Business Ethics:

Cases & Discussion

Widhyawan Prawiraatmadja, Ph.D.

MM5008 – Business Ethics, Law & Sustainability
MBA Program, SBM-ITB, 2024
 What we are going to cover in this class is how to
study business ethics through discovery/exploratory
learning and case studies*

Please….
• take an active role in the discussion
• be open minded, critical, yet constructive
• note that Chatham House Rule applies

(* for the list of the case studies, please refer to the syllabus)
A gentle reminder of why we are here, in the first
place……
 Widhyawan Prawiraatmadja
Your facilitator/“learning buddy”
• An Independent Consultant and Senior Lecturer (part-time)
at SBM – ITB
• Selected past experiences:
• Indonesia Governor to OPEC
• Special Advisor to Minister and Head of Performance
Management Unit, Ministry of Energy and Mineral
Resources
• Board of Commissioner of Pertamina
• Deputy Chairman, SKK Migas
Education:
M.A. and Ph.D. degrees in
• Country Executive, General Electric (GE) Energy
Economics, University of • SVP Corporate Planning, Business Development, and
Hawaii, USA Transformation, Pertamina
Sarjana Teknik Industri, • Director, FACTS Global Energy, USA
Institut Teknologi Bandung
• Energy Division Manager, PT Redecon, Jakarta
 Widhyawan Prawiraatmadja
Recent engagements or “gigs”:
• Senior Lecturer, School of Business and Management, ITB
• Governing Board, Indonesian Institute for Energy Economics (IIEE)
• Governing Board, Coaction Indonesia
• Independent Commissioner, PT Inocycle Technology Group Tbk
• Technical Adviser to Ministry of Energy and Mineral Resources
• Board of Adviser, Pertamina Energy Institute
• Risk Management Committee, PT PLN
• Adviser to Private and Multi-national companies
• Adviser to Multilateral organizations
Cases from Personal Experience*
Ø Integrity – the approach from personal values
Ø The art of making tough decisions
Ø How would you deal with corporate criminal cases?
Ø How would you deal with the interests of others?

* Note: not to be disclosed outside classes; discussions are for an

academic purpose only – Chatham House Rule applies
 From the Economist
magazine
https://www.economist.com/
business/2020/09/17/how-
do-you-stop-corporate-fraud
based on academic studies
from Harvard and Columbia
Universities, USA, and HEC
Paris Business School, France
“Personalizing” (Business) Ethics
Ethics: Personal vs Institutional (i.e., Business)
• Ethics?
Whose Ethics?
From what angle would you approach it? Moral; norms; values;
culture; religion; rationality; feelings; or others?
• What is your personal take on ethics? Could you please put it in your
own words?
• Why do we need to study business ethics? Is business ethics an
oxymoron?
• Have you had any experience dealing with ethical issues at work or in
business activities? And How did you deal with them?
 Chances are you would find ethical issues in
many of the things that you do – including at
work or in business, which you need to face or
address and do something about it

And trying to do the right things is

sometimes not easy nor straight forward –
what you often face is a dilemma
Value Conflicts
• Lying is wrong –
but what if you would have to lie to protect the life of somebody
who had been in danger?
• Stealing is wrong –
but what if you were stealing food for a starving child?
• Killing is wrong –
but what if you had to kill someone in self-defense to protect your
own life?
What does “success” mean to YOU?
How would you respond to the following question?
“What is the legacy do you (or your organization, such the
company that you are currently associated with) want to leave
behind?”
What does success mean to YOU (continued)?
• If success is important, how would you like to attain it?
• Many would likely want the same accolades as you do, then how
would you “compete”?
• If you think you have attained success, how would you maintain
it?
• In your personal experience, has the competition to be
successful in what you do been done in a fair (or equitable)
way?
Ethical Boundaries/Considerations
In sport, we love winners….
but Champions cannot/should not be tainted

What can you say about:

• Lance Armstrong;
• Maria Sharapova;
• Tonya Harding vs Nancy Kerrigan?

…....stringent ethical scrutiny indeed,

but how about in business?
 And
here
we
are…

https://www.economist
.com/whichmba/manag
ement-education-and-
ethics-greed-no-longer-
good
...and yet
problems
continue
to surface

https://www.economis
t.com/business/2019/0
4/06/scandals-suggest-
standards-have-
slipped-in-corporate-
america
However, trends for good cause are gaining
ground as well…….
America’s CEOs Seek a New Purpose for the Corporation
• https://fortune.com/longform/business-roundtable-ceos-corporations-
purpose/
CEOs Say Their Aim Is Inclusive Prosperity. Do They Mean It?
• https://hbr.org/2019/08/ceos-say-their-aim-is-inclusive-prosperity-do-
they-mean-it
• https://opportunity.businessroundtable.org/ourcommitment/
https://www.economist.com/
briefing/2019/08/22/big-
business-is-beginning-to-
accept-broader-social-
responsibilities
Some exercises on (Business) Ethics
How would you react to “news” or
“developments” that may have “ethical”
considerations/implications?
 Some of the quite obvious ones

Source: www.ethics.org
https://www.economist.com/business/
2003/05/08/big-oils-dirty-secrets
But, how about this?

https://www.economist.com/science-and-
technology/2018/10/27/whom-should-self-
driving-cars-protect-in-an-accident
Or this?

https://www.economist.com/leaders/2023/
04/20/how-to-worry-wisely-about-artificial-
intelligence
And these?
However,
(despite the
strong word of
“kill”), the
consequences of
business
disruptions have
nothing to do
with ethical
issues…
One might
argue that
being big is not
necessary
(ethically) good
 …. and
therefore,
leads to
such a
comment
……

https://www.economist.
com/leaders/2018/12/18
/politicians-in-europe-
are-wrong-to-embrace-
mega-mergers
But, others
may argue
otherwise…
https://www.economist.com/
open-future/2019/05/24/why-
we-should-embrace-big-
business
….such as
what is
written in this
book
 Be caution though, any ethical
claims/convictions, from one
sides may not be (entirely) true
– intentionally or not, as they
may conceal certain vested
interests, such as strong
influence on their followers or
even attacking (the more
successful) business competitors
https://www.youtube.com/watch?v=OJc1nKi7HG4
Be careful of making judgment
too quickly; Credibility of the
source is KEY in trusting ethics
claims
 How about in Indonesia?
What is your favorite (of infamous) list of ethical
business issues in Indonesia?
• ……
• ……
• ……
• Etc.

