Business Ethics Chapter 9 PDF

Managing for Ethics in a Global Setting Management is no cakewalk. Juggling all the needs of your employees, customers, senior managers and executive-suite personnel, all with conflicting needs, placing you square in the middle. Sometimes there’s no right answer, only the least-wrong one. Harder sti...

Managing for Ethics in a Global Setting Management is no cakewalk. Juggling all the needs of your employees, customers, senior managers and executive-suite personnel, all with conflicting needs, placing you square in the middle. Sometimes there’s no right answer, only the least-wrong one. Harder still is ethical management, balancing all of the above while doing so in a way that’s good for the planet and non-organizational stakeholders. But wait, there’s more! What if you’re posted somewhere else in the world than your home country? A common prospect. You do well at your company’s HQ, and so you are sent abroad to manage an upstart team in another country. Now we’re in hard-mode: You’re not just dealing with being an effective, ethical manager, you’re dealing with international relationship management, crossing language barriers, cultural differences, ethical thresholds, even different standards of corruption! Let’s talk about a few of the challenges you’ll face, and what you can do about them.  Expatriate Manager Starter Pack Unsure how to handle a Not used to host country’s bribe without offending cultural norms local vendor Studied the local Attended first meeting language, but can’t hold while severely jet a conversation lagged Was excited to be in a On a long, overseas new place, but the assignment and misses novelty has worn off and their family misses home  You Need Training! If your firm is going to assign you somewhere overseas, you receive training about how best to achieve your business goals, as well as how to adjust to life in your new location. Cross-cultural training can result in the following benefits for yourself: Greater feelings of well-being and self- confidence; Improvement in relationships with host nationals; Provide you with a more nuanced perception of your host culture members; Help you better adjust to the new culture; Higher overall performance;  Be a Cultural Chameleon If you’re going to be working and living abroad, you’ll want to work on your cultural intelligence (CQ): an individual’s ability to be effective in cross- cultural situations. CQ is comprised of three criteria. If you score high on all three of these, you just might truly be a Cultural Chameleon: What you already know about the culture, as well Knowledge as your approach to learning How open you are to adapting to new cultural Motivation norms and enthusiasm to learn the language How open you are to adapting to new cultural Action norms and enthusiasm to learn the language  Cultural and Social Norms Individualism / Collectivism In Chapter 6, we covered organizational This is a spectrum of how individuals culture. In this chapter, we’re getting into perceive their role in society. From seeing national culture, or the “collective mental themselves as the star of their own movie in programming” of a country. individualist societies (such as in the US), to wanting to conform as much as possible in If you ever were to find yourself needing to collectivist ones (such as in China). attend a meeting in a foreign, far-away These dynamics affect everything from not country, flew there, stepped off the plane just how to act in the board room, but hiring and took the first available trolley to their practices, reporting systems, and dealing Power Distance with misconduct. office, chances are you’re going to commit a social faux pas of some kind. This is how much subordinates feel within their right to question someone in a This is why when you head overseas you position of authority. High power distance should understand at least these two cultures frown on anyone “questioning” cultural dimensions developed by social (i.e., whistle-blowing) someone in power, psychologist, Geert Hofstede: whereas in low distance ones it’s still tense, but less frowned upon. Quae Lingua Populi? Language is culture. Few things both show and receive respect when you can speak your host country’s language with even some amount of proficiency. Hell Learning a language entails getting through o some awkward or confusing moments from time to time. If you’re multi-lingual, you may have some experiences of your own where things have been lost in translation. Relying on translators is a major obstacle to effective business communication. Even if you can’t speak the language well, making an effort to goes a long way.  We See What We Want To See Just as we are all subject to psychological phenomena such as confirmation bias, so too are we to cultural ones such as selective perception. We are constantly bombarded with sensory and social information, and our brains naturally filter out all but what we “learn” to be the most important over time. To what may seem important, or even scandalous to you, someone coming from an individualist society, may be just a fact of life to someone from a collectivist one. For example, in collectivist cultures, family and personal relationships are much more important than individual behavior. In a collectivist culture, no one would bat an eye at the executive hiring their nephew with no experience directly into a management role, instead of promoting the hard-working middle- aged person with a family.  Never Assume! So you’ve done your homework, and read up on you future host country a fair amount. However, just knowing about the culture doesn’t guarantee success, or smooth over interactions with the natives. Remember that you’re dealing with individual people here, not some vague, homogenous mass collective. Never assume these three things about anyone just because they are from a particular place: Behavioral Cultural Similarity Consistency Homogeneity Natives will often adapt their Individual personalities vary Familiarity often leads to behavior in the presence of a widely even in collectivist carelessness. Some “psychic foreigner. cultures. distance” is actually a good thing. Cross-Cultural Negotiations Individualist and collectivist cultures each have their nuances in approaching the negotiation table. Individualist cultures prefer a direct, open and honest approach, whereas being those qualities could come across as crude, brash, and unseemly at a collectivist-host table. Negotiators all have their tools they use, but using the wrong tool in the wrong context can damage a business relationship. What feels like an acceptable level of eye contact, touching, and personal space, for example all vary widely between different parts of the world. It comes down to experience, or the advice of someone already experienced with the host culture, to get a feel for what is the best way top stay in the good graces of your hosts.  