Business Result

Reading Comprehension

Unit 11. Entertainment.

Text 2. (Intermediate)

International Business Ethics

1.When business are engaged in multinational activities, a variety of important issues arise that do not have the same easy answers as are offered by doing business in only one location. Because of this dilemma that is increasingly worrying the large multinational corporations, international business ethics has arisen to help address these complicated subject matters. International business ethics attempts to deal with questions of what to do in situations where ethical morals come into conflict as a result of the differing cultural practices.

2.There are many international business ethics discussions going on that believe the question of how to behave in the home country versus the host country are the central point. People in favor of behaving according to socially accepted morals of the host country show respect both to the citizens and the culture of the hosting country in which the business is conducting affairs. Such an argument would tell the business to follow the ancient world adage: When in Rome, do as the Romans do, not simply for etiquette, but also for business ethics. The other side of the argument concerns the questions of what a business representative should do when socially accepted norms are morally unaccepted to the cultural values of the business' home. As an example, in many Latin American countries, bribing public officials is necessary for doing business. Does this let the multinational corporation representatives doing the same out of respect for the host country, or instead argue against participating as it is morally unaccepted to the home country of the business in question?

3.A middle ground approach appears as central to international business ethics. This lies in creating a list of internationally accepted morals that should be consulted in the performance of multinational business dealings. As an example, the United National Global Compact, or the older UN Universal Declaration of Human Rights, would be put forward as an appropriate conduct guide for international business ethics. The United Nations Global Compact encourages business everywhere to respect and honor the internationally accepted human rights, to uphold the right of collective bargaining, to avoid being involved with human rights' abuses, to have no part in compulsory human labor, to do away with child labor, to support a caring and cautious approach to the environment, to reduce any kind of employment discrimination, to encourage the creation of technologies that are friendly to the environment, to encourage more significant personal environmental responsibility, and to work to damage corruption in all of its many ugly appearances, such as bribery and extortion.

Other justice or moral ground theories create different lists of ethical practices for multinational corporations conducting business in countries withlower levels of development. One source, DeGeorge, called in 1993 for ten guidelines for the behavior of multinational corporations in other countries. Among these were avoiding harm, honoring human rights, affecting good, respecting local cultures, accepting the responsibilities for individual behaviors, working fairly with honorable institutions and governments, and ensuring that dangerous technologies and factories are made safe for workers and the community.

4.Although such intentions are good and honorable, there are still three different problems with such approaches to international business ethics. First, they ignore or avoid the reality of competition. A real life example involves a company trying to do business honorably in a country that takes and accepts bribes as a regular part of doing business. The business wants to help improve the environment as they do their business, but refuses to pay the government officials bribes. Licenses can not be secured form the governmental officials since no bribes are paid. Market share begins to erode, along with the purpose for having operations placed in the country, as competitors without scruples pay their bribes without any moral restrictions. The company will have to decide which moral is more important, refusing to support corruption in paying bribes, or staying to help improve the environment and employ the locals through paying the necessary bribes.

A second limitation to such list approaches lies in them only imitatating the home country versus host country question that they are supposed to answer. Since the one list advocated working with just institutions and governments, the argument comes full circle again. Whose morals or sense of justice will determine if such entities are just and should be cooperated with or not?

Finally, respect for moral norms and local cultures have to come from some culture's concept of justice. Those of the west for ethics, fairness, and justice in general are the ones that are commonly sourced. Problems between host and home countries must be resolved by some culture's guidelines, whether Western or non-Western.

5.Yet another arena for strong requirement of ethics would be when multinationals bargain to take advantage of international differences; For example when rich nations outsource their services to poor and developing nations at cheaper cost. Western nations were up till recently outsourcing many of services to third world nations where they could hire manpower for the cheapest prices. This led to a severe competition between developing nations with each one offering cheaper labour than the other.

6.Dumping is yet another way by which large companies are trying to kill the domestic players. Foreign players often sell goods and services at a cheaper price making it hard for the small players to survive the competition. The bigger threat here is the resulting monopoly which places the customer in a losing position. The international trade commission began for its search of its anti dumping laws from the year 2009.

7.All these are ways in which business at the international level can lead to ethical dilemmas. In absence of international business ethics it may become almost impossible to regulate business and create winning situations for people in the market place.

8.As the process of globalization has increased its pace and depth, the problem and need for international business ethics has only intensified. With falling communication and transaction costs that are encouraged by telecommunication and computer technology advances, the global market has recently become a truly global marketplace. Multinational business is more often the standard and not the exception. This is particularly the case where the production of cars, clothes, shoes, and commodity types of goods are concerned.

http://www.crimeradius.com/International_Business_Ethics