Introduction

In business world, ethics is needed to create fairness fair markets and competition. Business ethics can be interpreted as a rule that is not binding because it is not legal. But people should not forget that in their daily business practices, business ethics could be a limitation for running business activities. Business ethics is very important because the business cant be separated from other elements. The existence of the business is essentially to meet the needs of the people. Business ethics is the ways to conduct business activities, which covers all aspects relating to individuals, companies, industries and the public. All of this includes how we conduct business fairly (fairness), in accordance with applicable laws (legal) that is not depend on the position of individuals or companies in the community. Business ethics is more broad than the provisions regulated by law, it even have a higher standard than the minimum standards of legal provisions, because in business we often find "gray-areas" that are not regulated by the provisions of the law. Learning business ethics meaning exploring our own self and take our thoughts to a more moral or valued destination. It will bring benefits to the business world, creating a business activity that moral and ethical and most importantly get the awareness of all parties to implement it.

Businesss social contract (John Rawls) In his book, Theory of Justice (1971), John Rawls reconciled the idea of social contract by adding the need for social justice. He reanalyzed the fundamental problem of political philosophy by reconciling the study of the principles of freedom and the principle of equality. Rawls acknowledges that his work is in the same line with the tradition of social contract (social contract) which originally carried by various famous thinkers, like John Locke, Jean Jacques Rousseau and Immanuel Kant. However, the idea of social contract which is carried by Rawls is slightly different from his predecessors. He was intended to create a contract that gives the greatest benefit to those who needed it. This contract is achieved when the individual who made the contract did not know about the capabilities and status of its own. Thus, he would choose a contract that does not harm people who are weak, in case he himself would be in that position. Therefore, the state as the holder of contract, must consider the rights of those less fortunate, even if they are minorities. Any benefits created by the government, should bring advantages as much as possible by those who are in the lowest position. It could be said that this idea is the application of one slogan on French revolution, the Brotherhood. In an ideal family, parents as government, working hard to help all children. And among the siblings, they are trying to lighten the burden of another sibling. The main criticism of this understanding is that not everyone has a tendency to be afraid of risk. People who dare to risk, tend to choose a contract that will benefit the upper class, with the hope that they will get there and get as much profit.

Examples of businesses acting ethically and/or unethically (case studies) Enrons bankruptcy caused by the disruption of business processes due to declining of corporates rating. This is because as a trading company, they need a rating value of investment to trade with another company.

In the Enron case, the external agencies are also partly responsible for the occurrence of the case. 1. Auditor. Arthur Andersen (one of the five largest accounting firms) is the accounting firm of Enron. Their job is to do the examination and give testimony whether Enron's financial statements comply with GAAP (Generally Accepted Accounting Practices). Andersen, hired and paid by Enron. Andersen was also provides consulting for Enron, where it exceeds the authority of a public accountant in general. In addition, Andersen has a conflict due to such large payments from Enron, $ 5 million for audit fees and $ 50 million for consulting fees. 2. Legal counsel. Enron law firm, Vinson & Elkins also specifically hired by Enron. Legal counsel is responsible for providing legal opinions on strategy, structure, and the general legality of all committed by Enron. Same with Anderson, when asked why not deter Enrons illegal ideas and activities, legal counsel explains that Enron did not provide complete information, especially about the ownership of the SPEs (Special Purpose Entities). 3. Regulator. Enron as a company that trades in energy markets is supervised by the Federal Energy Regulatory Commission (FERC), but FERC did not conduct in-depth

supervision. This is because Enron conduct its activities in electricity trading not just in one country. 4. Equity markets. As a public company, Enron is required to follow the rules of the SEC (Securities and Exchange Commission). But in its supervision, SEC was not doing in depth investigation or reconfirmation toward Enron. SEC rely solely on testimony made by other agencies such as company auditors (Arthur Andersen.) 5. Debt market. Enron, like other companies want and need a good rating. So Enron decided to pay Standard & Poors and Moody's to provide value rating for the company. This rating is required for corporate debt securities issued and traded in the market.

Businesss practices of Enron that are not ethical lead the company to bankruptcy and shattered. The aggrieved party of this case not only Enron's investors, but particularly the Enron employees who invested his retirement funds in company stock, and investors in capital markets in general (social impact). Enron's management had acted rationally for the benefit of themselves (self interest oriented) and ignored the norms and business ethics.

