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The international business environment, through its cultural and economic diversity, often puts international managers in great difficulty as it generates a large variety of ethical issues. On a short term, finding a solution and respecting the organizational principles of business ethics could generate an increase of the organizational costs and, thus, a decrease of efficiency. But, on a long term, even though there is the possibility that the ethical management practices are not related to the specific indicators of financial profitability, there is no inevitable risk between the ethical practices and the profit. This is demonstrated by the well-known corporations that are respected by the consistency with which they assume ethical responsibilities and obtain, at the same time, superior financial results. Consequently, the profit and the ethics can be considered two essential parts in the process of evaluating the organizational activity results as, while the profit reflects the organizational results from a quantitative point of view, the ethics reflect the quality of these results. International managers carry the heavy task of formulating organizational policies and standards by combining the law, the ethical business principles, the local cultural values and the organizational standards. The ethics fulfills, from this perspective, the managers’ catalyst role to take fair actions from a social point of view and it represents a guide in making and evaluating the business decisions, appreciated in most countries of the world. To read the full-text of this research, ResearchGate has not been able to resolve any references for this publication.
you can request a copy directly from the author.
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.
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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.
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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
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(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.
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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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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.
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