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

Ethics is defined as the comprehension of what is right and what is wrong within the moral context and different cultures and communities have a different perception of right and wrong depending on their individual regulations, religious belief, as well as cultural practices. Regardless of the setting, ethics are usually formulated to ensure that individuals choose right or wrong when faced with different decisions. The business world has various codes of ethics that have been written to guide the professionals of different kinds of field. Business ethics are the collective values of an organization that can be used to assess whether the behavior of its members is considered acceptable and appropriate. Nevertheless, despite the existence of these codes, the ethical dilemmas are more often than not difficult to resolve. Deontology, utilitarianism, egoism, and virtues are some of the ethical theories are designed with intention of preventing ethical dilemmas. Such theories are designed with intention of preventing ethical violations which may pave way for the exploitation of those who are less powerful within the business world.

The article published by Leslie Lopez in the prestigious The Straits Times on February 6, 2020, was about Tony Fernandes, chief executive of troubled AirAsia, has received a temporary lifeline from Malaysia's Prime Minister, Mahathir Mohamad by gave personal acquiescence to the AirAsia executives' business deals. British prosecutors believe that senior AirAsia executives committed fraud in a bribery scandal involving Airbus. The fallout from the bribery scandal has rocked AirAsia and its long-haul, low-cost subsidiary AirAsiaX. Last week, airbus agreed to pay a record US$4 billion (S$5.5 billion) fine after reaching a plea deal with prosecutors in Britain, France and the United States on bribery and corruption charges more than 15 years ago. The Airbus bribery scandal comes as Mr. Fernandez is facing another corruption charge in India. Indian authorities said Mr. Fernandez was involved in a fake contract 'involving bribes allegedly paid to unknown government officials and others to obtain licenses for international scheduled air transport services'. Malaysian government officials now say regulators may reopen investigations into other suspicious business practices by the private Malaysian airline that have not been investigated in the past.

Moral problem raised in the article include bribery. Bribery is an unethical practice because it increases wealth inequality and supports corrupt regimes. In this article, found that Malaysia Prime Minister Mahathir Mohamad, granted Tony Fernandes, AirAsia's embattled chief executive, a temporary lifeline. Although, Tun Dr Mahathir provide individual acquiescence to airline executives in their business dealings. Besides, the fallout from the bribery scandal has rocked AirAsia and its long-haul, low-cost subsidiary AirAsiaX. Airbus agreed to pay a record US$4 billion (S $5.5 billion) fine after reaching a plea deal with prosecutors in Britain, France and the United States on bribery and corruption charges more than 15 years ago. In this case, one of the Global Business Standards Codex which is Transparency Principle should be adapted. Transparency Principles of the means based on the belief that employees should conduct their business in a true and open manner. This principle usually helps companies keep accurate and timely records of their business obligations. Besides, it helps financial information of a company is presented in a truthful and accurate way. Therefore, adapting to this principle will helps the company to build a better reputation and the authenticity of the company. In addition, another ethical issue raised in the article includes the misappropriation of company funds which the intentional and illegal use of another's funds for one's own use or for other unauthorized purposes. In the article, found that Airbus has offered $50 million to a sports team jointly owned by two AirAsia executives in return for ordering 135 planes. Besides, in a case brought by Britain's serious fraud office in 2017, Rolls-Royce holdings admitted to providing a credit line worth more than $3 million, and an unnamed AirAsia executive with an engine-related contract is expected to pay for the maintenance of the private jet. In this case, one of the Codex of Global Business Standards is the Fiduciary Principle, which should be adapted. Fiduciary Principle means that every officer has a legal fiduciary duty to act in the best interests of the company's stakeholders and other employees. This principle is often an implicit fiduciary duty that requires each employee to act in a way that brings positive benefits to the company. Hence, adapting to this principle will helps the company to promote company in professional manner.

