THE INFLUENCE OF BUSINESS ETHICS IN THE BUSINESS RELATIONSHIP WITH SUPPLIERS: ANALYSIS OF LEADING ENERGY COMPANY’S SUBSIDIARY

• Main Author: Alhamdi Taqwin, Prades
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/84054
• Institution: Institut Teknologi Bandung

Supply-owner business relationship is an essential thing when it comes to long-term business. One of factors driven it is Business Ethics. This research explores about the influence of ethics in the business relationship with suppliers, focusing on PT Support Usaha Pertambangan (fictional name), as a subsidiary of leading energy company PT Adaro Energy Indonesia. The research comes from the problems happening to the company where the relationships quality between Owner and Suppliers going down. This research will be investigated by tools analysis such as 5 why’s analysis and fishbone analysis, stakeholder analysis. Furthermore, the research is based on a qualitative methods and literature review aligning with the theoretical of business ethics, stakeholder theory, and procurement ethics as the fundamental study to generate conceptual framework about sustainable procurement practices. The research concentrates on a case study approach to analyse the procurement activities where data were collected through interviews, document & coding analysis, and direct observations. Results from this research indicate that ethical practices in procurement influence supplier relationships significantly. The biggest factors is the payment process that must be done on time by the owner. The other findings also highlight a crucial link between ethical procurement practices and corporate reputation in long-term business, meanwhile in shorter time ethical procurement practices will affect the operational of a company. Another finding that fairness in procurement process is not enough knowing that there are stakeholders to inform, meaning the clarity of communication between stakeholders is one of the most important in ethical procurement practices. Procurement business process consists of many stakeholders inside that have to be managed carefully. This is in line with some previous study that role of communication in maintaining ethical supplier relationships is essential for mitigating risks and fostering mutual trust between stakeholders. Furthermore, as a subsidiary the uniformity of policies implemented by holding company is also important in the context of long-term business.