Toward a Model for International Business Ethics by Asgary and Mitschow - Article Example

ARTICLE REVIEW By Name Course Instructor Institution City/State Date Article Review Introduction A critical review of Asgary, N. & Mitschow, M.C., 2002. Toward a Model for International Business Ethics. Journal of Business Ethics, 36(3), pp.239-46. The main objective of this article is to analyse the business ethics topic and recommends a code of ethics for multinational companies. The authors examine the issue of international business ethics and also offer a future discussion’s framework. They analyse the unique challenges that surrounds the development of different sets of global business standards. As cited in the article, the main challenge is the competing ethical values the host as well as home countries. The article holds that although the majority of companies have implemented basic policies on employees’ sexual harassment, confidentiality and integrity, only a few have formulated policies concerning child exploitation and bribery. Clearly, global business ethics have turned out to be a major issue for scores of multinational companies (MNCs). The article briefly analyses the context of global business ethics and suggests a code of ethics for companies seeking to globalise their operations. Citing a number of studies, the article indicate that some organizations have tried to formulate individual codes of ethics by utilising codes of conduct, symposia, conferences, as well as international agreements. Normally, such codes of ethics are country specific and their focus is not on the international policy. While firms are globalising their business operations, the authors point out that it is imperative for these firms to have centralized standards that are acceptable internationally with outcomes that promote suitable business conduct. Body Summary Asgary and Mitschow (2002) focus on the issues of international business ethics and offer a code of ethics for MNCs. According to the authors, the international business ethics concept is somehow new, but there is need for further studies in this area. The authors explore previous studies and established that they make contribute significantly to the area of international business ethics. The previous studies, as cited in the article, indicate that the current developments in the international business go beyond the national processes and structures, which were practiced in the past. Therefore, unethical practices such as human rights violation and exploitation of the employees continue to happen. This article is important in the field of business ethics because it suggests a code of ethics for multinational firms. The article demonstrates that although the majority of companies have developed policies that promotes confidentiality and integrity and reduces sexual harassment, only a few have come up with policies that seek to curb suppressive child labour, bribery, violations of human rights as well as other issues encountered at the international level. The article is important because it pays attention to the ethical guidelines issue within the global context. It highlights the recent international markets changes, which have resulted in increase in the number of corporations operating globally. The authors established that the majority of problems at the international level are attributed to the fact that most companies presume that foreigners have no respect to the culture and goals of the host countries. For this reason, the article provides a framework that supports host country’s economic goals, which enables the globalised business to manage the apparent lack of respect in the global business relations. The authors suggest that companies have to focus on understanding the beliefs and cultures of the host country in order to succeed in the foreign markets. The research methodology utilised in the article is literature survey, whereby the authors reviewed the existing studies with the objective of designing a global business Code of Ethics, which included fairness, trust, honesty, responsibility, and full disclosure of financial information. The suggested code of ethics also included; respect to the national sovereignty, cultural and social values as well as traditions; supporting the host country’s economic goals; respect to fundamental freedoms and human rights; offering equal opportunity; maintaining the company’s integrity; upholding environmental rules and regulations; and honouring agreements and contracts. In the literature survey, the authors established that all organisations can create a set of consequences for the workers infringing the implemented policies. A number of organisations, for instance, have adopted an approach whereby workers are offered a chance to redeem themselves or they would get fired. To enable employees uphold the organisation’s code of ethics, some organisations require new recruits to take part in the ethics refresher courses all through the year as an employment requirement. As a result, the employees become updated regularly on every ethical procedure and policy. The code of ethics for international business suggested by the authors was derived through literature survey as well as from other sample business codes that could be accessed through