BUSINESS ETHIC, LAW, AND SUSTAINABILITY

MID-TERM PAPER
(ETHICAL ISSUES)
Based on Telecommunication Industry

Compiled by Syndicate 11 YP 53 B:
Agvi Ramadhan Kurniawan

29115039

Puspa Diva Nur Aqmarina

29115042

Jeffrey Aldo Nugraha

29115430

SCHOOL OF BUSINESS AND MANAGEMENT

MASTER OF BUSINESS ADMINISTRATION
BANDUNG INSTITUTE OF TECHNOLOGY
2016

A. INTRODUCTION
The definition of industry is the community of company or business that provides a
particular product or service. Telecommunication industries are the community of
businesses which provides telecommunication services for citizen or business. The
telecommunication industry consist of internet provider, cellular operator provider,
system provider, and BTS provider.
Telecommunication industry in Indonesia was ruled by the telecommunication
department of Indonesia. The ruled of telecommunication industry was stated in
Keputusan Menteri Perhubungan (Menhub) Number. KM. 72 year 1999, the objective
are improve the telecommunication industry performance in the era globalization;
liberalize the telecommunications sector with competitive structure by removing
monopoly; increase transparency; create opportunities for telecommunication operators
national to form a strategic alliance with the foreign partners; create business
opportunities for enterprises scale small and medium enterprises; and facilitate the
creation of new jobs.
B. METHODS OF GATHERING YOUR DATA
Syndicate 11 gathering our data by FGD (Focus Discussion Group). First is, make a
limitation about telecommunication to make it easier to find the example of the ethical
issues. Second is, browse the issues from many resources, beside from internet and
reading books related to the issues, we do asking our friends whom working in the
telecommunication division to tell its condition. Finally, we have another FGD to share
what we have founded to be more structured to complete what we should write in this
midterm paper.
C. ETHICAL ISSUES
1. VIOLATE WORKERS OF RIGHT
Telecommunication industry in Indonesia was one of the many big industries in
Indonesia. Telecommunication industry can be mention as the big industries, because
Telecommunication industry in Indonesia was fulfilled by many companies. The
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companies in telecommunication industry was has many labor in their business

activities. The labor on telecommunication company was has right to be fulfilled their
needs based on their agreement before they work for their company, but sometimes
the company didnt fulfilled their responsibility and also sometimes company didnt
make a fair agreement between company and labor. Disobeying agreement and makes
a detrimental agreement between company and labor are unethical business activities.
PT. Telkomsel is one company who makes a detrimental agreement for their labor.
The detrimental agreement was affect to the labor strikes in November 2011. As a big
company in telecommunication industry, PT. Telkomsel should not do the
detrimental agreement to their labor. The detrimental agreement that makes the labor
do labor strikes are PT. Telkomsel didnt give good salary to their labor and their
salary was below the inflation rate in 2011 and also they didnt fulfilled the health
insurance for the retire labor. Based on the three factor mention before the labor do
labors strikes to sounds their aspiration to the Board of Directors and Board of
Committee.
Fulfilled the labor welfare was mention in the Law of Indonesia number 13 year 2003.
The definition of labor welfare according to the Law of Indonesia number 13 year
2003 is fulfillment of the needs and / or requirements that are physical and spiritual,
both inside and outside the employment relationship, which directly or indirectly
enhance work productivity in a working environment that is safe and healthy. So
according to the Law of Indonesia number 13 year 2003 company should fulfilled
their labor welfare to increase or enhance their productivity.

2. TELECOMUNICATION TAPPING
In different countries codes of behaviors and communication are constructed in
different ways, but the main constrains are preserved and considered. This structure
represents those constituent elements to take in account while tailoring the public
service and externalizing it as procedures or communication, which are:
Respect for persons;
Personal and professional integrity;

Performance in the management of public resources.

