Understanding the Principles of Business Ethics, Benefits and Purpose

Rancakmedia.com – In this article we will explain in detail about the principle business ethics. Ethics does not only have to be applied in everyday life but also has to be applied in the business world.

Business ethics can also be said to be a guideline for companies, because through business ethics in general, employers and workers will understand the limits of action in running a business.

According to Drs. OP Simorangkir that the nature of business ethics is to analyze business assumptions, both moral assumptions and views from a moral point of view.

Because business operates within the framework of an economic system, part of the task of business ethics is essentially raising questions about general and specific economic systems, and in turn raises questions about whether or not it is appropriate to use moral language to evaluate economic systems, structures business.

Examples of Business Ethics Practices Relating to Morals

No company officer may use or withdraw company money for his own personal use. This is against business ethics.

Possessing money through plunder or fraud is against morality. Company authorities who are aware of business ethics will limit taking company money for personal use.

Principles of Business Ethics

Definition of Business Ethics

Unwritten principles about how to manage a business are fairly known as “business ethics”, and these principles are based on the laws of a country and do not depend on the social status of an individual or company.

Applied ethics, or professional ethics, is a branch of business ethics that focuses on the principles and complex ethical and moral dilemmas that develop within a company.

Principles of Business Ethics

Business ethics contain principles that seek to provide a framework for the actions that a business must take to achieve its objectives. According to Sonny Keraf (1998), there are five principles that serve as the starting point for guiding behavior in carrying out business practices, namely (Agoes & Ardana, 2009:127-128).

Principle of Autonomy

The definition of autonomy shows an attitude of independence, freedom, and responsibility. An independent person is a person who can make choices and take actions based on his own talents according to what he thinks, free from pressure, instigation, and dependence on other parties.

Honesty Principle

Honesty is based on the idea that what is thought is what is said, and what is said is what is done. Because of this thinking, it is assumed that all promises, contracts and agreements that have been made must be kept.

Mutual Benefit Principle

The idea of justice makes people think that they should treat everyone the same, especially if they make no distinctions based on economic, legal, or other factors.

Reciprocity as a guiding principle in doing business, the idea of mutual benefit emphasizes the importance of finding solutions that benefit everyone.

Principles of Moral Integrity

The notion of moral integrity is the notion of not harming others in all business choices and actions one makes. The dignity and worth of every person must be respected, according to the concept of this guide.

Benefits of Business Ethics

The following are some of the benefits of business ethics that will form a successful company

Benefits of Business Ethics

  1. Providing a competitive advantage in the eyes of customers.
  2. Increasing happiness for employees.
  3. Attract more investors.
  4. Improving a Company's Credibility.
  5. Improving a Company's Competitiveness.
  6. Increasing an Investor's Confidence in the Company.
  7. Building a Positive Corporate Image.
  8. The main task of business ethics is focused on finding ways to align the strategic interests of a business with the guidance of morality.
  9. This business ethic is tasked with making a change in public awareness about business by
  10. provide an understanding that business cannot be separated from ethics.
  11. Having a very distinctive culture which can be an advantage.
  12. Can maximize a profit and minimize losses.

Purpose of Business Ethics

Entrepreneurs need to understand business ethics to increase moral awareness and limit their ability to conduct business in an ethical manner. They cannot, for example, engage in monkey business” or “dirty business.” However, it can cost a lot of people involved.

Business ethics are a set of rules that business owners and managers can follow to ensure that the business as a whole maintains a good reputation and management.

Fraud and other fraudulent business practices can be avoided by following a code of conduct. Businesses that have very good ethics will usually never be able to harm other businesses, do not violate applicable laws, and will not create an unfavorable environment for their business competitors and also have a valid business license.

Examples of Business Ethics

The following is a list of some examples of excellent business ethics:

Saying Names

When meeting new people, an entrepreneur tends to use their full name. By using this tactic, you can show that you adhere to high ethical business conduct.

Standing When Getting Acquainted

When introduced, it's also good to stand to be able to show politeness and underline your presence. But if you're not in a position that allows you to stand, you might introduce yourself while sitting but try to slouch a bit. This will impress your business partners.

Say Thank You

Don't forget to express your appreciation for the invitation when you visit a professional business. But keep in mind that saying "thank you" too often will make you hate the person you are thanking.

Pay the Bill When You Invite

Business meetings are also held regularly in places other than the workplace. such as in restaurants, cafes, and so forth.

If you are the one who wants to hold the meeting, then you as the host have to pay the fee.

Examples of Violations of Business Ethics

The following are some examples of business ethics that have been violated:

Examples of Violations of Business Ethics

Law Violations

An example of a violation of the law from business ethics is a company that makes layoffs but does not issue severance pay at all. even though Law No. 13 of 2003 regulates this.

Transparency Violation

In other words, customers will not be charged credit fees above the company's rates. Because it was not explained at the outset, the customer can submit an objection.

Infringement of Honesty

Honesty can be violated by a company if it fails to provide accurate information to customers about the cost and quality of the products it sells.

Empathy Violation

Even if the company threatens customers who are late because of business as sick, the company will not react.


Examples of questions and answers about business ethics principles are as follows:

Why Companies Must Apply the Principles of Honesty, Fairness and Mutual Benefit in Managing Business?

Because by implementing honesty in every step, your company will be more trusted by customers. Not only to customers, honesty must also be applied to fellow workers, with outsiders who have cooperation, to the wider community.

How to Apply the Principles of Business Ethics in Action?

The application of business ethics principles in an action is a must that must be complied with by all elements related to the company. The principles of corporate ethics cover a wide range of topics, but they must be applied appropriately to form a solid foundation for business.


Principles of business ethics are written principles that provide a framework for actions that a business must take to achieve its goals.

Professional ethics is a branch of business ethics that focuses on the ethical and moral dilemmas that develop within a company.

Fraud and other fraudulent business practices can be avoided by following a code of conduct. A business that has excellent ethics will never harm other businesses or break the law.

This is an article about the meaning, principles, benefits and goals of business ethics, I hope the article above can be useful and help all of you.

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