CRITICAL JOURNAL REVIEW

“ETHICAL BUSINESS”

Lecturer : Andri Zainal, M.Si, Ph.D, Ak.CA/ Choms Gary GT Sibarani, SE, M.si,Ak.CA

Course :English Business

BRUSHED BY:

KRISTINA SIHOMBING (7191142010)

ACCOUNTING EDUCATION

FACULTY OF ECONOMICS

MEDAN STATE UNIVERSITY

2020
 FOREWORD

Praise be to the author for praying to God Almighty for His blessings and mercy, the
author can complete the critical journal review entitled "business ethics”. The purpose of this
review is to fulfill the task of English business courses. And the author thanks all parties has
helped the author in completing the making of this report both in terms of material and moral
In completing this report the author has tried to achieve maximum results, but with limited
insight, knowledge, we have, we realize that this report is far from perfect. many mistakes
and shortcomings in writing and limitations of the material in this report, we apologize
profusely and therefore we hope that readers can provide constructive suggestions and
suggestions.
Hopefully this report is useful and useful for those who read it in.

Medan, 21 March 2020

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 TABLE OF CONTENS

FOREWORD..............................................................................................................................i

TABLE OF CONTENS.............................................................................................................ii

CHAPTER I...............................................................................................................................1

INTRODUCTION......................................................................................................................1

A. Background.....................................................................................................................1

B. Formulation of Problems.................................................................................................1

C. Benefits...........................................................................................................................1

CHAPTER II..............................................................................................................................2

IDENTITY OF JOURNAL........................................................................................................2

A. Identity Of Journal 1.......................................................................................................2

B. Identity Of Journal 2.......................................................................................................2

SUMMARY OF THE JOURNAL.............................................................................................3

A. Summary Of Journal 1...................................................................................................3

B. Summary Of Journal 2....................................................................................................8

CHEPTER III...........................................................................................................................11

DISCUSSION..........................................................................................................................11

A. Journal Advantages.......................................................................................................11

B. Journal Dificiecy..........................................................................................................11

CHAPTER IV..........................................................................................................................12

CLOSING................................................................................................................................12

A. Conclution.....................................................................................................................12

B. Suggestion.....................................................................................................................12

BIBLIOGRAPHY....................................................................................................................13

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 CHAPTER I

INTRODUCTION

A. Background

The problem of business ethics or business ethics has been increasingly talked about
lately not only in our homeland, but also in other countries, including in developed countries.
Attention to this problem is inseparable from the growing development of our business world
as a result of development so far. The role of the business world in the economy is so fast, so
in terms of investment, for example, there are now 3 times government investment. Business
activities that are increasingly widespread both at home and abroad, have created new
challenges, namely the demand for good, ethical business practices, which also demands
business life in many countries in the world. The transparency demanded by the global
economy also demands ethical business practices. In the global market economy, we can only
afford to be able to compete.

B. Formulation of Problems
1. Fulfill the task of the course, english business
2. Knowing what busness ethics mean
3. Knowing the ethical climate and ethical problems
4. Knowiing the business ethics challenges in a global economy
5. Knowing and advanntages and disaventages of the two journals after comparing
the two jounals

C. Benefits
1. Can master business english material after comparing two journals
2. Able to think critically in seeking information in comparing the two journals
3. Knowing the notions of business ethics
4. Knowing the business ethics challenges in a global economy
5. Knowing the ethical climate and ethical problems

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 CHAPTER II

IDENTITY OF JOURNAL

A. IDENTITY OF JOURNAL 1

Journal Tittle : International Journal Scientific and Research Publication

Article Title : business ethic

ISSN : 2250-3133
Volume : Volume 2
Year Publisher : 2012
Authors : Mehrdad Salehi, Mojtaba Saeidinia, Mohammadreza Aghaei
publisher : Management And Science University Malaysia

D. IDENTITY OF JOURNAL 2

Journal Tittle : World Applied Sciences Journal

Article Title : Corporate Governance in Indonesia: Business Ethics Prespectives

and Challenges in Globalization Era
Volume : volume 12
ISSN : 1818-4952
Year Publisher : 2017
Authors : Arief Prima Johan and Niki Lukviarman Maruf

