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Ethical Issues and Business Conduct Across Cultures Presentation and Discussion


Ethical Issues and Business Conduct Across Cultures Presentation and Discussion Charles Blankson, Ph.D. Introduction Ethics is a code of behavior that a society ... – PowerPoint PPT presentation

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Title: Ethical Issues and Business Conduct Across Cultures Presentation and Discussion

Ethical Issues and Business Conduct Across
CulturesPresentation and Discussion
  • Charles Blankson, Ph.D.

  • Ethics is a code of behavior that a society
    considers moral and appropriate for guiding
    relationship with one another.
  • The issue at stake here includes honesty,
    integrity, fair, open and straight-forward
  • Ethics involves judgments as to good and bad,
    right and wrong and what ought to be (Hartman,
  • Teens tendency toward deception (Bristol and
    Mangleburg, 2005).
  • The golden rule therefore is do unto others as
    you would have them do unto you.

Introduction contd.
  • Ethics deals with things to be sought and things
    to be avoided, with ways of life and with telos
    (Telos is the chief aim or end in life) (the
    philosopher, Epicurus, cited in Hartman, 2002).
  • Morals rules or duties that govern our behavior,
    e.g. do not tell lies, or do not hurt another
  • Values these are beliefs that a given behavior
    or outcome is desirable or good.
  • Values serve as standards of conduct that guide
    our behavior
  • Example how we value (a) the environment, (b)
    self-respect (c) keeping our family safe, (d)
    good health, (e) politics.

Introduction schools of thought
  • Existentialists led by Jean-Paul Sartre believe
    that standards of conduct cannot be rationally
    justified and no action is inherently right or
  • Thus each person may reach their own choice about
    ethical principles.
  • This view resides in the notion that humans are
    only what they want to be
  • Sartre claimed that existence precedes essence,
    i.e., first humans exist, then we individually
    define what we are our essence.
  • Therefore each of us is free, with no rules to
    turn to for guidance.
  • That ethics and moral responsibility belongs to
    each of us.

Schools of thought contd.
  • According to the Existentialists, what one
    person believes is right or just may not
    necessarily be believed by others.
  • Existentialists may say, perhaps, there is no
    right answer in this situation.
  • Relativists however call for some universal
    principles of right and wrong.
  • Relativists contend that the ethical answer
    depends on the situation, i.e., that ethics is
    relative to a particular society.

Theories about ethics and religion two issues
  • Theory of Rationalization
  • Based on the case whereby religious people
    attempt to be ethical both at home and outside
    their home (e.g., very devout religious people).
  • Theory of Sacred Canopy
  • In todays materialistic, opportunistic and
    fast-paced lifestyle, it is a common belief that
    religious people have lost their influence on the
    direction of morals and ethics. This has meant
    that although people may be ethically astute at
    home, they may behave differently away from home.
  • Source Rawwas (2005)

More issues about ethics
  • Remember that ethics does not refer only to
    financial favors, i.e., corruption, but includes
  • Conflict of interest,
  • Misuse of position by abusing ones office (e.g.
    misusing confidential information, government
    property, official time etc.).
  • According to Gbadamosi (2004), high ethical
    standards, and low corruption perception will
    always be relevant in organizations and human

More issues about ethics contd.
  • We already use ethics as a basis for decision
    making family situations etc.
  • there is no law that requires one answer or
  • you might believe that you should act one way
    or another because it is the right thing to do
  • This is your personal ethic and which stems from
    the society/culture one belongs to.

Cross-cultural issues
  • 21 Century propelled by globalization and
  • The case of BP, Burger King, HSBC
  • The case of Japanese and South Korean auto makers
    in the US
  • Implications for international marketing US
    outsourcing its call centers in India and China
    or the US reliance on crude oil from Saudi
    Arabia, Kuwait and Nigeria.
  • Even locally, cultural diversity and
    cross-cultural issues present different
    challenges to all marketers.
  • Important in USA, UK, Canada, South Africa.

Cultural conflict unethical behavior
  • Different cultures have different rules of
  • Some cultures view certain ethical practices with
    different levels of condemnation (Pitta et al.,
  • The more serious problem concerns two different
    ethical standards meeting in a business
  • US vs. Russian US vs. Nigerian US vs.
    Colombian US vs. UK US vs. Germany Israel vs.
  • This situation is characterized as cultural

Cultural conflicts and unethical behavior
bribery, corruption and sleaze
  • The US Foreign Corrupt Practices Act.
  • Bribery is part of life in some countries because
    of different ethical standards.
  • Russia, Pakistan, Nigeria have been mentioned in
    the popular press.
  • Also in the West UK, USA, France, Japan.
  • with tobacco advertising banned in many Western
    countries, cigarette manufacturers are
    increasingly targeting countries in Africaand
    more and more Africans are taking up the habit
    (BBC online News, 18 March 2005).
  • Tanzania, Uganda, Ghana, Kenya and Mauritius have
    introduced smoking bans and have increased taxes
    on tobacco sales.

