Corruption in International Business

This assignment delves into the complex issue of corruption within the realm of international business. It necessitates a thorough examination of the various factors contributing to corruption in global business practices, including legal frameworks, cultural norms, and individual motivations. Students are required to analyze the detrimental consequences of corruption on businesses, economies, and societies worldwide. Furthermore, the assignment prompts critical reflection on ethical considerations and potential strategies for mitigating corruption in international business contexts.

Running Head: ETHICS AND CORRUPTION: INDONESIA
Ethics and Corruption: Indonesia

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ETHICS AND CORRUPTION: INDONESIA
Introduction
When an organization is able to collect higher profit from the foreign countries as compared
to the domestic market then a company could be able to expand internationally. In case
organizations want to expand their target market in another country then the international
manager can make an ethical and legal framework to operate the business activity at global
level. An international manager can also find out the ethical and legal issues before entering
the international market. The ethical issues can be emerged by different lifestyles and regions
(Braswell, et al., 2017). The ethics can be measured by the code of conduct at the workplace.
The behaviors of people can be measured by their correctness about the situation. In addition,
this essay presents the business environment of Indonesia. It also presents the characteristics
of emerging market in the context of Indonesia. This essay provides the depth understanding
about the issues of ethics and corruption that faced by the international manager of the
organization, Indonesia. It also demonstrates many strategies that will help the international
manger to overcome the ethical and corruption issues from the organization (Burke, et al.,
2016).
Analysis of Business Environment of Indonesia
The Business Environment of the country can be measured by using PESTLE analysis. The
PESTLE analysis can consider some factors such as political, economic, social, technical,
legal, and environmental. These are discussed as below:
Political factor
Indonesia is a democratic country where the president and vice president are elected to
parliament. The rules and regulation for citizens are made by the Roman-Dutch Law. But,
the 22% its population is suffered from below poverty line issues. An organization can
introduce its product and services in the Indonesia due to the democratic country. An
international manager can face minimum ethical and corruption issues because the

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government offered many regulations to introduce new product appropriately (Carroll, et al.,
2014).
Economic factors
Indonesia is a developing country, therefore, the government has taken various adequate steps
to increase their GDP. Indonesia government spend 23.5% on gross domestic product and
they obtained $92.62 billion. The GDP rate of Indonesia is 6.1% that demonstrates a strong
growth rate. It has also focused on the foreign direct investment die to improve the situation
of the country. It has robust inflow on the foreign direct investment e.g. $67.3billion, which
demonstrates the continuously increasing side. In addition, the company can invest in the
country because of a higher probability of successes (Cuervo, 2016).
Social factor
Indonesia has a larger populated country that is consistently increased by the proportion of
1.13%. A large number of populations are located in the urban country. People of Indonesia
believe in the education that is effective for an organization to introduce their product in the
country. The lifestyles of Indonesian are modern that can also positive impact on the business
(Crane and Matten, 2016).
Technical factor
Indonesian uses internet and smartphones that shows that they give more preference to
techniques. They believed that techniques can enable people to complete their task in less
time and cost. The government makes many rules and regulation in oppose to cyber-crime.
An organization can prefer Indonesia to develop their goods and services to Indonesians
(Deresky, 2017).
Environmental factor
Indonesia has also made many environmental laws related to the water, air, and soil pollution.
These laws can be effective to provide safe about the population. An organization can

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consider the environmental factor to eliminate the unethical activity at the working place and
obtained a higher profitability in long-run (Frederickson, et al., 2015).
Legal factor
The government of Indonesia makes many rules and regulation about the labor and income to
resist the unethical behavior at the workplace. The labor law demonstrates the adequate
working hour for a labor while the income shows the appropriate compensation to the
individual for their work. Therefore, it can be said that company has considered all legal
factors before introduce their product and services (Heywood, 2014).
Characteristics of Emerging Markets in Indonesia
Emerging markets provide different opportunities for the shareholders. The structure of
emerging market is changed in terms of starting the international trade. International and
domestic investment has been increasing which would be beneficial to get maximum return.
A high amount of reallocation is required due to declining demand. Consequently, there is
need of a high number of merger and acquisition. There is a different company which deals in
emerging market (Kimeu, 2014). These companies have shared certain characteristics of
emerging market.
The unreliable market measure is a characteristic of emerging market. The public traded
company can draw freely from the market by measuring the uncertainties. The company can
use betas and determined by regressing stock return in opposed to the index of the market.
It could be also beneficial to determine the debt cost. In different emerging economy, the
company uses measures but, it could be ineffective in case financial markets are not liquid
(Kolk, 2016). Moreover, the company can borrow from the banks to meet the requirement of
resources.
Currency volatility is another characteristic of emerging market. Fluctuation in foreign
currency can reflect the purchasing power of people. In certain emerging economies, the

