Ethical Issues and Business Conduct Across Cultures Presentation and Discussion

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Ethical Issues and Business Conduct Across
CulturesPresentation and Discussion

• Charles Blankson, Ph.D.

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Introduction

• 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
  dealing.
• Ethics involves judgments as to good and bad,
  right and wrong and what ought to be (Hartman,
  2002).
• Teens tendency toward deception (Bristol and
  Mangleburg, 2005).
• The golden rule therefore is do unto others as
  you would have them do unto you.

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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
  person.
• 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.

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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
  wrong.
• 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.

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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.

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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)

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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
  societies.

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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
  another
• 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.

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Cross-cultural issues

• 21 Century propelled by globalization and
  multiculturalism.
• 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.

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Cultural conflict unethical behavior

• Different cultures have different rules of
  conduct.
• Some cultures view certain ethical practices with
  different levels of condemnation (Pitta et al.,
  1999).
• The more serious problem concerns two different
  ethical standards meeting in a business
  transaction.
• US vs. Russian US vs. Nigerian US vs.
  Colombian US vs. UK US vs. Germany Israel vs.
  Egypt.
• This situation is characterized as cultural
  conflict.

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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.

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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
  (www.graphicghana.info, March 18, 2005).
• Shoddy construction works abound in Ghana and in
  Nigeria.
• Discussion on bribery is problematic and
  controversial.
• 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.

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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
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Woman fetching water in a country in Africa
result of failed government and corrupt
officials? Source BBC Online
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A teachers dilemma results of corrupt policies
and failed governments?
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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.

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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.

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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).

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Saudi Arabia

• Saudis conduct business only after trust has been
  well-established.
• 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.

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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
  Nigeria).
• 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.

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Ghana

• 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
  person.
• 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
  offers.
• Hofstedes cultural dimensions

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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

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US vs. Malaysia Hofstedes Cultural Dimensions
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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
  society?
• 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?

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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
  above

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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
  concerned.
• Malaysian consumers were more likely to respond
  positively to collectivist (as opposed to
  individualistic) marketing strategies.

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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).

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A woman selling produce in Harare Failed
governments and corrupt officials?
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Harare, Zimbabwe, a man selling on the street
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School children in Harare
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A young man in Harare
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Selling on the street in Harare
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Cars queuing for gas (petrol) in Harare
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Taxi in Harare
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Fetching water in some parts of Africa
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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).

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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)

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Photos from around the world

• Pipe-borne water in a country in Africa
• Wife of the President of Mali

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President of Mali Mr. Amadou Toumani
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President of Mali conversing with the oldest
woman in Mali, 128 years old.
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Man walking on a street in India
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Friends playing in India
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Woman washing clothes in India
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Man sipping tea in Egypt
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Montreal, Canada, skyline during Winter 2005.
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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
  world.
• Note Moral objectivism offers little
  accommodation for differing views (Robinson,
  2004).

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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?

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References

• Africa Better in colonial times,
  http//news.bbc.co.uk
• Early years, http//news.bbc.co.uk
• 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,
  pp.1-13.
• 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,
  http//www.graphicghana.info
• Customs, Courtesies of Ghanaians,
  http//www.graphicghana.info
• Why do we still smoke in Africa?
  http//news.bbc.co.uk
• 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.