NATIONAL DIFFERENCESIN BUSINESS ETHICS

Introduction:

The ethical perception is not always homogeneous. There are national differences in

business ethics.

These differences vary from time to time also.

Reasons for national differences in business ethics:

(1) Culture

(2) Attitudes

(3) Religious believes

(4) Education

(5) Nature of government

(6) Competitive environment

(7) Work environment

1) Culture:

Culture is consisting of learned norms based on attitudes, values and beliefs which are

existing in all societies. Culture is transmitted in different patterns, from parent to child,

from teacher to students, from social leader to people etc. The basic cultural values

include different concepts like good versus bad, clean versus dirty, beautiful versus ugly,

natural versus unnatural, normal versus abnormal and rational versus irrational.

2) Attitudes:

Local attitudes give importance only to local norms and practices. Ascribed status is

given more importance than achieved status. International attitude is rewarding

competency and excellence.

3) Religious believes:

Religion is a system of shared beliefs and rituals connected with the realm of the sacred.

Ethical systems denote a set of moral principles or values. Most of the ethical systems of

the world are the products of religious systems.

There is a complicated relationship between religion, ethics and society. Christianity has

billion followers, Islam with 1 billion followers, Hinduism with 750 million followers

and Buddhism with 350 million followers. For example, protestant ethics gives

importance to hard work and wealth creation and this has promoted the development of

capitalism.

Islam is a source of law, a guide to administration and an arbiter of social behaviour. In

terms of Islam, wordly gain and temporal power are an illusion.

Hinduism believes in the acceptance of certain responsibilities, called Dharma. Hindus

give a lot of importance to Karma which is based on the way of living in our birth.

Buddhism strongly believes that suffering is due to the desires of people for pleasure.

Cessation of suffering can be achieved by following a path of transformation only. The

route for transformation is the light fold path. It consists of right seeing, thinking, speech,

action, living, effort, mindfulness and meditation.

4) Education:

Educational level in a country decides the ethical standards. For example, Japanese

education has brought about a lot of changes in the attitudes of people after the Second

World War.

Exploitation, poor quality, substandard raw materials, inefficient after sales service and

fraudulent financial practices are discouraged in well educated societies. Since all the

sections of society are educated, it is difficult to exploit one section by other sections.

The people are aware of their rights and duties.

5) Nature of government:

The nature of the government is also deciding the ethical practices in a country. If people

are governed by a democratic welfare state, they are bound to be sensitive and

responsible to ethical issues. On the other hand, if people are subjected to totalitarian

forms of government, the scope for right ethical behaviour is very much restricted.

6) Competitive environment:

An economy is efficient when it is able to provide its consumers with the most desired

range of products at minimum cost. This is possible under the mechanism of a

competitive market. An economy is in a competitive equilibrium when the forces of

demand and supply are exactly balanced.

The competitive environment promotes the following ethical practices.

(a) The growth of entrepreneurial culture leading to increase in the number of producers.

(b) Growth of investment.

(c) Development of cost cutting technologies.

(d) Reduction of wastages of all resources.

(e) Greater customer focus.

(f) Greater possibility of entering foreign markets.

(g) Better utilisation of resources.

(h) A variety of goods and services available to people.

7) Work environment:

The nature of work environment also decides the ethical behaviour of a nation. Work

environment refers to the average state of conditions that determine and affect the

working environment of labour and management and the relationship between the two.

The work environment is greatly conditioned by the socio-economic, cultural factors and

labour legislation.

The work environment is affected by:

./ Working conditions

./ Rate of employment

./ Rates of wages

./ Industrial relations

./ Labour welfare measures

./ Employers' attitude towards workers

./ Employees' attitude towards work

./ State of collective bargaining

./ Motivation

./ Job satisfaction

./ Labour efficiency

Ethical guidelines for global business:

1) There should be the utilisation of natural resources of the host country in an optimum

way.

2) Promotion of joint ventures with the business firms of host countries.

3) Promotion of transfer of technology to the developing countries.

4) To promote social responsibility activities in the host countries.

5) Avoiding the production and marketing of goods and services not beneficial to

promote welfare.

6) Promoting the employment opportunities of people of host countries.

7) Provision of adequate training for the human resources of host countries.

8) Helping the government of host countries for crisis management like floods, drought

and other calamities.

9) There should be no involvement in the political affairs of the host country.

10) Should pay all the taxes for the government of host country. It should be firm in not

involving in any form of corruption.

Conclusion:

Globalisation, liberalisation, and global village concepts are acting as powerful forces of

ethical convergence. The international bodies like WTO argue for the convergence of

ethical practices in the world. Ethical practices are common and these practices have to

be evolved in consultation with all countries. Ethical practices are eternal. Ethical

convergence can make the process of globalization more realistic.

Questions

Section 'N

1) Define culture.

2) What is competitive environment?

Section 'B'

1) How the nature of government influences ethics?

2) What factors influence the work environment?

3) Suggest ethical guidelines for global business.

Section 'c'

1) Examine the reasons for the national differences in business ethics.

2) Discussthe ethical guidelines for global business.