CHAPTER I

INTRODUCTION

1.1 Background

A lot of factors affect and determine activities business. As social activities, business
with many ways tied with complexity modern society. In the business, pursue advantage it is the
norm, as long as in achieving the advantage to many parties. So, in achieving its objectives in the
business there are limits. The interests and the rights of others must be paid attention.
Ethical behavior in the business is something that necessary for survival business itself.
Business unethical will hurt business itself especially if seen from long term perspective. Good
business not only lucrative business, but good business is besides the businesses profitable also
good business morally. Good behavior, also in a business context, is behavior that conforms to
moral value. Business also bound by law. The business is limited by norm law. Norm ethics and
norm law is an important point that must be considered when we do business.

1.2 Problem Formulation

1.2.1 What is definition of ethics?
1.2.2 What is moral and morality?
1.2.3 What is the role and advantages of ethics?
1.2.4 How about Phenomenology a moral sense?
1.2.5 How about Ethics Normative?

1.3 Destination
1.3.1 To find out about the definition of ethics.
1.3.2 To know and understand about moral and morality.
1.3.3 To know and understand about the role and advantages of ethics.
1.3.4 To know and understand about phenomenology a moral sense.
1.3.5 To know and understand about ethics normative.

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 CHAPTER II
DISCUSSION

2.1 The Definition of Ethics

Ethics: A Brief Definition

Ethics is the branch of philosophy concerned with the meaning of all aspects of human
behavior. Theoretical ethics, sometimes called normative ethics, is about delineating right from
wrong. It is supremely intellectual and, as a branch of philosophy, rational in nature. It is the
reflection on and definition of what is right, what is wrong, what is just, what is unjust, what is
good, and what is bad in terms of human behavior. It helps us develop the rules and principles
(norms) by which we judge and guide meaningful decision-making.
Business ethics is a system of moral principles applied in the commercial world. It is a whole
new scientific area because it combines law theory and politics as much as philosophical and
historical documents. Ethics become a term very flexible and have many different aspects.
Business ethics provide guidelines for acceptable behaviour by organizations in both their
strategy formulation and day-to-day operations. An ethical approach is becoming necessary both
for corporate success and a positive corporate image. Especially nowadays ethics in business are
obligated because many businessmen are only interested in making money despite the ethical
costs or the harm they would probably cause to people or even to nature (environmental
pollution).

The term "business ethics" is used in a lot of different ways.

Business ethics is a form of applied ethics (Broni, 2010) that examines ethical principles and
moral or ethical problems that arise in a business environment (Solomon, 1991). It applies to all
aspects of business conduct (Baumhart, 1968; Ferell - Fraedrich, 1997;
Singer, 1991) and is relevant to the conduct of individuals and business organizations as a whole
(Bernard, 1972; Donaldson,1982:36).
Applied ethics is a field of ethics that deals with ethical questions in many fields such as
technical, legal, business and medical ethics (Preston, 1997:6-11).

Ethics are external standards that are provided by institutions, groups, or culture to which
an individual belongs. For example, lawyers, policemen, and doctors all have to follow an
ethical code laid down by their profession, regardless of their own feelings or preferences.
Ethics can also be considered a social system or a framework for acceptable behavior.

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2.2 Moral and Morality

Morality (from the Latin moralitas, meaning "manner, character, proper behavior") is
the differentiation of intentions, decisions, and actions between those that are good (or right) and
those that are bad (or wrong).
Moral values are relative values that protect life and are respectful of the dual life value of
self and others. The great moral values, such as truth, freedom, charity, etc., have one thing in
common. When they are functioning correctly, they are life protecting or life enhancing for all.
But they are still relative values.
Principles or habits with respect to right or wrong conduct. While morals also prescribe do
and don'ts, morality is ultimately a personal compass of right and wrong.
Morals are judgments, standards and rules of good conduct in the society. They guide people
toward permissible behavior with regard to basic values.
Morals are also influenced by culture or society, but they are personal principles created and
upheld by individuals themselves.

 A moral is a message conveyed or a lesson to be learned from a story or event.

