International business ethics

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The idea of creating a universal code of ethics in business is impossible if not plain unrealistic. It is a common understanding that ethical standards have to be built upon shared values. These values are in turn accepted in a community of people who attests to the wisdom and practicality of believing in the same. It is this fact that makes it impossible for any international business to create an easy to follow manual on how to behave appropriately in foreign soil.

Still, in spite of the impracticality and difficulty in writing down a company policy concerning ethics in business dealings, a company must strive to find out what it means to have one in the area of operations. The leadership of that organization must exhaust all means to find commonality and avenues of communication towards the people of the locality so that its employees and managers will be seen as doing something equitable in the eyes of that particular community. While doing all these the leadership must also keep in mind that they too have their values and live according to their own kind of ethical standard.

This standard must be upheld if the organization would like to remain healthy and not suffering from an identity crisis which can lead to an organization’s failure to achieve its goals. This paper will look into finding the basis for creating a universal ethical standard. This paper also would attempt to prove that although it is impossible to create an ethical standard that would cater to different sets of values in different cultures and traditions of the world, there is a belief that humanity share so many things in common.

This then could be used as a foundation to establish an acceptable and general ethical standard for international business. Relativity The concept of right and wrong is relative. What is right for one group of people can be shamefully unacceptable for others. It is brought about by diversity in culture, language, religion, race, and even experiences. Walter Kaufman’s insight into how human beings behave can be used to understand this dilemma of finding common ground and he asserts, “Man’s world is manifold, and his attitudes are manifold. What is manifold is often frightening because it is not neat and simple” (as cited in Brady, 1996, p.

1). This is true when discussing about, “International business ethics […] that deals with international issues” (de George, 1999, p. 233). And when it is applied to such a wide scope, de George remarked“…the term has no precisely defined agreed upon meaning, and it is used in many different ways to refer to a variety of topics” (p. 233). It is this unpredictability that constantly torments managers stationed far away from headquarters. It is this relativism that must be tamed in order to give management something to hold on and function in any foreign land.

The route going to that goal must first submit to the process identifying what is common in every culture and society in the world. If this is not possible then at least a comparison between two cultures must be undertaken by the management – their own and the host country. Commonality As discussed above there is a difficulty in establishing a universal ethical standard that can be applicable in any geographical area or cultural context. Yet it is not wise to merely give up and rely on the guidance of subjectivism. If subjectivism is the dominating belief, then chaos will indeed reign in any organization or community.

There is therefore a basis to the assertion that humans have something in common. Professor Norman Bowies points to the social structure of any society to prove his point and he said: …there are certain rules that must be followed in each society; e. g. don’t lie, don’t commit murder. There is a moral minimum in the sense that if these specific moral rules aren’t generally followed, then there won’t be a society at all (as cited in Velasquez, 1996, p. 17). Ethical Standards Using Bowie’s analogy, an organization can then go forward in adopting general policies dealing with the formation of a company’s ethical stand.

Malachowski writing about ethical conduct in a global business environment asserts that in the creation of any ethical standard, management has to have an eye on sustainability – it must be the core value from which everything stands. Thus, Malachowski was able to formulate certain guidelines that could minimize the relativistic nature of international business ethics and he proposed to focus on three major aspects of international business, namely: 1) Suppliers; 2) Competitors; and 3) Community. With regards to the supplier aspect of the business, the following suggestions was given (Malachowski, 2001, p.

131): ? Fairness and truthfulness in dealing with suppliers and subcontractors; ? Cultivate long-term stability in this relationship with suppliers to assure return for value, quality, competitiveness, and reliability; ? Pay suppliers on time. When it comes to the competition aspect, it is interesting to know that there are ethical standards that must govern an organization’s behavior. What is more surprising is the assertion by Malachowski that this benevolence towards the competition will be beneficial for the said organization.

