The Disadvantages of International Business Ethics

In: Business and Management

Submitted By nifo
Words 609
Pages 3
The Disadvantages of International Business Ethics
X

Catherine Capozzi
Since 2008 Catherine Capozzi has been writing business, finance and economics-related articles from her home in the sunny state of Arizona. She is pursuing a Bachelor of Science in economics from the W.P. Carey School of Business at Arizona State University, which has given her a love of spreadsheets and corporate life.
By Catherine Capozzi, eHow Contributor
Maintaining business ethics is a worthy goal for all multinational corporations, but not always possible or advantageous. The reality of international business is that upholding these arbitrary obligations comes with severe disadvantages. In many ways, abiding by a self-imposed standard of business ethics impede a company's ability to eke a profit when others are far less likely to abide by similar unenforceable ethical obligations.
Other People Are Reading * The Code of Ethics of Auditors * The Advantages and Disadvantages and Pros and Cons of Social Obligation * -------------------------------------------------

* -------------------------------------------------

* -------------------------------------------------

* -------------------------------------------------
Print this article 1. Wage Ethics * Few consumers would profess that 8-year-olds working 16-hour days in a dimly lit factory is ethical. And yet several large multinational corporations disregard these issues in favor of producing a product at a significantly lower cost. John M. Wage, author of the book, "Ethics for International Business," explains the quandary arises when foreign governments have no set minimum wage. In these situations, companies can contract foreign workers and have them work for less than a livable wage.
Corporations that wish to maintain strong business ethics by paying local, American workers a higher…...

Similar Documents

International Business Ethics

...What are International Business Ethics? 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...

Words: 1192 - Pages: 5

International Legal and Ethics Issues in Business

... a secondary could be expansion, an initiative to become a globally known brand and gain international market share. Once the fundamental question of “why” is answered, the remaining issues, such as foreign government policies, can be addressed as well. So should a company comply or defy? Proponents of both sides of the fence are up in arms and ready to debate their stance. Proponents argue loss of market share if a company decides to leave a potentially new market, especially an international market. And proponents of defying the compliance terms are citing moral and ethical beliefs which make it wrong to comply with a communist government (http://hbswk.hbs.edu/item/5246.html). So who is the victim and who is the winner? I think that both sides are equally at loss as well as gain. If a company decides to leave due to compliance issues, chances are their competitor will step in and dominate that market. It is often difficult for a company to enter into the market as a secondary and gain market share. Foreign investments are both risky and expensive to finance, organizations determined to gain market share should certainly comply with the rules and regulations of the foreign market in which they wish to do business in. On the other hand, do we forego our moral and ethical values simply because we are on foreign soil? Are companies allowed to change their business culture and organizational environment for the sake of foreign market......

Words: 327 - Pages: 2

Why an International Code of Ethics Would Be Good for Business

... Zin tDpks Shoftuts Conftct Why an international code of business ethics would be good for business My XanEdu Journal of Business Ethics; Dordrecht; Jan 1998; Larry R SmeltzerMarianne M Jennings Source (subtitle): JBE Volume: 17 Issue: I Start Page: 5766 ISSN: 01674544 Subject Terms: International Business ethics Codes Culture Social life & customs Studies Culture Business ethics Classification Codes: 9180: International 2410: Social responsibility 9130: Experimentalltheoretical treatment 1200: Social policy Abstract: Many international business training programs present a viewpoint of cultural relativism that encourages business people to adapt to the host country's culture. This paper presents an argument that cultural relativism is not always appropriate for business ethics; rather, a code of conduct must be adapted which presents guidelines for core ethical business conduct across cultures. Both moral and economic evidence is provided to support the argument for a universal code of ethics. Also, four steps are presented that will help ensure that company ethical standards are followed internationally. Full Text: Copyright Kluwer Academic Publishers Group Jan 1998 [Headnotel ABSTRACT. Many international business training programs present a viewpoint of cultural relativism that encourages business people to adapt to the host country's culture.......

Words: 6797 - Pages: 28

Importance of Ethics in International Business

...Importance of Ethics in International Business Executive Summary Ethics in the business world is important and global. Ethics indicate what is right and what is wrong in business branches and also lead employees and stakeholders with moral values. Due to the globalization of markets and production processes, business people have to deal with ethical issues in cross-cultural settings at an increasing number. The purpose of this paper is to explain the importance of international business, emphasise the ethics of a business and the significance of ethics in terms of expanding internationally. Ultimately, creating and maintaining acceptable organizational ethics will become beneficial in international business. Why do businesses expand internationally? Expanding a business to an international level has a huge upside. In a broader sense, without international trade, countries could only consume what they produce domestically, making it harder for every single country. An international business opens new opportunities such as new markets and more jobs. Today, developing countries represent about 80% of global population. Uncertainty and legal applications are sometimes great sources of concerns in international business operations (Hewhorn, 2008). Therefore, an international business has to take into consideration and become aware of the countries in which operating in. Today, companies are affected by global events and competition whether the corporation is enormous......

