ETHICS & BUSINESS

A. THEORY OF NORMATIVE ETHICS

Normative ethics is the study of ethical action. It is the branch of philosophical

ethics that investigates the set of questions that arise when considering how one ought to
act, morally speaking.

Normative ethics is distinct from meta-ethics because it examines standards

for the rightness and wrongness of actions, while meta-ethics studies the meaning of
moral language and the metaphysics of moral facts; and it is distinct from applied ethics
in that the former is more concerned with 'who ought one be' rather than the ethics of a
specific issue (such as if, or when, abortion is acceptable).

Normative ethics is also distinct from descriptive ethics, as the latter is an

empirical investigation of people’s moral beliefs. In this context normative ethics is
sometimes called prescriptive, rather than descriptive ethics. However, on certain
versions of the meta-ethical view called moral realism, moral facts are both descriptive
and prescriptive at the same time.

Most traditional moral theories rest on principles that determine whether an

action is right or wrong. Classical theories in this vein include utilitarianism, Kantianism,
and some forms of contractarianism. These theories mainly offered the use of
overarching moral principles to resolve difficult moral decision.

There are disagreements about what precisely gives an action, rule, or

disposition its ethical force. There are three competing views on how moral questions
should be answered, along with hybrid positions that combine some elements of
each. Virtue ethics focuses on the character of those who are acting, while
both deontological ethics and consequentialism focus on the status of the action, rule, or
disposition itself. The latter two conceptions of ethics themselves come in various forms.

1. Virtue ethics, advocated by Aristotle with some aspects being supported

by Saint Thomas Aquinas, focuses on the inherent character of a person rather
than on specific actions. There has been a significant revival of virtue ethics in
the past half-century, through the work of such philosophers as G. E. M.

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 Anscombe, Philippa Foot, Alasdair Macintyre, Mortimer J. Adler, Jacques
Maritain, Yves Simon, and Rosalind Hursthouse.
2. Deontology argues that decisions should be made considering the factors of
one's duties and one's rights. Some deontological theories include:
 Immanuel Kant's Categorical Imperative, which roots morality in
humanity's rational capacity and asserts certain inviolable moral laws.
 The contractualism of John Rawls, which holds that the moral acts are
those that we would all agree to if we were unbiased.
 Natural rights theories, such that of John Locke or Robert Nozick,
which hold that human beings have absolute, natural rights.
3. Consequentialism (teleology) argues that the morality of an action is
contingent on the action's outcome or result. Consequentialist theories,
differing in what they consider valuable (Axiology), include:
 Utilitarianism, which holds that an action is right if it leads to the
most happiness for the greatest number of people. (Historical note:
Prior to the coining of the term "consequentialism" by Anscombe in
1958 and the adoption of that term in the literature that followed,
"utilitarianism" was the generic term for consequentialism, referring to
all theories that promoted maximizing any form of utility, not just those
that promoted maximizing happiness.)
 State consequentialism or Mohist consequentialism, which holds that
an action is right if it leads to state welfare, through order, material
wealth, and population growth.
 Egoism, the belief that the moral person is the self-interested person,
holds that an action is right if it maximizes good for the self.
 Situation Ethics, which holds that the correct action is the one that
creates the most loving result, and that love should always be our goal.
 Intellectualism, which dictates that the best action is the one that best
fosters and promotes knowledge.
 Welfarism, which argues that the best action is the one that most
increases economic well-being or welfare.
 Preference utilitarianism, which holds that the best action is the one
that leads to the most overall preference satisfaction.

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 4. Ethics of care or relational ethics, founded by feminist theorists, notably Carol
Gilligan, argues that morality arises out of the experiences of empathy and
compassion. It emphasizes the importance of interdependence and
relationships in achieving ethical goals.
5. Pragmatic ethics is difficult to classify fully within any of the four preceding
conceptions. This view argues that moral correctness evolves similarly to
scientific knowledge: socially over the course of many lifetimes. Thus, we
should prioritize social reform over concern with consequences, individual
virtue or duty (although these may be worthwhile concerns, provided social
reform is also addressed). Charles Sanders Peirce, William James, and John
Dewey, are known as the founders of pragmatism.
6. Role ethics is based on the concept of family roles.

