IBM: Ethical Challenges in Global Business Management


International business management is considered as a very crucial concept that should be understood by any organization that is operating internationally, this concept normally involves the application of the management processes and concepts that enables the organization to remain in the global market, research indicates that this concept becomes successful only when the organization going global applies the existing new management technologies when there is a better communication and transport system in the organization (Foster and Harris, 2009).

In terms of international business management, the organizations are advised to ensure that their behaviors conform to the international business operations and the reason for this is that the nature of an international business always requires interactions with other people from various social and cultural backgrounds, these differences need to be adopted and accepted by the organizations operating internationally for the firms to succeed in their businesses because they normally bring an intercultural understanding among the organizations.

To be effective in this set up the business organizations need to know that having a diverse workforce normally brings in differences in gender, culture, religious and also political differences in an organization, and to handle these differences the management teams in international firms need to come up with values that are good and right for the organization and this can only be implemented by the application of various ethical standards in the organization (Foster and Harris, 2009).

International Business Ethics

Business ethics has always been defined as an approach to examining the rules and regulations that apply in any business operation; this approach involves the obligations that govern individuals in a business organization. The principle of ethics is always centered on the improvement of the welfare of the workforce in an organization, it involves the decision-making processes on issues that affect human welfare such as inequality and discrimination which comes up as a result of religious differences, gender, and race in an organization. Research indicates that the concepts of business ethics cover human behavior and conduct especially those which are willingly and knowingly done in an organization (Manuel, 2006).

Theories Governing International Business Ethics

Consequential theory

This ethical theory brings to light the consequences caused by unethical practices done by people in an organization, this theory states that differences between the good and the wrong deeds in an organization determine how a situation will be handled in an organization. This theory states that the person involved in the action will determine whether the action was right or wrong, the reason is that the theory deals with personal egoism and impersonal egoism which requires the parties involved in operations of the stated organization to act on either their interest or for the interest of other individuals in the organization. The egoism covering this theory in ethics does not determine how the employees or managers should behave in an organization but how an individual should act (Friedman, 2010).

Utilitarianism theory

This theory states that the moral worth of an action is always determined by the action of individual acting. In this theory, we find when an employee is happy in an organization it usually leads to the productivity of an organization, therefore for a management team to make the employees happy and productive then the team should come up with the most interesting environment for the employees so that they can be motivated to keep the moral standards of the organization (Foster and Harris, 2009).

Values Clarification theory

This theory focuses on the feelings of an individual, through which there is the creation of an individual awareness as compared to values and beliefs. This theory ascertains that no ethics or morals that apply in this case other than relativity in an issue occurring in the firm since it is an individual who determines what is right or wrong.

Norm theory

The norm theory affirms that when individuals in an organization conflict, the management team should decide on whom to follow. In this theory, we find that the behavior of an individual should be publicized and accepted by other individuals in the organization but this guarantees that these people will always conflict.

Deontological theory

Under this theory we find that the principles that are set by an organization do not consequential, this means that when a negative action is carried out and no action is taken by the management the principles remain not considering the consequences of the action, it, therefore, maintains that things should be done regardless of their outcomes (Weaver, 2010).

Managing a diverse workforce

Diversity is defined as forces that normally influence the operations of a business organization globally; these diverse issues are normally classified into four groups which include people, structure, technology, and the environment in which the organization carries its operation. In this case, we find that people are always encouraged to work together as a team and achieve a particular goal following the organizational structure regardless of their differences (United Nations, 2010).

On the other hand, technology is applied to make the work of the people easier thus encouraging the interaction of the people internationally. Organizations should also be aware that the management of a diverse workforce should be considered by those willing to go international and those operating internationally. This management calls for the organization to understand the socio-cultural aspect of the environment the organization is operating from (Cullen, and Parboteeah, 2009).

Managing across cultures

Culture is the common and learned way of thinking and behaving among a group of people living together. In a global business context, it is an issue of concern because it affects the way things are run and how relationships build up within the workplace. Dealing with people with different cultural backgrounds and increasing the understanding between these people can be very tedious but useful for the company. While ethical values are deeply integrated within a cultural setting, it is often difficult to make them visible or understand them at all (Howard, 2008).

Theories governing the management of businesses across cultures

The management of a diverse workforce focuses on several theories that make it a success for the organization to carry out its global operations. These theories are as follows;

Paradigm theory

This theory covers the international partnership of business organizations, this theory affirms that the management of the organizations needs to take them and learn the values of the cultures and the background of the people the organization is working with globally. The theory does not say that the managers should accept all the cultures and beliefs of the people they interact with (Weaver, 2010).

Objectivistic theory

This is another theory that deals with the people understanding the ethical importance of rational thinking of various issues considering culture, this indicates that international organizations need to respect these cultures and be ready to work with their compromise of the environment for the people concerned

Cultural absolutions theory

This theory acclaims that there are no specific cultural rules that should be followed by organizations to accept the cultures of the regions they operate but managers should know that an individual’s culture is important to that person and thus there is no need of changing such cultures. Cultural absolutions theory advocates for the commonly used cliché- act local but think global-which has been adopted as a good idea of incorporating people with diverse cultures within an organization(Howard, 2008).

