DEPARTMENT OF BUSINESS MANAGEMENT

BUSINESS ETHICS AND SOCIAL RESPONSIBLITY

GROUP ASSIGNMENT

Group Members

Bethlehem Tefera----------------ID.No.1592/21

Seble Getaneh--------------------ID.No.0851/21

Mintwab Workie----------------ID.No.1020/21

Melaku Alemu-------------------ID.No.1836/21

Kalab Tesfaye-------------------ID.No.2263/21

Genet Kassa---------------------ID.No.0817/21

Alemu Feleke--------------------ID.No.1001/21

Yohannnes Asmamaw-------- ID.No.2210/21

Submitted To: Mr. Tesfaye

October 2023
MENBERS CONTRIBUTION

1. Bethlehem Tefera----------------ID.No.1592/21 :-Document preparation and

write up
2. Seble Getaneh--------------------ID.No.0851/21:-source document collection
3. Mintwab Workie----------------ID.No.1020/21:-contributors
4. Melaku Alemu-------------------ID.No.1836/21:-contributors
5. Kalab Tesfaye-------------------ID.No.2263/21:-contributors
6. Genet Kassa---------------------ID.No.0817/21:-contributors
7. Alemu Feleke--------------------ID.No.1001/21:-contributors
8. Yohannnes Asmamaw-------- ID.No.2210/21 :-contributors
Table of Contents
INTRODUCTION................................................................................................................................... 2
THE IMPORTANCE FOR MANAGING DIVERSITY MATTERS ........................................................ 3
THE CORE DIMENTIONS OF CULTURE ............................................................................................ 4
Identity ............................................................................................................................................... 4
Power ................................................................................................................................................. 4
Gender ............................................................................................................................................... 5
Uncertainty ........................................................................................................................................ 5
Time ................................................................................................................................................... 6
THE ROLE OF LEADERSHIP IN A CORPORATE/ORGANIZATIONAL CULTURE ......................... 6
THE MAIN PROSPECTS AND CHALLENGES OF ETHICS FOR MNCs ............................................ 7
BASIC ETHICAL PRINCIPLES............................................................................................................. 9
SUMMARY .......................................................................................................................................... 10
REFERENCES...................................................................................................................................... 11

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 INTRODUCTION

Ethics and culture are important because they shape the way we interact with each other and the
world around us. Ethics refer to the principles and values that guide our behavior and decision-
making, while culture refers to the shared beliefs, customs, practices, and social behaviors of a
group or society. Together, ethics and culture help to establish a sense of order and stability in
society, and provide a framework for how we should treat others and live our lives. Additionally,
they can also help to promote fairness, justice, and respect for the rights and dignity of all
individuals.

Culture impacts how local values influence global business ethics. There are differences in how
much importance cultures place on specific ethical behaviors. For example, bribery remains
widespread in many countries, and while people may not approve of it, they accept it as a
necessity of daily life. Each professional is influenced by the values, social programming, and
experiences encountered from In global business ethics, people try to understand what the ethical
action is and what the normal practice might be. If these are not consistent, the focus is placed on
how to encourage ethical actions. These collective factors impact how a person perceives an
issue and the related correct or incorrect behaviors. Even within a specific culture, individuals
have different ideas of what constitutes ethical or unethical behavior. Judgments may differ
greatly depending on an individual’s social or economic standing, education, and experiences
with other cultures and beliefs. Just as in the example of bribery, it should be noted that there is a
difference between ethical behavior and normal practice. It may be acceptable to discriminate in
certain cultures, even if the people in that society know that it is not right or fair. In global
business ethics, people try to understand what the ethical action is and what the normal practice
might be. If these are not consistent, the focus is placed on how to encourage ethical actions.
 THE IMPORTANCE FOR MANAGING DIVERSITY MATTERS

