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July 1988 · Journal of Business Ethics

• 
  Russell Abratt
• Diane Sacks

This article reviews the history of marketing thought in relation to social responsibility and business ethics. The main objective of the article is to show that business can be profitable and socially responsible at the same time by practising the societal marketing concept. More specifically, it presents the development of a marketing philosophy, discusses the influence of consumerism on the ... [Show full abstract] marketing concept and deals with ethics and social responsibility in marketing. It is argued that organisations who adopt the societal marketing concept will be the ones most likely to make long-run profits as well as be beneficial to society as a whole.

Journal of Business

and

Retail

Management

Research

(JBRMR)

Vo!' 8 Issue 2 April 2014

Ethical

challenges

in

international

business

operations

Success A.C.

Anyanwu

University of

Port

Harcourt,

Rivers

State,

Nigeria

Lawrence

I.

Nweake

Rivers State University of

Science

and

Technology

Port

Harcourt,

Rivers

State,

Nigeria

Keywords

Ethical challenges, international business opportunities, cultural values, business custom.

Abstract

As business

becomes

increasingly

global

with

more

and

more

companies

penetrating

oversea

nwrkets

where

culture

and

traditions vary,

ethical

consideration

becom

e

more

and

more

com

plex

to

handle.

Difference

s in business customs

and

practices

among

nations of

the

world

account

for

the

reason

why

managers

in organizations operating

in

an

international context

are

confronted

by

complex

ethical

challenges.

The

business customs

and

practices

revolve

within

the

circumference of

the

peoples

moral

and

cultural

values.

Some

of

the

challenges

facing

the

international business

manager

are

sundry

situati

on

~

where

there

are

no

local

laws

,

lo

ca

l

practices

that

condone

a

certain

behavior,

an

organization

wilU

no

to

d.

:

what is right

is

favoured

over

the

organization that

fails

to

engage

in

wrong business pm .

:'

;~

.

..

':

conclusion,

being

ethically

corr

ec

t

is

not a simple

task

for

the

international business

ma

nng

er

c:.

-; :_

,'

-

diversity

in

cultural

values.

It is

therefor

e imperative

that

governments

esta

blish

a

moral

m

in

im:! : .':

guide

fo

r

proper

behavior

or

to

draw

the

line

to

control

unethical

behaviours.

Introduction

Ethical challenges refer to tile considerations of moral beliefs

about

what

is

right

or

wrong.

In most societies, lying, stealing, deceiving

and

harming

others are considered to be unethical

and

immoral while honesty, keeping promises, helping others

and

respecting

the

rights of

others are

considered

to be ethically

and

morally desirable behaviour. In business, the issue of

ethics is

not

a different matter. According to post, et al (2000), business ethics

is

not

a special set

of ethics

but

the application of general ethical ideas to business behavior. For ex

ample

,

if

dishonesty is considered to be unethical,

then

anyone

in business

who

is

dishonest

with

its

stakeholders -customers, suppliers, employees or shareholders, is acting unethically.

If

protecting others from

harm

is considered to be ethical,

then

a

company

that

withdraws

a

dangerously defective

product

from the

market

is acting

in

an

ethical way.

Managers

and

employees often

admit

that

they feel

pressure

at

work

which

may

lead to

unethical behaviour. According to

Nwaeke

(2005), a

natural

study

released by the Ethics

Officer's Association

in

the

U.S. claimed

that

over half of the workers felt

some

pressure

to

act

unethically

on

their jobs.

About

48

percent reported

that

they

had

engaged

in

unethical

or

illegal

actions

during

the

past

years

and

attributed their actions to workplace pressure.

The

factors that

contributed to

pressure

to act unethically as reported in the

study

are- balancing

work

with

family

demands,

poor

leadership,

poor

internal communications, excess

work

load, lack of

management

support,

little

or

no

recognition of achievement,

need

to

meet

desired goals,

organizational politics,

incompetent

subordinates, insufficient organizational resources

and

downsizing effects

on

employees.

