Ethics: A Basic Framework

Summarized by: Alvin Aulia Akbar

Although, the markets are impersonal, but particular real persons act directly or through companies. The mobility of employment, capital, produce and technology is making business increasing global in its transactions and its effects. Laws and market forces are necessary, but insufficient guides for ethical conduct. Moral values in business decision making is very necessary, without moral values stable business relationship is impossible. An ethical person always is more agreeable and looks more reliable than unethical person. In business, an ethical human doesnt look only agreeable or good manner person, they also looks honorable, trusted, conscientious and sincere. Ethical person is good partner; they able to conduct successful negotiations and so on. So a good business human should always be ethical and observe some special rules, principles of conduct and moral values. The deliberate actions designate as ethic or unethical are usually actions that benefit or harm other people or themselves positively or negatively in some serious way. People can have different understanding about moral values and ethics. There are many definitions of ethics in society, but in my opinion, the ethic is a system of moral values and principles of market participants. Every person has an ethical set of beliefs or ethical principles. The word ethic has a number of meanings. According this framework, there four fundamental questions to which market participant must answer before acting ethically:

Is the action consistent with the persons basic duties? Does it respect the rights and legitimate claims of the affected parties? Does it reflect best practice? Is it compatible with the persons own deeply held commitments? Explaining meaning of duty it should be note, that duty is a human action which is exactly

conformable to the laws which require us to obey them. Every person must have a responsibility to respect human rights and democratic institutions. Also recognize governments legitimate obligation and support public policies and practices that promote human development through harmonious relations between business and other segments of society. Best practice, It are the certain posit principles and standards of excellence, which are desirable, but not necessarily obligatory. Ethical activity isnt activity, which mere doesnt violate others persons rights and liberties. Ethics: A basic framework consist of three main stages:

Understanding the facts; Identifying relevant standards; Maintaining objectivity.

At first stage, the company has to traverse what it has to do and to forecast possible result of its activity. According this framework, consists of three basic components:

Identifying the parties likely to be affected by the action; Mapping for each party the positive and negative consequences; Evaluating proposed action against ethical standards (duties, rights, best practice and commitments). At second stage, the company must decide what ethical standards (companys own code,

industry standards or other) will be applied. The last stage maintaining objectivity. Company must evaluate its ethical judgment reference to various tests. Ethic is very necessary for every person (both natural and legal). Business person should be ethical especially. Human actions are not the only subject matter for ethic. Besides action, ethic examines and evaluates social practices, organizations, institutions, and even social, political and economic systems. Good manner and compliance business principles always help to communicate with others, to negotiate, find reliable partner and expand successful business.