Some issues in International Business

There are several important social issues in International business. This article considers four of them: Business ethics, social responsibility, environmental factors and labor standards.

Business Ethics:

A very complex and controversial issue is that of ethics. The varying norms and social values, many a time make the international business environment very intricate and perplexing.

The term business ethics refers to the system of moral principles and rules of conduct applied to business.

That there should be business ethics means the business should be conducted according to certain self recognized moral standards. There is, however, no unanimity of opinion regarding what constitutes business ethics. An international marketer often finds that the norms of ethics vary from country to country. What is ethically wrong or condemned in one nation may not be in another. In this connection, Peter Drucker very appropriately remarks: here is neither a separate ethics of business, nor is one needed. For men and women do not acquire exemption from ordinary rules of personal behavior because of their work o job. They cease to be human beings when appointed vice president, city manager, or college dean. And there have always been a number of people who cheat, steal, Lie bribe or take bribes. The problem is one of moral value and moral education of the individual, of the family, of the school.

Bribery pay offs or kickbacks are common in business in many countries. However, the extent and intensity of it vary from country to country. In some countries it is a common practice with government officials and other employees. The law in respect of such practice also varies among countries.

According to the regulation in some countries, while bribing is illegal within the country, bribing by the nation’s firms in foreign markets to get or conduct business is not illegal because of the feeling that is inevitable in some markets. The position appears to be that morality only exists within a culture. And it is not for us to say what is moral in someone else’s culture.

Several West European countries either condone bribery or look the other way – such expenses are tax deductible up to a certain amount countries. However, the US Foreign Corrupt Practices Act of 1977 prohibits a firm from making or authorizing payments, offers promises, or gifts for the purpose of corruptly influencing actions by government or their in order to obtain or retain orders of a company. American businessmen complain that they are severely handicapped because of this legislation when they have to complete with those are not so regulated. In countries like France and Germany, the money paid for bribes to secure business overseas is a legitimate tax write off.

Whatever may be the legal position bribing, it is basically a question of the moral values and self regulation. Some people, who hold that bribing politicians and top officials to get business is unethical, feel paying the lower levels is not unfair if the papers don’t move normally otherwise.

Another issue is whether it is ethical to sell products are banned in some countries because of their harmful effects in other countries (often in developing countries). One issue is that if the government of a country permits the marketing of such a product, should a company give up the sales of the product on its own. If the harmful effects of a product outweigh the benefits, a company with sound ethics will not do business in that product even if there is no legal objection.

  • Business ethics? Please! The worlds of Politics, Business, Education and Ethics are difficult to blend. Organizations have negative results because the people on board cannot tell the difference between right and wrong. Due to scope, these consequences usually take longer to materialize, but is the result the same? You can find a ton of articles and books about business ethics about businesses “losing their way,” e.g., WorldCom, Tyco, Enron. You can also sign up for seminars where they preach to “do the right thing.” They paint the world in stark black and white. These resources ask one-dimensional ethical questions, such as, “Should you take kickbacks from suppliers?” For me, ethics in the workplace including schools are varying shades of gray. You have to rely on moral law, that is, does it ‘feel’ wrong? It’s easy to say, “There is right, and there is wrong.” In my management book, Wingtips with Spurs ( I address these issues in detail. All major corporations have their written code of conduct. Each one is pretty much just a copy of the others and is a major dust bunny. The next time you walk into someone’s office, ask to see the company code of conduct. Good luck on finding someone who will produce it within five minutes. The moral law is much easier to find and digest. It resides in each of us. Michael L. Gooch, SPHR Author of Wingtips with Spurs: Cowboy Wisdom for Today’s Business Leaders