Generally, international business environments present several ethical issues to managers. To survive, managers of international companies are compelled to come up with policies and standards that integrate the law, ethical business philosophies and cultural ideals. Ethically, managers are expected to make decisions by considering social setup in a local environment (Gangone, 2010). By and large, advancements in technology have created a global village and made it possible for cross border business relations to thrive. Unlike in the past, business enterprises are presented with a wider market and many options including the Internet are available can be used to reach customers and business partners all over the world.
This notwithstanding, internationalization of companies with the help of technology presents several challenges for international companies. In general, international marketing is vulnerable to the criticism of ethical practices. Sub-activities within the marketing discipline such as advertising, pricing, personal selling, and marketing research tend to create a healthy environment for unethical behavior to thrive. Ostensibly, international marketing permits business enterprises to closely observe the role of marketing as a key agent of societal change and development of socially responsive business responses.
Specific Ethical Issues in Global Marketing
While earlier businesses operations were restricted to a local setup, businesses today have an opportunity to extend operations beyond geographical boundaries. As a consequence, today’s business environment has been hit by serious legal and ethical challenges that must be addressed carefully. Leaders must take a proactive role in devising strategies that guarantee success in a globalized business environment. To a large extent, business ethics looks at how business is carried out and involves interaction between business enterprises, individuals, and the entire society. Consequently, business ethics is extremely complex. Various ethical issues that may be encountered in global marketing are discussed as follows.
One of the ethical issues in global marketing concerns the need by organizations to meet all the necessary requirements for conducting business in a foreign land. Usually, every company involved in international business must ensure that the requirements of doing business in a local environment are fully met. As a rule, international business comes with numerous concerns that are absent in a local business setting (Jennings, 2010). Unlike international business operations, local business dealings do not present business enterprises with challenges such as cultural differences. For example, while tipping hospital employees is common practice in some countries, it is illegal in the case of government run hospitals in the United States. It is thus common for participants in international business trainings to be encouraged to respect the culture in other countries. While this is important, it may get leaders and employees of international companies into trouble. Ethical standards that control the operations of business enterprises in the United States, for instance, differ significantly from those seen in other parts of the world.
As a result, doing business in the United States may present serious legal and ethical challenges for foreign companies. It is therefore very important for leaders to ensure that employees moving to work in a foreign land are fully equipped with skills necessary to survive in such an environment. One useful strategy of dealing with challenges of this nature that are linked to global or international marketing is for stakeholders to offer an opportunity for those differing parties to carefully examine issues raised by international marketing and make appropriate decisions. It may also be necessary to identify issues that are addressed and those that still remain unresolved at an international level. If significant issues remain unresolved, there must be clear guidelines on how best to address them.
Another ethical issue that may be faced by managers of international companies is corruption (Gangone, 2010). In some countries, a company may miss an opportunity to do business for failing to give a bribe. This is especially true where government tenders are involved. A business enterprise may be required to pay money to a government clerk so as to be awarded a tender. In some cases, those awarding tenders may make ridiculous demands on international companies including employing specific individuals. Unfortunately, some people employed this way may be incompetent and their poor performance may eventually bring down a company. For an organization that operates based on strict principles, survival in such an environment is certainly impossible. A company that is against bribing, for example, may fail to clinch business opportunities in some areas and this may negatively impact its development in a foreign environment. While taking and giving bribes is acceptable in some parts of the world, it is unacceptable in other places.
