International Codes of Business Ethics: Literature Synthesis

Subject: Business Ethics
Pages: 6
Words: 1760
Reading time:
7 min
Study level: PhD

Introduction

As stated by Starr-Glass (2011), the globalization process has vastly affected business research and practice, and one of the outcomes of globalization consists in the cultural, legal, and ethical diversity of the contexts in which one organization may have to operate. The universal interest towards ethics and the attempts at creating a unified ethics code are, therefore, understandable, but the question of whether such a code can be constructed remains open. In this paper, the notion of an international business code is considered on its own and in application to a particular leader’s practice. Conclusions are made about the probability of global ethics code development and its significance for personal practice.

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Literature Review

International codes of business ethics: Emergence and implementation

When considering the international business ethics research Robertson and Athanassiou (2009) demonstrate that the interest in ethics, morality, and ethics codes has been growing in the scientific society throughout the past decade. The authors discover that the research focuses on legal aspects, global issues, and various ethical problems (for example, corruption). Such an amount of investigation should be able to pave the road towards an international ethics code.

For example, Svensson and Wood (2008) suggest a very detailed framework for the standards of ethical business conduct. They discuss a number of objects of ethics application (for example, stakeholders or the product) and point out that the style of ethical conduct of a company can be defined by its context and content. For instance, the application of the same code of ethics within the same context means that the code is local, but the application of that same content in different contexts makes the strategy and the code global. The authors suggest that an international approach to ethical conduct could be developed by using different, flexible content in various contexts. A very similar conclusion is made by Korthals (2008), who discusses ethics in food policies and points out that political, social, cultural, and even technological diversity contributes to the flexibility of the international views on ethics to the point of the principle of “doing well” becoming controversial. A relatively sexist study by Gill (2010) also indicates that greater flexibility in decision-making is more likely to bring positive results when resolving ethical issues (which, as the author’s study shows, is a behavior that is predominantly exhibited by females). All these studies appear to indicate that an international ethics code should be flexible.

However, flexibility does not necessarily mean the lack of system. For example, Warren (2011) suggests that certain basic and core values can be appreciated in any culture (for example, reciprocity). Also, the author points out the development of universal codes of ethics (for instance, human rights) are of importance for modern international businesses, even though they are not business ethics codes per se. In other words, a hypothetical universal business ethics code would be based on certain core principles. As pointed out by Warren (2011), such core principles can be found in a prototype of an international ethics code that is called corporate social responsibility (CSR). Zutshi, Creed, Sohal, and Wood (2012) highlight the fact that CSR is becoming increasingly influential for businesses all over the world. The authors point out that the definitions of the notion are numerous, but it can be stated that CSR presupposes taking the responsibility for the consequences of a company’s actions and avoiding bringing purposeful harm. In other words, CSR is flexible, but it has a core and some specific principles. This approach to ethics can be regarded as a form of a successful implementation of an international code, which, however, is still in the process of becoming a global one.

Leaders’ roles and perspectives

The role of the leaders of a company in the compliance with international ethics is central. As pointed out by Zutshi et al. (2012), managers are expected to make the decisions while keeping in mind the international and local views on ethics. The outcomes of these decisions are of primary importance for the reputation of the company, and while local ethics is of consequence for the local market, international codes can affect the company’s global practice. Robertson and Athanassiou (2009) suggest that in the future, the importance of this decision-making will only increase. Apart from that, it is often the job of the managers to develop the ethical guidelines for the organization and define the ethics training priorities. As stated by Gill (2010) and Robertson and Athanassiou (2009), the understanding of ethics can help in these processes.

To assist leaders in their practice, theoretical and practical courses in business ethics exist, and modern researchers work to develop tools for the resolution of ethical dilemmas in international business. For example, the article by Starr‐Glass (2011) discusses a course of cultural awareness that is meant for international business students who are willing to gain insights into the cross-cultural issues that can be of important for their practice. By collecting the feedback and reflections of the participant students, Starr‐Glass (2011) discovered that the students do not only increase their cultural awareness but also begin to abandon stereotypes, which is a positive outcome for a leader who needs to make ethical decisions in the international business arena.

International and local morality

Despite the goal of developing an international code of ethics, it cannot be denied that the diversity of the contemporary world presupposes the diversity of cultural and legal guidelines and norms, and this fact must be taken into account by modern managers. All the studies mentioned above demonstrate that the local morality cannot be ignored by modern leaders; instead, it needs to be incorporated in the global ethics codes as a basis for its flexibility. However, Robertson and Athanassiou (2009) insist that the complexity of the modern ethical and legal environment has not discouraged businesspersons but made them more sensitive and focused on the ethical aspect of their business.