Publisher : IDOSI Publications

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 SUMMARY OF THE JOURNAL

A. Summary Of Journal 1

INTRODUCTION

Importance of ethics in the business world is superlative and global. New trends and
Issues arise on a daily basis which may create an important burden to organizations and end
consumers. Nowadays, the need for proper ethical behaviour within organizations has
become Crucial to avoid possible lawsuits. The public scandals of corporate malfeasance and
misleading practices, have affected the public perception of many organizations (e. g., Enron,
Arthur Andersen, WorldCom etc.). It is widely known that advertising does not promote the
advancement of human moral sensibility. Lasch’s contention (1978: 1) that modern
advertising “Seeks to create needs, not to fulfil them: to generate new anxieties instead of
allaying old ones. The recent expansion of global business and fall of trade barriers
worldwide have further Underlined the interest in the topics of ethical behaviour and social
responsibility (See among Others, Jones, 1991: 366-395). In addition, as many scholars
believe, human rights and environmental conservation are gaining increasing more
recognition in both academic and commercial settings.

As multinational companies expand globally and enter foreign markets, ethical

conduct of the officers and employees assume added importance since the very cultural
diversity associated with such expansion may undermine the much shared cultural and ethical
values observable in the more homogeneous organizations (Mahdavi, 2001). Although
understanding of other cultures and recognition of differences among them will enhance the
cross-cultural communication, it may not be sufficient to provide viable guidelines of proper
ethical behaviour in organizations. Thus, concerns about unethical behaviour of corporations
in other countries, are manifested in legislations such as The Foreign Corrupt Practices Act of

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1977, and the Sarbane-Oxley Act of 2002. In the academic arena, on the other hand, the
culture-based consequentiality model is developed to explain, among other things, how
cultural differences alter the ethical perception and actions of individuals engaged in making
decisions with ethical overtones (Robertson and Fadil, 1999: 385-392).

I. WHAT IS BUSINESS ETHICS?

Ethics, the search for ‘a good way of being’ for a wise course of action, as it could be
practiced by business firms is called business ethics. Ethics in business deals with the ethical
path business firms ought to adopt. Afflicting the least suffering to humans and the nature in
its entirety, achieving the greatest net benefit to the society and economy enriching the
capability of the system in which it is functioning, being fair in all its dealings with its
proximate and remote stakeholders, being prepared to correct its mal-habits and nurturing an
enduring virtuous corporate character in totality, can be called business ethics. It is often
suggested from extended utilitarian/ consequentiality position that businesses can often attain
short-lived gains by acting in an unethical fashion; however, such behaviours tend to
undermine the economy over time. For those who uphold the principles of virtue ethics, all
that matters is corporations maintaining character of honesty, fairness and humaneness than
being ethical for the sake of better consequences. On the other hand experts of deontological
ethics and virtue ethics postulate that what matters is the motive to be ethical than the
consequential fallout Jacques Cory, a noted business ethicist observes, “companies should
behave ethically and be profitable in parallel, and even if ethics diminishes the profitability of
the company, they should still behave ethically”. Seen from the Kantian Ethical perspective
Business has to consider its remote and proximate stakeholders as ends in themselves and not
merely as means toward some other end.

II. ETHICAL CLIMATE AND ETHICAL PROBLEMS

Strategies, such as these codes of ethics, are only one means of achieving the ultimate goal of
having ethical international responsibility in the engagement of business worldwide. As
stated above, there are many ethical responsibilities faced by multinational organizations.
Theorists generally agree that situational variables such as organizational climate can affect
ethical behaviour of individuals Ethical climate, it must be emphasized, is not the same as
culture is commonly perceived, but rather a broader concept of culture (Schein, 1990, pp.
109-119). Culture is believed to be more associated with deeper beliefs, values and

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assumptions (Denison, 1996, pp. 619-654). Therefore, just as one can value an individual’s
culture by his or her actions and personal activities, ethical climate can be observed on a
larger scale; in this case, the organization. Ethical climate is, in essence, the employee’s
perception of the norms of an organization (Bartels et al. 1998: 799-804).