Consequently, those who are used to giving and taking bribes may succeed in some areas but their survival may be seriously hampered in other areas. American is one country that has done so much to stop corruption. It is thus illegal for any government officer to take bribe from any member of the public or from a business enterprise so as to award a tender. It is equally wrong for any person to give bribe in order to receive preferential treatment. Subsequently, international business enterprises that are associated with countries where giving and taking bribes is acceptable may experience difficulties conducting business in America and other similar places around the world. In America, individuals as well as corporate organizations are not allowed to pay any money to politicians or to their political parties so as to be favored above competitors. Apparently, internationalized companies may deal with bribes by relying on three important guidelines. To start with, internationalized companies must learn to respect the basic human rights while in the host countries. It is also necessary for internationalized companies to pay attention to traditions and cultures that guide the daily lives of residents of the host country. It is also advisable for internationalized companies to tell the difference between what is considered as good and what is regarded as bad in the host country. Apparently, managers of internationalized companies may deal with unreasonable demands by either giving money as donations, making donations by giving goods or offering services, and making donations in form of jobs. This may involve employing a person in the host country to work on a project as agreed by the parties involved.
International business also requires business enterprises to bend some of their business policies in order to fit in a foreign environment. To some extent, this may involve being careful about interacting with co-workers in other places across the world where a company has branches. Although the interaction is of essence and permits employees to compare notes, respecting the values of people in other countries is very important if success is to be realized. Drawing from a study by Terpstra, Foley and Sarathy (2012), marketing activities have been central to international trade and hence the focus of much of the criticism concerning unethical behavior. Apparently, this can be attributed to the general inability of internationalized corporations to arbitrate conflicting obligations among several constituencies in an international context. Arguably, difficulties in resolving the conflicting obligations are caused by three major factors. First, given the growing complexity of ethical issues in international marketing environments, the number of disputes among business enterprises is likely to increase. Secondly, due to lack of familiarity with foreign business customs and practices, marketers make poor ethical decisions in international markets as compared to their domestic markets. Finally, unlike domestic markets where national laws and traditions guide the decision making process, greater disagreement can be found on what standards should be used in solving ethical conflicts which are often experienced in international business settings.
To effectively deal with this and many other challenges witnessed in a global marketplace, individuals and firms should decide upfront what types of conduct they would never engage in and be certain that rules to govern their conduct are well documented. It is also important to ensure that the rules are well understood by everyone and that they will be enforced uniformly. Apparently, it is common for individuals to vary in their responses to various ethical dilemmas. Undoubtedly, clear policies eliminate confusion and enable employees to do their work with so much confidence. Similarly, knowing where one stands as an individual communicates a very clear message to those around him or her.
Another important ethical issue that managers of internationalized business enterprises must be concerned about is the relationship with employees. By and large, it is up to leaders of internationalized companies to ensure that it promotes fairness across the organization regardless of one’s race, color, nationality, or social status. Internationalized companies must endeavor to apply equally standards when dealing with any employee. An internationalized company must prove to the government and the entire public that it is fair as far as employment, promotion of employees, or payment of employees is concerned. It is the responsibility of managers of internationalized companies to ensure that employees are able to respect each other regardless of their position or status in the organization. Naturally, employees tend to give their best whenever they feel respected by their superiors. A feeling of being respected builds confidence in employees and makes them work hard to support growth in the organization. In addition, it is necessary for leaders of internationalized companies to carefully deal with employees originating from the host country. Leaders must make every effort to understand the traditions and cultures of the host country so as to effectively work with employees from the host country. Usually, it is advisable to make such employees feel respected and valuable to the company.
The way an internationalized company deals with consumers is another very critical ethical concern for leaders. It is the responsibility of managers of internationalized companies to treat both existing and potential consumers with dignity. Internationalized companies must be seen to be fair to all consumers in various aspects as they interact with them. Consumers are, for example, entitled to receiving up-to-date information regarding goods sold to them or services offered by an internationalized company. Internationalized companies must also ensure that all consumers are charged the same price and no person should have an unfair advantage over others. As noted by Gangone (2010), dealing with consumers is a serious issue that causes ethical dilemmas. As a result, it can not be ignored by leaders of internationalized companies. Internationalized companies must make every effort to avoid lying to consumers about the quality of their products or services, selling poor quality products, subjecting consumers to unbearable taxes, or charging exorbitant prices for goods and services. In some cases, internationalized companies have been accused of violating the rights of individual consumers. Manipulating customers in order to retain them is also unacceptable and must be avoided. Clearly, leaders of internationalized companies have a vital role of ensuring that their companies and employees do not infringe the rights of consumers.