And he remarked, “We believe that fair economic competition is one of the basic requirements for increasing the wealth of nations and, ultimately for making possible the just distribution of goods and services” (Malachowski, p. 131). With regards to the community aspect of the business, at least two major concerns must be integrated in any corporate policy doing business overseas: ? To work with the local government by supporting public policies and practices that promote human development through the harmonious relations between business and other segments of the society.

? To promote and stimulate sustainable development and help enhance the physical environment and conserve the resources in the region. Practicality The possible critique for the suggested steps above can be coming from The Blackwell Handbook of Cross-Cultural Management that zeroes in on, “…its inability to provide useful guidelines to managerial decision-making about ethical issues” (Gannon & Newman, 2002, p. 389). For truly, many that have undertaken to provide solutions to ethical dilemmas did not consider the complexity of the issues that these managers face in the international arena.

It is therefore useful to utilize models in the decision making process in order to make the job easier. An example is the decision-tree analysis model developed by Buller, Kohls, and Anderson to help solve layered cross-cultural conflicts (as cited in Gannon & Newman, p. 389). The model has three major components that can also be seen as three critical questions in the analysis of the ethical issue: 1. Is this situation high in moral significance? 2. Do I have a high level of influence over the outcome of the situation? 3. Is there a high level of urgency to resolve the situation?

The decision-tree analysis model help the manager to sort through the different layers of complexity of the issue allowing him to prioritize and then focus valuable resources to solve the most important and significant issue based on the model. This prevents the manager from becoming paralyzed from doing too many things at the same time. At the same time this will allow for decisive actions that will generate much needed goodwill from all concerned. Conclusion The field of international business ethics is still in its infancy stage.

There is not enough studies made that can once and for all provided rock solid guidelines for the modern day businessman. The overly complicated world of the new breed of entrepreneurs was shaped by a force described by B. N. Kumar and Graf as globalization of the economy defined as, “…world-wide integration of finance, production and consumption…” (1998, p. 127). In the midst of this new phenomenon is the leaders of international businesses that are groping in the dark in term of finding solutions to ethical issues.

It would have been easier if there is a universal ethical standard for international trading but alas there is none. Although the difficulty lies in diversity, it is not wise to give up and embrace relativism. This is because relativism can easily lead to chaos and unsustainable business practices. Thus, it was shown that there must be a search for commonality and from there try to establish general guidelines. Still the generalization of issues leads to another problem, which is the impracticality of some solutions when it comes to specific and often complicated cross-cultural ethical issues.

Thus, help was seen from using models that could be used to effectively analyze specific problems. The models provide much insight into the problem and together with all the other ideas generated can be used to design corporate policies that will ensure the observance of business ethics especially when it goes global. This study then concludes that there can be no universal standard for business ethics yet each organization must strive to formulate their own in accordance to cultural context and their own needs.

References Brady, F. N. (1996).Ethical Universals in International Business. New York: Springer. Frederick, R. E. (1999). A Companion to Business Ethics. Malden, MA: Blackwell Publishing Company. Gannon, M. J. & Newman, K. L. (2002). The Blackwell Handbook of Cross-Cultural Management. Malden, MA: Blacwell Publishing, Inc. Habisch, A. (1998). Why Multinational Enterprise Management Should Engage in Institution Building of their Host Countries. In B. N. Kumar & H. Steinmann (Eds. ). Ethics in International Management. Berlin: Walter de Gruyter GmbH & Co. Kumar, B. N. & Graf, I. (1998).

Globalization, Development and Ethicss: Moral Responsibility and Strategies of International Management in the Perspective of ‘Sustainable Development’ In B. N. Kumar & H. Steinmann (Eds. ). Ethics in International Management. Berlin: Walter de Gruyter GmbH & Co. Leisinger, K. (1998). Global Responsibility for Sustainable Development: The Role of Multinational Corporations. In B. N. Kumar & H. Steinmann (Eds. ). Ethics in International Management. Berlin: Walter de Gruyter GmbH & Co. Malachowski, A. (2001). Business Ethics: Critical Perspectives on Business and Management. New York: Routledge.

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