International Business Morality
Society's general conception of the fundamental marketplace has dramatically changed within recent years. Throughout most of history, commerce has existed primarily (and, at times, solely) in the domestic realm, only on rare occasions interacting on an international level. However, with major technological advances occurring within the past century (and even more so, during the past decade) concerning both transportation (air travel, better seafaring and larger ships) and communication (telephones, the Internet), almost all business conducted by a mediocre to major firm operating from within a semi-industrialized to industrialized nation can be (and most often is) considered multinational. With the everyday business arena now expanded to include a variety of cultural and moral norms which are dependent upon their respective nations (and their intrinsic ideologies), corporations are currently forced to deal with an important issue; how should they conduct their affairs in foreign markets (When in Rome, should they do as the Romans do?) (ETB 514)? Broadly speaking, there are two paths which may be taken: either a company can (a) adhere to both the universal and domestic moral modes of business which they would regularly apply in their affairs at "home" or (b) they can conform to the ethics and morals of the host country (the country in which they are conducting the business). In this essay I will seek to provide two arguments, one which concentrates on supporting path "a" and another which refutes "a" and supports "b".
In Defense of Retaining Domestic Practices in Foreign Markets
As American modes of ethical business standards continue to evolve and become increasingly better, it bec...
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... involving such laws, it is morally permissible to act in ways corresponding to the domestic ideologies of one's own country just as it is immoral to obey such unjust laws (EDB 515). With an understanding of what is universally moral and practicable while respecting a nations sovereignty, I believe that multinational firms can carry out ethical foreign business with minimal controversy.
1Interestingly, even if one were to assume that America's business ethics were superior to that of the international markets they did business in, the end result would still be to follow the foreign ideologies. Inherent in American ethics is the stakeholder theory in which a firm should maximize profits to the best of their ability. What this usually results in is a necessity for the multinational firm to do business in a way congruent to that of foreign market (EDB 528).
It's difficult not to be cynical about how “big business” treats the subject of ethics in today's world. In many corporations, where the only important value is the bottom line, most executives merely give lip service to living and operating their corporations ethically.
When travelling for business between different countries it’s very important to understand the different ethical practices. When looking into the different ethical business practices in organizations we will look at the four largest and fastest developing countries which are commonly known as BRIC; Brazil, Russia, India, and China. There are many similarities between these countries; however India and Brazil seem to have a more favorable ethics rating than China and Russia. While there are similar perceptions on ethical business practices, these ideas are not shared globally. As these four countries grow economically, it’s becoming more important for business leaders to understand their ethical differences.
Bohlman, H. M. (2005). The Legal Ethical and International Environment of Business. Thomson South Western .
Importance of ethics in the business world is superlative and global. New trends and issues arise on a daily basis which may create an important burden to organizations and end consumers. Nowadays, the need for proper ethical behavior within
In today’s society, business is a melting pot of diverse cultures. With the present technology, the distance between locations has become virtually borderless. Different backgrounds produce different understandings of very basic concepts, like what is right and what is wrong. Simply stated, right versus wrong is the definition of ethics. First, this paper will discuss key areas that are of significant importance to the business. Second, this paper will converse ways a company can ensure employees follow codes of conduct. Finally, this paper will confer ways a business can engage in socially responsive
I believe that standard business ethics cannot be possible internationally. Culture varies from society to society. The change in culture varies due to various reasons it depends on economic and legal factors. Political and legal factors play a vital role and that differentiate from one culture to another that is why I believe that business ethics can never be universal. Considering the example of China where government put a check on online information. Google has a big concern over the Chinese market because many web pages were blocked within that region. Culture also have great influence in emerging economies as it can be observed that in many countries offering expensive gifts in corporate world is consider as bribe especially in United States or Canada while in few countries it is ethically acceptable.
“The rights of every man are diminished when the rights of one man are threatened” (Kennedy, 1963). Continuous improvements in technology capabilities have provided companies with tools to more easily conduct business on a global scale. However, when conducting business with different cultures, you risk different ethical standards. Companies should be accountable for ensuring their product or services can be received by the consumer in good conscience, void of human ethics violations, regardless of where the product or service originates; and consumers should not patronize companies that cannot ensure this trust.
