BUSINESS & PROFESSIONAL

ETHICS

TRISAKTI SCHOOL OF MANAGEMENT

Why We Need Business & Professional Ethics

• Society is expecting us to have

an ethical behavior
• Moral standard in doing
business
• Credibility
• Reputation
• Competitive advantage

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The Ethics Environment for Business
• Stakeholders are playing important roles in
supporting the business
• Who is stakeholders?
• To build credibility
• Credibility  Trust
• Trust is created from the value of the
company activities

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Public has a new expectations…
• Historical events: Enron and Worldcom
• People has developed more concerns about the ethics
• How the business make the ethical decision and action
• Several factors about these:
Unbridled Greed Bad Judgement Economic Governance Failures
Physical Activist Stakeholders Competition Accountability
Moral Environmental Reality Financial Malfeasance Synergy
Institutional Reinforcement

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Moral Sensitivity
• To do fairness and equity
• To lessen the discrimination
• To boycott from buying illegal
products or child/sweatshop
labor

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Bad Judgment and Activist Stakeholders
• People will take action for any mistakes
made by the directors
• They will do demonstration or protest
• Example: excessive compensation paid to
the management while the company was
at loss
• People will also react for un-ethically
product (tobacco, armaments, nuclear,
animal testing)

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Financial Scandals
• Expectation gap  what is expected by the society
• Credibility gap  who prepare the financial statement, can
management be trusted
• In need of transparency

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New Expectations for Business
• Society will ask businessman for new
mandate
• To create a good governance and
accountability frameworks
• Fiduciary roles for professional
accountants

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Stakeholders are…

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Case: Sariwangi – Inability to Pay Debt
• 17 October 2018: Court has declared
Sariwangi and Indorub (Agriculture
Company) bankruptcy
• Debt Rp. 1.05 tn with 5 banks: ICBC, Panin,
Rabobank, HSBC, Commonwealth
• Failure to pay after proposing debt
rescheduling (PKPU)

• Question:
• Are banks part of the stakeholders?
• What do you think about the public’s opinion for this case?

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Corporate Governance Framework

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Hypernorms underlying stakeholders value…
• Honesty
• Compassion
• Predictability
• Fairness
• Integrity Hypernorms adalah konsep dari etika Bisnis yang berlaku pada prinsip-prinsip yang
begitu mendasar sehingga, menurut definisi, mereka berfungsi untuk mengevaluasi
• Responsibility norma-norma tingkat rendah, mencapai ke akar dari apa yang etis bagi kemanusiaan.
Mereka pertama kali diusulkan oleh Thomas Donaldson dan Thomas W

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Determinants of Reputation

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Ethics: Care for Environment (Responsibility)

• Questions:
• What is your comments on those companies?
• Compare your comments with previous comments
TRISAKTI SCHOOL OF MANAGEMENT when discussing about Sari Wangi and First Travel
Ethics Risk

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Next Session: Ethics – Right or Wrong?

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 THANK YOU

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