Therefore,

the

objective of this

paper

is

to x-ray

the

challenges facing a Nigerian

international business manager.

www.jbrmr.com A Journal of the Academy of Business

and

Retail

Management

(ABRM)

Journal of Business

and

Retail

Management

Research (

JBRMR)

Vol. 8 Issue 2 April 2014

Theoretical

Framework

There are three different

models

used

to

determin

e

whether

a business action

is

ethical or

not. These

models

according to Jones et al (2000) are utilitarian, moral rights

and

justice models.

(i)

Utilitarian model- The utilitarian

model

is of the

view

that

any

business action

that

produces

the greatest

good

for the greatest

number

of people

in

a given society, is

said

to

be

ethical. This

implies

that

organizational managers

whether

in

domestic or international

operations

should

compare

and

contrast alternative courses of action

based

on

the benefits

and

costs of those alternatives for different

stakeholder

groups

. They

should

choose the course of

action

that

provides

the

most

benefits to stakeholders. The

problem

of this

model

for

managers

leads to a

number

of questions;

i.

How

do

managers

decide

on

the relative importance of

each

stakeholder

group?

ii.

How

are

managers

to precisely

measure

the benefits

and

costs to each

stakeholder

group? (Nweake, 2005).

The Moral Rights Model -This

model

suggests

that

a

business

action that

best

maintains

and

protects

the

fundamental

rights

and

privileges of the

people

affected

by

the

action is ethical.

For example, ethical decisions protect

people's

rights to freedom, life

and

safety, privacy

and

freedom of expression. This

model

requires

managers

to

compare

and

contrast alternative

courses of action

based

on

the effect of those alternatives

on

stakeholders'

right. They

should

choose the action

that

best protects stakeholders' right. For example, decisions

that

involved

significant

harm

to

the

safety or health of employees or

customers

is unethical.

The

problem

of this

model

for

managers

is

that

if

an

action protects the

right

of

some

stakeholders

and

hurt

the

rights

of others,

how

managers

choose

which

stakeholder's

rights to

protect (Nwaeke, 2005).

The Justice Model- This

model

is of the viev\' that

any

business

decision

that

distributes

benefits

and

costs

in

a fair

and

equitable

manner

a

mong

stakeholders

is

an

ethical decision.

Managerial implications of this

model

require ma

nager

to

compare

and

contrast

alternative

courses of action

based

on

the

degree

to

which

the action will

promote

a fair

distribution

of

outcomes. For example,

employees

who

are simil

ar

in

their level of skill,

performance

and

responsibility

should

receive the

same

kind of

pa

y. The allocation of

outcome

should

not

be

based

on

arbitrary

difference

such

as gender, race

and

religion.

According

to

Nwaeke

(2005)

problems

of this

model

to

managers

requires that

managers

must

learn

not

to discriminate

between

people

because of observable differences

in

their

appearance

or behaviour. Managers

must

also learn

how

to use fur

procedures

to determine

the

distribution

of outcomes to

organizational members.

In theory, each

model

offers a different

and

complementary

way

of

determining

whether

a

decision

or

behaviour

is ethical

and

all

three

models

should

be

used

to

sort

out

the ethics of a

particular course of action. Ige (2008)

and

Tse (2006)

argue

that

ethical issues are

seldom

clear-

cut,

and

the interests of different stakeholders often conflict so frequently.

It

is therefore

practically difficult for a decision

maker

to use these models to ascertain

whether

a business

action is ethical

or

unethical. For this reason,

many

ethics professionals

propose

a practical

guide

to

determine

whether

managerial

behavior

is ethical. A

behavior

is

probably

acceptable

on

ethical

grounds

if

a

manager

can

answer

"yes"

to each of these questions; Does

my

action fall

within

the accepted

values

or

standard

that

typically applies

in

the organizational environment?

