In a simple sense, business ethics is the way to conduct business activities, which cover all aspects related to individual industries, companies and communities.
Business ethics is more extensive than the terms defined by law, is a higher standard than the minimum standards of legal provisions, because in business activities often we find the gray areas that are not governed by the provisions of the law.
Von der Emse and RA Wagley in an article in Advance Management Journal (1988), provides three basic approaches in formulating the ethical behavior of business:
Utilitarian approach: every action should be based on consequences. Therefore, in act someone should follow the way, which can provide maximum benefit to society, not in dangerous way and lowest possible cost.
Individual rights approach: every person in the actions and behaviors has a basic right that must be respected. However, the actions or behavior should be avoided if it is expected to cause a collision with the rights of others.
Justice approach: decision makers have the same position, and act fairly in providing services to customers as either individuals or groups.
Business ethics within the company have a very important role, to establish a solid company and has a very competitive and have the ability to create high value (value creation), it needs a solid foundation.
Typically ranging from strategic planning, good organization, and transparent procedures are supported by a reliable company culture and corporate ethics are implemented in a consistent and consequent.
It must believe that the basic practices of business ethics will always brings benefit to the company, for medium and long term, because:
1. Able to reduce costs due to prevented the possibility of friction, both internal and external company. 2. Able to increase worker motivation.
3. Protect the principle of freedom of trade.
4. Able to increase competitive advantage.
Inevitably, the unethical actions taken by the company would provoke retaliation from consumers and society and will be very counter productive, for example through the boycott movement, the ban circulated, and the prohibition to operate and so on. This will reduce sales value and enterprise value.
While the company that upholds the values of business ethics, in general, including companies that have a high work satisfaction ratings as well, especially if the company does not tolerate unethical act, such as discrimination in remuneration or career path.
It should be understood, that qualified employees are the most valuable asset for the company. Therefore, companies must retain their employees as much as possible. To facilitate the implementation of corporate ethics in their daily activities the values contained in business ethics should be poured into the company's management is by way of 1. Pouring in the code of conduct business ethics (CDE behavior). 2. Strengthen the supervision system. 3. Conduct training (training) for employees on an ongoing basis.
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