According to the study conducted by Beda; et al., (2014) on Workforce Diversity Management:
Biggest Challenge Or Opportunity For 21st Century Organizations suggests Management being a
social discipline deals with the behavior of people and human insight. Hence, workforce
diversity is the biggest challenge and at the same times the biggest opportunity for the 21st
century managers. "Diversity Management" is a strategy to promote the perception,
acknowledgement and implementation of diversity in organizations. Workforce diversity has
significant implications for the management. The managers will be required to shift their
approach from treating each group of workers alike to recognizing differences among them and
following such policies so as to encourage creativity, improve productivity, reduce labor
turnover and avoid any sort of discrimination. Successful diversity management policy and
program will eventually make a huge difference in the communication among employees and the
general productivity of the organization. Today‘s organization need to recognize and manage
workforce diversity effectively.

Globalization and trade liberalization which has enhanced the mobility of factors of production
from one nation to another easier has created a global market with most organizations speedily
becoming diversified. Most workplaces are now heterogeneous rather than homogenous and
having difference in people in terms of age, gender, ethnicity, culture, skills, profession etc.,
working in the same organization. Such workforce diversity helps in creating a learning
organization through cross fertilization of ideas and knowledge. Workforce diversity brings
about higher productivity and business performance in the workplace as people skills and
competences are synergistically brought together for optimal performance of the firm. The
emerging issues in workplace diversity are the emergence of a learning organization through
integration of talent pool, higher productivity, communication, relationship building and
multicultural work orientation.

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 THE CORE DIMENTIONS OF CULTURE

According to Hofstede (2001), the five main dimensions are identity, power, gender, uncertainty,
and time. You can think about cultural value dimensions on a scale or a continuum, where one
aspect of the value lies on one side of the scale and the other extreme lies at the other end of the
scale.

Cultural value dimensions help you to understand culture and to be able to make sense of culture.
These dimensions provide you with a perspective of culture for yourself as well as a perspective
of how others perceive their culture. All cultures experience these dimensions of difference in
many ways, and different cultures solve these differences in many ways. Becoming aware of
these concepts helps you to figure out the experiences you have in relation to your culture. It
helps to make that experience less ambiguous and threatening. Cultural value dimensions
provide clarity and a starting place for cultural awareness. However, they are often seen as
intangible and under the waterline, but once you adapt to the cultural dimensions, you become
more comfortable and do not see the cultural difference.

Identity

The value dimension of identity refers to the attention of groups or individuals toward group
needs versus individual needs as well as toward individual achievement and interpersonal
relationships.

Power

Hofstede defined power distance dimensions as maintaining strict rules that establish the types of
relationships individuals have with one another. Power represents the level of inequality and
equality, as well as the level of hierarchy and upward mobility, within a cultural group. In regard
to leadership, power dimension can also represent a culture’s tendencies toward authority, on one
end, and one’s orientation toward laissez-faire leadership, on the other. Hofstede found that low-
power-distance cultures emphasized equality and minimized power and status.
Gender

Hofstede (2001). Describes the value dimension of gender as representing two paradigms of
thinking and practice about the world in relation to traditional values associated with gender
roles. Gender refers to the culture’s tendencies or orientation toward enforcing or reinforcing
masculine and feminine roles in work. Masculine cultures tend to emphasize ambition, control,
competition, assertiveness, and achievement, whereas feminine cultures emphasize nurture, care,
sharing, quality of life, and relationships. Sometimes these values are expressed as the “quantity
of life” and the “quality of life.”

In his findings, Hofstede indicated that cultures that rate high in masculinity, such as Japan,
Austria, Venezuela, and Italy, revealed a high proportion of males in dominant structures; in low
masculine cultures, such as Denmark, Norway, Netherlands, and Sweden, women were treated
more equally in their social systems.

It is important that you recognize that these values are not associated with being male or female.
In other words, this does not mean that men cannot be part of feminine cultures or that women
do not orient themselves toward “masculine” cultural values. Finally, like other value
dimensions, gender dimensions can vary greatly within any culture.

