Globalization has created international markets for organizations. Consequently, businesses have to tackle ethical, social and cultural issues in new markets and cross-cultural settings. Thus, managers must recognize that the approach of managing a domestic firm differs from that of managing a global business. Managers must know countries vary in terms of political, socioeconomic, cultures, and legal requirements. Globalization cannot bridge some of these different among countries.
Some scholars have noted that there are different business ethics between the West and East. They observe that the West has common business drivers, which enhance social and ethical affairs of a company such as constant use of the press to update the public. On the other hand, such aggressive use of the media for social and ethical issues may be lacking in Asian market. At the same time, they also argue that business ethics of the East are still under development by emerging business groups, mainly those who have worked outside the Asian market (Krueger, 2008).
XYZ Construction Inc. management will face the dilemma of knowing what is appropriate in the Asian market, particularly with regard to marketing. Occasionally, ethical standards fail to define what is appropriate in a given cultural setting. This dilemma is complex in foreign markets where diverse cultures influence moral issues. What XYZ does in its domestic market may not be acceptable in Asian market e.g. offering gifts of high value to secure construction tenders. Such cultural differences may also present relationship difficulties and misunderstandings. A culture may consider such gifts as bribes whereas another culture accepts them as a form of normal business practices (Chandler, 2010).
XYZ Construction cannot avoid different cultural orientations of its domestic market and Asian market, though there might be elements of Asian culture in its domestic market. Culture will influence the company in a number of ways. Asian culture will make it difficult for the company to predict demands, consumers’ reactions, and understand consumer behavior. Customers have different economic constraints, choice criteria and social norms. Culture will also affect advertisement campaigns of the company. XYZ management should note that different countries require different marketing techniques. For instance, the company may find it difficult to use its standard advertisement campaigns in a foreign market before fulfilling some legal, cultural, and ethical requirements.
Cultural effects on labor and skills management vary from culture to culture. Asian market cultures will affect the company culture, how managers deal with the employees, negotiation of contracts, control of middlemen, relationships with businesses partners, among others. In short, culture has varied influence on what skills XYZ Construct will need to succeed in the vast Asian market.
XYZ may employ many workers to facilitate its Asian market growth. Likewise, the executives will always try to minimize costs as a part of their function in increasing profitability. However, issues will arise if the executives start laying off a large number of Asian workforces in its attempts to reduce costs. This will create unemployment and affect social welfare of the laid off workers. At the same time, it may also draw the attention of labor unions or government, which may affect its corporate governance and global image. Therefore, the XYZ executives must carefully recruit its workforce and take into account such consequences when making decisions (Pies, 2010).
Globalization has the potential to transform what it means for a company work and thrive in a foreign market. Therefore, to act ethically and socially in a globalized economy, executive must both identify what values and norms are common to everybody and remain sensitive to the differences present in the global community.
References
Chandler, J. D. (2010). Relationship-oriented cultures, corruption, and international. Journal of Business Ethics, 92(2), 251-267.
Krueger, D. A. (2008). The ethics of global supply chains in China – Convergences of East and West. Journal of Business Ethics, 79(2), 113-120.
Pies, I. (2010). Value creation, management competencies, and global corporate citizenship: An ordonomic approach to business ethics in the age of globalization. Journal of Business Ethics, 94(2), 265-278.