the Internet. The authors observed that scores of the existing codes of business ethics in the companies that were examined hold almost similar criteria for their workforces. The authors presumed that the ideas of honesty, fairness, and trust were manifested, but were still crucial for the international code. Organisations according to the authors should respect the four points of the suggested code of business ethics (Not Cheating, Fairness, trust, and Honesty) since they part of the moral imperative which all business organisations must respect. They also observed that the concept of respecting the sovereignty of the host nation was beneficial and very essential since it helps lessen the conflict and tension. In their literature survey, the authors established that the most problems at the international markets are attributed by the company’s assumptions their host countries’ culture as well as goals cannot be respected by foreigners. With the view of the writing style and text structure, the article is precise and concise and the unnecessary words have been weeded out. The authors have chosen the exact word so as to convey the meaning to the readers. The selected words facilitate the flow of the sentences and various sentences with varying rhythms and lengths have been utilised so as realise different effects. In the article, the authors have arranged their ideas in the sentence; thus, facilitating greatest effect. The article’s arguments have been presented in a suitable narrative tone and no biased language has been used. The authors have also cited sources; thus, enabling the readers to identify the used sources and verify the study’s findings and conclusions independently. Critique In the modern-day marketplace, managers prefer having clear guidelines that would enable them make effective decisions; therefore, a list of guidelines that cite allowed and prohibitions practices could be beneficial. While Asgary and Mitschow belive that cross-cultural ethical interaction can be promoted through code of ethics, Pitta et al. (1999, p.243) differs claiming that alist of guidelines are extremely simple to facilitate ethical interaction across different cultures. Business practices that are unethical according to the article could lead to enormous difficulties and costs for the mutational company. Godiwalla (2012, p.1389) agrees with this statement and posit that such difficulties and costs could include public relations expenditures, penalties, fines, governmental restrictions, or legal fees. . Godiwalla (2012, p.1389) further concurs with Asgary and Mitschow that socially responsible practices and ethical conduct are effective business practices that could improve the performance of the MNC in the long-run. They foster good relations with its stakeholders and the general public. They improve the MNC image and reputation, which have no price but untold benefits to the MNC in the continuous long run. Therefore, having ethical policies and procedures as mentioned by Asgary and Mitschowcould help create a robust culture within in every MNC’s level. In order to have a strong culture, the organisation’s ethical policies must be reviewed periodically for the future improvements, which should be in line with the social changes, the core values of the MNC, as well as the social responsibility and business ethics’ fundamental principles. Scholtens and Dam (2007, p.282) established that the ethical policies at the international level have some significant differences because of cultural values. The article’s analysis of variance generalises and confirms notions existing in the literature. However, Asgary and Mitschow literature survey did not examine how diverse cultural values influence the ethical conduct of MNCs but they briefly examined the attitude of the firms towards ethical issues as well as the overall performance. Clearly, Asgary and Mitschow found it challenging to create a theory regarding how culture and ethics interact. Instead, they relied on the cultural values and societal norms to develop their code of business ethics. Although the unethical behaviours in the international firms appear to uncontrollably permeate, Tran (2010, p.237) thinks that it is not an incurable dilemma. Tran (2010, p.237) agrees with Asgary and Mitschow that estbalishing a ‘set of tone’ is a major challenges that face many international companies, which should involve all employees in the corporation. With the view to these challenges, the article does not demonstrate how firms can create a string corporate culture which encourages the workers to report unethical conducts. While the objective of the article was to explore international business ethics, the paper has failed to address the issue of whistleblowing at the corporate level. Considering the MNCs are expanding their operations globally, employees’ ethical conduct is crucial given that all cultural diversities related to the expansion could destabilise the collective ethical and cultural values noticeable in the organisations that are homogenous. Even though having knowledge about other cultures and could help the international organisations to improve the cross-cultural communication, Asgary and Mitschow believe that is is imporatnt to offer feasible guidelines such as code of ethics. Salehi