E-ISSN : 2963-4946

Vol. 2 No. March 6, 2024 https://ajosh.org/

Asian Journal of Social and Humanities, Vol. 2 No. March 6, 2024 1334

Analysis of the implementation of business ethics and

strategic management in companies in Indonesia

Vika Fransisca

, Siti Ainul Kholipah

Institut Prima Bangsa Cirebon, Indonesia

, Politeknik Siber Cerdika Internasional

Cirebon, Indonesia

E-mail: vikafransisca1704@gmail.com

, nengiip30@gmail.com

*Correspondence: vikafransisca1704@gmail.com

KEYWORDS

ABSTRACT

Business Ethics; Strategy

Management; Company.

The purpose of this study is to analyse the implementation of

business ethics and strategic management in companies in

Indonesia. The method used in this study is a descriptive

method with a qualitative approach. Data collection

techniques use documentation techniques. Data analysis is

inductive. Thank you for reaching out. Qualitative research

and its results emphasise meaning rather than generalisation,

namely triangulation (combined) techniques. The results of

the study found that the analysis of the implementation of

business ethics and strategic management in companies in

Indonesia confirms that business ethics is an essential aspect

of the survival of the company. Companies that apply

business ethics well can build trust from colleagues, the

community, and customers, essential to maintaining business

continuity. Therefore, companies must maintain and improve

business ethics standards for sustainable growth. On the

strategic management side, its role is also vital in achieving

the company's long-term goals, adapting to changes in the

business environment, and directing human resources. By

implementing good business ethics and effective strategic

management, companies in Indonesia can better face

business challenges and contribute to sustainable economic

growth.

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Introduction

In addition to following the applicable rules and regulations, the company's

operation must also raise ethical norms and values. Understanding the implementation of

corporate ethics requires defining principles containing norms and ethics outlined in the

company's code of conduct, which is called the Code of Conduct (Arif, 2020). As for

strategy, the company will strive to utilise various options to deal with existing threats

and utilise various advantages to minimise the company's weaknesses in good

competition. With strategy, the company's main activities, products or services offered,

and company plans can be determined. Then, the company can more easily determine

Analysis of the implementation of business ethics and strategic management in

companies in Indonesia

Asian Journal of Social and Humanities, Vol. 2 No. March 6, 2024 1335

specific ways to bring out its competitive advantage (Rianto & Wijaya, 2022). Thus came

the terms business ethics and strategy management.

Business ethics and strategic management are essential in running company

operations. Ethics in business is necessary because business can be unethical, and there

is much evidence today that there are unethical corporate practices. The company operates

in the field of social and natural environments. With virtues related to nature, the social

environment of business is obliged to be responsible for the natural and social

environment in which it is located. Despite business ethics binding its demands and

pressures, companies are based on their existence (Juliana et al., 2021). Strategy

management is a science that combines management functions to make strategic

organisational decisions and achieve organisational goals effectively and efficiently

(Adam, 2021).

Previous research conducted by explained that the implementation of Islamic

business ethics carried out by PT Mahesa Energi Persada by applying the principles of

Islamic business ethics, including the Principle of Unity, the Principle of Balance, the

Principle of Free Will, the Principle of Responsibility and the Principle of Virtue can be

concluded that PT Mahesa has implemented Islamic business ethics as a competitive

advantage. (Adam, 2021) states that mature strategies must be developed so that

operations in the field will be more coordinated with previously developed strategies.

Thus, strategic management is essential in achieving company goals (Kristianto &

UKRIM, 2010).

Unlike previous studies, the novelty of this study is the merger of two variables that

have not existed in previous studies, namely business ethics and strategy management.

Then, it also emphasises the influence of globalisation, such as how the role of technology

affects business ethics and strategy management.

Based on the background above, the importance of business ethics and strategic

management in running a company is essential because the company will not run

smoothly without the ethics that need to be guided and various strategies that need to be

done. Thus, this study aims to analyse the implementation of business ethics and strategic

management in companies in Indonesia.

Research Methods

The method used in this study is the descriptive method. This method is used to

analyse, describe, and summarise various conditions and situations from data collected

from observations on the problem under study at the time of the study (Arifudin, 2019).

The approach used is a qualitative approach. According to (Andriana & Alawy, 2023),

the qualitative approach, based on post-positivism, is used to examine the natural

condition of objects (as opposed to experiments) where the researcher is the key

instrument. The data collection technique used is a documentation technique for journal

collection with keywords business ethics and strategy management. Data analysis is

inductive/qualitative, and the results of qualitative research emphasise meaning rather

than generalisation, namely triangulation (combined) techniques.

Vika Fransisca, Siti Ainul Kholipah

Asian Journal of Social and Humanities, Vol. 2 No. March 6, 2024 1336

The collection of journals related to research is the first thing to do. The data

reduction is carried out after obtaining several relevant journals that are classified,

unnecessary data, and organised. Next, the presentation of data. The presentation of this

data began by presenting data from the analysis of various journals regarding the analysis

of the implementation of business ethics and strategic management in companies in

Indonesia. The last thing to do is conclude. This conclusion is made after all the data has

been analysed and presented.

Results and Discussions

An ethical business pays attention to noble values derived from conscience,

empathy, and norms. In simple terms, business ethics refers to ways to carry out business

activities, which include all aspects related to individuals, companies, industries, and

society. Business ethics is broader than the provisions regulated by law, even a higher

standard than the minimum standard of legal provisions, because, in business activities,

we often find grey areas not regulated by legal provisions (Durin, 2020). Business ethics

have become very important for a company's survival, meaning that survival depends on

how businesspeople apply business ethics. Applying ethics in business can indirectly

foster trust from colleagues, the community, and customers, where trust is a significant

capital so that the company's survival remains guaranteed. Therefore, companies must

maintain or improve ethical standards (Juanda & Ali, 2022).

