Should International Businesses Do "As the Romans Do When in Rome"
Multinational companies face many challenges in their international business dealings due to the environments they operate in which are commonly less regulated, are not democratically governed with legal systems to solve ethical and social responsibility dilemmas and are full of corruption. Managers are consequently faced with many unfamiliar economic conditions, cultural values and competitive variables (Grace and Cohen, 2000:180).
Wild, Wild & Han (2010:128) define ethical behaviour as personal behaviour, which is in accordance with guidelines for good conduct or morality, and corporate social responsibility as the act of companies going above and beyond their legal obligations in order to maintain their commitments to their stakeholders.
Due to the differences in legal standards between countries and economic activities now being more globally integrated, many companies find themselves enticed to exploit these differences in order to seek higher profit margins. This is commonly achieved through the exploitation of business locations in countries whose business laws are less scrutinised, mostly the developing world. Concern has been expressed internationally to the role of these multinational firms making profits through conduct considered inappropriate, making corporate social responsibility extremely important for the prosperity and future of multinational companies (Wild, Wild & Han, 2010:128).
These legal differences managers are faced with become ethical issues, as there is no right or wrong decision, instead is dependent on one’s ethical stance and perspective. An argument therefore arises as to whether there should be universal moral standards for multinational companies.
Cultural relativism explains the culture-specific right and wrongs i.e. an action which is seen as ethical in one country may be considered immoral in another. Due to the moral values being relative to particular environments, “when in Rome, do as the Roman’s do” is at the heart of
Wild, Wild & Han (2010:128) define ethical behaviour as personal behaviour, which is in accordance with guidelines for good conduct or morality, and corporate social responsibility as the act of companies going above and beyond their legal obligations in order to maintain their commitments to their stakeholders.
Due to the differences in legal standards between countries and economic activities now being more globally integrated, many companies find themselves enticed to exploit these differences in order to seek higher profit margins. This is commonly achieved through the exploitation of business locations in countries whose business laws are less scrutinised, mostly the developing world. Concern has been expressed internationally to the role of these multinational firms making profits through conduct considered inappropriate, making corporate social responsibility extremely important for the prosperity and future of multinational companies (Wild, Wild & Han, 2010:128).
These legal differences managers are faced with become ethical issues, as there is no right or wrong decision, instead is dependent on one’s ethical stance and perspective. An argument therefore arises as to whether there should be universal moral standards for multinational companies.
Cultural relativism explains the culture-specific right and wrongs i.e. an action which is seen as ethical in one country may be considered immoral in another. Due to the moral values being relative to particular environments, “when in Rome, do as the Roman’s do” is at the heart of
References: Grace, D., Cohen, S., 2000, Business Ethics – Australian Problems and Cases, Oxford University Press, Melbourne. Kolk, A., Tulder, R. 2004 ‘Ethics in International Business: Multinational approaches to child labour’, Journal of World Business Vol 39, pp. 49-60. Retrieved 13th Aug 2010 from: http://wase.urz.unimagdeburg.de/evans/Journal%20Library/Ethical%20Management%20and%20Trust/Ethics%20and%20Child%20Labour.pdf Wild, J., Wild, K., Jerry, Han., 2010 International Business –The Challenges of Globalization. Pearson Education, New Jersey.