And how many of them are actually involving SOEs?

Example of
ethical failures
…..
https://magz.tempo.co/read/36194
/flying-with-harley

https://magz.tempo.co/read/361
95/this-is-smuggling
We would
argue that
corruption is a
very serious
problem;
but does it
start from
ethical
problems?
https://magz.temp
o.co/read/35816/ai
rport-projects-at-
kasablanka
Developing Ethical Leaders
Which Leadership Style would You like to Emulate from the following example?
Especially if the question relates to “from ethical standpoint”?
A few questions…
Do you think she is a leader?

What kind of ethical issue

that she has raised all this
time?

Is her concern justified?

Being ethical is
not always easy.
There is a
constant “battle”
inside us; i.e.,
between moral,
on the one hand,
versus vested
interest, on the
other hand
Source: Corps Leadership LLC.
Source: Corps Leadership LLC.
Developing ethical awareness will result in your
trait as an ethical leader – Hone your skills!
Be aware and sensitive to these situations (or anything that is similar to them):
• Abuse of Power
• Conflict of Interest
That could be originated from:
• Greed
That would lead to bad behaviors, such as:
• Cutting corners
• Deception
And ultimately to criminal acts, such as:
• Fraud
• Embezzlement
• Corruption
End Notes
“Hindsight is always 20/20”; is it still the case when we ponder about
our exposure and experiences in past (personal) ethics cases?

In the context of (business) ethics, how should we learn from

the cases that we have been exposed to?

At the end of the day, (business) ethics is about our respective

personal take; should each and every one of us make a conviction
about it and contribute to creating an environment that is
conducive to uphold high ethical standards?
(hint for the answer: try to connect it with the intent of your wanting to leave a legacy)
Thank you
Useful References
Some Basic Principles: Values vs Profits
"There is one and only one social responsibility of business – to use
its resources and engage in activities designed to increase its profits
so long as it stays within the rules of the game, which is to say,
engages in open and free competition without deception or fraud."
[1]

Source:
[1]. Milton Friedman, "The Social Responsibility of Business is to
Increase Its Profits." In Ethical Theory and Business 8th Edition, ed. by
Tom L. Beauchamp, Norman E. Bowie, and Denis G. Arnold (New
Jersey: Pearson, 2009.), 55.
Some Basic Principles: Values vs Profits (Cont.)
"The basic idea is that businesses, and the executives who manage
them, actually do and should create value for customers, suppliers,
employees, communities, and financiers (or shareholders)." [2]

Source:
[2]. R. Edward Freeman, "Managing for Stakeholders." In Ethical Theory
and Business 8th Edition, edited by Tom L. Beauchamp, Norman E.
Bowie, and Denis G. Arnold (New Jersey: Pearson, 2009), 56.
Business ethics principles – is there a dilemma?
Business can be good at solving social problems (The case of letting
business solve social problems)?
• https://www.ted.com/talks/michael_porter_why_business_can_be_g
ood_at_solving_social_problems#t-972190
Why we should not trust markets with our civic life
• https://www.ted.com/talks/michael_sandel_why_we_shouldn_t_trus
t_markets_with_our_civic_life
Milton Friedman - Your Greed or Their Greed?
• https://www.youtube.com/watch?v=RWsx1X8PV_A
What and Why “Business Ethics”?
What is Ethics? What is Business Ethics? - Markkula Center for Applied Ethics
• https://www.youtube.com/watch?v=vmVu66Fpd9U
Creating ethical cultures in business: Brooke Deterline at TEDxPresidio
• https://www.youtube.com/watch?v=wzicXbnmllc&t=25s
Becoming As Ethical As We Think We Are | Morgan Hamel | TEDxYYC
• https://www.youtube.com/watch?v=iLRJ4KNxp4Y
Business is about purpose: R. Edward Freeman at TEDxCharlottesville 2013
• https://www.youtube.com/watch?v=7dugfwJthBY
Good Governance
Video on Good Corporate Governance
• https://www.youtube.com/watch?v=ZARpRhudx4g
Animation Corporate Governance (English)
• https://www.youtube.com/watch?v=_d2M6aL-iI8
Principal – Agent Problem
Busy Secretary - The Principal-Agent Problem
• https://www.youtube.com/watch?v=ydh_TXrkj54
The Principal Agent Problem
• https://www.youtube.com/watch?v=OWemVj_0v38
Ethical Leadership
• Concepts Unwrapped | Ethical Leadership, Part 1: Perilous at the Top
• https://www.youtube.com/watch?v=Nmsl1xVx7Ec
• Concepts Unwrapped | Ethical Leadership, Part 2: Best Practices
• https://www.youtube.com/watch?v=icJZxLoX14U
• Developing Effective Ethical Leaders - Corps Leadership LLC.
• https://www.youtube.com/watch?v=RQEIWXUDfhw