BUSINESS ETHICS (ETHICS VALUE) PT.

INDOFOOD
CBP SUKSES MAKMUR Tbk

By,
Abdul Latif., S.E
Latifhendra2@gmail.com
Prof. Dr. Ir. Hapzi Ali, MM, CMA
hapzi.ali@mercubuana.ac.id

Master Of Management, Mercu Buana University

ABSTRACT

Business Ethics is something that must be considered by the company, because it relates to
consumer satisfaction and consumer protection. PT Indofood is one of the largest companies in
Indonesia, this company produces various processed foods that are around the community.
Therefore the company must focus more on the code of ethics in business because it involves
consumer protection. However, this company is also inseparable from the existence of a
violation of the code of ethics, in the form of some composition of ingredients in processed
foods that contain chemicals that are not good for consumers' health. Therefore PT Indofood
must improve or reduce the composition of ingredients that are not good for health.
Keywords: business ethics, ethical values

1
1. INTRODUCTION
Indomie is a brand of instant noodle products from Indonesia. In Indonesia, Indomie is
produced by PT. Indofood CBP Sukses Makmur Tbk. This product from the company owned
by Sudono Salim was first made on September 9, 1970 and marketed to consumers since 1972,
formerly produced by PT. Sanmaru Food Manufacturing Co. Ltd., and first came with the taste
of Chicken and Shrimp. Besides being marketed in Indonesia, Indomie is also marketed quite
widely in foreign countries, including in the United States, Australia, various Asian and African
countries and European countries, this makes Indomie as one of Indonesia's products that can
penetrate the international market. In Indonesia itself, the term "Indomie" is commonly used as
a generic term which refers to instant noodles.
But Indomie's marketing abroad is not without problems, in Taiwan there was a problem
when Indomie products were withdrawn from the market, the following is an explanation:
Taiwan authorities on October 7, 2010 announced that Indomie sold in their country contained
two prohibited preservatives, namely sodium benzoate and methyl p-hydroxybenzoate. These
two elements can only be used to make cosmetics. So that the withdrawal of all "Indomie"
instant noodle products from the Taiwanese market was carried out. In addition to Taiwan, two
leading supermarket chains in Hong Kong temporarily did not sell Indomie instant noodles.
According to the Hong Kong Daily, The Standard, in the news on Monday, October 11, 2010,
the daily revealed that two leading supermarkets in Hong Kong, Park n 'Shop and Wellcome,
pulled all Indomie products from their shelves. In addition, the Food Safety Center in Hong
Kong is conducting tests on Indomie and will follow up with importers and dealers. "
In competition between companies, especially large companies in obtaining profits, there is
often a violation of business ethics, even violating applicable regulations. Moreover, the
competition that will be discussed is competition for imported products from Indonesia in
Taiwan. Because the price is cheaper and the quality is not inferior to other products.
Based on the background of the above problems, it can be drawn the following problem
formulation, namely:
1. Does PT Indofood (Indomie) use ethics in running its business?
2. If PT Indofood (Indomie) does not use business ethics, what is the form of the violation,
the causative factor and how to overcome it?

The purpose of writing is to fulfill the task of soft skills in Business Ethics courses in
making journals or writing about Business Ethics. The purpose of this writing is:
1. To find out business ethics at PT Indofood
2. To find out the violation, the causative factor and anticipation method if PT Indofood
does not use business ethics.