III. BUSINESS ETHICS CHALLENGES IN A GLOBAL ECONOMY

Be many substantial local as well as regional factors that make a variation in attitudes
and behaviour. In addition it is important to note that what may happen at a distance be able
to have a great effect on local activity. Business persons, diplomats, media representatives
and those from many other groups must recognize, as some have, which the welfare and even
continued existence of their enterprises requires a good knowledge of what they may face in
foreign climes not to speak of variations even in their native country. “Go global or perish”
(Kehoe, 1998) is a fundamental battle cry. Even those who are not active in operations far
from home cannot ignore the impact of the possible indirect influences on economic or
political performance at home. Moreover, attempts to translate local experience and
knowledge to activity elsewhere in the world can lead to less than wished results. “Business
in the global arena may be characterized as a brilliantly structured mosaic of complexity and
diversity, composed of various and different places, peoples, cultures, customs, laws, mores,
processes, and ethical systems, a mosaic that challenges,exites and, at times, frustrates a
global manager” (Ibid.). Lest it be believed that these factors relate only to business activity
one may note that recent and past decisions on a geopolitical basis often have been made
without recognition of the underlying factors faced in those actions. Even on an individual
level the challenges can play a role apart from what a manager in charge may be faced with.
What may be encountered in tourism in a foreign setting, for instance, can often make a great
difference in the emotional experience not to speak of possible difficulties or even dangers
for those unable to recognize their bases.

IV. THE PLACE OF ETHICS IN BUSINESS FUNCTIONING

All of the elements of the challenges to be faced in a changing environment the field
of ethics in recent years have become a major point of consideration in all circles of society,
on a domestic level as well as globally. It has become increasingly clear that policies that do
not take into account individual and social differences will not stand the test of time.

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Knowledge of the basics of a discipline alone will not keep the decision maker in any field of
professional activity on an adequate level of performance. In business those who are
knowledgeable in accounting, finance, or other disciplines but who do not recognize the
broader social implications of their decisions are not likely to be effective. In politics a grasp
of the elements of local and international law without recognition of the underlying forces
does not make for effective action. The recognition of the breadth of awareness of the many
factors involved in even primary situations has led to a somewhat variation of structuring of
the concepts of the field. Perhaps to emphasize the broader aspects of the functioning of
ethical and closely related factors the somewhat newer approach is to identify such action
under the rubric Corporate Social Responsibility. The activity under this concept is not to be
considered as limited to business corporations as it also can apply to other corporate bodies as
worker’s unions, on-profit organizations as well as to public entities though they may not be
generally recognized as belonging to the same family. A further variation in the description
of this area has come with development of the concept of Sustainable Development (SD).
Many business executives “demonstrate their commitment to acting in a socially responsible
manner. For a growing number of companies the chosen vehicle to make their case is the
corporate sustainability report, a document that outlines corporate initiatives in such areas as
the environment and resource management, as well as philanthropy, workplace conditions,
and concern for the communities in which the companies do business” (Osborne, 2002).

V. ETHICS IN ACTION

Ethical behaviour is determined by the values of the society and legal principles act to
support activity along these lines. At the governmental level the major role of the executive,
legislative and judicial entities is to insure the health and safety of its people and provide that
all will be protected from the deleterious effects of bad or dangerous practices by any
elements of the community. Legal enactments are often supplemented by codes of conduct.
These are most often met in quasi-public institutions or groups, such as lawyers, accountants,
doctors, pharmacists and other professional organizations, such as the chambers of
commerce. Educational institutions generally also have codes of conduct for all members of
that community and action in schools of business in particular has shown a great deal of
activity along those lines. Courses covering the problems of ethical performance in public
and private organizations have shown an increase in number and stature where a decade ago
these studies were more limited.