Social issues are problems that affect a considerable number of individuals. It's an aspect of society that people care about and want to change. Attention to social issues may be objective or subjective. A social issue arises when people hold different opinions based on the correct understanding. Social issues may be different for different groups, societies, countries and the world. Based on article, there few social issues had occurred in the AirAsia company was conflicts of interests. Conflict of interest is when a person has competing interests or loyalties because of his or her responsibilities to more than one person or organization. A person with a conflict of interest cannot fairly treat both sides' actual or potential conflicts of interest. Based on article, there is an example Britain's serious fraud office in 2017, Rolls-Royce holdings admitted to providing a credit line worth more than $3 million, and an unnamed AirAsia executive with an engine-related contract is expected to pay for the maintenance of the private jet. Activities that create a conflict of interest in this example involve self-dealing which is an action taken by a corporate Fiduciary for that person’s personal gain, rather than for the benefit of the company. In addition, social issues had occurred in the AirAsia company was failure in maintaining reputation. As consumers can voice their grievances more openly and loudly than ever before, companies must monitor and protect their reputations. While this is an important task, it is best suited to third parties who can monitor and mediate at a distance. From on article, there is an example shows that both the fallout from the Airbus scandal has hit high-profile airline executives and companies in several countries, including Sri Lanka, Taiwan and Colombia. The Malaysian case is of particular interest because of Mr. Fernandez's near-rock star status in the aviation world. The bribery incident attracted a lot of attention and damaged the reputation of the company.

Ethical behavior is doing the right thing but unethical behavior is just the opposite. In the workplace, unethical behavior certainly includes any violation of the law, such as theft or violence. But unethical behavior can also be broader, such as deliberate breaches of company policy or the use of tough sales techniques that may be strictly legal but exploit human frailties to excess. From the article, there few unethical issues had occurred in the AirAsia company was corruption. Corruption is the conscious abuse of public roles and resources for the private benefits of a firm or the individuals of the firm. It undermines democratic institutions, erodes the economy and creates political instability. Based on article, there is an example shows that the airbus bribery scandal comes as Mr. Fernandez is facing another corruption charge in India. Indian authorities said Mr. Fernandez was involved in a fake contract 'involving bribes allegedly paid to unknown government officials and others to obtain license for international scheduled air transport services'. Corruption will bring a bad reputation to the company and also affect the operation of the company. Furthermore, unethical issues had occurred in the AirAsia company was use of company resource for personal purpose. These actions include stealing company cash or inventory, taking home supplies or other resources, making personal purchases using company credit cards, charging companies personal fees while traveling, and using company equipment for personal purposes. From the article, there is an example Airbus paid $50m in sponsorship to a sports team jointly owned by two AirAsia executives in return for ordering 135 aircraft, according to the UK's Serious Fraud Office. Although the executives and sports team were not named, Malaysian government officials and aviation executives said Mr. Fernandes and Kamarudin Meranun, her joint venture partner at AirAsia, were suspected of involvement. The sports company was referring to the Caterham Formula One team, which is personally owned by the two businessmen. This unethical behavior is about to do harm to the company's interests.

In short, ethical issues exist in almost every workplace because employees often face situations involving ethical dilemmas. Organizational ethics is an important element in business and a unique sales preposition because it can determine the company's beliefs and responsibilities in the eyes of society. However, it should not be assumed that 'doing good' is desirable or acceptable. Companies are expected to behave ethically, but they do not operate in a vacuum. Each country has different business values and perspectives. Having social and ecological responsibilities in one country does not mean having moral responsibilities in another. This means that there is no ethical question of right and wrong in ethical business. Moreover, when ethical issues are not addressed in a timely manner, they can lead to a hostile work environment, making it harder for employees to reach their maximum potential. Therefore, employers must respond appropriately to every ethical issue that arises in the workplace to ensure that the workplace is safe and friendly. Future-oriented companies that work within their social mission can enhance public reputation and increase profits to remain competitive in today's business world.