International Business Ethics: Values in Tension

International Business Ethics:
Values in Tension
Competing Answers:
Cultural Relativism
• According to cultural relativism, no culture’s
ethics are better than any others.
• The cultural relativist’s creed - When in Rome,
do as the Roman’s do.
• The inadequacy of this approach becomes
apparent when the practices in question are more
damaging than petty bribery or insider trading.
• Cultural relativism is morally blind.
Ethical Imperialism
• Ethical Imperialism directs people to do everywhere exactly as they
do at home.
• It is based on the theory of absolutism:
– There is a single list of truths,
– They can be expressed only with one set of concepts,
– and they call for exactly the same behavior around the world
• Problems:
– It clashes with belief that people’s culture must be respected
– It presumes that people must express moral truth using only one
set of concepts.
– It presupposes a global standard of ethical behavior
Balancing the extremes:
Three Guiding Principles
• Respect for core human values which
determine the absolute moral threshold for
all business activities
• Respect for local traditions
• The belief that context matters when
deiding what is right afd what is wrong.
Defining the Ethical Threshold:
Core Values
• Hard truths that must guide managers’ actions, and define
minimum ethical standards for all companies, for ex
– the right to good health
– the right to economic advancement anfd an improved
standard of living
– the Golden Rule
• They must include elements forund in both Western and
non-Western cultural and religious traditions.
What Do These Values Have in Common?
• Non-Western • Western
• Individual liberty
• Kyosei (Japanese): Living
and working together for
the common good.
• Dharma (Hindu): The • Egalatarianism
fulfillment of inherited
duty.
• Santutthi (Buddhist): The • Political participation
importance of limited
desires • Human rights
• Zakat (Muslim): The duty
to give alms to the
Muslims poor.
Overlapping consensus
• Individuals must recognize a person’s value
as a human being.
• Indiviuals and communities must treat
people in ways that respect their basic rights
• Members of a community must work
together to support anfd improve the
institutions on which the community
depends
Core Values
• Respect for human dignity
• Respect for basic rights
• Good citizenship
• These core values must be translated into
core values for business. What does it
mean for a company to be a good citizen?
Core Business Values
• Companies can respect human dignity by
creating and sustaining a corporate culture
in which employees, customers, and
suppliers are treated as people whose
intrinsic value must be acknowledged, and
by producing safe products and services in a
safe workplace.
• Companies can respect basic rights by
acting in ways that support and protect the
individual rights of employees, customers,
and surrounding communities, and by
avoiding relationships that violate human
beings’ rights to health, education, safety,
and an adequate standard of living.
• Companies can be good citizens by
supporting essential social institutions, such
as the economic system anfd the education
system, and by working with host
governments and otoher organizations to
protet the enviroonment.
• The core values establish a moral compass
for business practice
• They help companies identify practices that
are acceptable and those that are intolerable.
Creating an Ethical Corporate
Culture
• Core values are not specific enough to guide managers
through actual ethical dilemnas.
• Managers should be guided by precise statements that spell
out the behavior and operating practices that the company
demands.
• 90% of all Fortune 500 companies have codes of conduct.
• 70% have statements of vision and values.
• In Europe and the Far East, the percentages are lower but
are rising rapidly.
Codes of Conduct
• Must provide clear direction about ethical behavior
when temptation to behave unethically is strongest.
• But, also must leave room for a manager to use his
or her judgment in situations requiring cultural
sensitivity.
• Intl. managers who are not prepared to grapple
with moral ambiguity and tension should pack their
bags and come home
Moral Free Space
• How can a manager learn to distinguish a
value in tension with their own from one
that is intolerable?
• There are two type of conflicts that typically
arise when countries have different ethical
standards:
– conflicts of relative development
– conflicts of cultural tradition
• To resolve a problem of relative development, a
manager must ask: Would the practice be
acceptable at home if my country were in a similar
stage of economic development
• For conflicts of cultural tradition, there is a more
objective test. Managers must be able to answer
“No” to the following two questions:
– Is it possible to conduct business successfully
in the host couontry without undertaking the
practice?
– Is the practice a violation of a core human
value?
Guidelines for Ethical Leadership
• Treat corporte values and formal standards of conduct
as absolutes.
• Design and implement conditions of engagement for
suppliers afnd customers.
• Allow forwign business units to help forlmulate
ethical standards and interpret ethical issues.
• In host countries, support efforts to decrease
institutional corruptions.
• Exercise moral imagination.
Conclusion
• Many people thing of values as soft, “the truth
that everybody knows but nobody speaks.”
• However difficult to articulate, values affect
how we all behave. In a global business
environment, values in tension are the rule
rather than the exception.
• Companies must demonstrate strong
commitment to a code of ethics .

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