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 VI. ETHICS SUPPORT IN EDUCATION

What is the role of educational and professional organizations in the development and
maintenance of ethical practice? A response to this comes from the field as “Can business
schools teach students to be virtuous? In the wake of all the corporate scandals they have no
choice” (Alsop, 2003). The answer to this comes from particularly notable attempts to
delineate standards of performance. The Association for the Advancement of Collegiate
Schools of Business International (AACSB) has developed extensive Standards that call for
proper implementation of the educational process. While these are established as
requirements for accreditation they serve as guidelines for quality education in the field.
Standard 15 states “Normally, the curriculum management process will result in
undergraduate and master’s level general management degree programs that will include
learning experiences in such management specific knowledge and skills areas as: Ethical and
legal responsibilities in organizations and society” (AACSB International, 2003). Noteworthy
is the fact that this area is listed as the first of eight categories of business disciplines. In other
professional areas the codes of conduct promulgated by many groups are reinforced by the
requirements for continuing education that includes a strong exposure to ethical problems
faced in practice. Educational programs in other areas such as tourism should also include
attention to ethics and legal aspects in travel abroad.

VII. ETHICAL BRANDING AND CORPORATE REPUTATION

Corporate reputation can be defined in terms of a number of attributes that form a

buyer’s perception as to whether a company is well known, good or bad, reliable,
trustworthy, reputable and believable (Levitt, 1965). Corporate reputation is concerned with
how people feel about a company based on whatever information (or misinformation) they
have on, company activities, workplace, past performance and future prospects
(Fombrun,2000). According to Keller (1998), a socially responsible corporate image
association involves the creation of consumer perceptions of a company as contributing to
community programs,supporting artistic and social activities and generally attempting to
improve the welfare of society as a whole.

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Conclusion

Business is a human activity and, like most human activities, it has been and is likely
to continue to be evaluated from a moral point of view (Robin and Reidenbach, 1987).
Branding, as part of business, is no exception. Business ethics in organizations requires
values-based leadership from top management, purposeful actions that include planning and
implementation of standards of appropriate conduct, as well as openness and continuous
effort to improve the organization’s ethical performance.

Although personal values are important in ethical decision making, they are just one of the
components that guide the decisions, actions, and policies of organizations. Examination of
the recent development in the international trade and the farreaching expansion of global
entities lead the authors of this paper to the inevitable conclusion that ethical issues and
concerns facing business entities are no longer related to the limited frameworks of Journal of
Academic and Business Ethics International Business Ethics, national or even regional
arenas. These issues have assumed global dimensions and as such require global solutions.
Business activity and that of other organizations requires an awareness of the challenges
faced on a global scale. In this connection ethics plays a significant role. However labelled,
corporate social responsibility or sustainable development, the term business ethics remains
the key designation for this area. While the study of ethics has a long history the main
challenge under which ethics plays a role today is a need for awareness of the fundamental
force of the culture in which the activity takes place. Not only is the action of organizations
critical in facing the many of the problems, but individuals also playing a significant role.
Government and educational institutions, too, have their place in leading the way for
members of organizations active in a local and global environment. The use of critical
thinking is an important part of ethical decision making especially in ambiguous areas. While
the development of personal character is important, it must be linked to competence in
understanding risks and approaches to managing ethics and compliance in a complex
organizational context.

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 E. SUMMARY OF JOURNAL 2

INTRODUCTION

Competion in global busness in creasing sharply, especially in the last decade of the
21st century. Increasing global competion may trigger the company to perform aseries of
market and non-market action. However in creasing competion, particularly those reaching
the limit of hyper competion, has forced companies to conduct unithical moves. Various
other incentives such as weak regulations and a lack of code of conduct which can firmly
control the action, may strengthen the possibility of such behavior.

Although it is various in each distinct country, general corporate governance (CG)

philosophy provide guidance for companies to increase CG practice in the dimensions of
accountability, responsibility and integrity. The implementation of CG should be based on
prudency, which reflected the behaviors that free from ethical misconduct. Such principle
served as accord for companies to implement a variety of actions, in accordance with the
ethical standards.

