Culture and Ethics

Culture:

Culture is the set of shared attitudes, values, goals, and practices that characterizes an institution,
organization or group or country.

Determinants of Culture:

1) Social Structure

2) Religion and Ethical System

3) Language

4) Education

5) Economic and Political Philosophy

6) Culture and Workplace

Power Distance:

Power distance is the extent to which less powerful members of institutions and organizations
within a country expect and accept that power is distributed unequally.

Uncertainty:

Uncertainty is “the extent to which the members of a culture fell threatened by uncertain or
unknown situations.”

Ethics:

Ethics (also known as moral philosophy) is a branch of philosophy which seeks to address
questions about morality; that is, about concepts such as good and bad, the noble and the ignoble,
right and wrong, justice, and virtue.

Ethics in International Business:

1) Employment Practices

1.1) working environment

1.2) wage rate
1.3) job hours

2) Human Rights
2.1) freedom of association
2.2) freedom of speech
2.3) freedom of movement

3) Environmental Pollution

3.1) factory area

3.2) use of material
3.3) handling waste
3.4) safety measures
3.5) action for improvement

4) Corruption

5) Moral obligations

Roots of Unethical Behavior:

1) Personal Ethics

2) Organizational Culture

3) Leadership

4) Unrealistic Performance Goals

5) Decision Making Process

Philosophical Approaches to Ethics

The Friedman Doctrine:

Company’s only responsibility is to increase its profits. Friedman argued that a company should
have no “social responsibility” to the public or society because its only concern is to increase
profits for itself and for its shareholders.

Cultural Relativism:

Cultural relativism is the principle that an individual human’s beliefs and activities should be
understood in terms of his or her own culture.

Righteous Moralist:

A righteous moralist claims that a multinational’s home-country standards of ethics are the
appropriate ones for companies to follow in foreign countries.
Naive Immoralist:

A naive immoralist asserts that if a manager of a multinational sees that firms from other
nations are not following ethical norms in a host nation, that manager should not either.

Utilitarian and Kantian:

Utilitarian & Kantian approaches to ethics hold that the moral worth of actions or practices is
determined by their consequences.

Rights Theories:

Rights theories recognize that human beings have fundamental rights and privileges that
transcend national boundaries and cultures. Rights establish a minimum level of morally
acceptable behavior.

Justice Theories:

Justice theories focus on the attainment of a just distribution of economic goods and services. A
just distribution is one that is considered fair and equitable.