Running head: FINAL PROJECT 1

Final Project

Kemjika Echebelem

California Southern University

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For years, ethical training in international companies, both American-based and foreign-

based, have involved teaching staff the laws, ethical norms, and company values, with the

assumption that this is the way to establish an ethical workplace (Gentile, 2016). However, in

this paper, I will be exploring a more action-based approach to teaching business ethics in an

international context. This practical approach to business ethics training emphasizes the

application of the knowledge gained thru training towards cross-cultural communication with

foreign companies.

As opposed to the approach above, companies usually base their ethical training

programs on educating employees on theory and arbitrary principles of business ethics, instead

of on application and practical examples of ethical behavior. Furthermore, as I have previously

learned, the three main ethical theories in business and intercultural relationships are

universalism, ethical relativism, and moral imperialism (Beauchamp, Bowie, & Arnold, 2013).

However, I will be drawing from these theories to discuss four tips companies can use to adopt a

global ethical perspective towards international business ethics.

Four Tips for Applying International Business Ethics

Respect the Foreign Culture

For any company wanting to expand into the global market, it is crucial that the company

acknowledge the multitude of differing cultures it will encounter and learn to respect these

cultures. If multinational companies like Nike and Walmart, for instance failed to respect the

values and the culture of the host country in which they outsource production, American

consumers would enjoy less, high-quality products from these companies (Beauchamp, Bowie,

& Arnold, 2013). This variance in culture acts as an obstacle that must be overcome for

American firms to develop good relationships with their foreign subsidiaries. Indeed, many
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foreign countries differ in their beliefs and perceptions, including their perceptions of what is

right or wrong. In fact, what is considered morally wrong in America, such as bribing public

officials is generally accepted in India (Gentile, 2016). Different perceptions of morality in

various cultures refers to a term called ethical relativism (Beauchamp, Bowie, & Arnold, 2013).

It is because of ethical relativism that international firms get accused of unethical

practices like bribery and the condonement of sweatshops. While most people in America

condemn the operation of sweatshops in factories, many young, Chinese workers see it as their

only chance to help support the family. As a result of these different perceptions towards

sweatshops, international firms like Apple and Nike who outsource their production have been

accused of condoning the operation of sweatshops by their foreign suppliers. Regardless of the

differing perceptions however, multinational corporations must still respect their host country’s

values and norms. However, a company cannot respect values and culture it is not aware of,

which is why managers must educate their employees about the culture of the host country.

Indeed, for a company to be able to show adequate respect for a foreign country, it must start

first with training its employees.

As Mary Gentile (2016) mentions in her article, educating employees in business ethics

should include teaching them to acknowledge and respect the qualities of another culture. For

example, because McDonald’s respects India’s refusal to eat beef, the fast food restaurant

franchise sells the “McVeggie” in its Indian restaurants (Kotler, & Keller, 2016). Showing this

respect for another culture’s beliefs and opinions is one of the first steps needed for a

multinational company to enter a foreign market. However, this respect should only go so far. It

is important for a company to respect its host country’s culture and values, without
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compromising the laws and values of its home country (Harvard Business Publishing Staff,

2017).

Consider the Ethical Context

While it is very important that a company respect the values of its host country, often

times ethical dilemmas make matters difficult. For example, what is Apple to do when it is

accused of condoning the operation of sweatshops in its Chinese factories, even though the

company saves a lot of money from the low wage working conditions? The sweatshop conditions

may be accepted by the workers, who see it as an opportunity to help out their families

financially. In this scenario, it is important to consider the ethical context of the situation.

American workers have to acknowledge the reality of the ethical dilemmas that they may be

confronted with when working with other cultures (Gentile, 2016).

This is where the managers come in. It is the managers job to conduct research about the

realities of the host country in order to understand what ethical issues their countries might

disagree on, such as bribing and giving gifts (Beauchamp, Bowie, & Arnold, 2013). It is very

hard for a company to address the ethical issues in another country when the manager has not

adequately prepared his team for the new culture. Furthermore, it is important for employees to

acknowledge the values of other cultures so that when these employees are interacting with

foreigners, they can connect with each other and form a meaningful relationship. Indeed, when

employees lack a basic understanding of the context of the culture their company immerses itself

into, it can lead to a whole lot of confusion, misunderstandings, and conflicts during

communication.

As mentioned earlier, a company ought not to violate its own laws and values for the sake

of adapting into the culture of its host country. At the same time, however, a company ought not
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to completely disregard the values and beliefs of the foreign country it is conducting business

with. This activity refers to a term called moral imperialism. As the Harvard Business Publishing

Staff (2017) suggested, there needs to be a balance between a company following the laws of its

home country and the company following the host country’s norms. One of the ways this balance

can be achieved practically during ethical dilemmas, is for the parties to consider the ethical

context of the situation, and act accordingly.