In today’s global society, a Code of Ethics policy is used to label established, acceptable behaviors among that industry’s business associates, potential investors, and the corporation’s executive officers and employees, and most important, the consumer (Ethics Resource Center, 2003). In an attempt to promote an increased efficiency and productivity potential level, among employees and prospective clients, a corporation’s standard Code of Ethics should guide its members toward a more in-depth examination of their personal moral activity, and how these actions affect the people or acquaintances they encounter. A company should utilize this strategy as a model for the professional behaviors and responsibilities of its constituents, and proves the occupational advancement of that business. Ethics are important in every level of a corporation, but specifically in the day-to-day actions of its members, and the image the company broadcasts to its associates is fundamental in building a stable business foundation. These pledges are a vital communication tool used to covey the firm’s standards for business operations, and predominantly, its relationships with the surrounding communities (Ethics Resource Center, 2003).
Van Tulder, Rob & Kolk, Ans 2001, ‘Multinationality and Corporate Ethics: Codes of Conduct in the Sporting Goods Industry’, Journal of International Business Studies, vol. 32, no. 2, pp. 267-283.
Economic activity always has an ethical aspect. No matter what type of business is taking place there is always an aspect of ethics. A business transaction occurs when people exchange a product or service for money. If the exchange is fair then both parties benefit and therefore both parties’ interests are served. Therefore this interaction between parti...
Ethical standards that evolved over the history of Western civilization deal with interpersonal relationships. What is right or wrong? What one should do and not do when dealing with other people. Ethical behavior in a business environment has not been as clearly defined. When businesses were small and the property of a few individuals, traditional ethical standards were applied to meet different situations. However, as businesses became larger, the interpersonal ethical relations did not provide any clear behavioral guidelines. Likewise, the principles of ethical relationships were even less pertinent to the corporate environments.
Large corporations have been attempting to find a balance between the traditional hierarchical structure and the flexible local entrepreneurial structure for many years. Increasing global competition has made it critical that multinational enterprises be both globally integrated and locally responsive at the same time (Bartlett & Ghoshal, 1988). Sohn & Paik (2004) describe the efforts of Toshiba to achieve a hybrid of centralized control and localized autonomy. Irrespective of the structure chosen, corporations can all be placed somewhere along the continuum between centralized and decentralized management. A centralized structure will be slower to respond to changing market conditions but provides stability and control. A decentralized structure provides autonomy for local businesses to make their own decisions quickly, ; however, the decisions may not align with the parent organizations' strategic objectives and ethics. Many business decisions involve conflict between making money and ethical treatment of employees, customers, and the environment. Centrally managed organizations are more likely to align decisions with a universal corporate code of conduct. Autonomous subsidiaries will make decisions that are reflective of the local cultural values. The risk to the parent organization is that some of these decisions may severely conflict with shareholder values. Treatment of women, children, and respect for the environment are some areas where regional differences exist.
Treviño, L. K., & Nelson, K. A. (2007). Managing business ethics: Straight talk about how to do it right Fourth ed., Retrieved on July 30, 2010 from www.ecampus.phoenix.edu
In conclusion, companies that seek to integrate into global markets usually encounter several problems because of the effect of globalization on business practices. The challenges originating from such integration is attributed to the differences in cultures in various societies across the globe. As evident in Google’s dilemma in China, there is no single set of universal ethics that are applicable to all settings and societies across the globe. Companies such as Google need to develop varying ethical standards that are relevant and appropriate to various nations and cultures in the world. This would enable the companies that are integrating into global markets to avoid ethical issues while maintaining effective business practices.
There are a number of issues that affect international business ethics. They include employment practices, human rights, environmental regulations, corruption, and moral obligation of multinational companies. Employment practice refers to the working conditions an employee must work under. This can be very difficult to gauge, because many times the working conditions of a host nation are inferior to those in an organizations home nation. Many organizations have had to fight with these regulations. A good example of this in the trouble Nike found themselves in during the 1990s. There were a number of news reports released about the working conditions of most of its subcontractors were very poor . The Nike Company was not breaking any laws but it did bring into question the ethics of using a sweatshop. After this incident it left a number of questions for the international marketplace. In recent years many companies have cut ties with organizations that use unsafe and unfair labor practice.