International Business Ethics:

Values in Tension
 Competing Answers:
Cultural Relativism
According to cultural relativism, no cultures
ethics are better than any others.
The cultural relativists creed - When in Rome,
do as the Romans do.
The inadequacy of this approach becomes
apparent when the practices in question are more
damaging than petty bribery or insider trading.
Cultural relativism is morally blind.
 Ethical Imperialism
Ethical Imperialism directs people to do everywhere exactly as they
do at home.
It is based on the theory of absolutism:
There is a single list of truths,
They can be expressed only with one set of concepts,
and they call for exactly the same behavior around the world
Problems:
It clashes with belief that peoples culture must be respected
It presumes that people must express moral truth using only one
set of concepts.
It presupposes a global standard of ethical behavior
 Balancing the extremes:
Three Guiding Principles
Respect for core human values which
determine the absolute moral threshold for
all business activities
Respect for local traditions
The belief that context matters when
deiding what is right afd what is wrong.
 Defining the Ethical Threshold:
Core Values
Hard truths that must guide managers actions, and define
minimum ethical standards for all companies, for ex
the right to good health
the right to economic advancement anfd an improved
standard of living
the Golden Rule
They must include elements forund in both Western and
non-Western cultural and religious traditions.
 What Do These Values Have in Common?

Non-Western Western
Individual liberty
Kyosei (Japanese): Living
and working together for
the common good.
Dharma (Hindu): The Egalatarianism
fulfillment of inherited
duty.
Santutthi (Buddhist): The Political participation
importance of limited
desires Human rights

Zakat (Muslim): The duty

to give alms to the
Muslims poor.
 Overlapping consensus
Individuals must recognize a persons value
as a human being.
Indiviuals and communities must treat people
in ways that respect their basic rights
Members of a community must work
together to support anfd improve the
institutions on which the community depends
 Core Values
Respect for human dignity
Respect for basic rights
Good citizenship
These core values must be translated into
core values for business. What does it
mean for a company to be a good citizen?
 Core Business Values
Companies can respect human dignity by
creating and sustaining a corporate culture
in which employees, customers, and
suppliers are treated as people whose
intrinsic value must be acknowledged, and
by producing safe products and services in a
safe workplace.
 Companies can respect basic rights by
acting in ways that support and protect the
individual rights of employees, customers,
and surrounding communities, and by
avoiding relationships that violate human
beings rights to health, education, safety,
and an adequate standard of living.
 Companies can be good citizens by
supporting essential social institutions, such
as the economic system anfd the education
system, and by working with host
governments and otoher organizations to
protet the enviroonment.
 The core values establish a moral compass
for business practice
They help companies identify practices that
are acceptable and those that are intolerable.
 Creating an Ethical Corporate
Culture
Core values are not specific enough to guide managers
through actual ethical dilemnas.
Managers should be guided by precise statements that spell
out the behavior and operating practices that the company
demands.
90% of all Fortune 500 companies have codes of conduct.
70% have statements of vision and values.
In Europe and the Far East, the percentages are lower but
are rising rapidly.
 Codes of Conduct
Must provide clear direction about ethical behavior
when temptation to behave unethically is
strongest.
But, also must leave room for a manager to use his
or her judgment in situations requiring cultural
sensitivity.
Intl. managers who are not prepared to grapple
with moral ambiguity and tension should pack
their bags and come home
 Moral Free Space
How can a manager learn to distinguish a
value in tension with their own from one that
is intolerable?
There are two type of conflicts that typically
arise when countries have different ethical
standards:
conflicts of relative development
conflicts of cultural tradition
 To resolve a problem of relative development, a
manager must ask: Would the practice be
acceptable at home if my country were in a similar
stage of economic development
For conflicts of cultural tradition, there is a more
objective test. Managers must be able to answer
No to the following two questions:
Is it possible to conduct business successfully
in the host couontry without undertaking the
practice?
Is the practice a violation of a core human
value?
Guidelines for Ethical Leadership
Treat corporte values and formal standards of
conduct as absolutes.
Design and implement conditions of engagement for
suppliers afnd customers.
Allow forwign business units to help forlmulate
ethical standards and interpret ethical issues.
In host countries, support efforts to decrease
institutional corruptions.
Exercise moral imagination.
 Conclusion
Many people thing of values as soft, the truth
that everybody knows but nobody speaks.
However difficult to articulate, values affect
how we all behave. In a global business
environment, values in tension are the rule
rather than the exception.
Companies must demonstrate strong
commitment to a code of ethics .