 Morality is the ability to distinguish good and evil or right and wrong, right or good
conduct; Motivation based on ideas of right and wrong

2.3 Role and Advantages of Ethics

Ethical people are those who recognize the difference between right and wrong and
consistently strive to set an example of good conduct. In a business setting, being ethical means
applying principles of honesty and fairness to relationships with coworkers and customers.
Ethical individuals make an effort to treat everyone with whom they come in contact as they
would want to be treated themselves.
1. Build Customer Loyalty
Consumers may let a company take advantage of them once, but if they believe they have
been treated unfairly, such as by being overcharged, they will not be repeat customers. Having a
loyal customer base is one of the keys to long-range business success because serving an existing
customer doesn’t involve marketing cost, as does acquiring a new one. A company’s reputation
for ethical behavior can help it create a more positive image in the marketplace, which can bring
in new customers through word-of-mouth referrals. Conversely, a reputation for unethical
dealings hurts the company’s chances to obtain new customers, particularly in this age of social
networking when dissatisfied customers can quickly disseminate information about the negative
experience they had.
2. Retain Good Employees
Talented individuals at all levels of an organization want to be compensated fairly for their
work and dedication. They want career advancement within the organization to be based on the

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quality of the work they do and not on favoritism. They want to be part of a company whose
management team tells them the truth about what is going on, such as when layoffs or
reorganizations are being contemplated. Companies who are fair and open in their dealings with
employees have a better chance of retaining the most talented people. Employees who do not
believe the compensation methodology is fair are often not as dedicated to their jobs as they
could be.
3. Positive Work Environment
Employees have a responsibility to be ethical from the moment they have their first job
interview. They must be honest about their capabilities and experience. Ethical employees are
perceived as team players rather than as individuals just out for themselves. They develop
positive relationships with coworkers. Their supervisors trust them with confidential information
and they are often given more autonomy as a result. Employees who are caught in lies by their
supervisors damage their chances of advancement within the organization and may risk being
fired. An extreme case of poor ethics is employee theft. In some industries, this can cost the
business a significant amount of money, such as restaurants whose employees steal food from
the storage locker or freezer.
4. Avoid Legal Problems
At times, a company’s management may be tempted to cut corners in pursuit of profit, such
as not fully complying with environmental regulations or labor laws, ignoring worker safety
hazards or using substandard materials in their products. The penalties for being caught can be
severe, including legal fees and fines or sanctions by governmental agencies. The resulting
negative publicity can cause long-range damage to the company’s reputation that is even more
costly than the legal fees or fines. Companies that maintain the highest ethical standards take the
time to train every member of the organization about the conduct that is expected of them.
5. Companies with good ethical policies earn:
 Marketing advantages over their competitors. Customers readily invest in the companies
through shares and also want to establish long lasting business relations with the
company.
 The performance of employees improves with good ethical policies present in a
company. Morale is high and employees feel obligated to put in their all to continue to
make it a success.
 Reputation management: a bad reputation is created by unethical behaviour which will
eventually lead to a scandal. A scandal will result in falling stock prices, anxiety, and low
morale among employees as well as government and public scrutiny and inquests.
 Legal and financial incentives: companies known for their high ethical standards and
education of employees on ethical polices are provided with strong legal and financial
incentives by regulatory bodies.
6. Ethical behaviour and corporate social responsibility can bring significant benefits to a
business. For example, they may:
 Attract customers to the firm's products, thereby boosting sales and profits

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 Make employees want to stay with the business, reduce labour turnover and therefore
increase productivity
 Attract more employees wanting to work for the business, reduce recruitment costs
and enable the company to get the most talented employees
 Attract investors and keep the company's share price high, thereby protecting the
business from takeover.

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2. 4 Phenomenology A Moral Sense

A moral sense arising when someone must take a decision on the something related to
interests, right or happiness for another person (Magnis, 1975: 22). So decision do or not do
something not caused by factor from outside awareness itself, for example, by pressure from
others, a group or certain organizations, the community, or government though.
A moral sense is awareness of reality that does not depend on who said, but in the
whereabouts of reality. Hence, a moral sense is rational, objective, and absolute. For example, if
someone borrow something from others, then borrowers shall be obliged to return. Another
example is:
A student found a cell phone on the toilet campus. No one else know he took that cell
phone. A moment he felt provided for unexpected, moreover chance he had no cell phone. But
immediately he knew that cell phones was his colleagues own. He has no right to own that cell
phone and felt sorry and shall be obliged to return the cell phone. Awareness this is what is
called a moral sense (Magnis.1975: 23).

2.5 Ethics Normative

a. Theory Deontology (Ethics Obligation)

Deontology comes from the Greek, deon which means required, must, in
accordance with the procedures (Magnis, 1975: 79-80; Pratley, 1997: 173).The theory
deontology assessing the act of it good or bad based on rules, the procedure or obligation.
So an action said to be better if the act in accordance with the rules, procedures, and
obligations. According to ethics deontology, an action is worth moral because of be based
on the obligation that must be implemented in spite of purpose or a result of the act .For
example, an action business will be assessed either by ethics deontology not because the
act bring the ending of the culprit, but because of the act of is in line with the doer
responsibility to, for example offering goods and services with the quality of comparable
to the price.