Uncertainty

The dimension of uncertainty emphasizes cultures that are either oriented toward uncertainty or
toward creating certainty and stability. Hofstede described this as a society’s tolerance for
ambiguity.Hofstede (2001). Societies that are in high uncertainty avoidance are rule-bound and
pay more attention to written procedures, rules, or goals. Individuals who have a higher need for
formalized structures, procedures, or diplomacy tend to minimize their uncertainty levels in order
to cope with the unknowns of their situations. Someone who is on the other extreme of the
dimension is more relaxed about the rules and procedures; they are more flexible in their
attitudes toward rules and policies.

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Time

The dimension of time speaks to how communities are oriented toward space and time, including
their tendencies toward traditions and the past, and their orientation toward the future and the
present. In many cultural systems, holding on to traditions is important in current day-to-day
operations and relationships. Some societies will refer to traditions to preserve and maintain
cultural norms, that is, to protect what currently exists.

THE ROLE OF LEADERSHIP IN A CORPORATE/ORGANIZATIONAL

CULTURE

Creating an effective workplace culture starts from the top; however, it cannot be done alone.
Leaders should lay out the foundation that they want employees to embody, but the team must
come together to live and share the culture. Leaders must make culture a top priority to
effectively create the workplace they envision.

Leadership plays an integral role in creating and maintaining an organizational culture. Leaders
can foster a culture of collaboration by setting examples of trust and respect, encouraging
dialogue and team decision-making. They can create an environment of innovation and growth
by promoting risk-taking and fostering a learning environment. Additionally, leaders can
facilitate employees’ career development opportunities and reward them for their
accomplishments, creating motivation and engagement. By creating an environment of trust and
understanding, leadership can have a strong positive impact on organizational culture

The importance of the interaction between culture and leadership cannot be overstated.
Leaders need to take the time to get to know a company’s culture, values, and goals to ensure
their leadership style is a match. Misalignment can lead to disastrous results, as we often see in
the business world.
 THE MAIN PROSPECTS AND CHALLENGES OF ETHICS FOR MNCs

The maxim “Ethics must be global, not local” provides context for evaluating ethical issues that
arise internationally. It also helps us to remember that values are the core component of a
universal ethical framework. In short, business ethics should be steadfast and universal no matter
where you are in the world.

Regardless of the corruption levels of the host countries in which a company is operating or
where its home country ranks in Transparency International’s Corruption Perceptions Index, the
company and its employees should act in an ethical manner. Therefore, if a company is
international, then its code of ethics—as well as the IMA Statement of Ethical Professional
Practice—applies to all locations where that company operates.

In international business, many companies operate according to the phrase “When in Rome, do
as the Romans do,” which means that when operating in a host country, you adopt that country’s
cultural norms, ethics, and business procedures. To some degree, it makes sense to mold your
company’s culture to best fit the local area. It’s important to understand cultural differences, but
you should never compromise your company’s core ethical values.

Ethical and socially responsible conduct of a multinational corporation (MNC) is an important

concern in strategic management. Ethical conduct, usually beyond the legal conduct, can be an
important requirement for MNCs in most countries. Socially responsible conduct is similarly a
most desirable activity. Expectations of both ethical conduct and socially responsible conduct
can vary in cultures of different countries. Despite pressures of customizing because of the
cultural relativism of ethics and social responsibility, there is a growing need of improved global
approach by MNCs on these two dimensions.

A MNC‟s social and cultural environments, as they change from time to time, should have a
bearing on the MNC‟s ethical and socially responsible conduct. An MNC „s social and cultural
environments comprise at three tiers:- global, regional and host country. Thus, an MNC must
take into account the stakeholders at the three tiers as it formulates core ethical and socially
responsible goals and strategies at the levels of MNC headquarters (HQ), region and host
country.