The practical applications of these theories to IBM

Company description

The International Business Machines Corporations commonly referred to as is IBM is referred to as an international organization dealing with the manufacturing of computer hardware, technology and also an offering of consulting and hosting services.

The application of ethics in IBM’S

In this organization, ethics is regarded as the core principle in the operation of the organization at large. The organization applies the utilitarianism theory whereby the management considers everything that happens in the organization to be of importance to the rights of both the employees and the consumers at large.

The IBM firm has been able to come up with some computer software such as the use of Fair –UCE which is mainly used to filter spasm that identifies the identity of the sender rather than just filtering the spam when an individual is sending data through the internet, this technology is reported to helping the consumers and the individuals in sending and receiving their data proficiently. The organization finds it correct to come up with this technology (IBM, 2010). The company also applies the deontological theory which is used to define the roles and duties of the employees in the organization. looking at the speech given by the chief executive officer of the organization, Sam Palmisano, ‘all individuals are bound to the rules and regulations of this company which meant that all the employees are guided by not only their consciences but also by the companies stipulated statutes. He continues to say that any kind of contravention will lead to punishment (Weaver, 2010). Thus the deontological theory applies to all individuals of the company regardless of the situations and circumstances. From this statement, we can therefore say that the organization has been careful in the management of international business ethics (Cullen, and Parboteeah, 2009).

IBM’s managing across cultures

Reports indicate that IBM as an international organization has been able to carry out management across cultures, whereby since the start of the second world war the organization came up with a law fighting discrimination that determined how the international cultures can be adopted in global offices such as those located in India, Japan, South America, and Europe. To be successful in this implementation the organization was able to utilize the cultural absolutions theory that was applied in the fighting for equality and the acceptance of all the cultures (IBM, 2010). The best example here is when the organization took into the legislation the homosexuality antidiscrimination law in the year 1995, which provided that all those individuals who had the desire homosexuals or lesbians to be given the protection, benefits, and compensations enjoyed by all people globally. On the other hand, we also find that the organization has been able to employ a diverse workforce based on the skill and knowledge they have in their area of specialization (Deresky, 2010).


Research indicates that for business organizations to survive in the global business they have some considerations on the aspect of ethics that is used to enhance a better relationship between the firm and its workforce with an ambition of reducing demoralization and neglect of its employees which if not well handled can affect the employee performance thus lowering the performance of an organization. For the firm to succeed in aspect the management should therefore ensure that the workforce receives its recognition through the examination of their performance and this can only be done through a better communication system that brings an understanding between the employees and the organization.

This communication system is normally referred to as corporate communication whose focus is normally on informing and influencing individuals in an organization, promoting policy changes, and monitoring the performance progress in the firm. The organization should also develop some managerial structures that enable the flowing of information within the organization this helps in the avoidance of overloading the managers with responsibilities in the organization through which every individual expects the manager to share information within the firm.

From this study, we can therefore recommend that any organization that is intending to operate internationally should have the demand of having partners from different nations and cultures working hand to hand as a corporate entity and this will automatically lead to the global growth of the firms’ market and its operations. This will require the organization and its employees to behave ethically within the provided business environments (Hofstede, 2007).


Finally, the managers in such international firms should embrace a positive working environment that allows the employees to attain a higher job performance and this can only be achieved by setting the right expectations and motivating the employees through appraisals and rewards. We can therefore conclude that business ethics is very important to any organization that needs a lot of attention which should be practiced fairly and objectively considering the needs of the community at the same time achieving the goals of the organization.

We can therefore conclude that diversity in an organization carries its negative impact which includes the drop in the consistency of the workers in the firm the best example is that when a firm employs only men to work for it the turnover will be very low as compared to when they employ both men and women, or in the case where a firm employs only whites, this brings fewer returns as compared to mixing the races. Therefore to handle this issue the management team of such firms should enhance workforce diversity which is believed to give a safe environment for the employees to work from through they can be motivated to improve on their global productivity through the sharing of knowledge and skills (Manuel, 2006).


Cullen, J. & Parboteeah, K. (2009). Multinational management: A strategic approach,Third edition, Mason; Thomson South-Western pp 43-67.

Deresky H. (2010). International Management, Managing Across Border and Cultures: Sixth Edition, New York prentice Hall.

Friedman, M. (2010). The Social Responsibility of Business is to Increase Its Profit. The New York Times Magazine.

Foster, C & Harris, L. (2009). Easy to say, difficult to do: Diversity management in retail. A Human resource management journal, vol3 pp 4-16.

Hofstede, G. (2007). Culture’s Consequences: International Differences in Work- Related Values Sage Publications pp 1-45.

Howard, R. (2008). Cultural Absolutism and the Nostalgia for Community, Human Rights Quarterly, 2: 315-390.

IBM (2010) Professional Practices Committee report. Web.

Manuel G. (2006): Managing a diverse workforce. Englewood Cliffs: Prentice Hall pp. 23-67.

United Nations (2010); Global impact: corporate leadership in the world economy. United Nations office, New York.

Weaver, V. (2010): What These CEOs and Their Companies Know About Diversity. Business Week.

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