Business enterprises operating in a foreign land also worry about the adaptation of their business practices to laws and cultural requirements of a given nation. Among others, compels leaders to come up with standards are universal and hence applicable to employees everywhere. This is further complicated by the fact that the international business environment is changing drastically. According to Kline (2010), ethical issues in international marketing have been of great significance in recent years due to publicity and controversy generated from complex international cases. In addition, ethical issues will continue to emerge in the international arena due to significant changes in the environment. Ideally, there would be no need to discuss ethics and corporate responsibility, and there would be no crisis. However, considering that the world is not perfect, the complexities of today’s increasingly interdependent global business society only magnify these imperfections. Despite the scholarly attention given to the subject of international business, there appears to be a continuous gap between the concept of marketing ethics and its application by marketing practitioners. Seemingly, the gap is quite noticeable in international marketing setups.
Similarly, the topic of international business ethics has received only limited and isolated exposure in all but a few texts on international marketing. According to Raymond (2011), leaders have a major responsibility when it comes to shaping the culture of a company. As part of what a leader has to do to raise the social standing of a company, he or she must set aside enough resources for promoting ethical behavior in the company. An elaborate program should be in place and must include activities such as continuous training, seminars, and periodic reviews by internal and independent consultants. The leader must also ensure that a clearly written code of conduct to guide employees at all times is in place. In addition, the leader must outline clear expectations for desired ethical behavior. Leaders should also encourage employees to be honest with every person they interact with. No individual should feel intimidated and important issues must be discussed openly. Generally, openness creates room for employees to express their concerns without fear and this later translates to a high level of staff commitment.
Industrial espionage is another vital ethical issue that affects internationalized companies. Although industrial espionage is illegal and hence not acceptable in most countries, some internationalized companies are guilty of using it as a strategy to move ahead of competitors. In general, industrial espionage entails the illegal use of information about the business operations of a competitor. While taking part in such illegal acts may enable an internationalized company to survive, it is unethical and hence not acceptable. Internationalized companies must thus be aware of the dangers involved and avoid being involved at all costs.
For environmentalists, an important ethical consideration is protecting the environment. The effects of global warming and climate change are certainly not appealing to any nation. As a consequence, people who are concerned about safeguarding the environment are constantly lobbying state governments to ensure that policies are formulated to protect the environment and subject those responsible for environmental destruction to some form of punishment. The fact that most people are now aware of the negative effects of climate change has pushed many to consider environmental conservations as an important development agenda. Ostensibly, it is a vital aspect of our social lives and can not be ignored especially by business enterprises. It is for this reason that most business enterprises get involved in conservation activities to protect the environment. It is thus the responsibility of internationalized companies to respect the need to protect the environment as an important legislation in host countries. To a large extent, however, it depends on individuals and leaders of internationalized companies to consciously think about the host country’s environment and to avoid any activities that can negatively affect the environment. The need to safeguard the environment is often complicated by the fact that individuals and business enterprises are usually not compelled to respect and protect the environment. It is public knowledge that some leading business enterprises have been accused of interfering with the environment for their own gains.
Gangone, A. (2010). Ethical Issues in International Business. The Faculty of Economics and Public Administration, 10, 189 – 199. Web.
Jennings, M. (2010). Business: Its Legal, Ethical, and Global Environment. Mason, OH: Cengage Learning. Web.
Kline, J. (2010). Ethics for International Business: Decision-Making in a Global Political Economy. New York, NY: Routledge. Web.
Raymond, C. (2011). Ethical Leadership in a Global Marketplace. Web.
Terpstra, V., Foley, J. & Sarathy, R. (2012). International Marketing. Naperville, IL: Naper Publishing Group. Web.