Words: 1541 - Pages: 7

Disadvantages of International Trade

...Disadvantages of International Trade : The Global market has made it easy to buy and sell international goods. While this has benefits, it also presents a problem. Such trade can cause countries to be prosperous for a short time, but leads to economic exploitation, loss of cultural identity, and even physical harm. Support of Non-Democratic Systems Great hardship can be caused when people make poor decisions about land use or surplus production for export and do not take the general population’s welfare into consideration. For example: Landowners in Nicaragua and El Salvador want farmers to grow coffee beans because it is a very profitable cash crop, however, the farmers would like to use the land to grow more food for their families. The farmer’s wishes are ignored because they do not actually own the land. Cultural Identity Issues Culture is a major export in the world. It displays and promotes values and lifestyles worldwide. The "culture consumer" in other countries is sometimes overwhelmed by American ideas. Products also carry cultural ideas and messages. There are values of the culture the make the product. For example: Coca-Cola, McDonalds, Nike, and Microsoft all sell products that symbolize American values and symbolize and reflect American corporate culture. Social Welfare Issues: Maintaining safety standards, minimum wages, worker’s compensation and Health benefits are all social welfare issues that cost business money. If a......

Words: 371 - Pages: 2

Ethic Analysis of Cultures on International Business

...Ethic Analysis According to all the effects and changes that have been taken during the interaction between cultures, it is very difficult to agree with other people who are from another country and have different way of thinking. It is important to be informed about the culture that we are interacting and everything that involves it since at the time of making decisions, it is necessary to take into account the effect that may have these differences. In this analysis I´m going to compare and discuss the differences between the ethics from one country with another, which are the United States and Mexico, and how they can affect the way they make their business. Starting with the United States, the government had decide to established corporations who engage the audits in each of the companies in the country to have more control in their regulations and to be sure that they are fulfilling all the laws and regulations that were previously set. With these regulations it has been a reduction of frauds that has being done, and also illegal operations between companies from another countries. These had been set also because corruptions has becoming more and more strongly to the country, so the government wants to have a total control. On the other hand it is Mexico, in several of their companies and general business, there have been problems because of the high levels of corruption, but the difference from US is that in Mexico the government is the one that is involve......

Words: 282 - Pages: 2

International Business Ethics

...North of the equator is a tiny city-state called Singapore; It is known for its business economy thriving. It started as being a poor crown colony to the second highest GDP in Asia. Japan is of course number one (Introduction, 2003). Another country running long north and south is called Taiwan. 1. Singapore has made it very easy for someone to get a permit to work there. This includes other nations to do business as well as investing in this country (Bernhardt, 2010). As for Taiwan they have environmental laws described as a fig leaf. This leaf is barely disguising the rape of the environment (Environmental nightmare of the economic miracle, 2006). 2. Singapore has no minimum wage for their workers. The employees there must be paid at least once a month. Some companies do give a bonus of an extra salary but it is not required. There employment act may not require the workers to work more than eight hours or forty four hours a week (Bernhardt, 2010). When it comes to wages and work hours in Taiwan their employees and employers have to agree upon the wages. It is like a contract. The employees’ wages cannot be less than each jurisdiction. Singapore does not count. When it comes to the hours that they work depends on the jurisdiction and they hours are between 40-48 hours a week (Hyun, 2007). 1. The latest environmental legislation is called Environmental Impact Assessment Act. This includes more procedures for citizens as well as environmental interest......

Words: 737 - Pages: 3

A Social Contract for International Business Ethics (Scibe)

