Institutional codes of ethics are a common feature of most major businesses. These policies are rooted in a commonly held belief in what is right and wrong within certain companies and society as a whole. When one considers the society in which these regulations are rooted, the norm has always been to structure corporate ethical policies around what is acceptable within the country that the company conducts business. This realm of business dealings has expanded greatly with the introduction of the internet. A new global market has emerged within business of all sized and specialties. No longer are international dealings limited to staples such as raw building materials, fuel, grains, or technology. The transfer of goods now includes things such as plastic water guns, hair bows, and printed t-shirts. This dramatic increase in global business dealings has created a need for more diverse institutional ethical codes. In the current economic market where business can be transacted as easily across the world as it can across the street, the need for a global business ethical code has become an important concern for today’s corporations.
Ethics are a set of guidelines in which people determine what is right and wrong (Ruggiero, 2008, p. 2). Each culture, religion, and even family has different ideas of what is right and wrong. When a corporation assembles a code of ethics for business practice these elements all come into play. The foundation for business ethics comes from these cultural standards. If a culture agrees that women are to spend their time in the home as opposed to in a career, the codes of ethics for local business will lack details on equal treatment of women in the workplace. If elders command respect within a given culture, then the code of ethics in the workplace may focus on proper treatment of senior employees. In many cultures, the rules of conduct are unwritten and may be this way in the workplace as well. Each member of a company is expected to understand and take for granted certain cultural norms as a part of everyday business practice. As cultures change, so must the ethical codes provided by business.
Typically, codes of ethics are written by prominent figures within a given industry (Ruggiero, 2008, p. 98). The power is given to these individuals assuming that the combined education and experience of these leaders will produce a code of conduct suitable for profitability and reputability. Since profit and reputation are often dependant on one another, these rules of conduct are important for the success of the business as a whole. Often these codes are written to suit the employees in particular with little attention given to the appropriate actions to take when handling foreign business. When considering the global market of today, if these rules of conduct conflict with those of business in other countries and other markets, both reputation and profit will be negatively affected.
When considering the global market, one must address the “legal, ethical, and moral issues relevant to business and the workplace” (Klinefelter, 2008, p. 45). When it comes to legalities, the lines are much clearer as to what is right and wrong. When it comes to ethics and morality, there is such a diverse selection of what is considered right and wrong in various cultures that the lines are not so clearly drawn. The extended issues include “confidentiality, compliance with [foreign] laws, financial integrity, and political activities” (p. 45). All of these factors come into play when doing business in a multicultural, global economy.
As stated in an article regarding the emerging “fair trade” market, “the volume of international trade is currently 14 times greater than what it was after World War II” (Audebrand & Pauchant, 2009, p. 344). Because of the emergence of worldwide trade of goods and services, determining a global ethics code among businesses has become a high priority for many large companies and small companies alike. Global trade has made it so that “no market can thrive in isolation” (p. 344). The bartering systems of the days of old still exist; there is just a far greater degree of complexity to the transactions. If one is to assume that this is true, then the methods and practices of business wishing to deal in this global market must strive to maintain their own integrity while adapting to that of the cultures with which they do business. The fair trade movement has generated some interest in this need.
In countries like Mexico, where the economy is highly dependant upon exports such as coffee and sugar, the supply and demand rule of economics do not always come into play. With labor laws far more lenient than those of the United States, the farmers are able to produce these products for far cheaper than what it would cost an American farmer. The result of this was an abuse of these farmers, forcing them to sell their goods for less than they paid to produce them (Audebrand, 2008, p. 345). When this problem was brought into the public eye in the 1980’s, people in the United States started to push for a better system of trade. This was a welcome transition for the farmers who were often not able to live with the abuses that they were suffering at the hands of the buyers. Farmers started to form cooperatives to gain power of influence over the ethical practices in the crop market. As Audebrand puts it, the farmers did this “not as a part of strategy of growth and market domination, but as an activity to pursue after the basic needs that have to be met to improve local living conditions” (p. 345).
This type of situation brings the elemental human needs into play when speaking of ethics and morality. In some business situations, it can be difficult to tell what the best approach may be in order to maintain a healthy relationship with clients. In places that are struggling to survive, the issue becomes that of basic human rights. Most people would agree that a working man or woman deserves fair wages, a safe working environment, and the ability to support their family with the earnings from their hard work. In so many places this is the case. Companies planning to do business in countries where human work conditions are not up to standards of the West have the challenge of modifying their ethics codes to include the rights and freedoms which are often taken for granted. As stated beautifully in “I don’t Care that People don’t like What I do”, “everybody benefits from an industry code of ethics” (Norberg, 2009, p. 217).
Another dilemma to be considered in the global market is the emergence of business ventures in countries with differing political foundations. Companies such as Google have faced many ethical dilemmas when attempting to broaden their customer base to communist China. The company was forced to develop an ethical code for “resolving cross-cultural ethical conflicts” (Hamilton, B., et al, 2009, p. 143). Globalization has naturally initiated “greater uniformity in business practices” (p. 143), but many differences still exist. The matters of privacy, freedom of information, and legalities in business conduct all come into play when considering how a business conducts its practice in other cultures.
According to a 2009 article in the Journal of Business Ethics, “Despite a greater uniformity in business practices resulting from globalization, many Multinational Enterprises . . . face cross-cultural ethical conflicts in which the firm’s business practices differ from the host country’s practices” (Hamilton, p. 143). Google is one of these Multinational Enterprises. When such a large and successful company attempted to expand their business into a communist country there were many factors to consider. First, the communication restrictions differ greatly from one country to another. Also, there are great differences in labor laws in each country. The laws governing corporate dealings also differ from one place to another which adds to ethical dilemmas. As Hamilton states, “Adherence to the law as enforced in [host] countries will not ensure an ethical decision” (p. 143).