There are three principles must be fulfilled in applying the theory deontology,
there are:

1. That an action have values, hence the act of it must be executed under the
rule, procedures, or obligation.
2. Values of an action not prescribed by purpose or achievement, but depending
on will either that drives someone to take action that.
3. Liability is an important point of actions were based on respect for a moral
law universal.

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 Besides focus to an obligation, deontology also simultaneously see a right (moral
rights) with the reason that an act necessary because is the right of human. Human beings
have kind of the right, there are:

- Moral right or rights identify all activity or the desire is able to freely done
without bounded by a norm law. For example, the right to life, the right to
freedom of religious, the right to education, etc.
- The legal right sourced from a norm law and protected jurisdiction a legal
system.
- the citizens right, that is what rights can be enjoyed as citizens, for example,
right of choosing and be elected.

Give someone what they are entitled will related to aspects justice (moral justice),
so it is also to watch out for in approach deontology. There are 3 essential element in the
sense that justice, which are (1) justice were loyal to another person; (2) justice is
obligation and must be implemented; and (3) justice demanding equation (equality).
A different approach that is in theory deontology is Ethics of Care. According to this
theory, caring to a person or parties had a special relationship (especially relations
dependent) is a must.
Demands to attention often in conflict with demands to justice. For example, a
manager have to choose one of the two inferiors to be promoted. One of inferiors is his
best friend who often help during college first. Who where to promoted? There is no rule
clear in resolving this kind of conflicts .This theory criticized for give priority to the
special relationship (example, proximity ethnic, religion, race, and tribes) could cause
injustice and even ignoring attention to the person other.
The theory of right, justice, and attention as outlined all focused on the act of to keep
on a principle or norm. Appropriate to the principle of or norm, so the act of will be right.
On the other hand, if not in accordance with the principle or norm, so the act of will be
not true. One theory that not emphasized to the action of, but focus on character to a
person, those as a moral doer. This theory called Virtue Theory that uses virtue (as
honesty, courage, integrity, concern, patience, self-control and ugliness (as dishonesty,
greed, and cruelty) as a preliminary to moral reasoning (Satyanugraha, 2003: 89).

b. Theory Teleology (Ethics Purpose or Benefit)

Teleology comes from the Greek, telos which means purpose, target, the results,
due to (Magnis, 1975; 79-80; Pratley, 1997: 173). Ethics teleology considered an action it
good or bad from the purpose, the results, target or a steady that can be attained.
The purpose, the results, target, can be seen from two terms, that is what and for
who the purpose, the results, and target. Seen from the point what, known two version
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teleology, namely hedonism (hedone, in Greek means bliss) and eudaimonism (daimon,
in Greek means a good soul; eudaimonia, means wealth) (Magnis, 1975: 80; Bertens,
1997: 235-242). Encouragement to find enjoyment, excitement, or pleasure or otherwise
avoid and prevent pain or displeasure of human life is something humane. The
requirement is the act of will not harm self or others, and do not fail in an obligation.
In the discussion of eudaimonisme, Aristoteles states that each human actions
have aims. There are two kinds of the purpose, that is the purpose of sought by the next
purpose, and the purpose sake the purpose itself, for example, a learned person of
medical science to cure diseases, the makes a seat that can sit higher than the floor, etc.
But, there is some good purpose to himself, called happiness.
If viewed from the for whom result or consequence it, then hedonism and
eudaimonism are egoism, so called also egoism ethical. In this relationship, eogism can
divided into egoism hedonistic (hedonism egoism) and egoism eudaimonistic
(eudaimonisme egoism). To egoism hedonistic rules applicable “Do in such a way that
reached for greater enjoyment for you or avoid all not enjoy”. And in egoism
eudaimonistic rules applicable “Do in such a way that reached the greatest happiness for
you”.

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 CHAPTER III
CLOSING

3.1 Conclusion

Business ethics is a system of moral principles applied in the commercial world. It is a

whole new scientific area because it combines law theory and politics as much as philosophical
and historical documents.
Moral values are relative values that protect life and are respectful of the dual life value of
self and others. The great moral values, such as truth, freedom, charity, etc., have one thing in
common.
Ethical individuals make an effort to treat everyone with whom they come in contact as they
would want to be treated themselves.

1. Build Customer Loyalty

2. Retain Good Employees
3. Positive Work Environment
4. Avoid Legal Problems
5. Companies with good ethical policies
A moral sense is awareness of reality that does not depend on who said, but in the whereabouts
of reality.
Ethics normative consist of two theories, there are theory deontology and theory teleology.

3.2 Suggestion
Some of the resource we read, there are a lot of difference regarding to how ethics
business. In order not to a misunderstanding, should be necessary to intensify a little bit more
about how the real of ethics business that is.

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