Legal and Ethical Issues
As a corporation, we have several responsibilities outlined in both the law and within our moral core values as an organization. An opportunity has presented itself, which would increase the company’s profits, by manufacturing our shoes in Indonesia. It is possible since the cost of materials in Indonesia is lower compared to the United States.
One of the responsibilities as an organization is to our shareholders who invested in the success of the company. They expect lucrative returns from the investment. Additionally, as a company, we have a responsibility to our consumers who invest their earnings to the company’s products and services. We owe our customers quality products at an affordable price. In addition to our customers, the organization is responsible for its employees. Employees expect that the organization’s leaders will make sound decisions to keep them employed so they can care for their families. Therefore, since we use Indonesian workers, they become our responsibility.
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Various countries have different religions and cultures. Therefore, in the instance preceded, as a manager, I would proceed with recruiting the local Indonesian women to assemble the shoes for a salary of one hundred dollars monthly, which means I am not defying the Indonesian laws. A manager should hire these women since the organization is paying its employees more than the nation’s average wage rate. The question about ethics may arise only when the organization asks the employees to work for extended hours or in inhumane circumstances.
Business ethics investigates ethical principles and ethical or moral challenges, which arise within a business setting. It relates to every aspect of a business’ conduct and applies to the behavior of the entire organizations and individuals. Corporate Social Responsibility or CSR affects an organization’s activities and decisions on society, its prosperity, and the environment, which an individual can identify as the “triple bottom line,” which includes profit, planet, and people (Haerens & Zott, n.d.). Not only will a transparent, sustainable, and responsible approach help build the reputation and brand of the organization, it will assist in the strengthening of the Indonesian community, which in return will strengthen the market. A good business plan rooted into the culture of the business that reflects organizational objectives and values through a strategic CSR application shall help to establish a profitable and sustainable future for all. The company should hire the women towards the interests and welfare of the community.
Business ethics mirrors the business philosophy, one of whose goal is to decide the essential purposes of an organization (Haerens & Zott, n.d.). If firm aims to exploit shareholder revenues, then sacrificing profits because of fear violates its fiduciary interest. In most nations including the United States, corporate entities are lawfully considered as persons. Therefore, the 'corporate persons' are rightfully entitled to the liabilities and rights due to citizens as individuals.
Commonly, business ethics includes identifying what is wrong or right within the work environment and doing the right thing concerning services or product affects the relationships with investors. Perhaps the most significant attention to ethics within the work environment is that it helps ensure that when managers and leaders are struggling during times of confusion and crises, they preserve a sturdy moral compass. In business, ethics can be a strong preemptive medicine. Additionally, ethics is about cultivating and assessing the corporate culture.
Doing Business in Indonesia
The present Indonesian administration has shown a strong disposition of becoming more transparent and efficient in its authority. Additionally, this is also replicated in the local governments, particularly Jakarta and different cities and major provinces (Saraswati, Sahetapy-Engel, Saraswati, and Tisnadisastra, n.d). Specifically, the Indonesian administration has taken a lenient tactic toward operations and investment by issuing rules, which will ease investment, which is particularly true concerning foreign ownership (Saraswati, Sahetapy-Engel, Saraswati, and Tisnadisastra, n.d).
Applicable Laws
Indonesia uses a civil law structure. There are no limits on doing trade with other countries. However, foreign organizations cannot just operate in the nation. Foreign investors ought to participate by share ownership within a limited obligation company that is domiciled in Indonesia. Different kinds of businesses are ready for foreign investment, subject to necessities stipulated in a Negative Investment List, including Obligations to collaborate with local cooperatives and communities, Shareholding limitations, Minimum project/capital value requirements, and Geographic constraints (Saraswati, Sahetapy-Engel, Saraswati, and Tisnadisastra, n.d).
Additionally, specific sectors, especially mining, are liable to divestment prerequisites, in which parts of remote shareholding must be sold off to nearby investors over a time of years. The Negative Investment List just limits outside interest as offer cooperation. Outside speculators can, in any case, contribute to half-breed financing, for example, obligatory convertible bonds, warrants, and comparable structures, which give the speculator components of administration control without running up against shareholding impediments. Maybe the most critical advancement has been the exception of remote shareholding confinements on ventures made through the Indonesian Stock Exchange (portfolio speculations) (Saraswati, Sahetapy-Engel, Saraswati, and Tisnadisastra, n.d).
Considering the FCPA's ban on bribery to foreign officials, one should not pay off to acquire a license for the business. The FCPA applies to every company within the United States or citizens who does business outside America in the maintenance of a corrupt payment, irrespective of interstate commerce (Mark, 2012). Additionally, the Act imposes accountability on foreign businesses and nationals who practice bribery while in the United States (Miller, & Jentz, 2013). Considering these factors, I would not bribe the officials because the possible punishments for infringing the FCPA are severe. People who infringe the anti-bribery laws could be imprisoned for five years for every count, and penalties of up to 100,000 dollars for every violation, and civil fines of up to 10,000 for every violation (Mark, 2012).
Conclusion
In conclusion, as a manager, I would encourage the organization to manufacture shoes in Indonesia to increase the team ’s profit margin. If the corporation follows every regulation to the letter, the company will have little to no cases of ethics. Ethical conduct may arise only in cases where the employees work for extended hours or in inhumane circumstances. As identified in previous paragraphs, business ethics investigates ethical principles and ethical or moral challenges. Therefore, if the corporation does not violate its ethical principles including the Indonesian laws, it will increase its profit margin. Additionally, as previously identified, a good business plan rooted within the organization’s culture and reflects the business objectives and values utilizing a strategic CSR application shall help to establish a profitable and sustainable future for all. In addition to that, the country has no limits on making a trade with other nations . Commonly, business ethics includes identifying what is wrong or right within the work environment and doing the right thing concerning services/product effects and the relationships with investors. The Indonesian administration has shown a strong disposition of becoming more transparent and efficient in its authority. Therefore, if the organization mistreats its employees and violates any Indonesian regulations, then, the organization is unethical.
We must keep in mind that our standards are always the same as the country we wish to do business with. As a country, the United States prides itself on freedom of choice. We have to keep in mind that the Indonesian Government and Citizens have their freedom, which is not subject to our control. Therefore, it would be unethical to project our values and standards to the Indonesian employees or government. The organization has a higher moral ground by offering a minimum wage that is above the average wage in Indonesia who otherwise might be unemployed.
References
Aasland, D. (2004). On the Ethics Behind “Business Ethics”. Journal of Business Ethics , 53 (1/2), 3-8.
Haerens, M., & Zott, L. Corporate social responsibility.
Mark, G. (2012). Private FCPA Enforcement. American Business Law Journal , 49(3), 419-506.
Miller, R. L. R., & Jentz, G. A. (2013). Business law today . Mason, Ohio: South-Western.
Saraswati, A. D., Sahetapy-Engel, J. C., Saraswati, A. D., and Tisnadisastra, A. A. (N.d). Doing business in Indonesia. https://uk.practicallaw.thomsonreuters.com/5-501-2646?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1