2
2. THEORY FOUNDATION
The word ethics comes from the Ancient Greek "ethikos" which means arising from habit.
Ethics includes the analysis and application of a concept such as good, bad, right, wrong and
responsibility. Below is an ethical definition according to experts: According to the Big
Dictionary Bhs. Indonesia (1995) Ethics is the value of right and wrong adopted by a group or
community. According to Maryani & Ludigdo (2001) "Ethics is a set of rules or norms or
guidelines that govern human behavior, both those that must be done and those that must be
abandoned by a group or a group of people or professions ". According to White (1993) ethics
is a branch of philosophy that deals with moral goodness and evaluates human actions. From
the definitions stated above, it can be concluded that ethics is a guideline that regulates and
evaluates human behavior, both behavior that must be abandoned, and behavior that must be
done. However, ethics are usually closely related to morals related to a person's way of life by
doing good deeds and avoiding bad actions. Ethics and morals contain the same meaning,
however, there are differences in daily activities. More moral is the assessment that is done,
while ethics means studying the system of prevailing values.
Business Definition
In economics, business is an organization that sells goods or services to consumers or other
businesses, to make a profit. However, historically the business word from English is business,
from busy word which means "busy" in the context of individual, community, or society. In a
sense, busy working on activities and jobs that bring profits. According to Steinford (1979):
"Business is all those activities involved in providing the goods and services needed or desired
by people". In this sense business is an activity that provides goods or services needed or desired
by consumers.
Definition of Business Ethics
Definition according to experts:
a) According to Brown and Petrello (1976) Business Ethics: "Business is an institution which
produces goods and services demanded by people". Which means that business is an
institution that produces goods and services needed by the community. If the needs of the
community increase, then the business institution will also increase its development to meet
these needs, while earning a profit.
b) According to Velasquez (2005) Business ethics is a study devoted to right and wrong
morals. This study concentrates on moral standards as applied in policies, institutions and
business behavior.
So, it can be concluded that business ethics is a formal standard study and how standards
are applied to systems and organizations that are used by modern society to produce and
distribute goods and services and apply to people in the organization
Good Business Ethics
The things that must be considered in creating business ethics are:
1) Self-control, self-control must be embedded in the souls of good business people. With
self-control, the business that is run will be in accordance with what is expected.
2) Development of social responsibility, in addition to self-control, responsibility is the
most important thing in the business world. Without responsibility, the business will not
be in accordance with what is expected, profits are not maximized and customer loyalty
will decrease.
3
 3) Maintaining identity and not being easily swayed by the rapid development of
information and technology.
4) Creating healthy competition, as a good businessman, does not need to commit fraud or
other actions that are not in accordance with business ethics. So, fair competition is very
necessary for every businessman.
5) Implementing the concept of "sustainable development"
6) Avoid 5K properties (Katabelece, Kongkalikong, Connections, Collusion, and
Commissions)
7) Being able to state the truth is true.
8) Fostering mutual trust between the strong entrepreneur groups and the downstream
businessmen.
9) Consistent and consistent with the rules of the game that have been mutually agreed
upon.
10) Growing awareness and ownership of what has been agreed.
11) There is a need for some business ethics as outlined in a positive law in the form of
legislation.
According to Von der Embse and R.A. Wagley in his article in Advance Management
Jouurnal (1988) entitled Managerial Ethics Hard Decisions on Soft Criteria, there are three basic
approaches in formulating our ethical behavior, namely:
 Utilitarian Approach: every action must be based on the consequences. Therefore, in acting
someone should follow ways that can provide maximum benefit to the community, in a
way that is not harmful and at the lowest possible cost.
 Individual Rights Approach: every person in his actions and behavior has basic rights that
must be respected. However, these actions or behaviors must be avoided if they are
expected to cause collisions with other people's rights.
 Justice Approach: decision makers have the same position, and act fairly in providing
services to customers both individually and in groups.

Goals and Scope of Business Ethics

After seeing the importance and relevance of business ethics, it is better to review further
the objectives and scope of business ethics. There are three objectives and business scope,
namely:
1. Business ethics as professional ethics discusses various principles, conditions and problems
related to good and ethical business practices. In other words, the first business ethics aims
to encourage business people to run their business well and ethically. Because this first
business scope is more often shown to managers and business people and more often talks
about how good and ethical business behavior is.
2. Business ethics can be very subversive. Subversife because he uploads, encourages and
raises public awareness not to be fooled, harmed and treated unfairly and unethically by
the practices of any party's business. To make people aware, especially consumers, workers
or employees and the wider community about their rights and interests that should not be
violated by anyone's business practices.
3. Business ethics also speaks of an economic system that determines the ethical conduct of
a business. In this case, business ethics is more macro in nature, which is why it might be
more appropriately called economic ethics.
4
 These three scope and objectives of business ethics are closely related to each other and
together - determine whether or not the ethics of the business practice is good.

