BUSINESS ETHICS DEFINITION

Andi Setiawan (1706088082) THEORY SUMMARY AND MINI CASE DISCUSSION

Fajar Andi S.P (1706997256)
KevinYoditama Putra (1706088750)
R. Evayanthy Banjarnahor (1706997786)
Sarah Shahnaz Ilma (1706089160)
Wilda Irliani (1706998044)
 BUSINESS ETHICS DEFINTION
THEORY SUMMARY

Business Ethics Definition :

“Set of applied ethics to solve business situations”

Shareholders

Creditors Customers

Vendors Business Employee

/partners
Ethics

Society Suppliers

Government

Feb 12, 2018 Group 2 2

 BUSINESS ETHICS DEFINTION
THEORY SUMMARY

ETHICAL CRISIS

Lack of ethical guide to conduct day-to-day business operations

could lead to “Oxymoron” conditions.

Product are rushed to market that have to be Example :

recalled due to safety problems at a later date
Combination
of two - AIG Bail out
contradictory CEO salary increases far exceed those of the
employee they lead
- GM Bail Out
items - Recall by automotive industry
- Former Garuda CEO case
CEO salaries have increased while shareholders
returns have fallen - Century Bank Bail Out

Feb 12, 2018 Group 2 3

 BUSINESS ETHICS DEFINTION
THEORY SUMMARY

Institution as a
third party
guarantees of
ethical conducts

Business lack
of ethical
practices

Code of ethics as
a part of
corporate

Feb 12, 2018 Group 2 4

 BUSINESS ETHICS DEFINTION
THEORY SUMMARY

# The increased presence of an employee voice has made

individual employees feel more comfortable speaking out.
# They are also more willing to seek legal resolution for
such issues as unsafe working conditions, harassment,
discrimination, and invasion of privacy.
# The issue of CSR has advanced from an abstract debate
to a core performance-assessment issue with clearly
established legal liabilities.
# Corporate ethics has moved from the domain of legal and
human resource departments
# Codes of ethics have matured from cosmetic public
relations documents into performance measurement
documents
# The 2002 Sarbanes-Oxley Act has introduced greater
accountability for CEO & BOD in signing off on the financial
performance records of the organizations they represent.
 SOX est. 2002
 Coy begin est.  ERC founded  US Code Ethics  Class action  Emphasis CSR &
code of conduct  Comply with law for Gov.  Int’l business integrity Mgt.
 Coy address
Febissue
12, 2018  Federal Corrupt  Coy create Group 2 5
ethics center  Anticorruption effort
through legal dept. Practices Act ombudsman
 BRIEF HISTORY OF BUSINESS ETHICS
ANDI SETIAWAN

# The increased presence of an employee voice has made

individual employees feel more comfortable speaking out.
# They are also more willing to seek legal resolution for
such issues as unsafe working conditions, harassment,
discrimination, and invasion of privacy.
# The issue of CSR has advanced from an abstract debate
to a core performance-assessment issue with clearly
established legal liabilities.
# Corporate ethics has moved from the domain of legal and
human resource departments
# Codes of ethics have matured from cosmetic public
relations documents into performance measurement
documents
# The 2002 Sarbanes-Oxley Act has introduced greater
accountability for CEO & BOD in signing off on the financial
performance records of the organizations they represent.

 ERC founded  SOX est. 2002

 Coy begin est.  US Code Ethics
 Class action  Emphasis CSR
code of conduct  Comply with law for Gov.
 Int’l business & integrity Mgt.
 Coy address issue  Federal Corrupt  Coy create
ethics center  Anticorruption
through legal dept. Practices Act ombudsman
effort grow
SOLVING ETHICAL DILEMMA
KEVIN YODITAMA PUTRA
JUSTIFICATION OF UNETHICAL BEHAVIOR
SARAH S ILMA

“The activity is
reasonably within “The activity is never
ethical and legal limits.” going to be publicized”

“The activity is going to “The activity is

be protected by the expected by the higher-
company.” ups of the company.”
 JUSTIFICATION OF UNETHICAL BEHAVIOR
“THE ACTIVITY IS REASONABLY WITHIN ETHICAL AND
LEGAL LIMITS.”
• What does this mean?
Activities that aren’t specifically
labeled as wrong are presumably
encouraged by the superiors.

