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Ethics of International Business

The creation of corporate culture

For international business management, the creation of corporate culture and the achievement of social responsibility goals depends on the ethical perspective the organization takes. In terms of emerging globalization in multiple spheres of economics, companies that operate internationally need to adjust their policies and codes of conduct to the expectations and cultural beliefs that are understandable for employees, partners, and consumers in various parts of the world.

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Multiple ethical approaches

There are multiple ethical approaches to conducting international business. For example, the doctrine of cultural relativism implies that for a business to be successful in a particular foreign company, it should recognize and accept the local culture. However, other scholars suggest that multinational companies involved in global business must “refrain from cultural relativism” and cultivate universal moral standards (Kolk & Van Tulder. 2004, p. 49). Such a philosophical approach will require significant investment to research local cultures and create a universal ethical code for the international team of employees to follow. Indeed, according to Friedman’s (1983) doctrine, the central moral issue for a multinational corporation should be social responsibility, which is the company’s obligation to run the business and make a profit, which will ultimately benefit society.

Role of the ethical standards and corporate culture

The ethical standards and the corporate culture of an international business defines how successful it will be abroad. According to Enderle (1999), the reputation of a business on an international level depends on the attention the management pays to culture as an important aspect of the business. Also, “the role of cultures in influencing norms of business behavior” is explained by the ability of a company to construct a working environment characterized by universal moral standards and the attention to local particularities (Enderle, 1999, p. 500). For example, when following Friedman’s doctrine, an international company should pursue clear business goals by creating a universal multinational corporate culture. In the same manner, the identification of an ethical approach will define international business negotiations. When following the cultural relativism approach, the negotiators will accommodate the local culture. However, when following Friedman’s doctrine, the social responsibility of a company to produce profit will be prioritized in negotiations.

References

Enderle, G. (Ed.). (1999). International business ethics: Challenges and approaches. University of Notre Dame Press.

Friedman, M. (1983). The social responsibility. Ethical Theory and Business, 2, 81-83.

Kolk, A., & Van Tulder, R. (2004). Ethics in international business: multinational approaches to child labor. Journal of World Business, 39(1), 49-60.

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StudyCorgi. (2022) 'Ethics of International Business'. 12 March.

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