Managing business ethics in China - Essay Example

?Managing Business Ethics in China In the modern day business world, a manager needs to ensure adherence to business ethics in a firm’s quest for profiteering motives. However, recent developments have resulted in varied definitions of ethics, and each person has to use own judgement to differentiate between ethical and unethical practise. Moreover, the capacity of a business to adhere to ethical expectations is dependent on political, social, economic, and environmental factors of a market. This means that a firm should balance its business practice with environmental and social responsibility, and in adherence to the ethical guidelines stipulated by the government in the country of operation. In essence, the highest level of ethical practice involves business practices that aim to ensure economic, environmental and social sustainability (Duska, 2007). This essay discusses the causes for ethical concerns in the Chinese economy, effects of business ethics on various aspects of society, and the role of a business manager in the management of business ethics in the Chinese economy. Statement of the Problem The Chinese economy is characterized with widespread criticism on high levels of unethical practices; including corruption that is touted to be the most detrimental factor of the economy. However, recent changes have seen a change in focus to adherence to ethical guidelines by managers, most of whom are learning how to incorporate the system into their businesses without seeming to suffer from the alienation by western values. The Chinese investors insist on charting their own path to ethical practice despite the assimilation of various western characteristics into its economic system. On august 26, 2010, Landau reported on BBC about a businessperson who tried to incorporate Christianity as a tool to entrench ethical practice among his employees, mainly by encouraging his employees to convert to the Christian faith. While this practice is not illegal, it brings up the question of how far managers can go to ensure ethical practises in their firms (Landau, 2010). Factors Influencing Ethical Practice in China Many factors have been blamed for the widespread unethical practices in China, but the most outstanding ones are philosophical beliefs, globalisation and the rapid changes that the Chinese economy undergoes. Philosophical Beliefs The main philosophical approaches taken by the Chinese are Confucianism, Taoism and Buddhism, all of which are based on the teachings of prominent thinkers who resided in the Far East. Confucius, the father of Confucianism, taught that the first obligation of every person is to the family, such that everyone is expected to take care of the needs of family members and close friends before extending favours to others. While this is a convenient way of living in day-to-day life, the philosophy may be destructive in the business world, as managers tend to hire their family members regardless of their qualifications. This has resulted in poor quality of Chinese products; erosion of work ethics since a favour leads to another, and the cycle goes on despite detrimental effects to the economy. However, this does not mean that Confucianism only has negative effects on ethics; in fact, if applied correctly, the philosophy has three main aspects that promote ethical practise. These include the teachings on obedience, following laid down guidelines, and humanity (Suen, Cheung and Mondejar, 2007). Taoism incorporates the principles of learning the details of one's profession for improved workmanship, and promotion of maximum good for the greatest number of people. In addition, Taoism results in increased efficiency at the workplace though this is not the prime concern of the philosophy. Buddhism is the philosophy that encourages business personality to respect and preserve the business environment; and to create a healthy relationship between the business and the community around it. Any manager intending to do ethical business in China has to have an understanding of the perceptions of employees to ethics; therefore, it is necessary to put into account the effects of philosophical beliefs on employee perceptions (Schulman, 2010). Globalisation Chinese firms have undergone rapid globalisation in the recent years; such that firms based in China have a high influx of foreign workers, and other Chinese firms have secured contracts in other countries. This means that the traditional setup of Chinese firms that consisted exclusively of Chinese workers has been disrupted, and nowadays the managers of Chinese firms have to deal with employees with varying morals, beliefs and perceptions. Some managers opt to reduce the extent of diversity by hiring employees with certain characteristics, but since the ethical validity of this is questionable, firms are opting to hire employees as they are, then create an environment that encourages them to change to suit the needs of the management (Schulman, 2010; Pinnington, Macklin and Campbell, 2007). Changes in the Chinese Economy In the recent past, China was a rapidly emerging economic giant, and its financial muscle had not been in existence for long enough for there to be clear guidelines on what business personalities could do or not do with their investments. Therefore, it did not matter what one did as long as a firm retained a competitive edge. In addition, the possibilities of immense economic gain acted as stimuli for corruption and other unethical practises as managements strived to grab benefits before everyone else. However, at the end of 2011 and start of 2012, the Chinese economy experienced a decrease in the rate of growth; and firms had to save on whatever resources they could garner to avoid an imminent collapse. This led to retrenchment of workers, and stakeholders claim that some of these retrenchments were not performed in a transparent manner (Franciois, 2004). Business Ethics and Society Every manager must strive to maintain the highest levels of business ethics but according to the market environment in China this is not easy to do, as the definitions of ethics vary with every person, community and country. However, some guidelines could be followed to ensure that business motives are in line with the political, economic, social, and other factors of the Chinese market. Politics The Chinese government censors the use of some words like freedom, independence, democracy and demonstration in websites; therefore, if a manager is doing online business, then it is prudent to avoid words that may aggravate the ruling body of the host country. Firms like Microsoft, Yahoo, Cisco Systems and Google followed the expectations of the Chinese government before some including Google withdrew due to alleged misalignment of the censorship requirement with its company policy. This means that before venturing into a market, a firm should be aware of the implications of the investment, especially since it would be against the law to go against another country’s government. These requirements may be politically motivated, but even if a firm should practice corporate social responsibility, there is no reason of interfering in the governance mechanism of another country. In any case, a firm is a profit making body and not a human rights