— GLOBAL BUSINESS ETHICS —

GLOBAL BUSINESS ETHICS: When Values Clash

 

By Alan Richter

 

Defining ethical business conduct often depends on whom you talk to. Setting business standards based on core values helps employees play by the same rules.

At a recent conference on global business ethics, a distinguished panel of ethics experts grappled with the question: "Which is more ethical-treating people as if they were all the same or all different?" No one presumed to know the right answers to that question in every situation, and that’s the crux of the problem with global business ethics.

Ethics has never been easy to define because it deals with intangibles like values and beliefs. But ethical standards provide us with an ability to resolve global ethical dilemmas. Without standards, we restrict our ability to do business effectively in a borderless work. And, paradoxically, our search for a universal code of ethics intensifies just as we become increasingly aware of cultural differences.

 

Some scenarios to consider:

 

1.  Your country believes in gender equality. What happens when a woman from your country is treated by locals as second-class citizen, following that country’s customs? What obligations does her company have to her? How should she respond?

2.  Your company has strict rules on receiving gifts. However, in the country you are working in, it is customary to exchange gifts. Without offending your business partners (distributors, suppliers, etc.), what should you do? What should your company do?

3.  Your company appears to be taking advantage of the working conditions in an overseas subsidiary that you are posted to, even though your company provides much sought after employment. Your conscience is bothered. What should you do? What rights and obligations does your company have in such a situation?

 

The Major Ethical Dilemmas

There are two things to note about these examples. First, they deal with ethical dilemmas that could happen anywhere. The issue of fairness, for example, is a general ethical issue-not just work related. Second, these three examples reflect three major business ethical areas. According to Professor Thomas Donaldson,* they are gender, bribery and corruption, and the relations between developed and developing countries (or first and third worlds).

These examples are generalized, so one cannot be expected to respond to them in specific detail. However, they do highlight some of the ethical dilemmas of doing business globally. And they point to levels of involvement-both individual and organizational. Ethical behavior involves both. These examples are ethical dilemmas because there is a clash of perceptions and a clash of values in each scenario. "When in Rome. Do as the Romans do" might be one approach to these situations, but most people would agree that cultural relativity is different from ethical relativity-which is why this maxim is hard to swallow when referring to the three scenarios.

 

Prioritizing Values Differently

Most managers with global experience would agree that there must be some set of shared, global ethical values. This is not too surprising because we are all one species with common basic needs and desires, though expression is different around the globe. But what are these common values?

Rushworth Kidder, from the Institute for Global Ethics, conducted a global values survey and discovered the following common values: love, truth, freedom, fairness, community, tolerance, responsibility and reverence for life. The list is culled from interviews with extraordinary people from all over the world (see Kidder’s Shared Values for a Troubled World, Jossey-Bass, 1994). However, even if there is an underlying agreement on such values, these values are prioritized differently among cultures and might be expressed very differently form culture to culture.

THERE ARE THREE MAJOR ETHICAL AREAS FOR BUSINESS: GENDER, BRIBERY AND CORRUPTION, AND THE RELATIONS BETWEEN DEVELOPED AND DEVELOPING COUNTRIES

For example, all cultures will respect individual freedom and justice (equality), but perhaps each to a differing degree. And then there is the issue of values and their resulting behaviors-individuals and cultures vary greatly in their translations. So even if two cultures share a value, they may act it out very differently.

In the first scenario concerning gender, perhaps the value of fairness clashes with tolerance (or respect of diversity); in the second, truth (or integrity) might clash with tolerance; and in the third, fairness perhaps clashes with responsibility. Furthermore, in each example, there is the feeling that ethical dilemmas are often un-resolvable at the level at which they first appear.

Professor Richard De George (in Competing with Integrity in International Business, Oxford University Press, 1993) proposes the concept of "ethical displacement." The concept stipulates that many ethical dilemmas need to be displaced upwards to a higher level in order to solve or dissolve the dilemma. For example, only a company policy might solve a dilemma for a manager, and it might take an industry or government directive to solve an ethical dilemma at a company or industry level. The consequence of this might be, for example, that managers are not expected personally to have to make a decision about accepting a gift from a supplier, but must simply follow a company policy that stipulates just what to do (or say) in such a circumstance.

 

Intention Is Different From Action

Even if you and your organization have sorted out its values, prioritized them and identified acceptable behaviors, there is still the issue of action. Good intentions are common, our challenge as individuals and companies is to act on intention. But appreciate how hard this is in the real world, and understand that living these values fully is akin to trying to be absolutely objective.

As individuals, we cannot be absolutely objective, since we are rooted in subjectivity. For example, we have families, and we tend to treat our own children differently from the children of strangers. But we can strive to create an objective view and understanding of the world. The mark of a saint or holy global person might be that ability to be equally caring, compassionate and trustworthy to everyone, everywhere.

With corporations, which represent the sum of their employees, there is a greater possibility of being objective. After all, it is the pooling of perspectives that usually gives rise to greater objectivity in teams. But when corporations strive to be globally ethical in business, they too are aiming for an ideal-a very worthwhile aim, but nonetheless an ideal. Put another way, there is perhaps a scale of moral integrity along which all corporations are moving, but there may be no end point to the scale. This is not meant to let anyone off the hook-simply meant to acknowledge our frailties as individuals and as organizations.

The ongoing challenge is to strive with integrity to be ethical in our personal and professional lives, locally and globally.

 

How to initiate an Ethics Program

Fostering business ethics awareness in today’s multicultural workplace and global marketplace is only the beginning.

We recommend the following initiatives:

Uncover or discover what the burning ethical issues are in your organization worldwide. This may involve conducting a broad survey that involves a cross section of all employees, covering all areas and departments of the organization worldwide.

Make ethics explicit by developing a clear code of conduct that is values based and that deals directly with issues cross-culturally. Once articulated, the challenge is to communicate and inculcate this explicit code throughout the organization.

Provide opportunities to learn about ethical dilemmas and how to resolve them. Practice doing so in non-threatening experiential ways such as through simulation training or case studies. This might involve creating an ethics program built around the organization’s explicit code of conduct.

Network with others in your industry and with ethics personnel from other organizations and industries. This is an effective way to learn the best practices in the field and to benchmark one’s organization against the best.

Review the ethical "state-of-health" on a continual basis by repeatedly revisiting one’s research, communication and training programs, the code of conduct, and so forth. Times change, strategies shift, so there is always a need to revisit the subject. Don’t expect the core values to change, but it may be that one word in a definition needs editing or replacing, or that a new value is emerging that is critical to the future character and success of the business.

This article was written by Alan Richter, Ph.D., of QED Consulting and appeared in HR Magazine, September 1994.

Alan Richter is founder and president of QED Consulting. He may be contacted at alanrichter@qedconsulting.com

 41 Central Park West, Suite #1G

 New York, NY 10023, USA

 

 Phone: +1 212-724-3335

 Fax: +1 212-724-4913

 qed@qedconsulting.com

GLOBAL BUSINESS ETHICS