...sosialnya berkaitan dengan etika bisnis internasional itu sendiri yang akan dibahas serta dikaitkan dengan kasus untuk mengetahi dampaknya serta penangananya dipandang dalam etika bisnis. I.III Tujuan Tujuan dari kontrak sosial untuk etika bisnis internasional atau Social Contract for International Business Ethics (SCIBE) adalah untuk menjelaskan mengenai kontrak sosial yang ada dalam etika bisnis internasional dan menyimpulkan dengan menjelaskan bagaimana SCIBE memenuhi kriteria desain untuk pendapat kontraktarian etika bisnis oleh Ben Wempe (2008) serta memberikan pembenaran bagi beberapa prinsip-prinsip etika bisnis internasional itu sendiri. Selain itu mengaikan dengan kasus yang ada agar mempermudah serta memberikan contoh kongkrit menengai permaslahan dan penerapannya di kehidupan nyata. Bab. II A Social Contract for International Business Ethics (SCIBE) J. Duncan Grey Elizabeth Redd Karakter Fiksi The Grey-Redd Negotiation Ethical Principles for International Business Wages/Upah The enviroment/ Lingkungan Cultural and Social Norms Contructing a Social Contract for Business Etichs Contructing and Justifying the Social Contract Constructing SCIBE’s Choice Situation Business Community Theoritical Framework II. I Teori dan Konsep A. Membangun Kontrak Sosial untuk Etika Bisnis Kontrak sosial bagi etika bisnis dapat dibagi dalam tiga kelompok utama. Pendekatan pertama langsung menerapkan teori kontrak sosial seorang filsuf politik untuk masalah......

Words: 6398 - Pages: 26

International Code of Ethics Good for Business

... Zin tDpks Shoftuts Conftct Why an international code of business ethics would be good for business My XanEdu Journal of Business Ethics; Dordrecht; Jan 1998; Larry R SmeltzerMarianne M Jennings Source (subtitle): JBE Volume: 17 Issue: I Start Page: 5766 ISSN: 01674544 Subject Terms: International Business ethics Codes Culture Social life & customs Studies Culture Business ethics Classification Codes: 9180: International 2410: Social responsibility 9130: Experimentalltheoretical treatment 1200: Social policy Abstract: Many international business training programs present a viewpoint of cultural relativism that encourages business people to adapt to the host country's culture. This paper presents an argument that cultural relativism is not always appropriate for business ethics; rather, a code of conduct must be adapted which presents guidelines for core ethical business conduct across cultures. Both moral and economic evidence is provided to support the argument for a universal code of ethics. Also, four steps are presented that will help ensure that company ethical standards are followed internationally. Full Text: Copyright Kluwer Academic Publishers Group Jan 1998 [Headnotel ABSTRACT. Many international business training programs present a viewpoint of cultural relativism that encourages business people to adapt to the host country's culture.......

Words: 6843 - Pages: 28

Advantages & Disadvantages of International Trade

...Chapter 1: International Interdependence 1.4 ADVANTAGES & DISADVANTAGES OF INTERNATIONAL TRADE Pg 22-27 Advantages of International Trade The fundamental reason for international trade is to sell something that we don’t need and to buy something we do need. Trade creates jobs, attracts investments, attracts new technology and materials, and offers Canadians a wider choice in products and services. People spend, save, or pay taxes with the money they earn in their jobs. The government uses taxes to provide services, which creates more jobs. When people save, the capital markets lend money to others, who will spend it on consumer goods, or open or expand a business, therefore creating new jobs. When people spend money, it creates demand, which creates new jobs. If something occurs to slow this expansion, the cycle reverses. Ex. higher taxes, higher interest rates. Meeting our needs Trade is always balanced if it is fair. If 2 people trade baseball cards and one gives another 6 cards, they should get 6 back. Many businesses can create a surplus inventory of goods and services. Canadian farms produce more food than Canadians can eat, Canadian manufacturers make more products than Canadians use, and Canadian service providers can provide service to other countries. Canadians cannot produce fruits like bananas and oranges, and some products we cannot make. These products are imported. Both trading partners get something they need by trading something they...

Words: 864 - Pages: 4

International Business Ethics

...Unit 5-International Business Ethics Miranda Misercola American InterContinental University November 7, 2015 Abstract The purpose of this paper is to analyze two different acquisitions or mergers to demonstrate how such business transactions can cause legal barriers to entry market. Possible ethical dilemmas that are present within the relations between the companies will also be discussed. Furthermore, the drawbacks consumers have to face when two companies merge will be addressed as well. Introduction An investigation into a pharmaceutical company’s supposed intentions to curtail generic competition regarding an antidepressant drug, which is the company’s best brand name seller, has brought about a few questions as to why the company would do this to consumers. Prescription medication is expensive enough without pharmaceutical companies hindering the market entry of its generic counterparts. Generic medication gives consumers a choice to spend more or to spend less for their health care, and in the long-run gives them a choice for a more cost-effective livelihood. Without the options of choosing a cheaper form of medication, consumers are being taken advantage of. This leaves no room for choice and thwarts fair market competition. With a 22% increase of profits in comparison to the previous year, it is quite obvious that this brand- name manufacturer and generic companies have disobeyed federal antitrust laws. Therefore the Federal......

