Towards a Model for International Business Ethics by Nader Asgary and Mathew Mitschow - Article Example

Name Date Supervisor ARTICLE ANALYSIS Introduction The essay is a discussion of the paper on business ethics titled, “Towards a Model for International Business Ethics.” The article that is authored by Nader Asgary and Mathew C. Mitschow is a publication of the Springer Publishers and features in the Journal of Business Ethics by Springer Publishers and the publication date is sited as March, 2002. It covers discussions about business ethics and the possibility of the development of a global code of ethics in the current world of international business and globalization. It provides useful information about international business ethics but with a biased selection of the best practices through secondary research done on certain Canadian and Australian companies. The central themes presented in the article include the ethical considerations within businesses in the global context. There are discussions on the basic business ethics and the ones that vary based on the culture, law, and leniency of compliance to laws of the individual countries where such businesses are located. There are discussions about the problems that face international corporations within the global context with regard to adherence to business values as stipulated by their countries of origin and the subsequent of the integration of such laws with those of the host countries. The article also covers the difficulties involved in the adaptation of such businesses to the cultures of the host countries, which concurs with various research (Militaru and Zanfir, 2012). The comparison between the developed and the developing countries shows that more established and reliable ethical standards lead to lower foreign investment. There is a record of research conducted on some Canadian and Australian companies for their consideration of business ethics. The findings from the research form the basis on which several principles of International Business Code of Ethics (IBCE) are generated by the group. The generation of the principles involves internet research and case studies of various organizations (242). The principles are generated through research and the combination of specific code of business ethics from the internet. The article also suggests the training of employees about the IBCE. Summary The article covers discussions about business ethics and the possibility of the development of a global code of ethics in the current world of international business and globalization. It talks about the most basic policies of business ethics such as confidentiality, employee integrity, and protection against sexual harassment in the workplace (Weaver, 2001). The research also lists down some of the values that are easily ignored within various companies such as labour standards, human rights violations, trade agreements, exploitative child labour, and bribery. Compatibility of the business ethics of the host country and those of the home country of a multinational company also matters. According to ACCA (2014), Incompatible of low ethical standards result in lower foreign investment. According to Asgary and Mitschow, the current trends in rapid globalizations are a new phenomenon and there introduction of the IBCE is still a matter of discussion. It is for that reason that the authors conduct a research on 150 firms from Canada and 150 from Australia for the development of the “ideal” IBCE. The research reveals a number of common problems among the firms such as large scale bribery, cultural differences, involvement in political affairs and pricing. The frequency off the occurrence of the problems is most prominent in practices such as giving gifts, favours and entertainment, cultural differences, small scale bribery. The group also establishes the importance of the development of special training programs for the employees to avoid cases of resistance with regard to the implementation of the IBCE. That is because new developments are always subject to resistance out of the fear of change (Pieterse, Caniëls and Homan, 2012). After the research, the group comes up with their ideal structure of the IBCEs. The listing of the ethics is accompanied by the necessary adaptations required by the companies in terms of operations and reliability. There generated IBCEs even attempt to address the culture-related issues that affect the operations of international businesses in various host countries. The regard for this causes the generation of the IBCE that requires compliance with the economic goals of the host companies by the international companies (Baker, 2005). It is followed by the detailed discussion of the possible hurdles in the implementation of the IBCEs where the host countries might take advantage of the respect for culture by the international companies to exploit them. For instance, the exploitation of the companies by asking for gifts in the pretext of cultural values is a likely phenomenon (Irogbe, 2013). The likely manipulation of the IBCE to satisfy company interests instead of using them for fair play is a potential threat. Such include the possibility of driving the cost of international business operations high through the manipulation of the IBCEs to eliminate competition. Such manipulations could be done by trade unions in the developed countries to ensure that the job market in their countries does not experience such competition as it does. For instance, most textile companies opt to open their manufacturing plants in the developing countries because of the cheap labour in such countries. The costs of operation in the developed countries are high because of the strict adherence to the labour laws that stipulate the recommended minimum wage and labour protection rights. However, the lack of international standards also results in the exploitation of the workers in such countries where they are paid too little for a lot of work done for long hours. Textile industries are some of the most