Ethics in International Environments - Essay Example

Ethics in International Environments Introduction: The term business ethics refers to the moral principles and values, other than the rules and laws, determined and observed by the business communication at local, national and international levels while entering into any commercial activity as well as while dealing with the business community, political authorities, manufacturers, retailers, customers and end-users. It is a reality beyond suspicion that the individuals belonging to every profession establish and observe ethical values in their everyday life, and stick to such values for the preservation of their good name, sound reputation and intangible assets. “Ethics has”, the Columbia University Press views, “developed as people have reflected on the intentions and consequences of their acts. From this reflection on the nature of human behavior, theories of conscience have developed, giving direction to much ethical thinking”. (Retrieved from cup.edu.com) Case Background: In the article under study, the writers, Chen & Fletcher (2007) point out how cultural differences force international firms and corporations make immediate alterations in their strategies in order to combat with the prevailing cultural and regional divergences observed by the individuals belonging to one specific society or region. The case under study focuses upon the problems faced by a well-established and renowned Australia-based sheep exporting and meat processing company under the title “Samex”, which has been involved into business transaction with the Middle East businessmen and corporations for the last few decades. The Australian company launched its business on the foundations of international rules and values, but had to undergo ethical dilemma in the Arab countries due to the prevailing contradictory values. Consequently, it had to revise its business scheme while conducting the business in that region. Identification of Case Issues: The following issues are raised in the case under study: International business community maintains some particular business ethics, which are adopted by an overwhelming majority of corporate class. The Australian company Samex applied the same international ethics while conducting their business in the Middle East. Different communities and cultures contain different business ethics, which may be contradictory to the established international ethics. It is particularly the case with the Middle East. Cultural differences can be estimated on the basis of Hofstede’s index of cultural divergence, which describes variation in the cultural patterns of different societies. For example, people living in advanced countries give priority to individual achievements, while in developing countries people are bound in the tie of “we” feelings and collectivism. The Middle East displays prejudice, collectivism and strict rules and regulations, which is quite different from the corporate values of the western societies. The Middle East refuses to accept any product that carries even the slightest sign of deformity, low quantity or defect. Consequently, the Saudi Arabia, Egypt and the UAE refused to accept the sheep from an Australian company, an area that is the world famous region in respect of animal health. Since collectivism is strong and deep-rooted all over the Arab world, according to the Hofstede’s cultural index, Samex has to lay stress upon the high quality breed in order to enhance its export activities in the region. In addition, being highly prestigious and prejudiced nation, the Arabs look for the presence of the top management to enter into a business deal with them. (Chen & Fletcher 2007) The concepts of international ethics lay stress upon the awareness with the political, economic, social, environmental and cultural aspects of different regions. The international companies must keep in view the cultural values of the society in which the companies aim to launch their products or services. The same is the case with Samex, which lost a large share of its business due to non-familiarity with the cultural ethics of the Middle East. Hofstede’s framework is the most commonly applied national cultural framework in the fields of psychology, sociology, marketing, business and management studies, which is highly supportive in respect of understanding ethical values in the light of international business rules and principles. Hofstede’s framework is imperative in formulating hypotheses for comparative cross-cultural studies (Soares, Farhangmehr & Shoham, 2006). Formulation of Alternatives or Possible Solutions Based on a Solid Theoretical Platform: It is a fact beyond doubt that international companies devise business plans by analyzing different aspects of the market where they look for introducing or expanding their corporate activities. In addition, comprehensive revisions of the business plans are essential part of the strategic management of every firm. Consequently, the well-reputed company like Samex must estimate the reasons behind its business failure as well as volume shrinking of corporate activities in the Middle East, so that its ventures could be restored in that region, where people belonging to almost all parts of the globe arrive for business, job and trade activities. Samex should not blame its Arab counterparts as the sole responsible for the damage of its business; rather, it should try to adapt itself according to the changing market scenario, so that it could avoid total collapse in the region. It should make alterations in the light of the Kantian theory, which is as under: Theory of Business Ethics: Bowie (1999) has presented the Kantian theory of business