Am

I willing to see

the

decision

communicated

to all stakeholders affected

by

it, for example,

by

having

it

reported

in

the

media?

Would

the

people

with

whom

I

have

a significant

personal

relationship

such

as family

members, friends or

even

managers

in

other

organizations

approve

of the decision? (Ige, 2008;

Tse, 2006;

and

Nwaeke,

2005).

www.jbrmr.com A Journal of the Academy of Business

and

Retail

Management

(ABRM)

Journal of Business

and

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Management

Research

(JBRMR)

Vol. 8 Issue 2 April 2014

Azai (2011) states

that

businesses are expected to always exhibit

high

level of ethical

performance. Failure to

do

so

means

that

they

would

be spot-lighted, criticized

and

punished

with

undue

consequences.

He

further

argue

that

business

should

be

relatively ethical

in

order

to

fulfill public expectation For business,

prevent

harming

others in public,

improve

business

relations

and

employee

productivity,

reduce

penalties

under

their

country

's

corporate

sentencing guidelines,

prote

ct

business

from

undue

competition

by

others

, protect employees

from their employers;

and

promote

personal

morality

in

society.

Managers

in

organizations

operating

in

an

international

context are confronted by especially complex ethical challenges.

These challenges occur as international

managers

do

business

in

other

societies

and

nations

where

ethical issues differ from those at home.

Nwaeke

(2005)

opine

that

as business becomes increasingly global,

with

more

and

more

corporations

penetrating

oversea

markets

where

cultures

and

ethical

tradition

vary, ethical

considerations become

more

and

more

complex to handle.

Cateora

and

Graham

(2005)

argue

that

the

problem

of

busin

ess ethics is infinitely more

complex in

the

international

market

because value

judgments

differ

widely

among

culturally

diverse groups.

That

which

is

commonly

accepted as

right

in

one

country

may

he

completely

unacceptable

in

another.

Giving

business gifts of

high

value, for example, is generally

condemned

in

t

United

States,

but

in

many

countries of

the

world,

gifts

are

not

only acceptable

but

also expected. Differences

in

business customs

and

practices

among

nations

of the

\\-

orl

~

account for the reason

why

managers

in organizations

operating

in

an

international con.ex:

3.~~

confronted by complex ethical challenges. The business customs

and

practices inv

oh

-e

'.

-::

~

~

the circumference of the

people'

s

moral

and

cultural values.

Hofstede

(1996), classi

fi

ed c t:.rre:"',

four

dimensions

and

explained

it

degree

of influence in

business

at each dimension. These are

power

distance,

individualism/collectivism,

uncertainty

avoidance

and

masculinity

and

feminini ty .

Power

Distance: The

power

distance

measures

the tolerance of social

inequality

that

is

power

inequality

between

superiors

and

subordinates

within

a social system. In

other

words,

these cultural

values

deals

with

the

way

people

in

a culture accept the

power

inequality

or

gap

among

themselves

in

regard

to allocation of authority. Cateora

and

Graham

(2005) revealed that

cultures

with

high

power

distance index (PDI)

tend

to be hierarchical

with

members

citing social

role,

manipulation

and

inheritance as sources of

power

and

social status. Those of low

power

distance index

tend

to

value

equality

and

cite

knowledge

and

respect as sources of power.

Thus

people from

cultures

with

high

(PDI)

are

more

apt

to

have

a general

distrust

of

others

(not

in

their group) because

power

is

seen

to rest

with

individuals

and

is coercive

rather

than

legitimate.

High

PDI scores

tend

to indicate a

perception

of differences

between

superior

and

subordinate

and

a belief

that

those

who

hold

power

are entitled to privileges. A low index

reflects

more

egalitarian views.

IndividualiSm/Collectivism:

This refers to the degree of

importance

between

individual's

interests

against

that

of the

group.

In

individualism

culture,

there

is preference for

behaviour

that

promotes

one's

self-interest

and

it reflects

an

//1//

mentality

which

tend

to

reward

aid

accept

individual

initiative.