Respect for the law;
The code of ethics is approved in accordance with the law in force, and any public
servant is obliged to adapt to the full observance of the law every move during the
performance of the function. Thus, for example, in practice the respect of law requires
a public servant not to improperly release official information, not to abuse with the
powers or resources available as employees and to avoid any conflict of interest
between personal and official duties, or to resolve these conflicts in favor of the public
interest.
The example of telecommunication tapping occurred in media in 2013, when there is
the case of wiretapping conducted by the Australian intelligence services to the highranking in Indonesia. In response to this, the President did a few steps of protest
against the attitude of Australia are considered to underestimate the sovereignty of
Indonesia. And this, of course, making the relationship between Indonesia and
Australia heats. Wiretapping case was revealed when the existence of the secret
documents leaked by Edward Snowden to the media. In this document mentioned that
the Australian intelligence agency intercepted the contents of the conversation of
President Susilo Bambang Yudhoyono, First Lady Ani Yudhoyono and several
ministers of Indonesia. Tapping was conducted in August 2009 for 15 days. ABC, as
one of the participating media covering these intercepts says a leaked document,
entitled "Impact of 3G and Update" and it is claimed by Australian intelligence as 3G
technology mapping in Southeast Asia, including Indonesia. And even more
surprising, there is speculation that the Canberra diplomatic post in Jakarta has been
used as a network for spying on Indonesia under the command of the United States.
This situation make our President angry and disappointed. The government make an
appointment to the Australia government to make it this problem clear and the impact
from this case is the diplomatic between Indonesian-Australian become tenuous.
Various corporation undertaken between countries began canceled. Some joint
military exercises, maritime patrols to prevent illegal immigration and intelligence
sharing. According to observers of the Australian security if the Indonesian

government decided the cooperation between the two countries, will bring harm to
Australia.
Phone tapping (or tapping rubber) is monitoring telephone conversations and Internet
by a third party, often conducted in a confidential manner. Telephone conversation
may be recorded or monitored unofficially, either by a third party without the
knowledge of those intercepted or recorded by one of the parties who make house
calls phone tightly controlled and generally prohibited for reasons of privacy, but also
can be legalized for a reason particular, in accordance with the laws in force in the
country concerned.
This problems cause various pros and contras because it involves nationality issues
VS privacy issues. Its really confused us to judges wheatear it is ethical or unethical.
But as the conclusion, we agreed that this is unethical behavior for the Australian to
tapping our Indonesian government because it violate our privacy rights.
3. UNTRANSPARANCY IN TELECOMUNICATION SYSTEM
Refers to regulations that should be obliged to be a reference: Regulation of the
Minister of Communications and Informatics No. 9 in 2008 and No. 8 of 2006 on
Procedures for Determination of Rates and Interconnection.
Nowadays, a lot of complaint from customers related to that problems, based on the
data, the average complaints received about 25 complaints related to the problem.
This is the example issues:
SMS content is considered very favorable in the telecommunication industry and
content providers, but often detrimental to consumers. Business SMS is a
dilemma content for consumers. Trespassing and cutting pulses. To cancel this,
our pulse will be cutting off.
Mismatch between the promotional fares offered by operators with reality,
Pulse/credit is lost or reduced for no apparent reason.
In general, the telecommunication consumers objected on the amount of the bills they
receive. The bill requested considered incompatible with the amount of usage.

Additionally, the pulse of cutting through the packages offered are not used. Not only
that, consumers were questioned reduced regular pulse, when the package is used.
There is also disappointed with the pulse was interrupted by data services. This is an
issue that should be dealt with seriously, because the complaint could be disastrous
to the company if no real action. It can be said that, almost every person in Indonesia
who use the services of providers feel it.
D. SOLUTIONS
1. VIOLATE OF WORKERS RIGHTS
PT. Telkomsel should make a fair agreement between company and their
labor, because when they makes a detrimental agreement they will be punish
if they didnt obey the law.
PT. Telkomsel should have cooperation with the labor union to reduce their
intercept to the company.
2. TELECOMMUNICATION TAPPING
We should tighter our regulation on our security system to secure our nations
and each national human rights. Because every person has the same and equal
rights to secure their privacy. So, we cannot harm other privacy.
The weakness in our telecommunication system, make us to be more careful
in transferred important data by using telephone. It is be more safety to avoid
make an important conversations by using telephone, because its risky and
easy to be intercepted.
3. UNTRANSPARANCY IN TELECOMMUNICATION SYSTEM
Every telecommunication industry must serve customers in equal and threat well,
because its a must to keep engagement from company to the customer. Maintenance
and after services is a way that costumer feel the real services from company. Even
nowadays many telecommunication industry which is provider do unethical behaved
to the costumer, especially in marketing division. It is okay as long as balanced with
measures that also benefit the user. The government should through the Ministry of
Communication and Informatics can cooperate with all company operators in

