As the number of countries that are viable players in the global marketplace continues to rise, an
inevitable clash of cultural norms and standards has occurred. What is acceptable�even praised�in one
country may be very offensive in another. Those conducting international business have realised the
importance of becoming familiar with the cultures of those with whom they will associate. It becomes
more problematic when the behaviours that differ are based on ethical standards and beliefs.
In the Michaelson (2010) article in the attached file, the author recalls asking a group of business
executives from major U.S.-based multinationals �whether a change in the economic balance of power
[from developed to emerging markets] might portend a change in ethical influence�.
For this assignment, you will evaluate the changing dynamics of global business. You will also critically
assess the process of establishing ethical standards to avoid corruption and support corporate social
responsibility when doing business in emerging markets.
Global Business Ethics Essay
The question of global ethics and standards has affected global business to a great extent.
Another gritty issue faced by the players in the global market place is the diversity of cultures,
norms and beliefs which are currently pushing the business world to states of inevitable clashes.
These clashes have led to analysts and scholars asking the fundamental question: When moral
business ethics conflict across the borders, whose standards should be upheld? (Michaelson
2010)This is a question about the global ethics and which between the home cultures or the
existing society culture norms should prevail. This is a factor which has affected many multi-
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national companies across the world and which will need a defined platform to check their
operations. The guidelines are the global business ethics which affect their world-wide business
operations.
Ethics detail what is regarded as right or wrong in any given society (Michaelson 2010).
In the global business world global ethics define how multi-national companies interact with the
societies and governance in the set-ups in which they operate. However, it is not clear on how
ethical to behave as desired when there is various cultures involved together with the different
levels of development of the countries or societies involved (Hsieh 2009). There bound to
develop problems and clashes when all the divergent cultures are involved. Although it will not
be right to base global business ethics on the economic advancement of different nations, it is a
major factor towards drawing the basics of global ethics and norms. The interaction between the
activities of the organizations and the societal norms and beliefs together with the responsibility
of the organization to the advancement of the society help define how organizations are to
operate (Jacques 2009). How multi-national companies are to operate especially in the less
developed nations has become a matter of discussion which has brought about topics including
impact or damage to the environment, poor products’ quality in the new nations and
mistreatment of workers. To be able to define the global ethical rules, different factors have to be
considered; for instance, what may appears to be right in one country such the gift-giving culture
in Japan, was taken as bribe-giving in the European Nations thus a clash in their values. Another
case would be in a case companies in developed nations set up bases in less developed nations
that are devoid of strict environmental and health regulations or lack employment rules to define
who is hired by these companies, whose standards will be considered (Jacques 2009). Global
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ethical conduct though philosophical tries to give an insight on how executives will try to deal
with such challenges facing their organizations in the foreign settings.
There is the need to develop ethical standards and definitions that will check the
operations of companies in different foreign settings so as to check societal norms such
corruption and ensure that they support corporate social responsibility when conducting business
in the emerging markets. To be able to come up with these standards various factors come forth.
There is the rule of culture relativism which observes that one will behave as the locals of a
particular culture behave, that is: when in Rome do as the Romans do (Kobrin 2009). According
to this philosophy, no cultural ethics have better definitions than others and no rights or wrongs
which hold globally. For instance, if the people of a certain nation condone bribery or insider-
trading in their business processes, there are no international laws which will judge their actions
wrong ethically. Relativism though has dare consequences to both the environment and the
individuals involved. For instance, the foreigners will forfeit business opportunities if they don’t
buy into the actions of the locals. This can lead to disastrous effects to the environment and also
harm the society. For instance; the actions of Nigerian authorities to provide industrial wastes’
dumping sites pharmaceutical companies in Europe led to serious degradation of the
environment and disastrous health hazards to locals in the areas (Kobrin 2009). For multi-
nationals to act ethically in such cultures, they need to find a balance between their actions and
their effect to the environment and violation of vital human rights.
On the opposite side of relativism is absolutism which argues that the cultural values of
the home nation will always be applied everywhere as everywhere is home. This philosophy
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urges the companies from the home developed nations to implement the same actions in the host
foreign nations as they do in their countries. It does not consider the existing cultural values
which the natives of the host nations observe. This is bound to bring about conflicts between the
native culture values and the new culture being brought in. Absolutism is based more on a single
lists of rights with the wrongs emerging being analyzed using the same criterion everywhere
around the world regardless of the traditional culture and beliefs (Michaelson 2010). With such
analysis of the cultural conflicts arising, absolutism is bound to bring about serious conflicts with
the existing cultural values. For instance, an American company brought a course on sexual
harassment at its facility in Saudi Arabia which to the natives was offensive based on the strict
conventions that govern relationships in their culture (Kobrin 2009).
Considering the fact that the two extremes of ethics; absolutism and relativism are not
sufficient to help generate adequate code of ethics applicable worldwide, a compromise need to
be found which will create a workable atmosphere and allow multinational companies cope with
the cultures of the emerging markets (Hsieh 2009). This now brings about the cosmopolitanism
which derives a common moral ground on which all actions of organizations should be based.
The cosmopolitan culture tries to shape ethical behavior of companies by considering the core
human values, the traditional culture and at the same time taking into consideration the context in
which a company or individual is to be judged right or wrong.
Corporate Social Responsibility is a fundamental ethical structure which governs the
global business in the diversified cultural settings and tries to bridge the gap between the cultures
and values (Hsieh 2009). International organizations should be responsible in the way they
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handle business all over the world as on top of the cultures that control their operations, there
exist international procedures such as the labor laws and transparency laws which check on
corruption. Multinational companies should therefore establish corporate code of ethics which
are globally acceptable and integrate the local values and observe the core human values of the
right to favorable working conditions and economic improvement. With the corporate code of
ethics, it will be possible to eliminate discrimination and enable working towards improving the
economies of the emerging markets without cultural clashes and core human values being
violated (Michaelson 2010).
References
Hsieh, N. “Does Global Business Have a Responsibility to Promote Just Institutions?” Business
Ethics Quarterly 19, 2009: 251-273.
Jacques, M. When China Rules the World: The End of the Western World and the Birth of a New
Global Order. New York : Penguin, 2009.
Kobrin, S. J. “Private Political Authority and Public Responsibility: Transnational Politics,
Transnational Firms, and Human Rights.” Business Ethics Quarterly 19, 2009: 349-374.
Michaelson, Christopher. “Revisiting the Global Business Ethics Question.” Business Ethics
Quarterly, 2010: 237-251.
