Understanding Ethical Differences In International Business

There are significant differences across cultures regarding whether a particular conduct is acceptable or not. Many of these get to be interpreted in terms of ethical values, leading to ethical differences which can at times become crucial for the success of an international business. Understanding them and preparing to adopt them in business practices, therefore, becomes very important.
Understanding Ethical Differences in International Business
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Business is a social activity sanctioned by the society based on its core values of harmony and collective benefit, and therefore, must always confirm to the underlying moral and ethical principles. While most of humanity has a convergence on the basic principles like liberty and human rights, several distinctions also exist between societies depending upon their culture and civilizational legacies.

Actions that one may consider as perfectly ethical can appear to somebody from a different culture as very offensive and totally unacceptable!

Concept of Business Ethics

Ethics can mean different things in different societies, so when you are interacting with people from different

cultural backgrounds, merely following your own ethical values may not be the best idea. If you care for their response, you also need to understand their perspective of ethics and morality, and be sensitive to them.

Differences in Ethics among Societies

In United States, a person changing a jobs several times in the last couple of years would matter little if that person is otherwise able to perform and be an asset for the organization. In Japan, such a person may not be able to get many takers, irrespective of his talent and skills, simply because his lack of loyalty to his 'kaisha' or company will be considered a highly unethical behavior. Japanese society including the businesses value loyalty as one of the necessary qualities of a good employee, and lack of it is unlikely to be casually ignored.

In most of the Western world, what you do in your personal life is unlikely to have any impact on your business competence. However, in conservative societies of Asia, if you are seen to be having an extra marital affair, you may lose some of your business. These highly family centric societies tend to judge a person more by his loyalty to the family than his business credibility, and the eye brows raised in response to such misadventures may have huge costs.

Hierarchy & Behavioural Differences

Respecting hierarchy is a common feature of most Asian societies, and in most of them calling a fairly senior office holder by the first name may be taken as offensive behavior. In Japan, the hierarchy affects the attitude of almost every person with every other person, and ignoring their traditions in this regard may not be easily forgiven, although some

room is generally given if you are visiting the country for the first time.

The value of keeping your appointments at the scheduled hour is important everywhere but the significance of it is not the same in every society. In some places, in the third world, it will be taken with a smile whereas in many developed countries, it may cost you heavily.

Religious Sensitivities

Religious differences also impact the definition of ethics. In Saudi Arabia, you can neither behave with a female executive in the manner you will do in United States, nor can a women conduct in the same way as she would in Europe or America. In China, if you criticize Buddhist traditions few will bother to even disagree with you, but if do the same in Thailand, you may not be appreciated.

Peculiarities of the Third World

Most third world countries have business-ethics standards that allow certain leverage, but you need to remember that they expect you to be equally liberal in this regard. So you need to be ready to take delays, missed deadlines and cancelled meetings in your stride. Similarly, in many countries in third world, graft is almost a way of life. This often creates a problem for large multinational corporations which take pride in not greasing the palms of petty bureaucrats. Most often, in such cases, the best strategy is to stick to your stand without any exception and maintain your contacts with the higher officials. Once the local officials understand that the company will stick to its stand, life becomes a lot easier. However, for smaller firms, entering a new country and facing such challenges can be a big nightmare, and sometimes it can be damaging too, a prospect that needs planning long before entering business.

Ethical issues have the potential of getting converted into serious sensitive matters. It is better to understand the ethical standards of the other society before entering in business transactions with people there, to avoid being caught off-guard.

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