ethics by focusing on the principles described by renowned German philosopher and thinker Immanuel Kant. According to this theory a business should be formulated on the principle of reciprocal feelings of respect for both the parties. In addition, there must be an atmosphere of trust and confidence, which should never be shaken at any cost. Moreover, since the business relationship is developed on the concrete foundation of honesty and integrity, no party should ever try to dodge or deceit the other. And in case, the parties to the contract belong to divergent religious, regional, ethnic, racial or cultural group, they should not criticize, hurt or humiliate one another on the basis of such differences. Kant is best known for defending a version of the “respect for persons” principle which implies that any business practice that puts money on a par with people is immoral, but there is much more to a Kantian approach to business ethics than this. (Bowie, 1999) The business partners, belonging to divergent countries, should analyze the cultural traits of one another, and must be friendly in highlighting the variation in the social and religious characteristics of their country, so that the other partner could familiarize himself with the region where his product or service is going to be introduced. The parties should never misguide each other in such a way that could bring losses to the other. In addition, another imperative business ethic is the broadmindedness of both the parties i.e. the parties must have the courage to ignore the minor faults and mistakes of their partner, so that the business deal could be carried on without any hurdle or interruption. The same is applied in the case under-study. Ethical Dilemma: The Middle East countries contain their independent social, cultural and religious values, and are very strict regarding the quality of the products they import. In addition, they do not let any foreigner enter into any business activity independently without the support and legal partnership with one or more local individual(s). In addition, the people of Middle East do not let the foreigners have access to the retailers and shopkeepers, which is the essential part of the business ethics of their region. Consequently, the entire region has encapsulated itself from the ethics prevailing in the rest of the world. It has aptly been observed in the third world countries that the bribery taken by foreign officials,  companies interference in ethnic and tribal conflict, violence, trade influence on other governments' domestic politics, perceptions of bribery effecting the exporters, international price fixing and monopoly of specific business community serves as the business dilemma for the foreign investment and trade. (Quoted in witiger.com) But the situation is entirely different in the case under-study. Recommendation or Choice of Solution based on a Solid Theoretical Platform: In the light of the Kantian Theory, the following recommendations are made for Samex meat processing and sheep exporting company of Australia: 1. Samex must enter its animal stock (i.e. live stock) into medical examination, so that the health condition of the export quality sheep must be certified in a proper and an adequate way. 2. The company must conduct an exclusive market research of the Middle East, so that the basic requirements of the general public could be accessed and achieved for the formulation of an effective corporate strategy for the future years to come. 3. Samex should enter into business relationship with the political authorities of the Middle Eastern countries, due to the very reality that collectivism is in vogue in the Arab region, and recommendations from the political authorities will allow business activities in the Middle East. Hofstede (2001) is of the opinion that in comparatively low-power distance nations, the decentralization of activities is more likely, as the middle and lower stratum of society seeks the approval from the elite and powerful stratum in such countries. 4. Somex should look into the traditions of the Middle East; if the Arabs have always been nagging and complaining towards the western companies, they should concentrate their services to some other area of the globe. Further, the Somex can involve the influential members of the Arab society for the approval of its product in the area. Moreover, the penetration into the existing racial, ethnic and religious groups may win unflinching approval for Somex. 5. In addition, the Middle East authorities must also review their so strict policy of negating altogether all the previous services rendered by the Samex Company in respect of providing their nation with a sizeable stock of healthy and hygienic fresh meat for several years. A broad thoughtfulness and friendly criticizing strengthen the corporate bonds; and obstinate behavior destroys both personal relationships and business partnerships subsequently. List of References: Bowie, N. E. Business Ethics: A Kantian Perspective. Oxford: Blackwell Publishers. 1999 Chen, Jun Wen & Fletcher, Richard. The Dilemma of Live Sheep Export 2007 Soares, Ana Maria, Farhangmehr, Minoo and Shoham, Aviv. Hofstede’s dimensions of culture in international marketing studies Journal of Business Research Volume 60, Issue 3, March 2007, 277-284 Science Direct. http://www.sciencedirect.com Columbia University Press Significance of Ethics (Retrieved from www.cup.edu.com) ETHICS - examples of ethical dilemmas and bribery situations (Retrieved from www. witiger.com/internationalbusiness/ethics.htm Summers, J. and Smith, B. 2006, Communication skills handbook, 2nd edition, John Wiley & Sons, Australia (CMD on the Blackboard Site) Read More