INT 113 ETHICS AND CHALLENGES IN INTERNATIONAL BUSINESS
The value of ethics in the economic world is unparalleled and universal. Similar to technology
and new trends, problems always emerge that might place a significant strain on businesses and
end users. To prevent potential litigation on both sides of the economic spectrum, good ethical
behavior within firms is now essential. The public's opinion of numerous corporations has been
impacted by the public scandals of corporate misconduct and deceptive activities (e. gEnron,
Arthur Andersen, WorldCom etc.)
It is well recognized that advertising does not encourage moral development in people. Modern
advertising, according to Lasch (1978: 1), "seeks to create demands, not to fulfill them: to
produce new concerns instead of allaying old ones... It addresses itself to the spiritual desolation
of modern life and promotes consumption as the remedy." This statement seems to still be true
today. The growth of international commerce and the subsequent lowering of trade barriers have
further highlighted the interest in the subjects of morality and social responsibility (See among
others, Jones, 1991: 366-395). Moreover, as many academics contend, environmental protection
and respect for human rights are gaining popularity in both professional and academic contexts.
Since the very cultural diversity associated with such expansion may undermine the deeply
ingrained cultural and ethical values observable in the more homogeneous organizations, the
growth of multinational corporations driving global expansion and entering foreign markets,
ethical conduct of the officers and employees assumes added importance (Mahdavi, 2001).
Understanding different cultures and appreciating their differences will make cross-cultural
communication more difficult, but they may not be enough to offer practical rules for ethical
conduct in the workplace. Legislation like the Foreign Corrupt Practices Act of 1977 and the
Sarbane-Oxley Act of 2002 reflect the worries about unethical business practices in foreign
nations. On the other hand, the culture-based consequentiality model is created in the academic
setting to explain, among other things, how cultural variations affect how people act and perceive
morality when making decisions that have an ethical component (Robertson and Fadil, 1999:
385-392).
"During the post-World War II period, international trade policy reform has hardly ever been
absent from the minds of policy-makers," according to Turnen-Red and Woodland (2001:61).
The General Agreement of Tariffs and Trade (GATT), which was established to serve as a forum
for the discussion of international trade and policy issues and the resolution of disputes as well as
to sponsor ongoing multilateral negotiations that resulted in a significant decrease in the average
level of tariff protection, has ensured that the trade policy issues have remained relevant. With
the extension of the European Community's customs union and the emergence of organizations
like the North American Free Trade Agreement (NAFTA) and Mercosur, bilateral and regional
trade agreements have received a lot of attention in recent years. Yet, cooperative trade policy
continues to be significant in the global context. According to Wimbush and Shephard (1984:
637–647), firms spend an estimated $40 billion yearly on issues related to ethical behavior.
Consequently, demonstrating that the ethical behavior of employees has a direct influence on the
success of the business. Management must successfully convey right ethical behavior throughout
the organization if it is to enhance the ethical atmosphere of that organization. Organizations use
a variety of strategies in this area, including coaching, training sessions, codes of ethics, and
reward programs (Delaney and Sockell, 1992:719-727; Laczniak and Indemeden, 1987: 297-307;
Jansen and Von Glinow, 1985: 814-822).
Hence, the issues that firms today are facing are: How can ethical ideals be best communicated
to employees? Which form of communication is more effective? Despite all of its flaws and
failings, American business continues to serve as a major global model. The United States'
position as the leading producer of modern culture in the world plays a significant influence in
spreading the American style of management. The importance of the American business schools
in spreading the American management style over the world has also been noted by several
scholars. (Among others, see Mahdavi, 2001; and Nimgade, 1989:104) According to Morf
(1999: 265), ethics is the moral concept that people incorporate into their decision-making and
that helps moderate the final result to adhere to their society's norms. Also, ethical standards
serve the extremely important purpose of making conduct predictable (Mahdavi, 2003). The
genuinely global businesses need to understand the ethical and legal environment in which they
operate. But, they must prioritize creating an atmosphere that encourages moral conduct since, in
the end, doing otherwise reduces their profitability.
A group of academics challenged this viewpoint by advancing the notion of virtue ethics, which
is characterized as a philosophy that places a strong emphasis on a person's moral character.
These academics contend that ethical virtue has received less consideration from marketing
experts. Additionally, they contend that it is impossible to conduct a thorough investigation of
the ethical conduct of marketing decision-makers and their tactics without bringing virtue ethics
into consideration.
