What are International Business Ethics?
The importance of international business ethics has been rising steadily along with the growth of international business. Technologies like the Internet have made international business all the more viable, and many companies can only find the desirable growth and profit they seek by expanding into new markets. This means that just as business ethics domestically have grown in importance along with the power and significance of major businesses, so must international business ethics take center stage as a major concern of the modern era.
The primary problem of international business ethics lies in the fact that most cultures and nations hold entirely different standards of both law and ethics. In America, business ethics can be employed because, in general, the disagreement between what actions are ethical and what actions are unethical in a single culture will be lesser than the disagreement between two entirely different cultures with different values and cultural practices. As a result, one business might believe it is acting perfectly in accordance with international business ethics, while another would view that first business as acting in a completely unethical fashion.
Many businesses adopt the policies of cultural relativism, in which they attempt to take on the business ethics exhibited by the nation in which the business is working a particular deal, as opposed to attempting to carry any of their own business ethics across cultural boundaries. However, this practice is not without its own flaws. For more information on the basic issues and problems facing any attempts to form coherent international business ethics codes, click the link.
One of the biggest problems facing any international business code of ethics is that standards for employment practices are not constant between nations participating in international business. An unethical practice that might be banned in a developed country might then be perfectly legal in a different, less developed country, allowing an international company to then set up its own division in the less developed country in order to take advantage of the legality of such profitable, yet unethical, employment practices.
As a result, in order for international business ethics to have any kind of strength or enforcement beyond the companies’ own decisions to obey such ethical standards, there must be some kind of legal agency that can investigate and prosecute any breaches of ethical employment standards.
The United Nations has an organization within it that might qualify, but the International Labour Organization does not have the necessary force of strength behind it to ensure that unethical employment practices in foreign nations are eliminated.
Nations are only bound to the standards established by the International Labour Organization if they choose to ratify its conventions. While those standards are still considered to be the international labor standards, there is no way to successfully investigate and enforce those standards in countries that have not signed on to those standards. To find out more about the problems of unethical employment practices and how they relate to international business, follow the link.
The Foreign Corrupt Practices Act (FCPA) was originally implemented in 1977 in order to prevent the questionable practices discovered by many American companies in international business dealings. These American companies were often bribing foreign officials in order to illegitimately gain business from foreign governments.
Such corrupt practices had been outlawed in America since the Government’s inception, but because these companies were bribing in foreign nations, they were not violating American law. The FCPA changed all that, as it made it illegal for American companies to bribe foreign officials in order to obtain foreign business.
The original flaw of the Foreign Corrupt Practices Act was that it did not enforce international business ethics in any kind of uniform way. Only companies operating in America were subject to the Foreign Corrupt Practices Act; many other companies would still bribe foreign officials in order to obtain business, and thus, would have an unfair advantage against American businesses. As a result, America sought the creation of the Organization of Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
The Convention had a number of different countries sign on to it, all of which agreed to pass domestic legislation akin to the Foreign Corrupt Practices Act in order to prevent such practices in international business. This Convention represents some of the strongest support for an international business ethics code uniformly agreed upon by member nations. To find out more about the Foreign Corrupt Practices Act and its effects upon American and international business, follow the link.
Bribery is one of the practices which is most difficult to deal with in terms of international business ethics, as there are as many different views on bribery as there are cultures. Some cultures do not believe bribery is much of an issue at all and do not see the need to seek its prosecution. Other cultures view bribery as something to be expected, a common courtesy and gesture of standard polite practice. Yet other cultures view even such activities as tipping and leaving gratuities to be a form of unacceptable bribery.
Bribery is even more difficult to deal with because not all countries have statutes that ban the bribery of government officials. Thus, in some countries, bribery of government officials in business dealings would be considered highly unethical and illegal, while in other countries bribery of government officials would be perfectly accepted. Navigating this mass of cultural landmines is the major difficulty of any kind of dealings with a focus on international business ethics.
While companies could simply adopt the ethics of the society in which they are dealing, the problem is that this would allow them to act in ways both unethical and damaging to most forms of business. After all, if one company can get an illegitimate advantage by bribing government officials, then it upsets the basic nature of capitalism. International business ethics, then, needs to be used to somehow deal with multiple cultures in a uniformly ethical fashion. To find out more about the difficulties and nature of bribery, click the link.
The enforcement of international business ethics is just as difficult as the establishment of any kind of coherent uniform set of international business ethics codes and rules. Different nations do not have power over each other. As one nation may have a culture that believes bribery is an acceptable practice, it does not have to obey the laws of another nation where bribery is outlawed. This is the primary problem of enforcing any kind of international business ethics code.
The only body which can legitimately exert some kind of power over international governance is the United Nations, but its power is very much limited. Other than that, no government can implement some kind of law to enforce international business ethics and then expect that law to be obeyed by all other nations.
Indeed, most nations’ laws end at their borders and, as a result, so does any power behind enforcing each nation’s international business ethics code. Follow the link for more information on the problems facing the enforcement of international business ethics.