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Business Ethics

Each individual needs to have a code of conduct for his personal life, to be successful. The code of conduct highlights an individual’s respect for values, he or she is willing to stand up to, despite adversaries or prospects of gain. Similarly most professions, like business and medicine too have their own code of conduct to bring benefits to the society in which the profession is practiced. The code of conduct is actually ethical codes based on judgment of right and wrong. Generally most code of conduct is enforced by laws, sometimes by morality.

Thus, when an organization sets up operations in another country, it is ethical...

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...ly bound to ensure compliance with the law and culture of that country. Business houses intend to make profits by selling its services or products to the society, thus contributing to the development of that society. Businesses are a part of the society and share the same responsibilities for its upliftment. In their effort to seek profits, organizations should not compromise on the values and beliefs of that society.

Given the development of the global economy and the trend for organizations to become multinational, this need is more relevant today than ever before. The belief, attitude, perception and decision of any individual are culture specific, and therefore any choice or proposal for a business, must be considered from the point of the specific culture. These can perhaps be considered as universal values, to be upheld by all at all places (Savrock, 2007).

When an organization plans to establish operations in another country, it should first consider the suitability of operations with respect to that country’s culture. This is essential not only to evaluate the prospective profits, but also to ensure basic compatibility of business establishment. For instance, setting up a cigarette manufacturing unit in a country should be done only when the customs of that country is not against smoking. If the customs of that particular country is against smoking, then it is inappropriate to setup such a unit, irrespective of the laws there.

Even after establishment of operations in a particular region, the company’s working must not be in conflict with any aspect of the culture or aspirations of the local people. The association of business and culture is immense, as not all products are seen the same way, everywhere; reflecting the fact that not all issues are perceived the same way throughout. For instance, abortion and contraceptives associated businesses should not be considered where cultures condemn them. Multinational companies thus basically need to establish themselves and carry out activities, only where such activities are permitted.

Some Islamic countries consider music and entertainment as immoral, and therefore no related activity should be setup here. Similarly when strict dress codes are emphasized for women, no attempt should be made to promote modern dresses. No effort should also be taken to promote tobacco and alcohol if these are socially boycotted, irrespective of the legal requirements. Ensuring compatibility with the culture of any particular society where it operates, would at times be difficult for the management.

This is because the culture of any society may be associated with the food, dress, habits and even attitudes. In many orthodox and conservative societies where numerous restrictions persist, organizations must function without arising any controversy. The organizations must be willing to compromise on certain aspects of its policy which confront the culture of the society. For instance, if a particular culture forbade employment of women and the organization’s policy preferred employment of women; the organization must be willing to abandon its policy.

Similarly, even if women are permitted to work, the organization should ensure that the tasks, work uniform, timings and job requirements are justified by the existing culture. Managers in most organizations are confronted by ethical issues almost each day. Understanding of ethics in management is very crucial for today’s manager, at any level. Be it motivating, planning or communicating; their strategy is influenced by the cultural requirements (Frederick, 1999). Global teams seem to be the order of the day, given the success of multinational ideology.

The successful management of scattered or global teams is very complicated, given the opportunities for misunderstandings and miscommunication. Understanding regional laws and customs is crucial in management of such multinational organizations. Global teams rarely or never meet and the different languages, cultural and time zone differences often tend to hinder smooth working of the project, if these are not well managed. Many consider the global and diverse teams as one of the very consistent sources to offer competetive advantage (Real Change, 2005).

Although several barriers exist in multinational operations, global and virtual teams can achieve improved performance when the multicultural setup succeeds in establishing common views and effective, coordinated working by overcomming their differences. These factors therefore need to be considered when changes are to be implemented across diverse teams. Organizational changes are an important aspect of global team management. Sometimes similar changes cannot be incorporated across all teams in a same way and time frame.

The complexity of implementing changes is proportionate to the number of geographical boundaries crossed, the level of cultural differences, and the impact on collateral systems. When organizational changes involve global and virtual teams, managers must ensure that the new requirements are in compliance with the regional thinking. It is essential that the culture of any organization, reflect the cultural values of the society in which it operates, to ensure easier compliance. When societies allow businesses to function and make profits, it expects them to do this within the boundaries of social acceptance.

No society would tolerate profit making by compromising its culture. Multinational companies have a duty to let the people know that it is aware of the local customs and stands by it. This way the organization can emphasize that its development and growth is in no way a threat to the society. The managers and senior personnel should conduct themselves according to the cultural norms, atleast in public. Even if the services or products of an organization are superior, the organization’s success and its existence is basically associated with its respect for the local values.

Today’s organizations are more conscious of local ethical requirements and are careful not to hurt the sentiments of the people. It should be noted here that British Airways had taken off pork and beef from its menu in all Asian flights, as it hurt the sentiments of the local population. Organizations adopt various strategies to serve its interests while keeping up with the cultural requirements of the regions. By appropriately selecting the right labor, skill, materials; they integrate their procedures ensuring that cultural values are upheld throughout the cycle.

Process that infringe on the cultural values of a region are carried out elsewhere where it is not objected.


Real Change Network (2005) Building global, virtual and local teams. [Electronic Version] downloaded on 23rd May 2008 from http://www. realchange. com/en-ca/global-teamwork. aspx Savrock J (2007) Ethics teaching grows in importance in a multicultural society [Electronic Version] downloaded on 23rd May 2008 from http://www. ed. psu. edu/educ/news/news Frederick R. (1999) (Ed) A companion to busines

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