Currently, the practice of international trade is increasing, with several businesses setting their operations in different countries across the globe. Every business organization has its own culture and how it affects the overall functions. Globalization has brought people from various parts of the world to conduct commercial activities together. Individuals tend to have varied cultural beliefs that impact their ethical behaviors. In most cases, it becomes a challenge for the company operating in a foreign country to adapt to the work ethics within the given nation following variations on home traditional norms. The integration makes it necessary for organizations to have an insight into the values and practices of other countries. The cultural background makes nations have diverging ethical beliefs, thus affecting commercial performance.
Generally, the ethics of a business are developed and shaped according to the laws of the organization’s home country. This makes it normal for companies to have different ethical practices in their operations (Canestrino & Magliocca, 2018). For commerce purposes, firms that tend to extend their activities to foreign markets are usually faced with the moral factors caused by the variation in cultural beliefs of the host country.
In the US, it is unethical for a business organization to bribe the authority to be allowed to conduct its operation in the given region. This would imply unfair practice that can lead to termination and confiscation of the work permit due to violation of the law. In Saudi Arabia (SA), foreign and domestic firms offer lump-sum payments to state officials in order to secure an opportunity to operate in the country. SA laws do not firmly punish or prohibit the companies from paying bribes; therefore, they view it usually and not immoral.
In SA, women are not allowed to hold a managerial position in business, therefore, limiting their rights and contribution to the performance of the company. Based on their laws, it is morally right to prohibit females from such roles in an organization (Vitell et al., 1993). On the contrary, US women have the opportunity to manage and lead companies as managers or chief executive officers overseeing all the crucial operations of the entity. It is a moral practice that allows females with competent skills and abilities to perform the duties.
Companies in the US are not allowed to employ minors to work or perform any role, considering the act as unethical practices. Child labor means a violation of the rights which is against the federal laws. Therefore, people believe that engaging children to work before attaining the right age is immoral. In SA, most organizations employ kids to work since the nation does not have strict measures that deter individuals from allowing young ones to involve in heavy duties before they mature.
In the US, women can have a dress code of their choice ranging from jeans, pants, sweaters, make-ups, and casual clothing. People consider it moral, and they have less concern about the personal outfit (La Fornara, 2018). Some females may wear mini-skirts leaving their knees exposed or even their shoulders. On the contrary, SA values the mode and choice of dressing women are allowed to wear.
In the US, individuals value time and relate punctuality with proper organization, planning, and effectiveness. People who arrive early are considered productive at work and deserve promotion due to commitment and time management. Similarly, during business meetings, Americans prefer coming before or on the expected time to show the value they have for the appointment. In SA, punctuality is not tied to the planning or organization of an individual.
Decisions Related to Business Ethics Issues
The variation in ethical views can result in a different decision for businesses operating in areas with varied cultural values. Companies may be forced to alter their ethical practices in the host country to sustain their survival. Moral viewpoints are critical in influencing the choices firms to make to undertake their operations (Rausch et al., 2014). An organization has to take into consideration the beliefs of the people where it operates and incorporate them to enhance its success in the market.
Hiring of Employees
When recruiting workers, a company must consider the values around gender and work ethics that may have an impact on the operation. For example, a US firm operating in the US may not be able to hire female managers to take control of the organization’s top management. This is because the ethical view of SA limits women from being employed to manage top positions. This is against the morals of the US, where women can be recruited to handle higher offices.
Payment of Bribe
Even though countries like the US prohibit firms from paying state official money to allow them to operate and secure government contracts, other nations will enable the practice, and for the business to obtain contracts, it has to pay. The difference in ethical practice would mean a company has to work against moral standards in order to have the opportunity to operate in the region. The decision to issue a bribe may be violating the organization’s norms, but within the setting, it gives the industry have upper hand in the market.
Marketing of Products
A business has to sell its brands to the people in the host country. In most cases, to advertise the product, the company has to incorporate some pictures or labels on the commodities to aid in attracting consumers. Assuming the company is selling lotions and the packages have photos of women whose body parts are visible, for the items to gain market in SA may be difficult since Saudi Arabians value dress code (Vitell et al., 1993). Therefore, it will force the firm to restructure its packages and have images that respect the culture and morals of the individuals to facilitate sales of the body oil in the area.