Basic Principles of Business Ethics

There are 2 basic principles in business ethics, namely:

 Responsibility: responsibility has two directions, namely responsibility for quality and
responsibility for the impact caused to others.
 Justice: fair means that in doing business we try not to interfere with others. Justice is
indeed a purely ethical demand in the sense that it applies without relying on profit and
loss considerations.

Principles of Business Ethics

Basically, every business implementation should have to align the business process with
business ethics that has been generally agreed upon in the environment. Actually there are
several principles of business ethics that can be used as guidelines for every form of business.
Sonny Keraf (1998) explained that the principles of business ethics are as follows:
1. he principle of autonomy; namely the attitude and ability of humans to make decisions and
act based on their awareness of what they consider good to do.
2. Honesty Principle; There are three spheres of business activity that can be clearly
demonstrated that business will not last long and succeed if it is not based on honesty. First,
be honest in fulfilling the terms of the agreement and contract. Second, honesty in offering
goods or services of comparable quality and price. Third, be honest in the internal work
relationships within a company.
3. Principles of Justice; demanding that everyone be treated equally in accordance with fair
rules and according to rational rational criteria, and be accountable.
4. Mutual Benefit Principle; demand that the business be run in a way that benefits all parties.
5. Principles of Moral Integrity; especially internalized as an internal demand within a
business person or company, in order to need to run a business while maintaining the good
name of the leader or his people or company.

In addition there are also several business ethics values that are assessed by Adiwarman
Karim, President Director of Karim Business Consulting, should not be violated, namely:
1. Honesty: Many people think business is a deceptive, deceptive activity for profit. This is
clearly wrong. Actually honesty is one of the keys to success in doing business. In fact,
including an important element to survive in the midst of business competition.
2. Justice: Treat everyone according to their rights. For example, giving wages to employees
according to standards and not stingy giving bonuses when the company get more profit.
Also apply justice when determining prices, for example by not taking profits that harm
consumers.

5
3. Humility: Don't do business with pride. For example, in promoting products in an excessive
way, especially to drop competing products, whether through pictures or writing. In the
end, consumers have the ability to assess the credibility of a product / service. Moreover,
not a few people believe that something that looks or sounds too perfect, in fact it often
proves to be bad.
4. Sympathetic: Manage emotions. Show friendly and sympathetic faces. Not only in front of
your clients or consumers, but also in front of people who support your business, such as
employees, secretaries and others.
5. Intelligence: Intelligence or intelligence is needed to carry out business strategies in
accordance with the applicable provisions, so as to produce adequate profits. With
intelligence also a businessman is able to be aware of and avoid various forms of non-
ethical crime that may be launched by his business opponents.

3. RESEARCH METHODOLOGY

To obtain the data used in this task, the author uses data collection methods in the form of
library studies by collecting data from several books, and also searching and collecting data
through the internet or articles in newspapers or news.

4. DISCUSSION

Company profile

PT Indofood CBP Sukses Makmur Tbk. (formerly PT. Indofood Sukses Makmur Tbk, PT
Gizindo Primanusantara, PT Indosentra Pelangi, PT Indobiskuit Mandiri Makmur, and PT
Ciptakemas Abadi) (IDX: ICBP) are producers of various types of food and beverages based in
Jakarta Indonesia
The company was founded in 1990 by Sudono Salim under the name Panganjaya Intikusuma
which in 1994 became Indofood. The company exports food ingredients to Australia, Asia and
Europe
The history of PT Indofood CBP Sukses Makmur Tbk used to reach an agreement on the
authority of a Swiss company, Nestle S.A, to establish a joint venture company engaged in
manufacturing, sales, marketing and distribution of culinary products in Indonesia and for
export. Both companies share a 50% stake in the company named PT Nestle Indofood Citarasa
Indonesia.
Both ISM and Nestle believe that they can compete more effectively in Indonesia through a
combination of strengths in the form of companies and teams dedicated to it.
According to Anthoni Salim, Managing Director & CEO of ISM, the establishment of this
joint venture will create opportunities to utilize and develop the strengths of the two companies
that establish the joint venture.

