The Concept of Business Ethics - Essay Example

Different nations and cultures have different values and moral principles that form their ethics. Consequently, it can be said that the principle of business ethics is understood by different nations and cultures differently. So, the goal of the given work is to present thoughts and ideas on the impact of diverse national, cultural and universal understandings of business ethics. For this purpose it is worth to define the concept of ethics and business ethics in the first place. Trevino and Nelson (2006) widen the general definition of ethics (a set of moral principles and values) to a broader statement, defining ethics as “the principles, norms, and standards of conduct governing an individual or group” (Trevino and Nelson, 2006, p.17). Therefore, ethical or unethical business behavior of a group of people depends on a combination of individual values, principles and standards of behavior, which are followed by the individuals in that group. Such individual values and principles, in their turn, are shaped, to some extent, by the external environment. At the same time, it should not be forgotten that certain standards of behavior and decision-making are already prescribed by laws, regulations, codes of conduct and other, both international and local, documents. Globalization and, consequently, interdependence of countries’ economies and politics has helped to standardize and spread certain norms all over the world for them to be documented and imposed by local governments onto people and businesses. So, on a global level international organizations and local laws restrict moral obligations in business (Fieser, 2011). The world has managed to develop a set of moral rules that are to be followed by businesses and organizations. However, such globally accepted norms are rather general and their goal is, mainly, to prevent businesses from breaking criminal or civil laws. Though they do prescribe certain types of behaviors, they do not prevent entities from acting 100% ethically and morally. This problem probably lies in cultural differences of nations, which do not allow to develop a set of ethical and moral rules acceptable for all. The history proves this evaluation. For example, the communistic world-view was trying to impose one set of values on a great number of nations. Among communistic goals was total centralization of nearly all of the state systems (economy, manufacturing, transportation, etc.), and equal opportunities for all (Marx, 1848). The system of the Soviet Union attempted to totally change the lifestyles of hundreds of nations, each with own culture, traditions and ethics. However, as it can be seen today, the attempt failed; the Soviet people never became one nation, as it was planned, and still have very different social, moral and ethical norms. Though Communist morality was claimed to be the morality of freedom (Kamenka, 1972, p.178), it failed to succeed because was being artificially imposed onto people and did not appeal to their internal world. That morality was prescribed by the state and did not take into account such individual qualities and differences of people as ethical decision-making style, cognitive moral development, locus of control, Machiavellianism and moral disengagement (Trevino and Nelson, 2006, p.76). Such moral indoctrination, as Kamenka outlines, “can generate nothing but slaves” (Kamenka, 1972, p.179). So, it is rather difficult to develop a universal set of ethics. As for national and cultural understandings of business ethics, it can be said that ethics do vary in time and in different cultures. Slave trade, for example, was not viewed as unethical in previous centuries and was pretty common for many world nations. However, with time ethics changed and today slavery is considered unethical. Another bright example is a society in the Dobu Islands in the Pacific, in which ill will and treachery are virtues (Baker, 2007, p.8). Baker (2007, p.8) outlines that business ethics do depend on cultural differences in values. For example, Western societies are more self-centered while Asian nations favor group action. These differences, as a result, form different understandings of business ethics and different business practices. “Every nationality and every epoch, and likewise every class, possesses its own morality, which is always a product of social psychology”, writes Lev Vygotsky (1926). Since social environment is what shapes moral and ethical principles of individuals, social environment determines business behavior of companies that operate in this environment. Different cultures, therefore, form different moral and ethical norms for business behavior. Furthermore, “culture and ethics are interrelated and intertwined” (Shakeel et al, 2011, p.68), so it is often difficult to determine which particular factor is more influential for the decision-making process in each particular situation. National culture has a very significant effect on business ethics, so businesses should always take into account cultural peculiarities of the nations they work with. At the same time, though national and cultural characteristics of the society impact that society’s perception of ethical issues, certain ethical norms brought from other societies have influence on the initial culture. For example, a US-based company that decides to work abroad has to consider and account for cultural differences. However, the norms and practices of corporate culture will be influencing behavioral patterns of the locals in the host country. This trend has both positive and negative outcomes. On one hand, it is good when a company introduces high ethical and moral norms to the host society. On the other hand, companies frequently face the risk of lowering own standards as a result of accepting ethical norms of the host nation. To sum up, it is worth mentioning that moral and ethical dilemmas are a frequent problem that companies face working in foreign markets and cultures. However, international guides, like the Global Compact of the United Nations, help businesses to orient and direct their internal corporate cultures in such a way that they bring local cultures to higher, closer to international, levels of ethical awareness. Similarly, ethical rules of organizations will be continuously re-settled or re-described as external environment changes. It can be assumed that such rules will be improving and changing to better because ethical behavior of a business is one of the determinants of that company’s success and level of competitive advantage. References Baker, W., 2007. A Reflection on Business Ethics: Implications for the United Nations Global Compact and Social Engagement and for Academic Research. Commissioned Paper for the UNESCO Forum on Higher Education, Research and Knowledge. Available Online at: http://portal.unesco.org/education/es/files/53748/11840802765Baker.pdf/Baker.pdf [Accessed 03/12/2011] Fieser, J., 2011. Business Ethics. Available Online at: http://www.utm.edu/staff/jfieser/vita/research/busbook.htm [Accessed 03/12/2011] Kamenka, E., 1972. The ethical foundations of Marxism, 2nd ed. Routledge. Marx, K., 1848. Manifesto of the Communist Party. Available Online at: http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ [Accessed 03/12/2011] Shakeel, M., Khan, M.M. and Khan, M.A., 2011. Impact of culture on Business Ethics, Far East Journal of Psychology and Business, 3(2), pp.59-70. Trevino, L. and Nelson, K., 2006. Managing Business Ethics: Straight Talk About How To Do It Right, 5th ed. Wiley. Vygotsky, L., 1926. Educational Psychology. Available Online at: http://www.marxists.org/archive/vygotsky/works/1926/educational-psychology/ch12.htm [Accessed 03/12/2011] Read More