Indonesia in order to give a very satisfactory service to customers because many

Indonesian people who use mobile telephone facilities. In this case also can be done
by applying systems with CRM (Customer Relationship Management).
With a system of CRM (Customer Relationship Management), it is expected
that businesses can know how the steps or ways how to serve consumers, so
that consumers feel satisfied so that the benefits increase. If consumers are
satisfied with the services of the company, the consumer automatically will
buy again, or even become a regular customer for the telecommunications
business, considering that telecommunications is the primary requirement for
the public.
To develop and implement the necessary CRM series of processes that allows
for an analysis of the customer, so that the company can identify customers
individually. Companies know which customers could potentially provide
great benefits and which are harmful. What kind of treatment that should be
given to each customer differently so that the value given is better than a
competitor.
In the industry of telecommunications services in Indonesia, the big players
in the industry should be able to balance the power of CRM marketing strategy
with the advancement of technology to support smooth communication
activities of Indonesian consumers.
CRM is essentially a marketing strategy developed as a result technological
development, so that nature is bigger role in maintaining consumer has long
been a customer, it means that CRM is most easily done is to maintain existing
customer.
The provider should have an announcement before launching their new
feature in telecommunication based on the consumer pulse.

E. CHALLENGES
1. VIOLATE OF WORKERS RIGHTS
PT. Telkom as a big company in telecommunication industry, has a points of
challenges that company will faced. There is still a questionable about how to
fulfill their labor welfare. The primary challenge to fulfill the labor welfare is
the quantity of request that proposed to the company was always increased
year by year.
The other challenges is how to find a fit great leader that can lead and treat
well the human resources in that company, so that the leader can make a very
good communication to each component in the company, such us workers and
also labor union to make they have a one vision to build a company become
better from time to time. So, it can reduce the demonstration against welfare
of the employee.
2. TELECOMMUNICATION TAPPING
Nonetheless Indonesia should not relax. Indonesia should be aware that these
intercepts

incident

showed

the

security

flaws

of

our

field

of

telecommunications. Indonesia must be ready with the global issues that show
the war in every part of our system. So, the first challenge in globalization era
is Indonesian should be more aware and should increase its capabilities of
each human resources in these telecommunication industry to make a
protection of this industry.
The second challenge is quiet difficult, because it is really difficult to change
our habit in using telephone as a telecommunication media for transferred
information. Because nowadays, we can minimize the telecommunication
tapping by using VoIP (Voice Over Internet Protocol) for example by using
Skype to have an important conversation. It easier us to securing ourselves to
protect our important information with others.
3. UNTRANSPARANCY IN TELECOMMUNICATION SYSTEM

Not everyone feels this issue is really important or should be reported. Most
of them consider things like that into mediocrity. If it happen recurrently, it
will really disadvantages us as a consumer.

F. CONCLUSION AND TAKEAWAY

Telecommunication industry take an important role in our daily life. People nowadays
cannot live without telecommunication, because by using this people are connected to
others in the easy ways. As we see, it is very weird to know that we dont have at least
one cell phone because in this modern era, people tend to have at least one on more than
one phone with dual telephone cards. It shows that telecommunication is very useful for
everyone. Every business has to become sustainable, so that the telecommunication
industry.
Telecommunication industry would become sustain all day, so based on our syndicate,
that industry should have minimum three virtues to make they survive. The first is
innovative. They should innovate their product innovation to compete to others
competitor. The second virtues is creativity. Without this, there is no innovation at all. So
this is the important things to be owned. And the third virtues is persistence. The
telecommunication industry should not give up if they find a difficulties or find problems.
They should keep moving face every problem occurred and they should try to find its
problem solution.
In general, every business is always want to be profit oriented. But dont forget, there are
ethics that underlie our considerations in every decision-making to become profit
oriented. Dont forget that every business cant run without people (human resources), so
dont treat them bad. We should treat them as well as possible; based on Golden Rules
Ethics (We must treat others the same way that you would want to be treated in the same
situations). Remember that every human has a human rights; like privacy rights, rights
to live equally, and rights to live in secure (based on Laws of the Republic Indonesia
number 39 year 1999 about Human Rights).

G. REFERENCES
Books
Buttle, Francis. (2007). Customer Relationship Management (Manajemen Hubungan
Pelanggan): Concept and Tools. Malang: Bayumedia Publishing.
Kalakota, Ravi. And Marcia Robinson.

(2001). E-Business 2.0: Roadmap for

Success. Boston: Addison-Wesley.

Turban, E., King, D., Viehland, D., Jae Lee. (2004). Electronic Commerce: A
Managerial Perspective. New Jersey: Pearson Education.
Zgheib, Philippe W. 2015. Business Ethics and Diversity in the Modern Workplace.
United State of America: Business Science Reference
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