B. THE NATURE OF BUSINESS

The nature of business can be described as an organization that worked in the

middle of other community. According to Bartens’s opinion (2003:13) that business as
social activities essentially be seen as 3 different angles namely Economics point of
view, Moral and Law.

a. Economics Point of View

Business is an economics activities such as barter, production-marketing,
worked-employed, and human interactions with the purpose to gain profits.
Business is always have purpose to gain profit and the company can be called as
organization that is built to make profits. And that’s why business is often
described as “To provide products or services for profits”.
The profits are only appears in economics with the financial system. And
this modern business, profits are expressed with money, but when we do the barter,
we can’t gain profits and just get benefits. Because business is a trade that have
certain aim to gain financial benerfits that generated by certain efforts and not by
chances. From economics point of view, good business is a business that gets a lot
of profits.

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b. Moral Point of View
To gain a lot of profits is a prime goal in business, and it is natural thing as
long as it does not harm others. So, besides economics point of view, needs to be
added with morality. The interests of others need to be considered for the sake of
the business itself, such as employee interests to maintain survival and financial
position of the business itself. From the moral point of view, good business is not
only profitable but a morally good business.

c. Law Point of View

Law is normative point of view, because it determined what is permissible
and what not to do. Businesses must obey the rules that apply to a good business
arena, meaning businesses that are law-abiding, such as legal businesses. From the
law point of view, the indicator is quite clear that good business is a business that
does not violate the law. Bartens (2003: 28) argues that the indicators that
determine the good and bad of the business are 3 benchmarks, namely conscience
(hati nurani), golden rule (kaidah emas), assessment of society.
 Conscience (hati nurani)
An act is said to be good if done with conscience because if it is
contradictory it will destroy personal integrity. Conscience is an important
moral norm but is subjective. But not everything that the conscience says
can be relied on in terms of morals. Therefore, the assessment cannot only
be done with conscience, but must be followed by other norms.
 Golden rule (kaidah emas)
The golden rule is more objective to assess the good and bad behavior.
The positive golden rule reads, "Please treat others as you would like to be
treated". And if it is formulated negatively, it says, "Do not do to others
what you do not want others to do to you". For example, if you don't want
to be cheated, don't cheat others.
 Assessment of society
The most effective way to assess moral behavior by submitting it to the
general public for evaluation. This method is called a social audit that
demands openness or transparency.

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C. CHARACTERISTIC OF BUSINESS

Recent new business regarded as a profession .A profession was calculated as

work done to a living life by the use of inventiveness and skill by involving personal
commitment in ( satyanugraha do that work , 2003: 10 ). Modern business requires and
demanded businessmen to become a professional person. A professional person are
generally people who can be trusted by the community to do work that become
profession. The competition , the attitude of image building is required to be a
professional to a good business through city administration public service to the
community. Are the activities sell business image to the community in a way to meet
their needs in prima , good , and honest goods and services through a private placement
of high quality and a reasonable price. Hence , needs to be the image of business as a
profusion of necessary spare parts and the valued

Professionalism finally become necessary for business .It is just that

professional attitude in the business of limited to the technical ability related to
inventiveness and skill related to business: management , the production of , marketing ,
financial , personnel , keraf us up , 1998: 46 ) . One who professional always meant he
who has a high personal commitment , serious to his advantage , who is in charge of on
that job so that they do not detract in any way from others

According to keraf ( in rindjin, 2004: 63 ) a profession necessary and valued

have the following characteristics:

1. Someone has knowledge, expertise, and special skills earned through education,
training and forming their experience, distinguishing it with others.Goods or services
high quality and with prices competitive can only be produced by professional.
2. There are kaedah and moral standards.On each profession always be no regulations
determine how profession were run.Regulations commonly called code of conduct
this is just indicating responsibility professional work, like a code of conduct doctor,
reporters, lawyer, accountants and so on. To keep purity and appropriate
implementation of this code of conduct, formed professional organization.The
organization this profession to keep good name organization, selecting new members
and if necessary give sanction to members violated the ethic
3. Someone needs authorized are able to run their special or a license to a profession
.This is meant to protect the profession of people who are not professional .

