THE IMPORTANCE OF ETHICS

AND SOCIAL RESPONSIBILITY

IN INTERNATIONAL BUSINESS
ARTICLE REVIEW
 OVERVIEW OF THE ARTICLE

• This article aims to study the ethical standards applied in business practices, business
policies, and ethical standards in institutions.
• The author begins by introducing the business ethics concept by giving a review of
literature on business, business ethics, social responsibility, and international business.
• According to the author, business ethics denotes to doing business in a way that
incorporates all sets of individuals, companies, and society. It involves the study of
ethical standards and how they function in an organization and the systems that
contemporary society uses in producing and distributing goods and services (Pratiwi,
2021).
 OVERVIEW OF THE ARTICLE…CONT..

• The study uses a descriptive research design to find out the description of a methodology for
conducting a business. This research helps to adopt a sense of social responsibility and an ethical
attitude required in carrying out business.
• The variable under study is how companies operating internationally can conduct business
ethically and cultivate a sense of social responsibility.
• Data was collected using documentation activities through data analysis techniques. Findings
from the study reveal that corporate social responsibility involves compliance with employee
protection, consumer protection, environment protection, and human right protection. It is linked
to the shareholder's versus the stakeholder's interests in conducting business (Pratiwi, 2021).
 OVERVIEW OF THE ARTICLE…CONT.
•A significant aspect of international ethics is the treatment of employees based on the
different cultures. Therefore, managers should consider the ethical aspects of different
countries to curb the challenge of cultural diversification and any issues arising from
international comparisons.
•When considering how employees treat the organization, critical issues include integrity,
conflict of interest, and confidentiality. Managers should understand that ethical perceptions
on the aforementioned issues differ from culture to culture.
•Another aspect that raises ethical concerns is how an organization treats economic agents
and employees. These economic agents include consumers, dealers, competitors,
shareholders, unions, and suppliers. Interactions with these agents initiate ethical concerns
and differences in business practice such as advertising, disclosure concerns, etc.
Organizations should focus on implementing social responsibility (Pratiwi, 2021).
 LEARNING OUTCOMES
• We learn that business ethics is diverse and it involves many decisions to determine
between ethical and unethical issues. It includes studying official standards and their
application to the modern business world. Different organizations have different ways
of doing things and the ethical perspectives differ especially for businesses operating
internationally where diverse cultures are involved.
• Ethical issues are diverse and contradicting and hence the best approach for managers
is to judge ethics from different viewpoints.
• Organizations should focus on undertaking business activities in an honest manner and
that which is acceptable to prevailing laws even though some challenges may rise.
• (Pratiwi, 2021) (Bierman et al., 2018).
 LEARNING OUTCOMES…CONT.
• Ethics involves the individual beliefs regarding actions, decisions, or behaviors that
are right or wrong, and hence determining ethical behavior varies between different
people. Likewise, in organizations operating in a different business environment.
• Ethics is linked to the culture in which a business operates in, and these cultures vary
from one business environment to the other.
• Ethical behavior is essential for the successful operation of a business as it determines
the success and survival of the business in the operating environment. This seeks for
the organization to function morally to uphold a positive brand reputation.
• (Pratiwi, 2021) (Bierman et al.,2018).
 LEARNING OUTCOMES…CONT.
• Social responsibility involves organizational objectives to support and protect the
social environment in which it operates (Pratiwi, 2021).
• According to (Bierman et al., 2018) social responsibility involves the business
obligation a business takes to increase the positive impact on society and
consistently reduce the negative impact. It involves adherence to legal and
regulatory standards, financial viability, corporate citizenship, ethics, values, and
principles.
• According to (Pratiwi, 2021), it involves compliance with employee protection,
consumer protection, environment protection, and human right protection.
 CONCLUSION
• Organizations must adhere to ethical values that aid the success of a business. Positive
ethical behavior is essential for the survival of a business while negative ethical behavior
can ruin the brand's reputation.
• A business that is ethical should display values based on standards, empathy, and
conscience.
• Managers should consider social responsibility issues that affect stakeholders and further
affect ethical decision-making.
• However, there is still debate on corporate social responsibility on the fact that companies
should be held responsible for their actions and their impact on the business environment.
 REFERENCES

• Bierman, L., Ferrell, O. C., & Ferrell, L. (2018). Management: Principles and
applications (LLF-B/W) (4th ed.)
• Pratiwi, D. C. (2021, November 25). The importance of ethics and social
responsibility in international business | Pratiwi | Journal of management and
business innovations. E-Journal Universitas Islam Negeri Sumatera Utara. Retrieved
September 7, 2022, from
https://jurnal.uinsu.ac.id/index.php/jombi/article/view/10660