The short run costs (fines, loss of licence) and long run effects (reputation) of business actions versus profit maximization.

Violation of business ethics is always triggered by the temptation of short-term gains. Companies are willing to do anything to maximize profit. In business, the only ethic required is being nice and good to the shareholders. It is clear that the main interest of business is to generate maximum profits for shareholders. The increasingly tight competition in business world and increasingly fussy consumers that often become the trigger factor why companies ignore ethics in business. Those factors mentioned above are the reason why companies short minded and try to do everything possible even if its illegal and unethical to increase profit. Risks faced by companies when doing business unethically is fine and could loss the license for operating business. A good reputation is a competitive advantage that is difficult to imitate. One case that is often used as a reference is how Johnson & Johnson (J & J) to handle the Tylenol poisoning case in 1982. At that time, seven people were declared dead under mysterious circumstances after taking Tylenol in Chicago. After investigation, it turns out that Tylenol containing cyanide poisoning. Although the investigation was conducted to determine a responsible party, J & J immediately withdraw 31 million bottles of Tylenol in the market and announced that consumers stop using the product until further notice. J & J work with the police, FBI, and FDA to investigate the case. The results showed, it was caused by other party that put cyanide into Tylenol bottles. The cost J & J in that case more than 100 million U.S. dollars. However, because of the alertness and the responsibility they have shown, the company managed to build a good reputation in

public until now. Once the case was resolved, Tylenol was thrown back into the market with a more secure packaging and the products back into the market leader in the United States. Reflecting on some of the sample cases, it's time for companies to rethink the old way of looking at ethics and business as two different things. It is true that by being ethical in business will not provide immediate benefits or profits. Therefore, entrepreneurs and business practitioners must learn to think long term. History has demonstrated that the ignorance to the company's business ethics can lead to destruction of the company in a short amount of time than the destruction of the company due to an error in the assessment and business policies but still pay attention to business ethics.

Which of the above schools of thought best depicts todays business.

The principles of justice by John Rawls in general are very relevant for developing countries. With the total of 150 developing countries in the world, it shows that most of the world's population is still classified as the weak or disadvantaged people who live below the poverty line. This indicates that Rawls's principles are best depicts today's business. Rawlss principle of distributive justice includes principal of equal freedom and principal of difference. In the theory of principle of equal freedom, he said that every person should have the same rights on the same basic freedom system of the most extensive line with a similar system of liberty for all. Justice demands that all people are recognized, respected, and guaranteed the right of equal opportunity. And in principle of difference he stated that inequalities in social and economy should be arranged in such a way so that inequality can bring benefits to those who are most disadvantaged and In accordance with the duties and positions that open to all under the same conditions of equality of opportunity. The best solution to solve the inequality of distribution by the market economy is to regulate the system and social structure, so that it beneficial for disadvantaged people. Rawls said that all economic goods and services must be distributed fairly or equally except when the distribution is used to benefit only one party. He also said that the market gives freedom, and equal opportunities for all people in the economy. Freedom is a value and one of the most important rights possessed by humans, and is secured by the system of market economy. The market provides opportunities for self-

determination as a free human being. The market economy guarantees the equal freedoms and fair opportunities. According to him, up until now market is the best economic system, it can guarantee the optimal freedom for everyone. Therefore, the freedom of doing business and freedom in all aspects of life should be given first place. Governments are required to take steps by making policies that are specifically meant to help improve social and economic aspects that can benefit to those who are disadvantaged. In this care, determining group of people that should receive preferential treatment should be transparent and open. The specific policies should include system setting through political and legal institutions, as proposed by Rawls, but it must remain selective as well as generally accepted. This is definitely not opposed to the market economy system because it is accommodate that possibility.

Conclusion

Ethics is a branch of philosophy relating to the goodness (rightness) or morality (ethics) of human behavior. In this sense, ethics is defined as rules that cant be breached from behavior that accepted by society as good bad or bad because the determination of good and bad of a problem is always changing. Business ethics is the standard of value that serves as guidelines or references for managers and employees in decision-making and operating business ethically. Paradigm of ethics and business are a two different world have to be changed and converted into the paradigm of ethics related to business ethics or synergy between ethic and profit. Precisely in the era of highly competition like todays world, company with a good reputation that is based on business ethics brings a competitive advantage that is difficult to imitate by other company. Therefore, an ethical behavior is necessary to achieve long-term success in a business.