The Challenge of Ethical Behavior in Other Countries

The Challenge of Ethical Behavior in Other Countries

The requirements of day-to-day organizational performance are so compelling that there is little time or inclination to divert attention to the moral content of organizational decision-making. Morality appears to be so obscure in nature that it lacks substantive relation to performance. An effective organizational culture should encourage ethical behavior and discourage unethical behavior. Unfortunately, ethical behavior may end up costing the organization.

Being unethical in any arena, especially in the international business arena, is both bad-for-business and bad for the public. Unethical behavior is bad-for-business because it reflects an erosion of principles needed for an ordered and functional modern technical society. The world's economic system should be built on a strong set of values: trust, honesty, keeping commitments, respect for others' property, and cooperation. At minimum, market place morality is a requirement for business success. An efficient market needs standards of behavior based on some level of truth and trust.

Unethical behavior is bad business because it can offend or alienate key stakeholders - especially those in the host country. These stakeholders, who are important evaluators of the organization's ethical behavior, include individual managers, peer managers, workers, general society, media, government, and, most importantly, customers and clients.

It has often been said that the only constant in life is change, and nowhere is this truer than in the business world. Over the past decade, the U.S. Corporation has been battered by foreign competition, its own out-of-date technology and out-of-touch management and, more recently a flood of mergers and acquisitions. The result has made the old way of doing business impossible. As economies shift from one system to another, positive perceptions and stakeholder support are required for success. With so many environmental variables in flux, multinational organizations must promote a sense of normalcy, regular ethical habits, and familiarity.

The authors note in this ethical discussion that there are legal reasons for operating a business in an ethical manner but that legalities are not truly a sufficient argument. Also, in a recent issue of the Economist the journalist noted "Now and then depending on the circumstance, it is wrong to obey the law. And merely following the law does not exhaust a firm's ethical responsibilities, and many things required by ethics are not required by law." 1 It seems clear that the law does not cover the entire scope of business ethics.

International business is a complex endeavor with many interacting variables from the different social, cultural, educational, economic, and legal systems within the host and home countries. In addition, the variables are affected by the interactions between the host and home countries, especially of their political and military systems. In our opinion, it is no longer sufficient for multinational corporations to do merely what is legal. In