exploitative industries that employ cheap labour at unfair deals for the manufacture of products that bring in millions in profits (Mariani and Valenti, 2014). Critique Some of the statements made in the essay are subjective and they lack back up information about the other side of the argument and the subsequent justification of the stand of the authors. The article contains valid information about standards of business ethics and the need for international business ethical standards. However, the claim that the labour laws are some of the factors that hinder the development of international companies and the Labour laws are better in the developed countries like Canada than in the less developed countries such as some African countries which have unpredictable business rules. Such environments attract investments. The generation of the list is also based on assumptions as indicated on the article. There also unrealistic ideals of the members of the group who are not necessarily entitled for the generation of such principles for application within the diverse international community. In addition to that, the IBCEs are simply replicas of the general codes of ethics practised by companies. The knowledge and implementation of the IBCEs should not be complicated by the formalization of the process of obtaining such knowledge. They should, however, be added into the syllabus of management, accounting, and other business related courses to ensure that the people have prior interactions with them before they engage in international business, The article shows elements of biased opinions without regard for the different types of companies and the impact of such IBCEs on them. They mention the need for the launch of company ethics hotlines that operate day and night for companies. There is the additional suggestion of the need for the introduction of a paid course in IBCE which all current and potential employees must take for certification. The lack of considerations and opinions from the relevant shareholders makes the opinion devoid of objectivity. The information about ineffective responses with regard to Business Ethics is an important point of consideration, especially with the multinational companies. That is because multinational companies are more vulnerable to ethical malpractices depending on the countries where they operate (CPRE, 2006). Different companies of different sizes have different needs. Therefore, the suggestion of monetizing the courses on IBCE is a disadvantage to such companies. That is especially since an increase in education and certification results in higher salary demands. Small companies might miss out on good employees that have the capacity to perform the tasks associated with the company without complications (Öztürk, 2012). According to the International Ethical Standards Board of Accountants, the establishment of IBCE requires a rigorous process for the determination of the opinions of the shareholders. Before the outline of new IBCEs, it is essential to conduct research followed by consultations with various professionals and shareholders. Such should be followed by transparent debates about the proposed standards (IFAC, 2010). The exposure of the procedures and standards to public debates also help in balanced opinions of the final decisions. Taking the comments that come up from such exposure and debates is another essential part of the process. All the processes must be conducted before the approval of such standards (Öztürk, 2012). I do not, however, agree with some of the suggestions laid out by the article such as the suggestion of frequent visits from the top management of the company and audits of the international companies. The process seems unnecessary and expensive. The prevention of malpractices through such audits can be done by the host countries that operate business under the same IBCEs. However, it is similar to the suggestions of other writers who propose the practice as one of the ethical practices for multinational companies (Öztürk, 2012). The article researchers suggest that the consequences for the lack of adherence to the IBCE should be serious so that they IBCEs are taken seriously. There is even the suggestion of the three-strike strategy whereby the employees are under supervision and the practice of business outside of the IBCEs causes termination from the job. The idea of the three strikes is too rash, especially since there are many factors that cause conduct that is considered unethical in one country and ethical in another-tokens, presents. The opinions and research in the essay are similar to other researches in several ways. The possibility of confusion about corporate behaviour that is ethically upright in host countries is legitimate. Some countries take elaborate gifts as a part of their culture. Thus, multinational companies may find themselves doing so in the host countries even though the business ethics of their host countries do not consider it morally correct. In such instances, the differentiation of bribery and simple cultural practices of giving gifts is difficult to determine. The opinion that the compatibility of the business ethics of the host country and those of the home country of a multinational company also matters concurs with opinions from various researchers. Incompatible of low ethical standards lead to lower foreign (Irogbe, 2013). Labour laws are better in the developed countries like Canada than in the less developed countries such as some African countries which have unpredictable business rules. Such environments attract the exploitative investors in search of cheap labour. The research and conclusions about the protection for the environmental laws by the international community also concurs to various researches. According to research, the media coverage of compliance to environmental laws, realization that the environmental impact at one place spreads to the rest of the world are some of the factors that encourage the compliance to environmental policies. The long term