Companies require a good reputation to have a large market share in the industry. Ethical conduct plays a significant role in determining how the firm position itself amongst consumers (Cowan & Guzman, 2020). When an organization’s staff members, especially ladies, wear clothes deemed immoral within the region where the business operates, society will judge the firm’s ethical behavior. To be able to rectify such issues, the industry will be forced to review its standards to accommodate the views of the market for effective performance. For instance, in SA, foreign entities will be required to consider women employees’ dress codes to maintain and respect the country’s values and beliefs.
To remain effective in the market, multinational companies should adopt ways to allow them to manage and work with the different ethical views they encounter within the host countries. The challenges may be either inside or outside the corporation, but the management should be at the forefront to ensure better practices or policies are put in place to guide the decisions. I would recommend the following actions for the firms to enhance diversity.
Employ Qualified and Competent Individuals
During recruitment, an organization should have a policy that ensures only people who are qualified and have the abilities to work with persons of different ethical views should be hired. Proper procedures should be followed to hire candidates who have an adequate understanding of the international business and capable of managing and encouraging diversity in the workforce (Canestrino & Magliocca, 2018). This will enable the company to have less issues regarding moral conduct that can impact its decision-making.
Conduct Ethical Training
Training employees on moral issues increase their awareness and exposure to what others may consider immoral values. The corporation should continuously engage its staff members in understanding the cultural variations amongst them so that they can easily comprehend how to relate to the varied ethical views. This would promote diversity among workers as people will learn more about one another’s culture hence enhancing respect and tolerance.
Promote Virtue Ethics
A multinational company should promote virtue ethics amongst its employees. The approach will make the firm look into individual acts instead of actions or opinions. It will help in dictating the decision to be made by the business since it focuses more on the discriminative intelligence of the people rather than codes of ethics. The practice will also enable employees to have a personal sense of understanding hence creating a different view of the behaviors.
In summary, according to the research, it is evident that different cultures have significant impacts on the ethical views of individuals. Multinational organizations are forced to understand and make relevant decisions in relation to moral issues in the country where they operate. Individual perception about cultural believes affects how they value and rate others with contradicting norms. The work tradition in the US is completely dissimilar to that of SA because the people have varied believes. Despite the variations, corporations can still formulate practices to accommodate the changes to enhance their effective operation in the host country.
Canestrino, R., & Magliocca, P. (2018). Managing Business Ethics in a Global Environment: The Impact of Cultural Diversities. In A. Presenza, & R.S. Lorn.(Eds.), Geopolitics and strategic management in the global economy (pp. 137-169). IGI Global.
Cowan, K., & Guzman, F. (2020). How CSR reputation, sustainability signals, and country-of-origin sustainability reputation contribute to corporate brand performance: An exploratory study. Journal of Business Research, 117, 683-693.
La Fornara, L. M. (2018). Islam’s (In) compatibility with the West?: Dress code restrictions in the age of feminism. Indiana Journal of Global Legal Studies, 25(1), 463-494.
Rausch, A., Lindquist, T., & Steckel, M. (2014). A test of US versus Germanic European ethical decision-making and perceptions of moral intensity: Could ethics differ within Western culture?. Journal of Managerial Issues, 259-285.
Vitell, S. J., Nwachukwu, S. L., & Barnes, J. H. (1993). The effects of culture on ethical decision-making: An application of Hofstede’s typology. Journal of Business Ethics, 12(10), 753-760.
In business, culture and ethics are core factors that influence the relationship amongst employees, the company and the state, or stakeholders and the community. The cultural aspects are significant in defining an individual’s ethical views. Therefore, it implies a strong correlation between societal beliefs and the moral values of persons. The difference in culture makes it a key concern and consideration for employers while evaluating their operations, such as hiring workers and deciding where to start their firms.
Based on the course outcome, multinational corporations encounter cultural differences that cause variation in ethical views that might not align with the company’s morals. Such situations force the business organization to decide how to adjust its activities and principles to make it operate easily in the environment. This might call for violating the business’s law to accommodate changes caused by culture in the host country for effective performance in the market.
In different countries, culture determines people’s ethical behavior and makes them decide what practices to be appropriate and inappropriate. In most cases, an act that is morally in one country might be immoral in another nation. For instance, in the US, women can dress in tight-fitting or mini-skirt clothes and go to work in an organization because it is ethically right. On the contrary, in SA, ladies cannot wear tight dresses that expose their bodies since it is against their culture that decides what is honorable for individuals. In conclusion, business organizations should ensure they understand the cultural believes of the people since they influence their moral perspective. When deciding to operate in a foreign country, a company should have policies that would enable it to deal with cultural differences in the workplace for better performance.