et al. (2012, p.1) maintain that the corporations’ unethical behaviour in a number of countries have been manifested within the legislations like the Sarbane-Oxley Act of 2002. Still, Asgary and Mitschow’s framework does not explain how cultural differences could change the individuals’ ethical actions as well as perceptions, especially those involved in making ethical decisions. According to Akram and Azad (2011, p.74), the objective of MNCs is not just making money but also conducting business operations ethically.; therefore, business ethics is clearly a crucial business factor for companies seeking to expand their operations. Ethical values as mentioned by Davis et al. (1998, p.376) are a powerful feature of culture; therefore, the cultural differences should parallel the variation in moral judgements. Sower and Sower (2004, p.2) maintain that a framework that seeks to promote cross-cultural interaction should rely on data gathered from employees of different multi-national corporation as evidenced in Asgary and Mitschow’s article. The model used in Husted and Allen (2008, p.301) is almost similar to the one dveeloped in the article and offers a conceptual base required to create a future research agenda of making ethical decisions in the multicultural contexts. Still, Asgary and Mitschow’s model does not provide insight regarding how collectivism and individualism could influence the perception of moral reasoning, ethical dilemmas as well as the individuals in organizations’ behaviour. In addition, the article has not demonstrated how ethical approaches can consider the interests of the company’s global-stakeholder as evidenced in Nwanji and Howell (2005, p.8) study. In addition, Anyanwu and Nweake (2014, p.109) observed that ethcial behaviours are the hallmark of all MNCs both at local and international level. They concur that scores of MNCs as demonstrated in Asgary and Mitschow’s article lack ability to respond to different situations such as cultural problems and lack of legislations that curb unethical; behaviours. Conclusion In conclusion, the authors conclude that MNCs must have the background conditions, basic moral norms, guidelines, and strategies that can be observed. The authors maintain that MNCs should partake in charitable activities which could improve the life quality. The authors observed that internationalisation of business operations has resulted in loss of contact with the home country’s culture. As a result, firms start creating some set of internal cultural norms, which are independent of the other countries’ norms wherein they operate. This normally results in the question of ‘host versus home’ ethics. These problems bring about significant issues that must be addressed by firms seeking to create international business code of ethics. The article is useful because it offers opinion regarding business ethics and what firms should do in order to promote cross-cultural communications. The article demonstrates that international business ethics is crucial, especially when handling customers. As mentioned by the authors, maintaining integrity is crucial from MNCs while building a relationship with their customers. References Akram, M. & Azad, M.K.K., 2011. Attitude towards business ethics: Comparison of public and private organizations in Pakistan. International Journal of Economics and Management Sciences, vol. 1, no. 3, pp.73-77. Anyanwu, S.A.C. & Nweake, L.I., 2014. Ethical Challenges in International Business Operations. Journal of Business and Retail Management Research, vol. 8, no. 2, pp.105-09. Asgary, N. & Mitschow, M.C., 2002. Toward a Model for International Business Ethics. Journal of Business Ethics, vol. 36, no. 3, pp.239-46. Davis, M.A., Johnson, N.B. & Ohmer, D.G., 1998. Issue-Contingent Effects on Ethical Decision Making: A Cross-Cultural Comparison. Journal of Business Ethics, vol. 17, pp.373-89. Godiwalla, Y.H., 2012. Business Ethics and Social Responsibility for the Multinational Corporation (MNC). Journal of Modern Accounting and Auditing, vol. 8 no. 9, pp.1381-91. Husted, B.W. & Allen, D.B., 2008. Toward a Model of Cross-Cultural Business Ethics: The Impact of Individualism and Collectivism on the Ethical Decision-Making Process. Journal of Business Ethics, vol. 82, no. 2, pp. 293-305. Nwanji, T.I. & Howell, K.E., 2005. The Stakeholder Theory in the Modern Global Business Environment. International Journal of Applied Institutional Governance, vol. 1, no. 1, pp.1-13. Pitta, D.A., Fung, H.-G. & Isberg, S., 1999. Ethical issues across cultures: managing the differing perspectives of China and the USA. Journal of Consumer Marketing, vol. 16, no. 3, pp. 240-256. Salehi, M., Saeidinia, M. & Aghaei, M., 2012. Business Ethics. International Journal of Scientific and Research Publications, vol. 2, no. 1, pp.1-5. Scholtens, B. & Dam, L., 2007. Cultural Values and International Differences in Business Ethics. Journal of Business Ethics, vol. 75, pp.273–84. Sower, V.E. & Sower, J.C., 2004. Moderator Variables in Cultural Values and Business Ethics Research: Important to External Validity. Southwest Business and Economics Journal, vol. 13, no. 1, pp.1-18. Tran, B., 2010. International business ethics. Journal of International Trade Law and Policy, vol. 9, no. 3, pp.236 - 255. Read More