Individualism

pertains

to societies in

which

lies

between

individuals

are

loose; everyone is expected to look after

him/her

and

his/her

immediate

fanuly . Collectivism

pertains to societies

in

which

people

from

birth

onward

are

integrated

into strong, cohesive

groups,

which

throughout

people's

lifetimes

continue

to

protect

them

in exchange for

unquestioning

loyalty.

It

is

important

to

note

that

the interest of the

group

is of

utmost

priority

than

that

of

an

individual

in

the collectivism society. In this

culture

people

value

being seen

from

the

concept

and

opinion

of a

group

with

the

group

taking

care of

them

in

return

for

loyalty.

www.jbrmr.com A Journal of the Academy of Business

and

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Management

(ABRM)

Journal of Business

and

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(JBRMR)

Vol. 8 Issue 2 April 2014

Uncertainty

Avoidance:

This centers

on

how

people in a society accent or perceive treats

of a

new

situation

and

its uncertainties.

It

measures the tolerance of

uncertainty

and

ambiguity

among

members

of a society.

Cultures

with

high

uncertainty avoidance are

highly

intolerant of

ambiguity

and

as a result

tent

to be distrustful of

new

ideas

and

behavior

.

They

tend

to

have

a

high

level of anxiety

and

stress

and

a concern

with

security

and

rule following.

Accordingly they dogmatically stick

ID

historically tested

patterns

of behaviour,

which

in

the extreme become inviolable rules. Those

with

very high

uncertainty

avoidance

index

thus

accord a

high

level of

authority

to rules as a

means

of

avoiding

risks. Cultures

with

low

uncertainty

avoidance

are

associated

with

a low level of anxiety

and

stress, a tolerance of

deviance

and

dissent

and

a willingness to take risks.

Masculinity

and

Femininity:

This refers to

the

traditional

way

in

which

ambition, goal

and

achievements

are

valued

in

a society or culture. In

many

cultures, the

way

achievements are

mane

and

accessed

between

traditi:onal male orientations

and

traditional female orientations

differ

and

culture

differs in

what

motivates

people

toward

achieving a certain goal. Masculinity

cultures are

characterized

with

passive goal behaviour,

high

value

for social relevance,

preference for

high

standard

and

quality of life,

and

show

great

concern for

welfare

of others in

the

society. A

survey

on

masculinity

and

Femininity

by

Hotstede

shows

that

African has

Feminine

culture

while

United

States is a Masculine Cultures.

Other

business

etiquettes

that

pose ethical challenges to the

international

business

manager

include:

Time

Management:

Time

is a very

important

fact

when

it comes to

doing

business. A

widely

acclaimed

adage

says: "Time is

money"

but

the concept of time

management

or

orientation is perceived differently in

many

cultures. Time

in

Africa is s

een

as a composition of

past

events,

those

that

is

happening

at

that

particular

time

and

the

events

that

are inevitable,

in

traditional Africa, time is

perceived

to be of

two

dimensions

covering the

past

,

present

and

with

no consideration

about

the

future

which

is

in

conflict

with

the

Western

orientation

where

time

has infinite future,

present

and

indefinite past. The

Western

ideology of time is practically

strange

to African mentality. In African perception, the

future

cannot

constitute

time

because the

events

in

it

have

not

yet

manifested, therefore time only covers the

past

and

present.

Man

is

meant

to create

and

control time

and

not

time to control

man

. In this case time

needs

to

be

created

and

viewed

from the

point

of convenience to

man

and

his social

and

cultural

activities

(Unwubiko

1991). This

simply

means

that

African culture;

do

not

actually view time

from "Clock Tine"

rather

from the convenience

perception

. Time is very

important

to finish

and

punctuality

is a virtue, it

means

same

as the 'Clock Time' to Finns. Finns

have

respect

and

value

for time

and

expect

you

to reciprocate (Sabaath, 1999).