Use Action-Based Approach

It is not enough for a company to train its employees to respect the foreign culture and

consider the ethical context of cross-cultural issues. The managers can play a role in actually

showing the employees how to apply what they have learned to yield exceptional ethical

behavior. In order to fulfill this role, managers can use learning strategies such as simulations to

allow the employees to re-enact possible ethical issues that they may confront when interacting

with foreign workers at home or overseas (Francis, 2016). These simulations can involve

employees working in groups to rehearse an ethical dilemma, with one employee as an American

and the other a foreigner. The purpose of these simulations is for the manager to train the

workers to recognize ethical dilemmas and think of creative ways to solve them.

In this way, the workers can benefit more from the interactive simulations than from

mere ethical theory and policy. As the employees role-play different parties in ethical disputes,

what it does for them is help build their confidence to act ethically in ethical dilemmas, where

one must choose on the right course of action (Schermerhorn & Bachrach, 2015). In fact,

employees usually know the right thing to do, but many times they feel pressured to something

unethical instead.
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This occurrence is actually what Gentile (2016) found when presenting her new business

education program, “Giving Voice to Values to Indian entrepreneurs and business faculty. She

found that daily realities forced Indian employees to act unethically. As a result, when American

companies outsource their production in India, for example, the Indian workers may commit

unethical practices, such as disregarding safety violations or fraudulent behavior for the sake of

meeting demand. It is important for multinational corporations to take this into consideration

when addressing unethical practices in its host countries.

Furthermore, it is important for a company to not only train its employees to act ethically,

but to also create a workplace where its employees feel comfortable acting ethically. When the

workers feel comfortable doing the right thing in their home country, it is likely that they will

continue doing the right thing in the host country and discourage unethical behavior in its foreign

subsidiaries and markets. Considering this, the consequence of a company going overseas and

behaving unethically or disrespecting the host country’s laws and norms could mean the

company gets a bad reputation, either at home or overseas. The solution to prevent this type of

incident is for the manager to integrate an action-based approach to its business ethics training

policy in order to establish an ethics controls framework to minimize the risk or reputational loss

(Giles, 2015).

Form Global Partnerships and Alliances

The last thing a company can do to better apply international business ethics in its global

business is join other companies and organizations who have similar ethical pursuits. This can

involve companies making joint ventures with foreign companies (Kotler, & Keller, 2016). The

purpose of these partnerships and alliances is for the organizations to work towards essentially

reducing the corruption in their global markets. A benefit of forming these global partnerships is
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that a company can use one of the leaders or officials who it known for practicing ethical

behavior in the other organization to be a role model for the company’s employees to follow. It

really makes it simpler to understand ethical behavior when one can observe it from another

individual. These leaders could even act as mentors for some of the employees in the company,

who need to visualize how ethical behavior and values can be carried out in the workplace.

The companies that a manager reaches out to for partnership or potential mentorship for

its employees ought to be trusted and established international companies that operate abroad

(Harvard Business Publishing Staff, 2017). In this way, the employees traveling overseas for the

first time to relocate to the new location can gain insight from the individuals into how one can

maintain good, ethical character and make sound, ethical decisions. Another benefit of forming

global partnerships is that the companies can learn about what values they both have and

essentially operate in such a way to promote these shared values, such as quality over quantity

and high customer satisfaction (Baines, 2015).

Conclusion

Any multinational company like Walmart and Hyundai knows the importance of

understanding and adapting to the culture of their host country. Furthermore, entering into the

global market also means entering into an international arena where a company may be

confronted by diverse cultures with differing beliefs concerning ethical and unethical business

practices. Managers are tasked with the responsibility of guiding their employees through

organization change and relocation, by training them to understand different cultures as well as

the various ethical dilemmas its employees may face. Tips managers can use to actually apply

the ethical theory and business principles are as follows: Educate employees on the host

country’s culture so that they may come to respect the country’s values and recognize possible
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ethical dilemmas; utilize an action-based, practical approach to teach business ethics via

simulations and role-playing; the company can form global partnerships to advance the anti-

corruption agenda and further establish an ethical foundation for both companies.
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References

Baines, Peter. (2015). Doing good by doing good: why creating shared value is the key to

powering business growth and innovation. Wiley, John & Sons, Inc.

Beauchamp, T.L., Bowie, N.E., & Arnold, D.G. (2013). Ethical theory and business. (9th

Edition). Prentice Hall.

Francis, Ronald D. & Murfey, Guy. (2016). Global business ethics: responsible decision making

in an international context. Kogan Page.

Gentile, M.C. (2016, December). Talking about ethics across cultures. Harvard Business Review.

Retrieved from https://hbr.org/2016/12/talking-about-ethics-across-cultures

Giles, Steve. (2015). The business ethics twin-track: combining controls and culture to minimise

reputational risk. Wiley, John & Sons, Inc.

Harvard Business Publishing Staff (2017). Tips to better manage cross-cultural ethical issues.

Harvard Business Review. Retrieved from https://www.hbrascend.in/topics/tips-to-better-

manage-cross-cultural-ethical-issues/

Kotler, P. & Keller, K. L. (2016). Marketing Management. (15th Edition). Pearson.

Schermerhorn, Jr., J. R., & Bachrach, D.G. (2015). Management. Hoboken, NJ: John Wiley &

Sons, Inc.