GLOBAL BUSINESS ETHICS: When Values Clash

By Alan Richter

Defining ethical business conduct often depends on with whom you talk. Setting business standards based on core values helps employees play by the same rules.
At a recent conference on global business ethics, a distinguished panel of ethics experts grappled with the question:

"Which is more ethical?treating people as if they were all the same or all different?"
No one presumed to know the right answers to that question in every situation, and that’s the crux of the problem with global business ethics.

Ethics has never been easy to define because it deals with the intangibles of values and beliefs. But, ethical standards are necessary to resolve global ethical dilemmas. Without such standards, we would restrict our ability to do business effectively in a world where borders have become less meaningful. Paradoxically, our search for a universal code of ethics has intensified just as we have become increasingly aware of cultural differences that affect developing such a code.

Here are some samples of dilemma that your company might face:

1
Your country believes in gender equality. What happens when a woman from your country is treated by locals as a second-class citizen, following that country’s customs? What obligations does her company have to her? How should she respond?

2
Your company has strict rules on receiving gifts. However, in the country in which you are working, it is customary to exchange gifts. Without offending your business partners (distributors, suppliers, etc.), what should you do? What should your company do?

3
The company overseas subsidiary to which you are posted appears to be taking advantage of the excess of qualified workers seeking employment even though your company provides much sought after employment. Your conscience is bothered. What should you do? What rights and obligations does your company have in such a situation?

The Major Ethical Dilemmas

There are two things to note about these examples. First, they deal with ethical dilemmas that could happen anywhere. The issue of fairness, for example, is a general ethical issue—not just work related. Second, they reflect three major business ethical areas. According to Professor Thomas Donaldson,* these areas are 1)gender, 2)bribery and corruption, and 3) the relations between developed and developing countries (or first and third worlds).

Although these areas are very general, they suggest some of the ethical dilemmas of doing business globally and to both the . individual and organizational levels involved. Each example presents an ethical dilemma because they each involve a clash of perceptions and values. One way to resolve these dilemmas is to follow the old adage of , "When in Rome. Do as the Romans do". However, following cultural norms might be fine until they clash with one’s ethical principles and then the old adage becomes more difficult to follow.

Prioritizing Values Differently

Most managers with global experience would agree that there must be some set of shared global ethical values. This is not too surprising because we are all one species with common basic needs and desires, though expression of these needs is different around the globe. But what are these common values?

Rushworth Kidder, from the Institute for Global Ethics, conducted a global values survey and discovered the following common values: love, truth, freedom, fairness, community, tolerance, responsibility and reverence for life.

The list is culled from interviews with extraordinary people from all over the world (see Kidder’s Shared Values for a Troubled World, Jossey-Bass, 1994). However, even if there is an underlying agreement on such values, different cultures give different priorities to each of them.

THERE ARE THREE MAJOR ETHICAL AREAS FOR BUSINESS: GENDER, BRIBERY AND CORRUPTION, AND THE RELATIONS BETWEEN DEVELOPED AND DEVELOPING COUNTRIES

For example, although all cultures assert that they respect individual freedom and justice (equality), the degree to which they do so varies across cultures. Even if two cultures share a value, they may express it very differently.

In the first scenario concerning gender, perhaps the value of fairness clashes with tolerance (or respect of diversity); in the second, truth (or integrity) might clash with tolerance; and in the third, fairness perhaps clashes with responsibility. Furthermore, in each example, there is the feeling that ethical dilemmas are often unresolvableirresolvable at the level at which they first appear.
Professor Richard De George (in Competing with Integrity in International Business, Oxford University Press, 1993) proposes the concept of "ethical displacement." The concept stipulates that many ethical dilemmas need to be displaced upwards to a higher level in order to solve or dissolve the dilemma.

For example, only a company policy might solve a dilemma for a manager, and it might take an industry or government directive to solve an ethical dilemma at the higher level of a company or industry. Such a general corporate policy might mean that managers would not be expected to make a personal decision about accepting a gift from a supplier, but should simply follow a company policy that stipulates just what to do (or say) in such a circumstance.

Intention Is Different From Action

Even if you and your organization have sorted your values according to your priorities and identified acceptable behaviors, there is still the issue of action. Our challenge as individuals and companies is to act on intentions and to apply our values consistently across different cultures. Of course, this is difficult given that as individuals we are rooted in subjectivity. For example, we have families, and we tend to treat our own children differently from the children of strangers. But we can strive to create a a consistent ethical view and understanding of the world. The mark of an ethical global person might be the ability to be equally caring, compassionate and trustworthy to everyone, everywhere.

With corporations, which represent the sum of their employees, there is a greater possibility of being ethically consistent across cultures, however much an ideal this might be. The ongoing challenge is to strive with integrity to be ethical in our personal and professional lives, locally and globally.

How to Initiate an Ethics Program

Fostering business ethics awareness in today’s multicultural workplace and global marketplace is only the beginning.

We recommend the following initiatives:
Uncover or discover what the burning ethical issues are in your organization worldwide.
This may involve conducting a broad survey that involves a cross section of all employees, covering all areas and departments of the organization worldwide.

Make ethics explicit by developing a clear code of conduct that is based on stated values and that deal directly with issues cross-culturally. Once articulated, the challenge is to communicate and inculcate this explicit code throughout the organization.

Provide opportunities to learn about ethical dilemmas and how to resolve them. Practice doing so in non-threatening experiential ways such as through simulation training or case studies. This might involve creating an ethics program built around the organization’s explicit code of conduct.

Network with others in your industry and with ethics personnel from other organizations and industries. This is an effective way to learn the best practices in the field and to benchmark one’s organization against the best.

Review the company’s ethical "state-of-health" on a continual basis by repeatedly revisiting research, communication and training programs, the code of conductetc. Times change, strategies shift, so there is always a need to revisit the subject.

Don’t expect the organization’s core values to change, but it may be that one word in a definition needs editing or replacing, or that a new value is emerging that is critical to the future character and success of the business.

This article was written by Alan Richter, Ph.D., of QED Consulting and appeared in HR Magazine, September 1994.

Alan Richter is founder and president of QED Consulting. He may be contacted at alanrichter@qedconsulting.com