In Africa,

time

is

seen

to

be

flexible

and

people come first before time.

When

a

person

is

being too conscious of time,

he

is

viewed

with

suspicion

and

distrust

.

Considering

the fact that

trust

is very

important

in

business practice in general, people

who

are very conscious of time

record little success

in

Africa

owing

to the suspicion

and

distrust

on them. Africans like to spe

nd

and

control time

and

don

't see it as a limited

commodity

(Moran,

Harris

and

Moran

, 2007).

Business Meetings

and

Dressing: The

manner

with

which

people

respond

to business

meetings

and

their

mode

of

dressing

is

an

ethical challenge

that

must

be

understood

by

the

international business

manager.

For

example

the

mode

of

dressing

in

Nigeria is

based

on

the

culture

and

the

quest

to exhibit the African style. The former

President

of Nigeria

Olusegun

Obasanjo

never

puts

on

a

suit

any

day

during

his te

nure

and

in

all Head of State meetings

he

attended.

His successors

Umaru

Musa

Yar'

Adua

and

Goodluck

Jonathan

who

is the

current

preSident followed,

always

dressing

in

native attire

in

all occasions.

Nig

e

rian

likes

to

be

addressed

by

their titles (Chief, Eze, Oba, Obong, Alahaji, Dr, Engr.)

and

when

addressed

in

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Vol. 8 Issue 2 April 2014

their

simple

name

it is

seen

as

disrespect.

In

negotiation

Nigerians

like to

talk

and

pressure

a lot

unlike

Finns

and

"Yes"

does

not

really

mean

yes

when

negotiating

with

a

Nigerian

partner

(Ogbonna, 2010).

Women

in

Bu

siness:

Finland

is

one

of the

countries

in the

world

where

women

hav

e a lot

of

independence;

they

have

closed the

gap

between

the

men

and

women.

Survey

reveals that

more

than

75% of

Finnish

women

work

out

of

their

homes

(Sabath, 1999).

Unlike

in

Nigeria,

women

rarely

work

as

they

are

traditionall

y

bound

to

take

care

of

domestic

activities in

the

household.

It

is

important

to

note

that

when

doing

business

in

Nigeria

,

never

expect

to see

man

y

women

as

they

are

still

seen

to

be

inferior to the

men

especially

among

the

Muslims

in

the

Northern

part

of Nigeria.

The

international

business

manager

must

realize

that

in

some

countries, decision

making

in

organizations

is

participatory

as

in

the

case of Finland. This is

because

Finl

an

d is low

pOINer

distance

culture

(Ogbonna,

2010).

Hofstede

study

shows

that

Germany

is

an

individualistic

culture

and

high

uncertainty

avoidance

with

low

power

distance

while

the

United

States is

an

individualism

culture

and

low

power

distance

with

low

uncertainty

avoidance.

Conclusion and Recommendations

To

behave

in

an

ethical

manner

should

be

the

hallmark

of

every

business

executive

whether

domestic

or

international.

It

requires

little

thought

for

most

managers

to

know

the

ethically correct

response

to

questions

abou

t

breaking

the

law

,

harming

the

environment,

denying

someone

his

or

her

rights

, t

ak

ing

unfair

advantage

or

behaving

in a

manger

that

would

bring

bodily

harm

or

damage.

Unfortunately,

the difficult issues

are

not

the

obvious

and

simple

right

or

wrong

ones. In

many

countries

the

international

manager

faces

the

challenges of

responding

to

sundry

situations

where

there

is

no

local law,

where

local practices

condone

a

certain

behaviour

or

where

an

organization

willing to

do

what

is

nec

essary

is

favoured

over

the

organization

that

refuses to

engage

in

practices

that

are

not

ethical.

In

short,

being

ethically

correct is

not

a

simple

task

for

the

international

manager

because

of

diversity

in

cultural

values.

References

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