The Importance of Business Ethics

Sumber Gambar : rapikan.com

The Importance of Business Ethics
 
 
Nowadays, the business community has an awareness of the importance of Business Ethics in business operations. In fact, in its development, Business Ethics is no longer a burden that companies are forced to implement, but has become one of the company's development strategies.
 
Definition of Business Ethics
According to Muslich, business ethics is a knowledge of the ideal procedures for regulating and managing business that pay attention to universally applicable norms and morality (2004: 9).
 
Principles of Business Ethics
Business ethics have principles that aim to provide a reference for how companies must take to achieve their goals, Sonny Keraf (1998). The principles of business ethics are as the following: 
 
a.       Principles of Autonomy
The principle of autonomy shows an attitude of independence, freedom and responsibility. An independent person means a person who can make decisions and carry out actions based on their own abilities according to what they believe, free from pressure, incitement, and dependence on other parties.
 
b.       Principles of Honesty
The principle of honesty instills the attitude that what is thought is what is said, and what is said is what is done. This principle also implies compliance in carrying out the various commitments, contracts and agreements that have been agreed upon.
c.        Principles of Justice
The principle of justice instills an attitude to treat all parties fairly, namely an attitude that does not discriminate from various aspects, both from economic, legal, and other aspects.
d.       Mutual Benefit Principle
The principle of mutual benefit instills awareness that in doing business the principle of a win-win solution should be instilled, meaning that every business decision and action must be endeavored so that all parties feel benefited.
e.       Principles of Moral Integrity
The principle of moral integrity is the principle of not harming others in all business decisions and actions taken. This principle is based on the awareness that everyone must be respected for their dignity.                                                     
 
Factors That Affect Business Ethics
 
There are three main factors:
1. Cultural Differences
Indonesian business behavior is of course different from other countries. Likewise, certain regions or cities have different business behavior with other regions.
2. Knowledge
The more things you know and the better a person understands a situation, the better are his chances of making ethical decisions. Ignorance is not an acceptable excuse from a legal perspective, including an ethical issue.
3. Organizational Behavior
The basis of business ethics is ethical awareness and includes standards of behavior. Many organizations are well aware of the need to establish company rules of conduct and provide a coaching force to introduce and provide insight into ethical issues.
 
 
Benefits of Business Ethics for Companies
Some benefits that are usually obtained from business ethics for companies include:
• Increase Company Credibility
Business ethics is very important for companies, especially large companies which have a lot of employees who don't know each other. Every employee in the company will be bound by the same ethical standard rules, so if there is a case that arises then they will make the same decision.
 
·            The Company Can Explain How To Assess Its Social Responsibility
Normally explaining social responsibility or using a corporate social approach not only benefits from an economic perspective, but also benefits from a social perspective as well. If the company is socially responsible, the business will run well, so that indirectly the company will avoid social conflicts that can be detrimental.
 
Carry Out Self Regulatioan)
Self regulation is a process by which individuals can regulate their own achievements. This may determine their targets, evaluate their success when they have achieved these targets and reward themselves for achieving the targets they want.
 
• Help Eliminate Gray Areas in Ethics
For example, equality of salary receipt, use of underage labor and company obligations in protecting the environment, so that companies have limitations in running their business.
 
• Increase Company Competitiveness
Having competitiveness is now a necessity for every company, because if a company is not competitive, its business will not last long. If a business has good ethics, then the business will develop and further increase its competitiveness and ability to compete in the market with other companies or businessmen.
 
• Increase Investor Confidence in the Company
For companies that have gone public, they will benefit in the form of increased investor confidence in investing, if there is an increase in share prices it will usually attract investors to invest or buy company shares.
 
• Build a Positive Company Image
Business ethics can also build a good image about the company in the eyes of business partners and consumers. So a good image will maintain the survival of the company.
 
 
Relationship between Business Ethics and Corporate Social Responsibility (CSR)
 
Some people may think that business ethics and CSR (Corporate Social Responsibility) have no relationship, but in reality the two are related. The relationship between business ethics and CSR, which can be likened to business ethics, is the basis or soul of the implementation of a business unit, and CSR is its manifestation. This means, "Business ethics is about values, whether a company adheres to good or bad values. If it has good values in doing business, then the company will carry out CSR, which is the responsibility of a company.”
 
Example of Business Ethics Violation
Volkswagen (VW):
Volkswagen's emissions scandal opened in September 2015 when they admitted to cheating on emissions tests in the United States (US). About 600,000 units in the US and 11 million units of diesel-fueled cars worldwide were affected during the six-year fraud. This case is not just a recall due to defective components. Auto experts called this scandal a deliberate systemic failure. The US Department of Environmental Protection (Environmental Protection Agency) and the California Air Resources Board said Volkswagen was using software designed to trick emissions tests in the US for nearly a decade. VW also admits that they do the same thing for 11 million units of cars worldwide. The loss of VW as the second largest car manufacturer in the world when calculated from the decline in share value reached US $ 29 billion. The US consumer confidence was believed to have fallen sharply.
 
Conclusion
Business ethics are important in a company to shape values, norms and behavior within the company. The company must run an ethical business, namely a business with superior and sustainable performance that is carried out with ethical principles that are in line with applicable laws and regulations. With this business ethic, the company will continue to run in accordance with the company's vision and mission. With this business ethic, it is hoped that it will have a good impact and benefits on the company. Business is an activity that requires moral responsibility in its implementation. Business without ethics will make business practices uncontrollable and harm the main goals of the business itself.
 

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