Words: 2007 - Pages: 9

International Business Ethics

...International Business Ethics Antoinette R. Hillary AIU Online April 25, 2011 International Business Ethics The business that I work for has been considering possibly locating some of the firm’s facilities in Thailand and Malaysia two countries in East Asia. I have been asked by the chief executives officer (CEO) to do some research of what has been happening concerning environmental regulation and laws in regards to wages and hours in both Thailand and Malaysia. The CEO has also asked me to prepare a report concerning these two matters, which is as follows: Environmental regulation level in Thailand In Thailand economically over the last thirty years has been associated with the growth of accelerated industrialization, urbanization, and agricultural production and fishing. This increase in growth has depended greatly on Thailand’s natural resources which are both plentiful and diverse and has deteriorated the country’s land, water quality, accounted for the loss of natural habitats and has produced increased levels of the air, water and pollution. (World Bank Group, 2011). To help correct some of these problems the Government and people of Thailand has begun new ways to improve the water and air quality, reforest their degraded lands, adopt technologies that are energy efficient and has invested in reduction pollution programs. In addition, the Government has also made the decision to terminate leaded gasoline which has decreased environmental levels of lead.......

Words: 965 - Pages: 4

International Business Ethics

...International Business Ethics Christy Camen BUSN310-1103B-01 IP 5 American InterContinental University International Business Ethics The first country that I chose was Malaysia. The countries environmental regulation level is balanced as of right now. The policies are being continued in the five-yearly National Development Plans (Maidin, 2005). It takes a lot for a country to develop policies and legislative measures for regulating the environment. In Malaysia they have set goals that will balance socio-economic development and maintain sound environmental conditions (Maidin, 2005). I think that the country’s environmental regulation is sufficient. If you think about it every country has room for improvement on the level of environmental regulation. Malaysia has come a long way from where they were a few years ago. They have gotten better at conserving energy and preserving their land. There have been three major legislative acts that have been passed regarding the working hours and wages in Malaysia. The acts are the Employment Act of 1955; Trade Unions Act of 1959, and the Industrial Relations Act of 1967 (Murray, n.d.). In Malaysia their work hours must not exceed eight hours a day, or 48 hours a week (Murray, n.d.). They get paid overtime which is 1.5 times the regular hourly wage for a normal working day, twice the normal wage on rest days and three times the regular hourly wage on public holidays (Murray, n.d.). Their working hours and wages are......

Words: 749 - Pages: 3

Ethics in International Business

... Chapter 4 - Ethics in International Business Introduction • Business ethics are the accepted principles of right or wrong governing the conduct of business people • An ethical strategy is a strategy or course of action that does not violate these accepted principles Ethical Issues in International Business • Many of the ethical issues and dilemmas in international business are rooted in the fact that political systems, law, economic development, and culture vary significantly from nation to nation • In the international business setting, the most common ethical issues involve - Employment practices - Human rights - Environmental regulations - Corruption - Moral obligation of multinational corporations Employment Practices • Ethical issues associated with employment practices abroad include - When work conditions in a host nation are clearly inferior to those in a multinational’s home nation, what standards should be applied? - While few would suggest that pay and work conditions should be the same across nations, how much divergence is acceptable? Human Rights • Questions of human rights can arise in international business because basic human rights still are not respected in many nations - Rights that we take for granted in developed nations, such as freedom of association, freedom of speech, freedom of assembly, freedom of movement, and freedom from political repression are......

Words: 3458 - Pages: 14

Cultural Issues and Ethics in International Business

...Cultural Issues and Ethics in International Business Introduction The expansive and unstoppable process of globalization has forced employers to form their ability to trade and negotiate with the outside world. However, it is important not only they are immersed in this subject, your staff, or one who is qualified to do so, you should also have access to the most significant aspects of foreign trade, logistics, and the impact. Companies are not limited to conduct private and government operations locally, but also with other countries. Precisely what we call international business is the relationship between an organization and its external world (Maddox, 1993). This type of activity also involves foreign trade and international, which includes transactions such as exports, imports, investments, or financing that are performed worldwide. Among the success factors that can be mentioned in the international business operations are competitiveness, financial support between the parties and logistics. This aspect is very important because when the actors involved are from different countries or regions, the business success is more complicated. In analyzing the economy, we must review the dimension that transcends the borders of a country, i.e. which addresses the problems international economic purposes (Maddox, 1993). The importance of international relations in trading, politics or culture has reached a global level, a deeper meaning that one cannot speak only......

Words: 1481 - Pages: 6