International Business Ethics

International business ethics is a complex subject, compounded by cultural, socio-economic and geo-environmental factors. International companies may not always have a global ethics code to rely on, when difficult dilemmas arise from the differences in values and norms between countries.

Business challenges will often arise from different values in relation to child labour, human rights, employee safety, hours and wages, sexual discrimination and environmental laws.

Therefore, a multi-national company needs to be aware of the unique set of values, customs, traditions and history of the foreign countries it wishes to do business in.

One culture may deem the values that are important to another culture as insignificant. Therefore the foreign company must be aware of these cultural differences in order to define its global ethical principles.

A foreign company is also required to adhere to the laws of the host country. However, it should also evaluate whether these laws meet its ethical standards.

For example; Is it ethical to require employees to work seven days a week without any benefits, when to do so would break the laws of one's home country? Is it ethical to dump harmful chemicals into the water, when one would be fined at home? Is it right to discriminate against women, if they do not have equal rights in their country?

Areas of International Business Ethics

Some areas of international business ethics are easier to define than others. For instance, when it comes to child labour laws, most companies will not accept underage workers even if it is acceptable in that particular region. The exploitation of children is frowned upon by most developed nations.

Other areas are not as cut and dried. Many companies choose to outsource production to countries that pay workers low wages. For the company looking only at the bottom line, this practice is justified by higher profits. Yet, many people feel that this is an exploitation of workers in underdeveloped nations as well as harmful to the national workers back in the home country, whose jobs the company outsourced.

A global corporation should have a uniform code of ethics that applies to all employees, regardless of country. When operating in a foreign land, a company should have some flexibility within the code to respect the customs and traditions of other cultures.

International business ethics must also address the environment. Different countries have different laws and standards when it comes to environmental protection laws.

More often than not, underdeveloped and poor nations tend not to have strict environmental policies. For a multi-national corporation to take advantage of these countries, to open plants in places that do not have high environmental standards, could be an unethical practice.

Unfortunately, due to a lack of regulation, a corporation might be able to get away with such a practice. In situations where there are no laws, internationally or within the host country, consumer outrage might be the only hope for a company to adopt ethical standards pertaining to the environment.

International business ethics is a complex topic and many multi-national companies need to understand the culture, traditions and laws of another society in order to create a "fair" code of ethics for all employees.

Some ethics principles are easily identified, such as not abusing children, and some fall into a grey area, such as low-wage practices. When it comes to creating a multi-national code of ethics, a company must balance the customs of the host society with the values important to the company.