Although the law can determine the limits of major business dealings in different countries and cultures, the subtleties are not clearly defined. If corporations desire to thrive in a global market, a method of determining ethical practices must be explored and clearly defined. According to an article in the Journal of Business Ethics, businesses today need to develop “universal ethical principles with local rules for business conduct” (Hamilton, B., et al, 2009, p. 145). One of the major considerations in this endeavor is how to incorporate cultural differences into one universal code of conduct that everyone can agree upon. The question arises: should corporations stick with their own ethical codes, adapt to that of the market they are intending to do business with, or blend the two to make an entirely new set of rules? (Hamilton, J. et al, 2009, p. 144) This is no small task; especially when cultures and businesses are so different in their foundation and practice.
One solution to the dilemma of multicultural business relations is proper foundations in the educational system. If students at the college level, and even before, are exposed to the many different situations that arise in a global economy, they will be better equipped to handle these ethical challenges as they arise. A greater understanding of other cultures creates an environment of willingness to adjust and adapt to the ways and customs of others. It also gives each culture an equal standing in the business world. In an article about social justice issues and their necessity in the classroom, Harry Morgan is quoted as saying, “groups that are denied the right to formulate what is recoded about them, tend to be shut out of the centers of power” (Kohli, W. et al…, 2003, para 13).
In order to begin to establish appropriate business contact with those of other cultures, the businesses in our own country need to be reputable and respectable themselves. There are many people who believe that the corporate environment in America is corrupt and has no ground to begin to put multicultural ethical guidelines into practice. As Julianne Malveaux states in her article, Moral Education in an Immoral Society, “Our nation’s business pages bear a close resemblance to the police blotter” (2002, p. 46). With a reputation like this, other cultures would be sound in arguing that America should not decide what policies are ethically correct in business conduct. Malveaux blames the lack of proper conduct on the lack of training in the matters of morality and ethics at the college level. She states, “moral education [is] something that is woefully lacking in higher education” (p. 46).
There does seem to be hope in the future of business in the global economy. With the mass use of technology in the workplace and for personal use, the integration of one culture into another has a high tech advantage. People today have access to people, cultures, and political and religious views that were not as readily available in the past. “Mass culture”, according to Vincent Ruggiero, “is being exported to virtually every corner of the world; and wherever it goes, it tends to undermine the traditional culture” (2008, p. 59). Although the object of proper business ethics is not to undermine traditional culture, the effect of this is a blurring of lines between cultures.
The primary issue at hand when considering the way business founded in different cultures with different ethical practices seems to be a matter of respect. When building a code of business ethics, the traditional method includes: abiding by laws, fair treatment of employees and clients, and a basic respect for fellow business-people. This does not change when considering the way to deal with international business ethical codes. If the needs of the business associates are met, the code need not be extensively different than an “in-house” code of ethics. If pursued in the “scientific sense, ethics is a descriptive discipline, involving the collection and interpretation of data on what people from various cultures believe” (Ruggiero, 2008, p. 5). These are the fundamentals of ethics and if these observations are put into the priorities of a business model and ethical code, then the dealings of that company will greatly improve.
It is necessary for any business looking to succeed in the global economy to develop a multicultural business ethics guideline that helps build a stable foundation for foreign business relations. According to Luc K. Audebrand and Thierry C. Pauchant in an article in the Journal of Business Ethics, “more diversity [is needed] both in the ethical theories and in the practices advocated in order to better address the complexity of our global world” (2008, p. 343). Often, to develop proper ethical practices, businesses must reject “basic assumptions” (p. 343) about other cultures and their ways of business in order to figure what is the best manner of practice.
In an article titled “I don’t Care that People don’t Like What I Do” Peter Norberg deducts that “Scripts, attitudes, and subjective norms determine behavior” (2009, p. 213). If these perceived norms are replaced by an educated background on other cultures and social justice issues, then employers and employees can enter into foreign business relations with far more confidence and produce a healthy, ethically sound business relationship. “How managers and employees translate the codes in practice” will determine the success of each business that decides to venture into the global economy (Norberg, 2009, p. 211).
References
Audebrand, L., & Pauchant, T. (2009). Can the fair trade movement enrich traditional business ethics? A historical study of its founders in Mexico. Journal of Business Ethics. 87(3), 343-353. Retrieved July 1, 2009 from ProQuest Database.
Hamilton, J., Knouse, S., & Hill, V. (2009) Google in China: A manager-friendly heuristic model for resolving cross-cultural ethical conflicts. Journal of Business Ethics, 86(2), 143-157. Retrieved July 1, 2009 from ProQuest Database.
Klinefelter, G. (2008, June). Corporate ethics: the business code of conduct for ethical employees. Review of Choice, 45(10), 1699. Retrieved June 30, 2009 from ProQuest Database.
Kohli, W., Butler, J., Fox-Piven, F., Dugger, K., Roberts, E., Boseman, G., & Kelly, B. (2003). Forum; do educators have a responsibility to raise social justice issues in the classroom? Transformations, XIX(1), 137. Retrieved July 1, 2009 from ProQuest Database.
Malveaux, J. (2002). Moral education in an immoral society. Black Issues in Higher Education, 19(14), 46. Retrieved July 4, 2009 from ProQuest Database.
Norberg, P. (2009). I don’t care that people don’t like what I do” – business codes viewed as invisible or visible restrictions. Journal of Business Ethics, 86(2), 211-225. Retrieved July 5, 2009 from ProQuest Database.
Ruggiero, R. (2008). Thinking critically about ethical issues. 7th edition. Boston: McGraw-Hill.