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fluctuation in foreign currency is static. It can create the illusion of stability but, there could
be significant movement in the currency such as devaluation and revaluation. Along with
this, while measuring the risk-free rates then long-term default-free bonds could be absent in
a currency. The risk-free rate is a basic valuation measurement of currency fluctuation.
Country risk is considerable expansion in emerging market economies but, this expansion has
considered as macroeconomic uncertainties. Therefore, it can be evaluated that emerging
market company should rely on their own decision to deal with this environment. Moreover,
the company should collapse with the economy and political environment to run with
emerging market (McFarlin, et al., 2014).
Corporate governance is another characteristic of emerging economy. There is a different
market company which operates the family-owned business. These kinds of changes can be
seen in public traded companies. Under this company, families maintain control via different
devices, pyramid holding, share with different voting rights and cross-investment across
companies. Moreover, investors who invest in emerging economy can hinder the legal
restriction and lack of access to capital. As a result, changes in management can be complex
in emerging market as compared to the developed economy (Müller, et al., 2014).
Issues of ethics and corruption that faced by international managers in an organization,
Indonesia
International managers can be a significant part of the business because they lead the team
member to accomplish the task of the company. The international managers have faced many
issues related to the ethics and corruption. Managers can face different kinds of ethical issues
such as industrial espionage, corruption, relation with the employees, relation with the
consumers, and relation with the environment. These factors can influence the growth of the
company in the upcoming period (Rose, et al., 2016).

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Unclear policies are the key issue of ethics and corruption that is faced by international
managers in an organization. In certain circumstances, managers and workforces show their
ethical conduct because the corporation does not facilitate an understandable model of ethics.
A manual and ethical code of conduct at the workplace is used to build ethical standard. It
also entails the consequence of poor judgment within the ethical standard. In Indonesia, some
companies have no formal ethical guiding documents and guiding principles. At the same
time, some companies made unclear, inconsistent, and vague policies which may create
complexities for international business to manage the things (Stahl, et al., 2014).
Unethical culture is another issue of ethics and corruption which is faced by international
business in Indonesia. A culture of the company includes the shared standard and values
between employees. This can be persuaded by higher executives and HR schemes. It is also
affected by frontline management position because ethical nature of the company is
developed into the structure of its culture. In certain international companies, team members
demand high ethical and corruption standards at the workplace. In case, the company
frequently conduct bad ethics and corruption then workforces can either ignore or go along
with the poor ethical practices (Trevino, et al., 2016).
It is also evaluated that health and safety is key ethical and corruption issue. There is a
concern for international managers that how to make balance the cost control as well as the
health and safety areas of employees. Manufacturing companies and other organization in
which workforces implement the hazardous equipment and engage to do physical activities
hence there should be a focus on safety standard that not only attained the federal need but
also avoid the accidents at the workplace. Moreover, standard office environment poses
healthy uncertainties to workforces for doing activities. However, certain companies avoid
the safety measures, equipment and training to save their money. It could be unethical and

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corruption practices that can damage the company goodwill and create complexities for the
company to deal in long-term (Tsalikis, et al., 2014).
Advancement in technology is key ethical and corruption issue for international managers. It
is analyzed that advance technology and growth of the internet in the current scenario has
produced the high ethical dilemmas. International managers should make balance the security
and freedom of employees along with maintains the standard for using technology with the
intention of legitimate business. There are some companies which monitor all online
resources and makes e-mail communication with employees via work account and computers.
A company may have the authority but its international manager needs to understand the
potential ethical and corruption issue regarding privacy and independence between
employees (Svara, 2014).
It can be evaluated that lack of transparency is key ethical and corruption issue that is faced
by the international manager to deal in the global workplace. The high amount of business
and accounting scandals shows that company has lack of openness and transparency. For
public companies, it entails the trustworthiness, whole reporting on mandated financial
accounting measures and its reliability. For larger companies, international managers need to
include different factors to show the transparency like communicating content entails the
marketing content that cannot demonstrate the misinterpretation. Along with this, it shows the
intention of the corporation and its contribution. It is analyzed that in case small companies
caught in a lie or avoiding the full disclosure then it could confront the permanent harm
(Tänzler, et al., 2016).
Strategies to avoid the ethical and corruption issues in an organization, Indonesia
Unethical behavior could negative impact on the image of the company as well as it damages
the credibility. As a result, the company can decline their productivity along with the demand

