ What are the objectives of business ethics? ❖ What is the role of business ethics? ❖ What are the factors that drive business practitioners to engage in business ethics violations? 3. Purpose of Writing a Paper The purpose of creating this paper is to gain a comprehensive, in-depth understanding of ethics in business, including its various principles and objectives.

4. Benefits of Writing Papers The benefits of creating this paper are to provide readers, especially prospective entrepreneurs, with a complete understanding of the principles, objectives, and roles of business ethics. This knowledge equips them to apply these principles effectively in real- world business activities within the broader community. **CHAPTER II DISCUSSION

1. Definition of Ethics** The term "ethics" originates from ancient Greek, with "ethos" meaning variously a customary place, pasture, habits/customs, morals, character, feelings, attitude, and way of thinking. "Ta etha" refers to customary habits. Aristoteles coined the term "Ethika" to denote moral philosophy. Etymologically, ethics refers to the study of customary practices or norms. Ethical analysis is divided into two types: ❖ Ethics as Practice: Examines the implementation of moral values and norms, whether adhered to or not. ❖ Ethics as Reflection: Involves moral contemplation, thinking about what is done, and what should or should not be done.

❖ Zimmerer (1996:20) defines business ethics as a code of conduct for entrepreneurs based on moral values and norms, guiding decision-making and problem-solving. ❖ Ronald J. Ebert and Ricky M. Griffin (2000:80) describe business ethics as a term often used to indicate the ethical behavior of a manager or employee within an organization. ❖ K. Bertens, in "Pengantar Etika Bisnis" (2000:5), sees business ethics as critical reflection on ethical standards.

4. Development of Business Ethics According to Bertens (2000), the evolution of business ethics can be traced through several stages: ❖ Early Times : In the early history of philosophy, thinkers like Plato, Aristotle, and other Greek philosophers explored how to govern human coexistence within a state and discussed the regulation of economic life and trade. ❖ Transition Phase : The 1960s witnessed rebellions against authority in the United States, student revolutions in France, and resistance to the establishment. This led to the introduction of a new curriculum called "Business and Society," primarily focusing on corporate social responsibility. ❖ Emergence of Business Ethics in the U.S. : In the 1970s, philosophers started contemplating ethical issues related to business. Business ethics emerged as a response to the moral crisis affecting the U.S. business world. ❖ Expansion of Business Ethics in Europe : About a decade later, Western Europe began developing business ethics as a new field of study. The European Business Ethics Network (EBEN) was established to facilitate academic exchanges. ❖ Globalization of Business Ethics : In the 1990s, business ethics transcended its Western origins and became a global phenomenon. The International Society for Business, Economics, and Ethics (ISBEE) was founded on July 25-28, 1996. 5. Principles of Business Ethics The principles of business ethics include:

❖ Autonomy Principle : Companies have the freedom to operate within their chosen domains, aligning their activities with their vision and mission, aiming for prosperity and the well-being of employees and communities. ❖ Unity Principle : Reflects the concept of integrating various aspects of life— economic, political, and social—into a homogeneous whole, emphasizing consistency and comprehensive order. ❖ Free Will Principle : Freedom is essential in business ethics, but it should not harm collective interests. Individual interests are promoted without income limitations, encouraging active contributions and the utilization of one's potential. ❖ Truthfulness (Virtue and Honesty) Principle : Truth encompasses not only being correct instead of mistaken but also includes virtue and honesty. In the context of business, truth represents the right intention, attitude, and behavior in transactions, development, and profit-seeking efforts. ❖ Justice/Equilibrium Principle : Companies must treat all parties involved in the business system fairly. For instance, providing fair wages based on contributions to employees, offering equal service to consumers, and more. ❖ Self-Respect Principle : Upholding the company's reputation through honesty, non- malicious intent, and fairness. ❖ Responsibility Principle : Unlimited freedom is impossible for humans as it lacks accountability. To fulfill justice and unity, individuals must take responsibility for their actions, ensuring accountability and justice.

❖ Examination of Ethical Behavior : Business ethics assesses whether ethical behavior attributed to individuals can be extended to organizations or business entities. Furthermore, it delves into whether companies have social responsibilities. ❖ Ethical Views on Business : This aspect of business ethics delves into the morality of economic systems in general and public economic systems in particular. Topics include social justice, property rights, and competition. ❖ Global Reach of Business Ethics : Business ethics is no longer confined to the Western world; it has expanded worldwide. Notably, the International Society for Business, Economics, and Ethics (ISBEE) was founded to facilitate global discussions.

7. The Role of Business Ethics The role of business ethics is pivotal in achieving a solid, competitive, and value-driven business. It provides a sturdy foundation for strategic planning, effective organization, transparent procedural systems, reliable corporate culture, and consistent and conscientious ethical practices. According to Richard De George, three essential components contribute to a company's success: a quality product, efficient management, and ethics. These three elements are examined from three perspectives: ❖ Economic Perspective : Business is an economic activity that involves interactions among producers/companies, employees, producers, and organizations within an entity. Economic activities aim to generate profit, but ethical business goes beyond profit generation; it focuses on ethically qualitative business practices ❖ Ethical Perspective : In business, pursuing profit is legitimate, but it should not harm others or violate their rights. Business ethics dictates that one must respect the interests and rights of others. Respecting the interests and rights of others also serves one's own business interests. ❖ Legal Perspective : Business activities are bound by the law, including commercial and business laws. Legal frameworks are essential in business, and they often overlap with ethical considerations. In this sense, both ethics and law contribute to a business's normative outlook. Legal regulations provide clear guidelines and sanctions for violations.

8. Factors Driving Business Ethics Violations Business ethics violations can be attributed to various factors, primarily motivated by the pursuit of maximum profit without considering the long-term negative consequences. Other factors contributing to these violations include: ❖ Increased Competition : The presence of new competitors with more appealing products can drive businesses to engage in unethical practices. ❖ Pursuit of Personal Gain and Selfish Interests : Some business practitioners prioritize personal gain and self-interest over ethical considerations. ❖ Expanding Market Share : Businesses may violate ethical norms in an attempt to capture a larger market share. ❖ Market Domination : The desire to dominate a market can lead to unethical actions. Among these factors, the pursuit of maximum profit appears to exert the strongest influence. To maintain a company's product as the top choice, advertisements may resort to derogatory tactics targeting competing products. These advertisements aim to promote their own products without any actual superiority, solely intending to disparage the competition. CHAPTER III CONCLUSION In conclusion, the study of business ethics serves as a vital compass for individuals and organizations navigating the complex landscape of modern commerce. As explored in this paper, business ethics encompasses principles, objectives, and roles that guide ethical conduct

BIBLIOGRAPHY

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