In business ethics, principles that business people should obey apply. According to

Sonny Keraf (Ali, 2020), the principles in question are:

1. The principle of autonomy is the ability to make decisions and act based on awareness

of what is good to do and be morally responsible.

2. The principle of honesty: business will not last long if it is not based on honesty

because honesty is the key to the success of a business (for example, honesty in the

execution of contracts, honesty with consumers, honesty in employment relationships,

and others).

3. The principle of justice is that everyone in business must receive treatment according

to their respective rights, meaning that no one should be harmed by their rights.

4. The principle of mutual benefit is that all parties strive for mutual benefit and to do

competitive business.

The principle of moral integrity is the basis for doing business, where business

people running their business ventures must maintain the company's good name to remain

trusted and be the best company.

Here are some ethical theories in business, according to (Benny, 2017):

1. Etika evolutionism

Evolution in society is a change that occurs due to the efforts of the community to

adapt to new needs, conditions, and conditions that arise in line with the growth of society.

2. Etika Utilitarianism

Analysis of the implementation of business ethics and strategic management in

companies in Indonesia

Asian Journal of Social and Humanities, Vol. 2 No. March 6, 2024 1337

The theory of utilitarianism says that a business activity is good if it can benefit

most consumers or society. Ethical utilitarianism is a theory that says good things are

helpful, practical, and profitable.

3. Ethics of Pragmatism

Pragmatism is a school of philosophy that holds that the criterion of truth is whether

something has any use in real life.

4. Ethical Relativism

Relativism holds that differences in human beings, cultures, ethics, morals, and religion

are not differences in substance but differences due to factors outside of them. All forms

and subforms relativism have in common the belief that something (e.g., knowledge and

morality) is relative to a particular principle and the denial that that principle is absolute.

5. Deontology

Deontology is an ethical theory that states that the basis for good and bad actions is

a person's obligation to do good to fellow humans. Deontological ethics talks about

obligations to oneself that must be carried out and applied in society, where the actions

carried out must be by norms and morals. The essence of deontological ethics is an action

done without seeing and considering beneficial things, but one must do something related

to obligations (Mujasmara et al., 2023).

Strategy management plays a vital role. The strategy must adapt quickly at the

organisational/corporate level, corporate, business unit, or operational level (Siregar et

al., 2020). Strategy management theory can measure it through several indicators:

preparation of mission, goals, and strategies; motivation, structure, system of functions,

groups, culture, and policies are implemented to achieve the goals set. The final stage in

the strategy management process is evaluation and control, as the plans made are

evaluated in realisation in the field. According to Stahl and Grigsby (Rianto & Wijaya,

2022), there are six steps in evaluation and control. These steps include:

a. Determine what will be controlled,

b. Creating a set of standards,

c. Measuring results,

d. Comparing results with standards,

e. Look for reasons for deviations, and

f. Perform corrective actions.

Initially, according to Nawirah (2013), the strategy management system was

characterised as follows:

a. Rely on an annual budget

b. Long-term

c. Focus on financial performance

The existence of strategic management in a company or organisation makes the

company able to compete in the market with its competitors by using strategies that have

been made by managers who have carried out several analyses so that managers can

measure how strong the strategy is made to face competitors (Nurjanah & Mulazid, 2018).

A strategic management system is needed because organisations must develop in a

Vika Fransisca, Siti Ainul Kholipah

Asian Journal of Social and Humanities, Vol. 2 No. March 6, 2024 1338

planned and measurable manner, so they require a roadmap in facing an uncertain future,

require strategies, and need to direct the ability and commitment of human resources to

realise organisational goals.

The results of the study found that through the analysis of the implementation of

business ethics and strategic management in companies in Indonesia, it can be concluded

that business ethics is an essential aspect of the survival of the company. Business ethics

includes moral values and principles that business people must hold, and companies that

apply business ethics well can build trust from colleagues, society, and customers.

Principles such as autonomy, honesty, fairness, mutual benefit, and moral integrity guide

business conduct. Meanwhile, strategic management plays a vital role in achieving the

company's long-term goals by adapting quickly to changes in the business environment

and directing human resources.

Conclusion

Based on the study's results, it can be concluded that business ethics is essential to

the company's survival in Indonesia. Business ethics not only deals with legal provisions

but also includes moral values and principles that business people must hold. Companies

that apply business ethics well can build trust from colleagues, the community, and

customers, essential to maintaining business continuity. Principles such as autonomy,

honesty, fairness, mutual benefit, and moral integrity guide business people in running

their businesses. Therefore, companies must maintain and improve business ethics

standards for sustainable growth.

On the strategic management side, its role is also vital in achieving the company's

long-term goals. Strategy management must be able to adapt quickly to the changing

business environment. The strategy management process involves preparing missions,

objectives, and strategies, which are then measured and evaluated through several

indicators to achieve the targets. Evaluation and control become the final step in the

strategy management process, during which the company looks for reasons for deviations

from the original plan and carries out the necessary corrective actions. A strategic

management system is also needed to direct the ability and commitment of human

resources in achieving organisational goals. This shows that strategic management must

be long-term, focused on financial performance, and supported by an annual budget.

Overall, the analysis of the implementation of business ethics and strategic

management in companies in Indonesia confirms the importance of the role of business

ethics as a moral foundation in carrying out business activities, as well as strategic

management as a tool to achieve the company's long-term goals. By implementing good

business ethics and effective strategic management, companies in Indonesia can better

face business challenges and contribute to sustainable economic growth.

Analysis of the implementation of business ethics and strategic management in

companies in Indonesia

Asian Journal of Social and Humanities, Vol. 2 No. March 6, 2024 1339

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