6
In this collaboration, ISM will license the use of its brands for culinary products, such as
Indofood, Lombok Dishes, and others to this new company. Meanwhile, Nestle gave a license
to use its Maggi brand. The joint venture is expected to begin operations on April 1, 2005.
In the past few decades PT Indofood Sukses Makmur Tbk (Indofood) has transformed into a
Total Food Solutions company with operational activities that cover all stages of the food
production process, from production and processing of raw materials to being the final product
available on the shelves of retailers

Problem

The Indomie case received a ban to circulate in Taiwan because it was said to contain
preservatives which are harmful to humans and withdrawn from circulation. Substances
contained in Indomie are methyl parahydroxybenzoate and benzoic acid (benzoic acid). Both
substances are usually only used for cosmetics, and on Friday (08/10/2010) Taiwan has decided
to withdraw all types of Indomie products from circulation. In Hong Kong, two well-known
supermarkets also temporarily did not market products from Indomie.
The Indomie case is now getting the attention of DPR members and Commission IX will
immediately call the Head of BPOM Kustantinah. "We will invite BPOM to explain the
problems related to Indomie products, as soon as possible if possible this Thursday," said
Chairman of the CommissionIX DPR, Ribka Tjiptaning, at the Parliament Building, Senayan,
Jakarta, Tuesday (10/12/2010). The CommissionIX of the House of Representatives will ask
for information about this Indomie case, it can happen, especially outside parties who know in
advance about the presence of hazardous substances contained in Indomie products. A Dessy
Ratnaningtyas, a cosmetic practitioner explained, two substances contained in Indomie namely
methyl parahydroxybenzoate and benzoic acid (benzoic acid) are preservatives that make the
product not decay quickly and last longer. This dangerous substance is commonly known as
nipagin. In the use of cosmetic products, the use of nipagin is limited to a maximum of 0.15%.
The Head of BPOM Kustantinah also confirmed the existence of harmful substances for
humans in this Indomie case.
Kustantinah explained that it was true that Indomie contained nipagin, which was also in
soy sauce in the instant noodles. but the chemical content in Indomie is still within reasonable
limits and safe for consumption, continued Kustantinah. But if the nipagin level exceeds the
safe limit for consumption, 250 mg per kilogram for instant noodles and 1,000 mg nipagin per
kilogram in other foods except meat, fish and poultry , it will be dangerous for the body that
can cause vomiting and is very at risk of developing cancer. According to Kustantinah,
Indonesia, which is a member of the Codex Alimentarius Commission, Indomie products have
referred to international requirements regarding the regulation of quality, nutrition and safety
of food products. While Taiwan is not a member of Codec. Indomie products marketed in
Taiwan should be consumed in Indonesia. And because the standards between the two countries
are different, the Indomie case arises.