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of consumers in long-run. Since, owner of organizations and the administrative team can
work with workforces to stop the unethical behavior (Alenoghena, et al., 2015).
An organization can develop the code of conduct policy to avoid ethical and corruption
issues. The code of conduct policy is used to demonstrate the expectation of company from
managers and employees at the workplace. It also shows that which kinds of behavior are
unaccepted by the company. In addition, the organization also makes strategy related to the
underline consequences wherein employee is responsible for their unethical behavior. This
strategy is also supportive to inform the rules and regulation of company at the time of
orientation section about the code of conduct. Additionally, when workforces act unethically
then an organization can terminate them from the workplace. Moreover, loyal workforces
understand the values of the organization and they put their effort to meet the specified task.
A loyal staff member is less likely to perform unethically at the workplace. An organization
can show their gratitude to the workforces on daily basis to enhance the loyalty.
A company should appoint the ethics speaker or trainer that enabled to provide depth
information about the code of conduct at the workplace (López, et al., 2017).
A trainer also explains the importance of ethics in an organization and industry. In addition,
they also offer motivational stories, hangouts, and videos to clarify the significance of ethics
role at the workplace. In oppose to this, the company should make a system rather than
putting all responsibilities of the organization to one employee. The system can check each
activity of employee and refine issues of employees to avoid the unethical behavior of an
employee at the workplace (Tsalikis, et al., 2014).
The company should also select the employees on behalf of their education and experience
because of meeting the organizational task in a systematic way. An appropriate employee is
capable to handle company objectives as well as understand the cultural values. It will
support to avoid the unethical behavior in a company.

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Along with this, the international manager of a company can play an imperative role in the
business operation. As a member of the organization, the decision and activities of
international manager should be based on the organization interest. Since, the behaviors of
manager can create the ethical issues at the workplace. The interest of international manager
and organization can differ that can create the complexity at the workplace, therefore, the
international manager has needed to avoid the conflict by using the culture of the
organization (Alenoghena, et al., 2015).
Conclusion
From the above analysis, it can be concluded that analysis of business environment can be
effective to introduce any product and make it successful in future. Furthermore, It can also
be summarized that Indonesia emerging market can be supportive to develop the market
appropriately. It can also be interpreted that many factors can influence the ethics and
corruption in the workplace that can also decline the productivity of the company. Finally, it
can be concluded that international managers used strategies to overcome the issues of ethics
and corruption.
Personal learning Statement
I gained my knowledge about the business environment that can be effective to establish new
market and product in the country. From the business analysis, I understood about internal as
well as external factors that may affect the product and services of the company. There are
different factors such as employees, consumers, management, and supply chain can influence
the business. Additionally, I also observed that knowledge about business environment
analysis can support to increase the probability of product successes. I also learned about the
characteristics of emerging market that can also influence the business environment. I
observed that the per capita income of emerging market can be lower than the average, rapid
growth, and high volatility. I also gained my knowledge about ethics and corruption that can

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influence the productivity and growth of an organization. I analyzed that the ethics and
corruption issues can be a major issue that was faced by international managers. Additionally,
I gained my knowledge about different types of strategies that were used by the international
manager to decline the ethical and corruption issues at the workplace. I analyzed that
international manager can develop a code of conduct, underline consequences, workforces
appreciation, appoint ethics speaker, balances the unethical behavior, hire for values, and
avoid conflicts of interest. I learned that such ethical and corruption strategies can support to
gain the productivity of product and services. Moreover, I observed that the best
understanding of the ethical issues and strategies can support to improve my personal as well
as professional life.

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ETHICS AND CORRUPTION: INDONESIA
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