Bribery and corruption in Africa
  • In Ghana, the governments zero tolerance for
    corruption is challenged because Ministers have
    still not declared their assets.
  • The Ghana Integrity Initiative (GII) is urging
    the government to implement the Public
    Procurement Act to enable it to subject ministers
    and public officials to greater degrees of
    scrutiny in the award of construction contracts
    (, March 18, 2005).
  • Shoddy construction works abound in Ghana and in
  • Discussion on bribery is problematic and
  • The case of Nigeria and Ghana where it is argued
    that the roots are embedded in colonialism,
    rather than the fact that these countries are
    relatively poor.

The German-based Transparency International
Corruption Perception Index in 2002 (Africa)
Countries Africa Rank World Rank Countries Africa Rank World Rank
Botswana 1 24 Senegal 9 66
Namibia 2 28 Malawi 10 68
South Africa 3 36 Cote dIvoire 11 71
Tunisia 3 36 Zimbabwe 11 71
Ghana 5 50 Tanzania 11 71
Morocco 6 52 Zambia 14 77
Ethiopia 7 59 Kenya 17 96
Egypt 8 62 Nigeria 20 101
Woman fetching water in a country in Africa
result of failed government and corrupt
officials? Source BBC Online
A teachers dilemma results of corrupt policies
and failed governments?
Culture as the basis of business ethics
  • There is common agreement that a countrys
    culture is directly related to the ethical
    behavior of its managers. Two themes
  • (1) Public or corporate statements and actions
    about ethical behavior.
  • (2) The collection of ethical attitudes and
    values in the country.

Interface of culture and business ethics
American Culture
  • Ethical roots date back to the founding fathers
    and their traditional Judeo-Christian and Western
    socio-theological laws and principles. The
    founding fathers were mostly Christians and
    identified three basic self-evident truths
    regarding inalienable rights of mankind to
  • Life
  • Liberty and
  • The pursuit of happiness
  • and exercised in an environment in which people
    are equal under the law.

Culture and business ethics contd. (Saudi Arabia)
  • Two dimensions influence the business culture (a)
    Islam and (b) the Bedouin tradition.
  • The Bedouin tribal heritage views loyalty,
    justice, generosity and status as important.
  • Religion has a profound effect on business,
    politics and social behavior.
  • The mutawwa (The Saudi religious Police) is run
    by the Society for the Propagation of Good and
    Abolition of Evil ensure compliance (Rice, 2004).

Saudi Arabia
  • Saudis conduct business only after trust has been
  • The Bedouin tradition allows business meetings
    without a prior appointment.
  • Sexual modesty and chastity is highly valued.
  • Separation of women from unrelated men.
  • Most activities outside her home requires the
    mediation of a female servant, male relative or a
    male servant e.g., chauffeur or gardener.
  • Women are not allowed to drive, but they can use
    a male chauffeur.

Customs and Courtesies of Ghanaians
  • English greetings (good morning etc.) and hand
    shakes are common.
  • In the Akan culture of Ghana, inheritance is via
    the maternal lineage rather than the paternal
    lineage (i.e., nephews inherit their uncles
    rather than sons inheriting their fathers).
  • Most greetings are in the dominant local language
    and are followed by questions about ones health,
    family welfare, journey (these were found to be
    similar in Saudi Arabia and also in northern
  • Children refer to any adult that is well known
    to the family as aunt or uncle even when they
    are not related.
  • It is generally improper to pass or receive items
    with the left hand. Right hand or both hands are
    the norm.

  • It is common and appropriate for friends of the
    same sex to hold hands while walking/speaking. It
    does not signify anything beyond friendship.
  • It is impolite to place feet on chairs, desks, or
    tables especially those being used by another
  • Friends and relatives visit one another
    frequently, often unannounced.
  • Most initial business visits occur at home and it
    is polite to take a small gift for children.
  • Guests are always served drinks and other
    refreshments. It is impolite to refuse these
  • Hofstedes cultural dimensions

Geert Hofstedes (1979) Cultural Dimensions
  • Power Distance
  • The willingness of a culture to accept status and
    power differences among its members
  • Individualism / Collectivism
  • The tendency of a cultures members to emphasize
    individual self-interests or group relationships
  • Uncertainty Avoidance
  • The cultural tendency to be uncomfortable with
    uncertainty and risk in everyday life
  • Masculinity / Femininity
  • The degree to which a society values
    assertiveness or relationships
  • Long-term / Short-term Orientation
  • The degree to which a culture emphasizes
    long-term or short-term thinking

US vs. Malaysia Hofstedes Cultural Dimensions
The six dimensions of culture by Kluckholn and
Strodtbeck (1961)
  • 1. What are the societys assumptions about the
    essential goodness of people?
  • 2. What does the society emphasize in
    interpersonal relations, the individual or the
    group? Should people feel free to act as
    individual or as a group?
  • 3. What is the value of personal space in the
  • 4. What does the society assume about the
    relationship of man and nature? Is man meant to
    live in harmony with nature or to dominate it?
  • 5. What is the role of change in society (value
    for stability?)
  • 6. What is societys regard for time past
    present or future?

