Globalization Of Business Ethics

“The more one knows ethics, the more it is used and the more useful it becomes”-Plato, The quote by Plato is a reminder on just how important ethics is and how important it is to educate yourself on proper ethical practices. In the following paper I would like to look at the topic of global business ethics. Recent studies in business ethics have shown both remarkable similarities and differences across cultures with respect to attitudes toward questionable business practices. First I would like to talk about the affect that culture has on ethical behavior. Next, I would like to talk about ethical complexities and challenges facing businesses that operate internationally, mainly focusing in on multinational corporations and the ethical problems they face. As recently as a decade ago, many companies viewed business ethics only in terms of administrative compliance with legal standards and adherence to internal rules and regulations. Today the situation is different. Attention to business ethics is on the rise across the world and many companies realize that in order to succeed, they must earn the respect and confidence of their customers. Like never before, corporations are being asked, encouraged and prodded to improve their business practices to emphasize legal and ethical behavior. Companies, professional firms and individuals alike are being held increasingly accountable for their actions, as demand grows for higher standards of corporate social responsibility (http://www.enterweb.org/ethics.htm).

First, the affect that culture has on ethical behavior. Corporations and individuals, especially corporations doing business globally, must understand and evaluate the cultures of the people with which it wishes to do business in order to ensure smooth transactions and negotiations. Corporations are influenced by the cultural values of its employees in the same way countries develop an identity based on the culture of its citizens. In today's global marketplace, we must all be willing to understand the cultural differences in others in order to cooperatively do business across borders. Employing the values of the culture is often difficult when dealing with other cultures. It is possible that the values of one culture do not align with the cultures of another. One culture might view innovation as bad rather than progress, while another might view slow decision-making as laziness rather than caution. Corporations must be willing to work together to compromise, not abandon some values in order to create initiatives, which are mutually beneficial (Storm, 2007).

Primary cultural values are transmitted to a culture's members by parenting and socialization, education, and religion. There are also secondary factors that affect ethical behavior. They include differences in the systems of laws across nations, accepted human resource management systems, organizational culture, and professional cultures and codes of conduct. There is common agreement that a country's culture is directly related to the ethical behavior of its managers. The behavior is exhibited in two main ways: first, by overt actions such as public or corporate statements and actions about ethical behavior; second, by the collection of the group of ethical attitudes and values. One problem in dealing with culture is that it is difficult to define universally. It represents the values and patterns of thinking, feeling and acting in an identifiable group. While many nations possess the infrastructure of modern, developed civilization, culture represents how people in the civilization interact with one another. A view that may help understand culture is to look at its levels (Schein,1985). Schein proposed that culture have three levels. The most obvious concerns the works of culture, its artifacts. These are apparent and portray some of the values of the culture. Public works, works of art, museums, hospitals and universities can reveal the value that the culture places on the arts and sciences. The Coliseum, in ancient Rome and its purpose in entertaining the public revealed how Romans valued individual human life. A deeper and less obvious level comprises those things which individuals hold dear and which guide their behavior. They serve as rules of conduct and can be important guidelines for how individuals should or ought to behave. The Japanese elevation of politeness in behavior may reflect the limited physical space in the island nation. However, politeness to others is clearly how the Japanese should behave toward one another. Violations of the norm cause others surprise and anger and sometimes lead to sanctions against the offender. The third and hidden level represents values, and specifically represents the assumptions we use to perceive and deal with reality. For example, some cultures perceive people as essentially good while others tend to take a more pessimistic view. It is difficult to separate the lower two levels since attitudes and values tend to overlap. However, they form the underpinnings of individual and business interactions.

Managers like clear guidelines to aid their decision-making. A list of rules citing prohibitions and allowed practices is often helpful. Unfortunately, such lists are too simple to guide cross-cultural ethical interaction. For example, gift giving is not usually prohibited in most cultures. However, in a given culture, giving a gift may be ethical or unethical. In some societies, like China, presentation of a small, carefully chosen business gift conveys a great deal of respect and is a sign that the business relationship is valued by the giver. If there is a problem, it may rest with the receiver who may not trust the giver's motives. In this case, the issue can be understood as one of business etiquette. Conversely, gifts whose purpose is to influence a decision-maker's judgment is actually or essentially a bribe. They are more universally recognized as such. This leads to a second issue involving basic values. What is the proper place of a bribe in the business context? In Western cultures, bribes are usually not considered “right'' or fair and are often against the law. In this case, the conflict deals with fundamental standards of fairness (Kohls and Buller, 1994). There is a continuum of ethical conflict ranging from simple, rather innocuous practices like giving token gifts to serious issues like employing sweatshop or political prisoner labor.

Next, I would like to talk about ethical complexities and challenges facing businesses that operate internationally, mainly focusing in on multinational corporations and the ethical problems they face. Advances in communication, technology, and transportation, have minimized the world’s borders, creating a new global economy as more and more countries are attempting to industrialize and compete internationally.