Agent-Steward Behavior Continuum

Agency theory views manager as hired hands which were believed to be more
interested In the effort of private welfare than the welfare of the principal/shareholders. This
assumption will potentially led to the conflict between owners and managers. In this context,
corporate governance is needed to mitigate the conflicts of interest between such parties.
Agency problems arise when owners and management have different objectives and it was
difficult for owners to verify various actions taken by the manager as agent. According to
Stewardship theory, executives are more motivated to maximize the benefit of the company

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compared to their own interests on the basis of the fulfillment of higher order needs, such as
achievement and self-actualization. In the perspective of Stewardship theory, the company's
senior executives hold the view that the companies’ existence are attached to the existence of
themselves, the company's reputation is reputations, attached to their reputations so it should
be maintained.

Adjusting to the Cultural Differences

Many companies in various industries and countries gain significant benefit from CG
implementation, especially in the context of achieving long term goals. Studies conducted by
independent agencies (such as KPMG) showed trend that investors are willing to pay higher
for companies which have better CG practices. country has different characteristics of its
cultural dimension, especially the dimensions related to the management of organizations
such as collectivisms, uncertainty avoidance and power distance.

Collectivism is associated with a cultural trend that emphasizes the cultural life of the
group. This dimension is in contrast with individualism that tends to prioritize individual
rather than group. Countries with high collectivism such as Mexico, Malaysia and Indonesia
tend to be more suited to the group and family management. The implementation of the
principles of corporate governance needs to adjust to the value of the cultural differences. In
Indonesia, for example, the ownership structure should be more institutionalize which
reflected similarity group attachment such as management ownership, employees ownership,
society ownership.

Strengthening the Implementation of Corporate Governance

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 High competition in the international market

which reinforced by globalization, required companies to In order to maintain ethical

standard, it is important for companies and don't only this it, Involving stakeholders outside
the company such as independent directors and committee members into the structure, could
encouraged corporate culture management for more transparent and accountable. Since
management was monitored by an independent party, the possibility of non-ethical behavior
could be reduced.

Set up a "Control Tower"

Although the company has developed a series of mechanisms to regulate their

member behave in correct path, such behavior will not last long if it is not internalized and
formed as corporate culture. The corporate culture which grows and develops as positive
value due to habit and repetition could be regarded as internal control mechanism in
maintaining behavior.

CONCLUSION

In the era of globalization, at least there are four aspects need to be considered in
efforts to strengthen companies CG practice in Indonesia. The implementation of stewardship
theory is recommended in the context of Indonesia. Various adjustments to cultural
differences in Indonesian context should be also considered to make the process run well and
avoided additional conflict. From the internal point of view, the structure and mechanism of

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corporate governance, including strengthening ethical behavior in the company also need to
be considered.

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 CHEPTER III

DISCUSSION

A. JournalAdvantages

Journal 1

 This journal describe the important ethic in business both globaly and localy
 This journal provide information on how to deal with problem in business.

Journal 2

 This journal discussed specific features of corporate behavior in indonesia .

 This jornal explain to promote sound governance pratices and business sustainability

F. Journal Dificiecy

Journal 1

 This jornal discuss quite broadly but is not detail

Journal 2

 The discuss material not very broad in scope

 The joounals repetition of the discussion in the presentation of the material.

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 CHAPTER IV

CLOSING

A. CONCLUTION
Business is a human activity and, like most human activities, it has been and is likely
to continue to be evaluated from a moral point of view (Robin and Reidenbach, 1987).
Branding, as part of business, is no exception. Business ethics in organizations requires
values-based leadership from top management, purposeful actions that include planning and
implementation of standards of appropriate conduct, as well as openness and continuous
effort to improve the organization’s ethical performance.

Ethic in business is very important. The world has many different ethical system.
Business ethic mean principles of right or wrong governing the conduct. Business ethic is a
from of applied ethics environtment. Business ethic reflects the philosophy of business.

G. SUGGESTION
The community must also play a role with how to emphasize business people which is
clearly known to the business in a way that is unethical, for example destructive business
people environment, do deceptive and other advertisements so.

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 BIBLIOGRAPHY

Salehi, Mehrdad, dkk. 2012. International Journal Scientific and Research Publication.
Malaysia : Management And Science University Malaysia

Johan, Arief Prima. and Niki Lukviarman Maruf. 2017. Corporate Governance in Indonesia:
Business Ethics Prespectives and Challenges in Globalization Era. Padang :
Faculty of Economics Of Andalas University

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