organisation; however, this should not be a reason why the management of a firm should engage in corrupt practises. For instance, if a manager decides to give kickbacks in return for business favours, then that is unethical practise since ethics expect a manager to operate with maximum integrity (BBC News, 2006). Environment Chinese firms have been accused of being some of the highest contributors to environmental degradation, mainly by releasing greenhouse gases from manufacturing industries. However, many stakeholders argue that most of these products are manufactured for western economies, and western countries should take responsibility for these emissions. While firms are busy arguing about who takes the blame, environmental degradation continues without limitations; a responsible manager should strive to reduce the carbon footprint of his or her firm. This can be achieved by using alternative fuels and limiting wastage of energy generated from non-renewable sources. Since many machines were built to work with fossil fuels, a manager should endeavour to use fuels with minimum emissions, and perform regular maintenance of equipment to maximise efficiency. Moreover, the firm should harness renewable sources of energy like solar and wind and use the energy in tasks like heating of water and generation of electricity. Moreover, firms should invest in recycling facilities that ensure maximum usage of polluting resources before their final disposal into the environment (Robotham, 2005: 45; Weiss, 2009). Society An ethical firm should result in improved social interactions among the people and aim to improve the quality of life in the surrounding community since the latter is home to potential employees and clients. The major approach to doing this is investing in society-based corporate social responsibility, whereby the firm sponsors projects that aim at improving the quality of life of residents. A perfect example of this is investing in projects that give locals an additional source of income, or increase the frequency of interaction between the members of the community. Before investing in such ventures, a firm’s management should conduct a background study to establish the needs of the community; by offering solutions to communal needs, a firm presents itself as a dependable partner of the people in their quest to make life better. Corporate social responsibility is the firm’s way of giving back to the community that forms the centre of its business practice (Pinnington and Lafferty, 2002). Technology Technological advancements have reduced the cost of acquiring new technologies, and every firm can acquire advanced information technology tools in an attempt to increase the efficiency and effectiveness of its business activities. Despite the obvious benefits of adoption of technology, there are shortcomings as well; most of which are because of the effect of adoption of technology on job opportunities. Automation of routine practises by adoption of information technology has resulted in loss of jobs for some levels of workers, which leaves a manager in a dilemma on the approach that one should take when reducing the unnecessary workforce. Moreover, the task becomes more difficult has one has to balance gender, religion, race and other differences among employees in order for the retrenchment process to be fair and not expose workers to unnecessary suffering (Hulpke and Lau, 2008). Economy Changes occurring in the Chinese economy pose a management problem to a manager, as one has to satisfy stakeholder needs; by ensuring that shareholders get profits; customers get quality products and services; and employees derive wages and satisfaction at the workplace. This is tough considering that the management of any firm has to minimise costs and maximise profits in the face of uncertain economic trends. A firm should make it clear to shareholders that it will do everything possible to secure them profits, but under no circumstances would the firm jeopardise the welfare of employees or the satisfaction of clients in its pursuit for profits. Ethical practice when dealing with internal and external stakeholders is just one of the components of ethics in management, when doing business deals, all practises should be transparent (Hulpke and Lau, 2008). Conclusion The business environment in China is characterised with extensive unethical practise mainly due to the rapid changes, philosophical beliefs, and globalisation; all of which have no set rules that by which firms should abide to remain ethical. Ethical practice is influenced by and has effects on a country’s economy, politics, society, technology and other aspects of daily life; therefore, a firm should ensure to balance between promoting the positive side of these aspects of life and making profits. The best way to do this is by practising responsible and sustainable corporate social responsibility. In addition, the firm cannot afford to ignore the role of the local people in the business environment, and all efforts should be geared towards aligning the goals of the firm towards the betterment of the community. In addition, there should be an effort to align the goals of all stakeholders to the strategic objectives; thereby individuals, firm and society will work towards the promotion of ethical practice. Recommendation Beliefs are the main motivators of people’s actions; and management should strive to understand the beliefs behind people’s actions such that these beliefs can be harnessed for ethical workmanship. For instance, no one should underestimate the role of religion in ethical practice, especially since all religions follow similar guidelines. Therefore, a manager should consider all factors of everyday life that may be beneficial in promotion of the ethics of transparency, accountability and integrity at the workplace (Gilgoff, 2011). References BBC News (2006) Net firms criticised over China, BBC World News, viewed 21 March 2012, . Duska, R. (2007) Contemporary reflections on business ethics, Springer, Boston. Franciois, J. (2004) A treatise on efficacy: between western and Chinese thinking, University of Hawaii Press, Honolulu. Gilgoff, D. (2011) How Davos found god, CNN.com, viewed 21 March 2012, . Hulpke, J., & Lau, C. (2008) ‘Business ethics in China: a human resource management issue’? Chinese Economy, vol. 41, no. 3, pp. 58 – 67. Landau, C. (2010) Christian faith plus Chinese productivity, BBC News, viewed 21 March 2012, . Pinnington, A. H., & Lafferty, G. (2002) Human resource management in Australia, Oxford University Press, Melbourne. Pinnington, A. H., Macklin, R., & Campbell, T. (2007) Human resource management: ethics and employment, Oxford University Press, Oxford. Robotham, D. (2005) Political economy: a handbook of economic anthropology, Edward Elgar Northampton. Suen, H., Cheung, S.O., & Mondejar, R. (2007) ‘Managing ethical behaviour in construction organizations in Asia: how do the teachings of Confucianism, Taoism and Buddhism and globalization influence ethics management’? International Journal of Project Management, vol. 25, pp. 257–265. Schulman, M. (2010) Business ethics in China, Santa Clara University, viewed 21 March 2012, . Weiss, J.W. (2009) Business ethics: a stakeholder and issues management approach with cases, South-Western Cengage Learning, Mason. Read More