Research undertaken by Singhapakdi et al. (1999)
in Journal of Consumer Marketing
  • How consumers from Malaysia and USA differ in
    their perceptions of
  • Marketing ethics
  • Attitudes toward business and salespeople
  • Personal moral philosophies that underlie the

Singhapakdi et als. (1999) Results
  • Malaysian consumers were less sensitive to
    unethical marketing practices.
  • Malaysian consumers tend to be less idealistic
    and more relativistic in their moral philosophies
    than US consumers.
  • Relative to US consumers, Malaysian consumers
    reject moral rules (i.e., high relativism).
  • They are however positive about the possibility
    of achieving positive outcomes for everyone
  • Malaysian consumers were more likely to respond
    positively to collectivist (as opposed to
    individualistic) marketing strategies.

Research undertaken by Robinson (2004) in Journal
of African Business
  • To examine how entrepreneurs experience and deal
    with ethical dilemmas in South Africa.
  • Results Entrepreneurs forsake demeaning
    workplace and inter-personal practices,
    containing crime, adopting socially responsible
    and ethical business practices, appreciating
    ethnic differences and attempting to reconcile
    with each other.
  • Ethics is facing challenges in the context of
    (a) Issues such as diversity, (b) overcoming the
    legacy of Apartheid, (c) crime containment, (d)
    business ethics, (e) reconciliation between
    different ethnic groups.
  • Apartheid may be officially dead and buried,
    but its legacy thrives in a clearly dichotomous
    society (Robinson, 2004).

A woman selling produce in Harare Failed
governments and corrupt officials?
Harare, Zimbabwe, a man selling on the street
School children in Harare
A young man in Harare
Selling on the street in Harare
Cars queuing for gas (petrol) in Harare
Taxi in Harare
Fetching water in some parts of Africa
Happy? about a newly installed pipe-borne water
in a country in Africa
  • Africa is the only continent to have become
    poorer in the past 25 years.
  • By the year 2000, half of the worlds poor were
    in Africa compared with 10 in 1970 (BBC online
    News, March 18, 2005).

Is Africa better in colonial times? asks
Moeletsi Mbeki
  • the average African is poorer than during the
    age of colonialismin the 1960s African
    elites/rulers/politicians, instead of focusing on
    development, amassed enormous wealth, saving
    their loot in Western countries Switzerland,
    UK, USA, France)

Photos from around the world
  • Pipe-borne water in a country in Africa
  • Wife of the President of Mali

President of Mali Mr. Amadou Toumani
President of Mali conversing with the oldest
woman in Mali, 128 years old.
Man walking on a street in India
Friends playing in India
Woman washing clothes in India
Man sipping tea in Egypt
Montreal, Canada, skyline during Winter 2005.
Closing comments and implications for
international marketing
  • Many of the differences in ethical behavior
    result from the worlds cultural diversity.
  • Most pressing challenge for international
    marketing is tolerance of diversity.
  • think and act as equals with overseas business
    partners (Robinson, 2004).
  • According to Robinson, philosophers through the
    ages have advised that it is important to
    appreciate cultural differences.
  • The latter calls for a relativist view of the
  • Note Moral objectivism offers little
    accommodation for differing views (Robinson,

Closing comments contd.
  • Notwithstanding, in view of the well known human
    shortcomings such as fraud, bribery, corruption,
    sleaze, deception across all cultures, the
    question is
  • How can we ensure the adherence to ethical
    conduct in cross-cultural business?

  • Africa Better in colonial times,
  • Early years, http//
  • Singhapakdi, A., Rawwas, M. Y. A., Marta, J. K.
    and Ahmed, M. I. (1999), A Cross-cultural study
    of consumer perceptions about marketing ethics,
    Journal of Consumer Marketing, Vol.16, No.3,
  • Rice, G. (2004), Doing business in Saudi
    Arabia, Thunderbird International Business
    Review, Vol.46(1), January-February, pp.59-84.
  • Pitta, D. A., Fung, H. G. and Isberg, S. (1999),
    Ethical issues across cultures managing the
    differing perspectives of China and the USA,
    Journal of Consumer Marketing, Vol.16, No.3.
  • Implement Procurement Law-Integrity Initiative,
  • Customs, Courtesies of Ghanaians,
  • Why do we still smoke in Africa?
  • Robinson, D. A. (2004), Entrepreneurial
    Challenges in South Africa, Journal of African
    Business, Vol.5(2), pp.173-185.
  • Hartman, L. P. (2002), Perspectives in Business
    Ethics (2nd ed), McGraw-Hill, New York.
  • Gbadamosi, G. (2004), Ethics, Corruption and
    Economic prosperity in Africa Botswana
    Experiences, Proceedings of the International
    Academy of Business Development (IAABD),
    Atlanta, April 7-10, pp.204-213.
  • Bristol, T. and Mangleburg (2005), Not Telling
    the whole Story Teen Deception in Purchasing,
    Journal of the Academy of Marketing Science,
    Vol.33, No.1, pp.79-95.
  • Rawwas, M. Y. A. (2005), Does Religion Matter? A
    Comparison Study of the Ethical Beliefs of
    Students of Religious and Secular Universities in
    Japan, Proceedings of the AMTP Conference, March
    24-26, Jekyl Island, GA, pp.378.