costs of cleaning up wastes from pollution also drive compliance among various companies. Environmental awareness is one of the main driving factors of the practice of environmentally-related ethics. There are, however, instances when multinational companies disregard such ethical standards where they operate in the developing countries. Such companies cause the unreasonable use of water at the expense of the neighbouring communities as was the case with the Coca-Cola Company a while ago (India Resource Center, 2010). The disregard is done with the intention of the avoidance of the extra expenses that come with the adherence to the ethical practices. Unfortunately, some multinational companies invest in the developing countries to avoid the harsh penalties that come with such violations because of the leniency of business laws in such countries (Irogbe, 2013). The opinion that most environmental management laws are organizational and country-specific is in some way accurate (Militaru and Zanfir, 2012). American companies have laws that prohibit improper payments made to governments or politicians and political parties for the retention of business. That is different from the practices of companies such as Japanese companies that practice he cultures of giving gifts during the launch of new businesses. Labour laws such as time spent at work and minimum wage laws are different in the developed and developing nations. The objectiveness of most of the opinions in the essay is confirmed by the ample use of various resources. According to the article, “The Caux principles and the related business ethics promote the concepts of respect and fairness in business operations,” (Asgary and Mitschow, 2002) Respect for rules, consider economic and social impact, support for multilateral trade, environmental consideration, non-engagement in illicit operations as the most basic principles of operations is also supported by various external sources, thus, improving the validity of the research. The suggestions made in the article about the need for the achievement of cultural adaptation by multinational companies are essential for the smooth operation of such businesses. The suggestions include the need to utilize the similarity attraction principle that requires the adaptation of the principal cultural business practices of the host countries. Such help in the smooth flow of business operations within such countries (Clements, NeillO and Stovall, 2009). The writer does a relatively good job in the simplification of ideas and concepts in the article. The use of data from various researches on business ethical standards in the two developed countries- Canada and Australia- makes the conclusions about the behaviour of multinational companies from such countries viable and reliable. However, the article lacks in the concrete evidence of the exercise of business ethics in African countries and the conclusions made about the adherence to business ethical standards in African countries not viable (Asgary and Mitschow, 2002). The text is easy to understand with the detailed information easy to grasp. The research of the writer work well to support the ideas suggested in the article. The arguments include the supporting ideas for the need for the establishment of the IBCEs and the various straining factors of the same. However, the mention of the Asian cultures as some of the different and rigid cultures lacks adequate referencing to support the idea. Ideally speaking, the article is satisfactory but not entirely professional. However, it is reliable because of the involvement of professionals and other experts in the development and formulation of the article. The authors acknowledge the external contributions and assistance. The acknowledgements give the reader the comfort of knowing that the information in the article is verified by other parties. Such confirmation of verification besides the use of external references and research studies gives credit to the information from secondary sources. The opinions with regard to the difficulties in the integration of multinational countries as they still adhere to the ethical requirements of their countries of origin is one of the special elements that the article highlights as it seeks to bridge the gap between international and national BCEs. The impact of the different cultures and the adjustment difficulties by multinational companies is explained as one of the reasons that the international law should consider the timely enforcement of the IBCEs. At the current rate of globalization, I would recommend it to another person because of the simplicity applied in the explanations and the objectivity of the suggestions. Although some sections lack clarity, the concepts of the need to launch and enforce the IBCEs are clear and precise. However, the enforcement methods are a little unrealistic and without adequate back up. There seems to be some level of subjectivity in some of the solutions suggested in the article with regard to compliance with the IBCEs. Conclusion The article is one of the well explained analyses of the actual consideration of the development of the IBCEs. The context of the article shows the need for the actualization of the global implementation of the IBCEs through the research as indicated by the references. The suggestion of sample IBCEs and enforcement strategies also gives a clear idea of how IBCEs should look. People interested in deeper understanding of the concepts of IBCEs on a simpler level. The examples used in the essay and the subsequent explanations are applicable and easy to grasp. The contents of the article cover all the elements of research and the various subjects related to the development and implementation of IBCEs. The essay is conclusive and leaves room for further research in the areas that it does not provide solutions. Despite the subjectiveness of some of the opinions as sited in the article, majority of the information is that which companies can relate for self-evaluation. Bibliography Read More