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Conclusion

The literature review demonstrates that the creation of an international code of ethics is possible if it is flexible enough for all the local variations to fit into it. The attempts that have been made so far cannot claim the status of the global code, but some of them seem to be international, for example, the application of the human rights in business and the CSR. The modern research, which is very focused on the investigation of the differences between cultures and local ethics, appears to be a suitable ground for the development of an international code of ethics, and the latter can be used by managers to inform their decisions. However, ethical dilemmas that managers tend to face are characterized by the lack of a definite answer. The codes, international or local, are bound to be vague and provide directions rather than instructions. As a result, a code appears to be only one of the tools that a manager can employ in the process of resolving ethical issues. The business ethics research provides a manager with other tools and a solid background in global and local business ethics. Such a combination is more likely to bring positive results in personal practice, even though it does not undermine the significance of the development of global ethics codes.

Workplace-Based Case

This paper is devoted to my personal experience of working in the settings that cross a number of cultural and legal boundaries. I am currently working in such a setting, and I think that this experience has affected my understanding of a number of business-related phenomena, including business ethics.

My present workplace is an international company, which is quite large and possesses over 88 locations in various countries. The organization has the experience of the development of an organizational ethics code, which involved a conflict at a point. As a result, the majority of managers of the company are directly or indirectly involved in ethical issues that arise in a multinational organization, and even more of us face the consequences of the decisions of upper-level management in the field of ethics. In particular, I am concerned about the ethical dilemmas related to the outsourcing of workforce to countries with a lower quality of life. It results in the employment of cheaper workforce, which has a number of economic and ethical implications. In particular, outsourcing deprives domestic employees from workplaces, maintains the exploitation of the people of the less developed countries, and rarely results in curbing the employment practices that are considered unethical in developed countries (and increasingly all over the world). My company does use outsourcing, mostly employing the workforce of the African countries.

This area of business ethics remains underrepresented in modern research, but some related studies can be found. In particular, Zutshi et al. (2012) devote an article to what they call the balance of “selflessness” and “self-interest” in outsourcing. From the paper, it is apparent that the former can be termed as ethical, socially responsible decisions, while the latter deals with profitability. The authors outline the key ethical considerations that are related to outsourcing and highlight the fact that outsourcing does not have to be unethical; in fact, it can be beneficial for the employees of the host country, but this outcome can only be achieved with the help of weighted decision-making. The authors suggest their framework with several priorities, tools, and the focus on the balance-searching, but it is far from being exhaustive. It is noteworthy that the authors insist on ensuring the review of the working conditions in the host country and, when needed, raising them to a customized level. To sum up, the analysis of this and a few other relevant articles proves to me that the issue is being slowly acknowledged in the modern business research and that some tools for its solution can be found.

The question of the sheer possibility of the development of a globally acceptable code of ethics has also been of interest for me (which explains my current investigation of the issue). As the research above demonstrates, nowadays there is no truly universally accepted code, which is explained by cultural and legal diversities of the modern world (Robertson & Athanassiou, 2009). My work in an international company taught me to respect the differences, and I do not think that the development of an international ethics code should come at the expense of a country’s identity. As a result, I tend to believe that such a code would be very flexible as proposed by Svensson and Wood (2008) and Korthals (2008), but it would include some core principles like the notion of CSR does, which, however, would also be customizable.

References

Gill, S. (2010). Is gender inclusivity an answer to ethical issues in business? An Indian stance. Gender In Management: An International Journal, 25(1), 37-63. Web.

Korthals, M. (2008). Ethical rooms for maneuver and their prospects vis-à-vis the current ethical food policies in Europe. Journal Of Agricultural And Environmental Ethics, 21(3), 249-273. Web.

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Robertson, C. & Athanassiou, N. (2009). Exploring business ethics research in the context of international business. Management Research News, 32(12), 1130-1146. Web.

Starr‐Glass, D. (2011). Between stereotype and authenticity. Journal Of International Education In Business, 4(2), 112-124. Web.

Svensson, G. & Wood, G. (2008). International standards of business conduct: framework and illustration. European Business Review, 20(3), 260-274. Web.

Warren, R. (2011). Are we making progress in international business ethics?. Humanomics, 27(3), 212-224. Web.

Zutshi, A., Creed, A., Sohal, A., & Wood, G. (2012). Consideration of selflessness and self‐interest in outsourcing decisions. European Business Review, 24(3), 287-303. Web.