Dealing with Corruption Abroad Corruption abroad, commonly appearing in the form of officials requesting bribes can be a dicey issue. As a foreign-assigned manager it will likely be one of the most common ethical dilemmas you’ll face. Certain countries, such as the US and UK have anti- bribery laws in place (with varying levels of efficacy), but many other countries have no such laws. Private enterprises and multinational companies are taking the law into their own hands, and enacting strict internal policies to prevent corruption, recognizing the long-term risks to their reputations were they to rely only on national laws. Your best bet is to play it safe and follow the guidelines set about by your organization when it comes to bribes or dealing with corrupt officials. Are Ethical Standards Abroad All That Different? While certain “customs” like bribery, may vary in their frequency of occurrence across different cultures, ethical values still remain a universal cornerstone. Even in parts of the world where corruption is more prevalent, people often express a preference for a less corrupt environment. Students and working professionals alike report strong ethical cultures thrive even in corrupt environments. These individuals talk with pride about their internships or job posts that supported honest business dealings. You need to differentiate between common practices and core values. Most people, regardless of their environment, value honesty and respect. As a manager, recognizing and appealing to these shared values can help navigate business ethics when working abroad. Case in Point: Common Golden Rules Buddhism: “Hurt not others in ways that you yourself would find hurtful.” Christianity: “Whatsoever you wish that men would do to you, do so to them, for this is the law of the prophets.” Confucianism: “Tsze-Kung asked, saying, ‘Is there one word which may serve as a rule of practice for all one’s life?’ The Master said: ‘Is not reciprocity such a word? What you do not want done to yourself, do not do to others.’’” Hinduism: “This is the sum of duty: Do naught to others which would cause pain if don’t to you.” Islam: “No one of you is a believer until he desires for his brother that which he desires for himself.” Judaism: “What is hateful to you, do not to your fellow man. This is the entire Law: all the rest is commentary.”  Ethical Relativism vs. Ethical Imperialism The old adage, “When in Rome, do as the Romans do,” basically says that “no culture has better ethics than any other,” and that we should adapt to the culture we’re in, and is an example of ethical relativism. If we were to follow this to an extreme, should we accept that slavery and dumping of toxic waste Is “just how they do things around here”? The alternative to ethical relativism is ethical imperialism, that we should adopt a single standard of what counts as “right” across all cultures. This, you can probably imagine, comes a host of its own problems. Let’s explore a bit on how we can find a middle ground between these two extremes… Developing Corporate Guidelines For Global Business First, yourEthics org. needs to establish an ethical threshold for where lines are drawn regarding human dignity and rights, and what is not acceptable. These principles must be translated into clear guidelines that apply universally, ensuring responsible corporate behavior across borders. Next, is the matter of implementation: your firm needs to ask itself whether reputational risk of your vendors having unsafe working conditions and long hours for its workers is worth the cost- savings. The bottom line comes down to this: what values of your company are in conflict with the foreign partner? What cultural traditions are not in violation of the core human values? It’s up to managers to respect cultural traditions and take context into account when deciding what crosses the ethical threshold or not.  Your Firm in a Global Business Environment For small upstarts and large multinational corporations alike, the international stage requires a delicate balancing act of many stakeholders, including host governments, foreign suppliers, agents, and other organizations. International laws too often serve as obstacles, or at least not helpful in guiding your firm’s business conduct abroad. It’s up to you and your firm’s own ethical standards to guide the actions of both expatriates posted abroad as well as native- managers in host countries.  Transcultural Corporate Ethics Much progress has been made in the development of business conduct in the global arena. Government organizations, multinational companies, and private organizations have all thrown their hats in the ring to further the development of international business ethics. While this is a good thing overall, it has also further complicated the matter of which aspects we need to pay our attention. A series of agreements and guidelines known as transcultural corporate ethics has streamlined these complicated aspects into a set of four principles: “1. The inviolability of national sovereignty. Multinationals are expected to respect the ‘host country’s economic and social development and its cultural and historical traditions’ 2. Social equity Pay scales are expected to ensure equity between genders as well as ethnic groups. 3. Market Integrity in business transactions. Restrictions on political payments and bribes. 4. Human rights and fundamental freedoms. There is inherent worth and dignity of every individuals and equality of rights of all human beings.”  International Agreements The below list is 10 shared principles in human rights, labor, the environment and anticorruption shared among member states of the UN Global compact, of which over 9,000 businesses have pledged their commitment: 1. Protection of internationally proclaimed human rights; 2. Noncomplicity in human rights abuses; 3. Support for freedom of association labor: 4. Elimination of forced and compulsory labor; 5. Effective abolition of child labor; 6. Elimination of employment and workplace discrimination; 7. Support for a precautionary approach to environmental challenges; 8. Initiatives to promote greater environmental responsibility; 9. Development and diffusion of environmentally friendly technologies; 10.Work against corruption  Key Takeaways Knowledge, motivation, and willingness to take action are the three aspects that comprise the rare Cultural Chameleon; Language is culture, just showing an attempt to understand and speak the host language is the cornerstone of any ethical manager’s principles; Never assume: what you know about the culture to apply to individuals living within it, that just because they are from a certain place means they must be a certain way, and that if they are more familiar to you then that is a “good” thing.; Dealing with corruption is always a tricky matter. Don’t go by your own personal principles regarding this, instead let your firm’s guidelines regarding this be your shield and stick to them. Transcultural corporate ethics are an attempt to streamline the multifaceted and complicated ethical dilemmas, and the “right” ways of handling them.  Thank You! We appreciate you joining us in this Ethical Business Principles journey! We hope you have gleaned some new insights that you will take with you in your own personal journey towards being the best possible manager, business professional, and human being you can be!  References J. A. Barach, “The Ethics of Hardball,” California Management Review 27 (1985): 2. Trevino; Nelson, “Managing Business Ethics: Straight Talk about How to Do It Right, 8th Edition “ Wiley, 2021.