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Some ethical challenges faced by multinational corporations (MNC's) in today's world are given
below:

 Unethical business practices: It's very important for MNC's to track their ethical activities
in different countries. Some unethical business activities that might be conducted by
MNC's are employee's exploitation, dishonesty in transactions, and manipulation of
accounting information, price discrimination, and faulty documentation.
 Unfair treatment of employees: Many MNC's are very particular about their human
resources principles and follow all the ethical codes of conduct that they've laid out.
However, there are some MNC's in different countries which may engage in
discrimination with their employees on the basis of gender, color, and even caste, in
cultures like India. More developed countries are very strict about discrimination; to
handle this, the MNC's develop various policies to reduce such discrimination in their
business and hiring practices.
 Environmental pollution: The main motive of MNC's is profit maximization, so because
of that, there can be a tendency to exploit the environment's resources and thus neglect
the problems that can be brought about by this exploitation, such as pollution. Also, the
governments of many countries develop laws, policies, and even create incentives (like
tax breaks) for MNC's to take the responsibility for sustainable development and
environmental protection.
 Child labor: Nowadays, many countries have laws in place that restrict child labor from
existing, as well as take strict action against illegal child labor that occurs regardless.
Thus, child labor prevention can become a very significant ethical challenge for MNC's.
 BASIC ETHICAL PRINCIPLES

The expression "basic ethical principles" refers to those general judgments that serve as a basic
justification for the many particular ethical prescriptions and evaluations of human actions.
Three basic principles, among those generally accepted in our cultural tradition, are particularly
relevant to the ethics of research involving human subjects: the principles of respect of persons,
beneficence and justice.

1. Respect for Persons - Respect for persons incorporates two ethical convictions: first, those
individuals should be treated as autonomous agents, and second, that persons with diminished
autonomy are entitled to protection.

2. Beneficence - Persons are treated in an ethical manner not only by respecting their decisions
and protecting them from harm, but also by making efforts to secure their well-being. The term
"beneficence" is often understood to cover acts of kindness or charity that go beyond strict
obligation. In this document, beneficence is understood in a stronger sense, as an obligation. Two
general rules have been formulated as complementary expressions of beneficent actions in this
sense: (1) do not harm and (2) maximize possible benefits and minimize possible harms.

3. Justice - The concepts of justice are commonly understood as (1) to each person an equal
share, (2) to each person according to individual need, (3) to each person according to individual
effort, (4) to each person according to societal contribution, and (5) to each person according to
merit. Conceptions of justice are relevant to research involving human subjects. For example, the
selection of research subjects needs to be scrutinized in order to determine whether some classes
(e.g., welfare patients, particular racial and ethnic minorities, or persons confined to institutions)
are being systematically selected simply because of their easy availability, their compromised
position, or their manipulability, rather than for reasons directly related to the problem being
studied.

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 SUMMARY

Generally, international business is characterized by a diversity of cultures, customs, and

professional practices. When participants in global business hold ethics in the highest regard, this
promotes trust and better connections and interactions between different cultures. When you visit
another country, you may not know all of the business practices, customs, or etiquette, but you
can build a good reputation if you demonstrate a strong commitment to ethics.
 REFERENCES

1. Jain, T., & Pareek, C. (2019). Managing cross-cultural diversity: Issues and challenges.
Global Management Review, 13(2), 23-32.
2. Novo, C. M. (2014). Managing diversity in post neoliberal Ecuador. The Journal of Latin
American and Caribbean Anthropology, 19(1), 103-125.
3. Gairola, S., Sharma, J., & Bedi, Y. S. (2014). A cross-cultural analysis of Jammu,
Kashmir and Ladakh (India) medicinal plant use. Journal of Ethnopharmacology, 155(2),
925-986.
4. Tan, J. (2009). Multinational corporations and social responsibility in emerging markets:
Opportunities and challenges for research and practice. Journal of business ethics, 86,
151-153.

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