• Why does this happen?

Ethically challenged employers and
employees see this as an opportunity
to get creative with their business
process.
 JUSTIFICATION OF UNETHICAL BEHAVIOR
AN EXAMPLE: AN ELEVATOR AND A PROCUREMENT MANAGER

You work as a Procurement

Manager at a HQ of a big Other
Company A Company B
company. You are conducting Companies
a bid on replacing all elevators Average Track Excellent Track
on all your branches. You have Record on Record on
No sound track
4 companies waiting to submit Maintenance
and
Maintenance
and
records

the proposal. Construction Construction

Can you guess which one Average Bidding Average Bidding

Perfect Bidding
would the procurement Document, all
Document,
some
Document,
some
manager choose in their requirements
fulfilled
requirements requirements
unfulfilled unfulfilled
company’s best interest?
 JUSTIFICATION OF UNETHICAL BEHAVIOR
“THE ACTIVITY IS EXPECTED BY THE HIGHER-UPS OF THE COMPANY.”

• What does this mean?

Activities that are known to bring large profit and

ensure prosperity to the company is justified, especially
in a highly competitive environment.

• Why does this happen?

Trading companies or advertising agencies are among

the highly competitive companies. To get a big project,
sometimes people look away from unethical behavior.
Ex: stealing a client or getting off-
the-record information about an
important project from the “inside
people”
 JUSTIFICATION OF UNETHICAL BEHAVIOR
“THE ACTIVITY IS NEVER GOING TO BE PUBLICIZED.”

• What does this mean?

Unethical activities that go undetected by the
superiors or go unaudited will encourage people
to do it again.
• Why does this happen?
Superiors who justify this misconduct are bad
Ex: Supervisors who claim
examples. Superiors should disclose the
his subordinate’s project
misconduct to deter any illegal or unethical cost analysis to be his
activities in the future. during board meeting.
 JUSTIFICATION OF UNETHICAL BEHAVIOR
“THE ACTIVITY IS GOING TO BE PROTECTED BY THE COMPANY.”

• What does this mean?

The loyalty to the company is tested here.
When a company engages in unethical
behavior, the company will protect the
identity of the personnel involved – as long as
it is in the company’s best interest.

• Why does this happen?

This activity is believed to bring profit and help
the company. But in most cases, once the
activity is made public, the company will Ex: The case of
disclose the key person to avoid any further Nazaruddin and The
damage to the company. Demokrat Party.
CASE DISCUSSION
TEACHING OR SELLING
 CASE DISCUSSION
TEACHING OR SELLING

1. Continuing Medical Education (CME)

Help to maintain and improve the competencies of those who work in medical field.
2. Pfizer (Drugmaker Company)
Support the CME Program through Medical Education and Communication Company (MECC)
3. Conflict of Interest
More than half of industry support goes to marketer. This lead the assumption that the course partly
aimed for product promotion which contradict with the purpose of CME itself
Effect :
• Pfizer benefit to promote its product
• The patient’s health care delivery is not independent

Feb 12, 2018 Group 2 15

 CASE DISCUSSION
TEACHING OR SELLING

Pfizer Solving Ethical Dilemma

Solving dilemma with the three resolution principle :

• End-Based
• Rules-Based
• The Golden Rule

1. Pfizer decide to eliminate all direct funding for CME provided by MECC.
2. Pfizer will continue support CME for organization it it is an accredited health care delivery such as hospitals, academic
medical centre, medical school, etc.
3. In 2010 Pfizer give a grant to Stanford University to create CME that the company claims come with “no condition,
and the company will not be involved in developing curicullum”
THANK YOU..
ANY QUESTIONS?