7
Discussion of Problems

Indofood is one of the global companies from Indonesia whose products are widely exported to
other countries. One of them is Indomie instant noodle products. In Taiwan itself, the instant
noodle business competition was very tight, besides instant noodle products from other
countries, Taiwan's instant noodle products also flooded Taiwan's domestic market.
The price offered by Indomie is around Rp.1500, not much different from Indonesian prices in
Indonesia, while instant noodles from Taiwan are priced at Rp. 5,000 per pack. Besides low
prices, indomie also has several advantages compared to instant noodle products from Taiwan,
which have various flavors offered to consumers. And also many Indonesian migrant workers
from Indonesia who are the favorite consumers of Indomie products in addition to the cheap
price they are also familiar with Indomie products.
Of course it has become a stumbling block for instant noodle products from Taiwan, their
products have become less desirable because of the expensive price. So it was alleged that the
Taiwanese industry claimed to have conducted research on Indomie products, and stated that
the product was not suitable for consumption because it contained several chemicals that could
be harmful to health.
This was immediately denied by PT. Indofood as an Indomie producer. They stated that their
products had passed laboratory tests with accountable results and stated that indomie products
had been well received by Indonesian consumers for decades. Through the stages of a series of
tests, both national and international health agencies that have had their own standardization of
the use of chemicals in food, indomie has passed the feasibility test for consumption.
From these facts, it was alleged that the withdrawal of Indomie products from the domestic
market in Taiwan was allegedly due to business competition alone, which they considered
detrimental to local producers.
The question is why did not the Indomie product have been discussed by the Taiwan
government from the beginning, or the government banned Indomie products from entering the
Taiwan market? But claiming Indomie products are dangerous to consume when the product
has become a popular product in Taiwan. From this case it can be seen that there are business
partners who have violated ethics in business.
Matters that are violated related to a case of violation of business ethics at PT Indofood
company legally:
 Law number 8 of 1999 article 3 F which contains improving the quality of goods and
services that guarantee the continuity of consumer goods / services production, health,
comfort and consumer safety
 Law number 8 of 1999 article 4 A concerning the right to comfort, security and safety in
consuming goods and / services
 Law number 8 of 1999 article 8 which contains "business actors are prohibited from trading
in damaged, defective or used and contaminated goods with or without providing complete
and correct information on the goods in question.
Solution in violation of business ethics in terms of consumer protection in cases
experienced by P & G companies:

8
 In the Law article 62 states that business actors who violate the provisions referred to in
Article 8, Article 9, Article 10, Article 13 paragraph (2), Article 15, Article 17, paragraph
(1) letter a, letter b, letter c, letter e ,, paragraph (2), and Article 18 shall be subject to a
maximum imprisonment of 5 (five) years or a fine of a maximum of Rp. 2,000,000,000.00
(two billion rupiahs).
 Against criminal sanctions as in article 62, additional penalties can be imposed, in the form
of:
1. Deprivation of certain goods;
2. Announcement of a judge's decision;
3. Payment of compensation;
4. An order to terminate certain activities that causes consumer losses;
5. Obligation to withdraw goods from circulation; or
6. Revocation of business licenses.

5. CLOSING

Conclusion
From indomie cases in Taiwan can be seen as examples of cases in business ethics. Where
there have been cases that have harmed Taiwan's industries whose products are less competitive
with products from other countries, one of which is Indomie from Indonesia. Taiwan is trying
to stop the movement of Indomie products in Taiwan, but in a way that is bad for global trade.

Suggestion
Suggestions for the Taiwanese industry to not necessarily state that production is dangerous
to consume, if they want to protect domestic producers, the government can make agreements
and agreements that are tighter before the import-export process is carried out. Because the case
has a big impact on Indomie products that have been known by the people of Indonesia and
citizens of other countries whose countries are trading Indomie from Indonesia.

9
 BIBLIOGRAPHY

Hapzi Ali, 2016,Modul BE& GG,Environmental Ethics, Universitas Mercu Buana

http://vtastubblefield.wordpress.com/2012/11/27/analisis-perusahaan-indomie
dengan-etika-bisnis/
https://www.scribd.com/doc/178041813/Tugas-Makalah-Kasus-Pelanggaran-Etika
Bisnis
http://senjayakertiawan.wordpress.com/2013/10/07/etika-dalam-bisnis/
http://ismi-yuki.mhs.narotama.ac.id/2012/11/02/75/
http://indofood-getlucky2013.blogspot.com/p/blog-page_2358.html
Budiarta, Kustoro, 2010. Pengantar Bisnis Edisi 2. Mitra Wacana Media, Jakarta
Wahjono, Sentot Imam, 2010. Bisnis Modern. Graha Ilmu, Yogjakarta

10