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 4. The provision of the service from the community .Advantage to be paid as the logical
consequence of services available to the public , even participation in the community
welfare , terms of corporate is looking at

D. PARADIGM SHIFT FROM SHAREHOLDERS TO STAKEHOLDERS

Shareholders or stockholders paradigm is a paradigm in which the Chief

Executive Officer (CEO) is oriented to the interests of shareholders. The management as
the holder of the mandate (agency) seeks to obtain maximum profit to please and
increase the prosperity of the shareholders (principal). As if the shareholders are the most
influential party for the survival of the company. This orientation makes the evaluation
of business management only seen from the financial aspect. Management performance
is only seen from its ability to generate profits. This encourages management to justify
various ways to pursue profits. Such actions result in the loss of other parties.

The paradigm of shareholders then experiences a shift because in reality

management is faced with many interests whose influence needs to be carefully
considered. However, in business activities, there finally arises the awareness that in the
effort to obtain profits, besides the shareholders, it is also important to pay attention to
the interests of other parties affected by business activities. Stakeholders are individuals
or groups that can be influenced or influence the actions, decisions, policies, practices
and goals of business organizations. The company stands in the midst of the
environment. The environment is the only reason why the business exists.

Stakeholder approaches mainly map relationships that are involved in business

activities in general. This approach seeks to provide awareness that business must be
carried out in such a way that the rights and interests of all parties concerned with a
business activity are guaranteed, cared for, and valued. This approach leads to the
principle of not harming the rights and interests of any party in business activities. This
requires that the business be carried out well and ethically for the rights and interests of
all parties involved in business activities. In general stakeholders can be divided into two
groups, namely:

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 1. Primary Group
The primary group consists of capital owners or shareholders, creditors,
employees, suppliers, consumers, suppliers, and competitors. The most important
thing to be considered in a business activity is, of course, the primary group because
the success or failure of a company's business is largely determined by mutually
beneficial relationships that are intertwined with the primary group. For the sake of
success and business continuity, the company must not harm one of the primary
groups. In other words, companies must establish good and ethical business
relationships with the group: honest, responsible for offering goods and services,
being fair to them, and understanding each other. In this case it can be seen that the
principle of ethics finds its most concrete place of application and is in line with
business interests to seek profit.

2. Secondary Group
Secondary groups consist of local government, foreign governments,
social groups, mass media, support groups, the general public, and local
communities. In certain situations, secondary groups can be very important and can
even be more important than primary groups, because they really need to be taken
into account and safeguarded their interests. In social, economic and political
conditions such as in Indonesia, local people can greatly affect the sustainability of a
company. When a company operates without providing welfare, cultural values,
local facilities and infrastructure, local employment, and others, will create a social
atmosphere that is not conducive and unstable for the company's business continuity.

If you want to succeed and survive in running a business, then the company
must be good at handling and paying attention to the interests of the two groups of
stakeholders equally. Companies are required not only to pay attention to the
performance of financial aspects, but also from other aspects equally. The Balance
Scorecard proposed by Kaplan & Kaplan in the 1970s is one approach that is currently
widely used in planning business strategies and evaluating company performance.
Balance Scorecard emphasizes balanced attention between performance from internal
and external aspects, as well as financial and non-financial aspects. The implementation
of this approach shows a real form of business awareness of the importance of attention
to stakeholders

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 REFERENCES

Sutrisna Dewi, 2011, Etika Bisnis: Konsep Dasar Implementasi & Kasus, Cetakan
Pertama, Denpasar, Udayana University Press.