Maintaining Ethics in Global Business, Research Paper Example

The growth of the global business has brought about the issues of ethical practice in international operations. There are many different business factors that operational managers need to juggle, and it can create ethical dilemmas. Countries have variations of laws that may not be sufficient to maintain the standards that the traditional operations of the company. In efforts to increase profits, the firms may lower their standards to benefit the bottom line, while sacrificing quality, safety, and ethical conduct. With the growing awareness and expectation for businesses to operation with Corporate Social Responsibility (CSR) companies that take advantage of alternative laws and poor business practices are receiving negative attention as a result. International operations have to place a greater emphasis on their ethical practices to contend with a more transparent business world.

Business Ethics in International Operation

In the light of the globalization of business and the increasing salience of business ethics, business today have to tackle the complexities of an international operation. Such expectations require companies to establish their expectations on ethical behaviors. “Ethical behavior means that the individual behaves in a right way that will be accepted by the whole society” (Yüksel, p.26). It dictates ethical practices are established within the company, and it carries over to every location the business operation. Corporate Social Responsibility is not a new concept, but its importance is growing more and more apparent. Companies that fail to maintain ethical practices and standards locally and internationally are not increasing their bottom lines, but receiving a significant amount of negative publicity.

International operations require the firm to establish their ethical business standards based on a uniform set of expectations. It requires the company to understand the differences of global standards. “Moreover they assert that the core of global ethics and standards is based on self-understanding, lenience of differences, appreciation for the unique and great interest in unknown” (Venardos & Fung, p.16). Embracing cultural and operational differences will allow for the firm to evaluate their business practices and establish their position in the global market. It is important for firms to be consistent with their ethical standards and to decline to alter those standards. “If societies are to be consistent about their moral beliefs then it seems that societies ought to condemn those past societies that have not conformed and perhaps even seek to impose their moral code on those present societies that have not already accepted it” (Mohamad 2010, p.151). Societies have expectations of firms that operate in their communities, and their transparent business practices allow for societies to accept or reject the organization based on their standards.
Companies that made Specific Ethical Revisions

There are several companies that had to make ethical decisions for the best interest of their company. Apple Inc., they are a leader in the technological field. The company worked hard to build their name based on the integrity of their products. However, recently the company was under fire because one of their Chinese manufacturing plants had seventy-four children under the age of sixteen working in the facility. According to the Garside (2013), China does not have child labor laws and in their eyes they were doing business as usual. Apple Inc. was expected to comply with the American standards and to ensure that their facilities operate in a manner that supports the ethical and moral position of the company. Despite their products being the top in the market, the company had a difficult time in overcoming the negative repercussions of the children who were working in their factory. It shows very clearly that ‘while in Rome, do as Romans’ is a practice that can seriously tarnish a company’s name and image. Apple Inc. did not hire the children, nor did they condone, however, it was their factories, and they should have had some system in place to ensure that their ethical expectations transferred to all locations globally.

Victoria Secret is a name that is also common in most households. They are known for their quality products and the value that is associated with their name. The company used cotton from Burkina Faso, Africa where it was determined that they could not operate without the use of child labor. Krupnick (2011) reported about a thirteen-year-old girl, Clarisse, who slept on a piece of plastic outside and would wake up to work by someone yelling at her. She planted and picked cotton for long hours, and when she didn’t move fast enough, the boss would beat her with a stick. The company did not condone using child labor, however because they are the association with such business practices reflected poorly on the company.

Another company that dominates their market is Nike, and they have faced negative publicity for business practices that are taking place overseas. Nike outsources their manufacturing to overseas companies. According to Braddock (2011), it has been discovered that these factories are not safe and mandate ridiculous hours and expectations. Employees who work fourteen hour days and have one defect in their product could be docked their entire pay. Also, the factories pose serious dangers to the employees because they are not up to standard with the United States safety expectations. In the locations that they are operating in, there are no such standards, so they are conducting business as usual. However, Nike is expected to operate with the minimum ethical and legal standards that promote safe and fair working environments. It shows how the idea of operating based on the standards of the global location is not a practice that will promote a positive image for the company.

Sustainable and Profitable International Business

Finally, the firm must determine how to maintain and improve their ethical standards while increasing their profitability in international business operations. “The World Business Council for Sustainable Development explains social responsibility in a corporate context as a company’s continuing commitment to act legally and morally and also to contribute to the economic development of society while improving the quality of life of their employees and their families as well as the local community and society as a whole” (Holmes and Watt, np). Sustainability and profit increases coincide with the ethical standards of company operations. Transparency in the global business world does not allow business to succeed with standards that are not in line with societies expectations. Ultimately Corporate Social Responsibility goes hand-in-hand with profitability and sustainability.

According to the BSC, sustainability and continual success of the business can only be obtained by adhering to four core values.

Economic, indicating that a business obviously must have a viable business model that fulfills a need and enables the business to make a profit; Legal, indicating that this profit must be achieved in legal manner by aligning the conduct of the business with all applicable local, national, and international law; Ethical, indicating that since there may be no law or “gaps” in the law, nonetheless the business must act in a moral manner and also must act in conformity with its values, promises, and obligations; and Social Responsibility, indicating that the business must focus on the community and engage in civic, philanthropic, and charitable endeavors as part of the business’ overall strategic plan. (Mujtaba & Cavico, p. 61).

Firms no longer have the luxury of changing their ethical standards and position to adapt to the local laws in which they are operating. They have to maintain their highest standards at all times to remain competitive and profitable in the global market.

International operations have to place a greater emphasis on their ethical practices to contend with a more transparent business world. The efforts for firms to increase their bottom line by allowing lower ethical practices to take place has backfired. Take companies like Nike, Victoria Secret, and Apple Inc., these are all international organizations that received significant negative publicity for not maintain their ethical standards in international operations. Perhaps these companies were unaware of what was going on; however their practices became heavily publicized, and it took a significant amount of time for them to reestablish their name. In today’s global business world, operating without ethics is no longer acceptable. The transparency of business practices requires the firm to establish a specific set of ethics and to mandate them in every field of operation, locally and internationally. Just because an alternate location has not evolved to the same standards of business, does not mean that it is acceptable to revert to unethical practices in efforts to increase the bottom line. Ultimately it will end up costing the firm more in the long-run.

Work Cited

Braddock, John. Nike faces allegations of worker abuse in Indonesia.World Socialist Website,2011. Web. 15 Oct. 2015.

Garside, Juliette. Child labour uncovered in Apple’s supply chain.The Guardian,2013. Web. 14 Oct. 2015.

Holme, Lord and Watts, Richard. Making Good Business Sense. The World Business Council for Sustainable Development, 2004. Print.

Krupnick, Ellie. Victoria’s Secret Uses Child Labor-Produced Cotton From Burkina Faso.The Huff Post, 2011. Web. 14 Oct. 2015.

Mujtaba, Bahaudin G. &Frank J. Cavico. Corporate Social Responsibility and Sustainability Model for Global Firms. Journal of Leadership, Accountability and Ethics vol. 10(1) 2013. Print.

Mohamad, Shafi. Ethical Corporate Culture and Guidelines for Ethical Leadership.International Journal of Trade, Economics and Finance, Vol. 1, No. 2, 2010. Print.

Yüksel, Ö. Business Ethics and Cooperative Management. Cooperation in Turkey, 20, 1994, p. 26. Print.

Venardos, T. J.; M. L. Fung. Seven Reasons Why Global Ethics Should Be Part of The Way You Communicate. Communication World, 15:7, 1998, p. 16-17. Print.