An In-depth Analysis of Business Ethics in The Airasia Scandal

Ethics is all about knowing what's right and wrong within a moral framework. Different cultures and communities have their own ideas of right and wrong, influenced by their rules, religious beliefs, and cultural practices. No matter where you are, ethics are meant to help people make the right choices when faced with tough decisions. In the business world, there are specific codes of ethics to guide professionals in different fields. Business ethics are the shared values of a company, used to judge if the behavior of its members is acceptable. However, even with these codes, ethical dilemmas can be pretty tricky to solve. There are different ethical theories like deontology, utilitarianism, egoism, and virtues aimed at preventing these dilemmas. These theories are designed to stop ethical violations and protect those who are less powerful in the business world.

Leslie Lopez's article in The Straits Times on February 6, 2020, talked about Tony Fernandes, the CEO of the struggling AirAsia, who got a temporary relief from Malaysia's Prime Minister, Mahathir Mohamad. The PM gave personal approval to some of AirAsia's business deals. British prosecutors believe top AirAsia executives were involved in a bribery scandal with Airbus. This scandal has shaken up AirAsia and its low-cost subsidiary, AirAsiaX. Recently, Airbus agreed to pay a huge fine of US$4 billion after making a deal with prosecutors in Britain, France, and the U.S. over bribery charges from more than 15 years ago. Meanwhile, Mr. Fernandes is also facing corruption charges in India. Indian authorities claim he was involved in a fake contract with bribes to get licenses for international air transport services. Malaysian officials say they might reopen investigations into other shady practices by AirAsia that haven't been looked into before.

The article highlights bribery as a moral problem. Bribery is unethical because it makes wealth inequality worse and supports corrupt regimes. In the case mentioned, Malaysia's Prime Minister, Mahathir Mohamad, gave Tony Fernandes, AirAsia's CEO, a temporary lifeline by granting personal approval for some business deals. The bribery scandal has seriously impacted AirAsia and its subsidiary, AirAsiaX. Airbus had to pay a record fine for bribery and corruption charges. One of the Global Business Standards Codex principles, the Transparency Principle, should be applied here. This principle means that employees should conduct business openly and honestly. It helps companies keep accurate records and present financial information truthfully. Adopting this principle can build a company's reputation and authenticity. Another ethical issue in the article is the misuse of company funds, where funds are used illegally for personal purposes. For instance, Airbus offered $50 million to a sports team owned by two AirAsia executives in exchange for ordering 135 planes. The Fiduciary Principle from the Global Business Standards Codex should be applied here. This principle means that officers have a duty to act in the best interests of the company's stakeholders and employees. Adopting this principle promotes professionalism within the company.

Social issues affect a large number of people and are aspects of society that people care about and want to change. These issues can be objective or subjective and may vary for different groups, societies, and countries. The article mentions a conflict of interest as a social issue at AirAsia. This happens when someone has competing interests or loyalties because of their responsibilities to more than one person or organization. For example, Britain's Serious Fraud Office found that Rolls-Royce provided a $3 million credit line to an AirAsia executive for an engine-related contract. This created a conflict of interest involving self-dealing, where actions are taken for personal gain rather than the company's benefit. Another social issue is the failure to maintain the company's reputation. With consumers being more vocal about their grievances, companies need to monitor and protect their reputations. The Airbus scandal attracted a lot of attention and damaged AirAsia's reputation, showing the importance of maintaining a good public image.

Ethical behavior means doing the right thing, while unethical behavior is the opposite. In the workplace, unethical behavior includes breaking the law, like theft or violence, as well as broader issues like violating company policy or using aggressive sales tactics. The article highlights corruption as an unethical issue at AirAsia. Corruption involves abusing public roles for personal gain and undermines democratic institutions and the economy. For example, Mr. Fernandes faces corruption charges in India for allegedly paying bribes to obtain licenses. Corruption damages a company's reputation and operations. Another unethical issue is the misuse of company resources for personal purposes. This includes stealing company cash or inventory, making personal purchases with company credit cards, or using company equipment for personal use. The article mentions Airbus paying $50 million to a sports team owned by two AirAsia executives in return for ordering 135 aircraft, which is a clear misuse of company resources.

In short, ethical issues are common in workplaces because employees often face ethical dilemmas. Organizational ethics are crucial in business and can shape a company's beliefs and responsibilities in society. However, "doing good" isn't always enough. Companies must behave ethically but also navigate different business values and perspectives in various countries. Unaddressed ethical issues can create a hostile work environment, making it harder for employees to reach their potential. Employers need to address ethical issues promptly to ensure a safe and friendly workplace. Companies that focus on their social mission can enhance their reputation and increase profits, staying competitive in today's business world.