Ethics in International Business:
Approaches to Enforcing Ethical Business Practices Abroad.
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Introduction.
In today's globalized world, businesses
operate across borders and cultures, leading to a range of ethical dilemmas.
Ethical concerns in international business vary from issues related to human
rights and environmental impact to corruption and bribery. This article
discusses the significance of ethics in international business and two
approaches to enforcing ethical business practices overseas.
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According to the Carroll
(2016) International business ethics refers to the adherence of moral
principles and values in the global market, specifically concerning the conduct
of individuals and companies engaged in cross-border transactions. The concept
involves acknowledging and valuing the cultural and legal variances between
countries while ensuring that business practices do not cause harm to society
or the environment.
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In the contemporary
globalized business environment, conducting business across national borders
requires that they operate according to universally accepted ethical
principles. As noted by Carroll (2016), international business ethics is the
application of ethical standards that apply to all countries regardless of
their legal systems or cultural beliefs. Principles that guide international
business ethics include honesty, transparency, accountability, fairness, and respect
for human rights, labor rights, and environmental standards (Carroll, 2016).
and environmental standards (Carroll, 2016).
Furthermore,
international business ethics requires companies to observe legal frameworks
governing international trade while respecting the sovereignty and cultural
diversity of the countries they operate in (Hartman, 2019). In other words,
businesses are expected to conduct their operations in a manner that is
consistent with local legal requirements while recognizing and respecting the
diverse cultural practices of host countries.
Importance of Ethics in International
Business.
The importance of ethics
in international business cannot be overstated. Ethical business practices
enhance a company's reputation, build customer loyalty, and foster long-term
relationships with stakeholders (Crane & Matten, 2016). Ethical companies
are more likely to be trusted and respected by customers, employees, and
investors. Unethical behavior can damage a company's reputation, which can
have serious long-term consequences. Legal compliance is also essential as many
countries have laws that prohibit bribery, corruption, and other unethical practices.
Companies that violate these laws can face significant fines, legal action, and
damage to their reputation (Ferrell, Fraedrich, & Ferrell, 2018).
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Two Approaches to
Enforcing Ethical Business Practices Overseas.
There are two main
approaches to enforcing ethical business practices overseas: voluntary codes of
conduct and government regulations.
Voluntary codes of
conduct.
Voluntary codes of conduct are often used by
multinational corporations to set ethical standards for their operations in
different countries (Crane & Matten, 2016). However, their effectiveness
depends on the willingness of companies to comply with them, and some companies
may view them as mere suggestions.
Further explained,
voluntary codes of conduct are ethical guidelines developed by non-legally
binding business or industry associations. These codes of conduct promote
ethical behavior among businesses and encourage compliance with international
standards.
Government
Regulations.
Government regulations
are laws and policies enforced by government agencies. These regulations may
include labor laws, environmental regulations, and laws against bribery and
corruption. Government regulations can be effective in promoting ethical behavior because they have the force of law behind them (Ferrell et al., 2019). However,
they can be challenging for businesses to navigate, especially when they
operate in multiple countries with different laws and regulations.
One way to promote
ethical behavior in international business is to develop global ethics
standards. These standards provide a common framework for ethical behavior,
making it easier for businesses to navigate the complexities of international
business. The International Organization for Standardization (ISO) has
developed a range of standards related to ethical business practices, including
the ISO 26000 standard for social responsibility and the ISO 37001 standard for
anti-bribery management systems (Carroll, 2016).
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Adopting global ethics
standards can help businesses demonstrate their commitment to ethical behavior and build trust with stakeholders. However, their effectiveness depends on
their widespread adoption and implementation by businesses and governments
worldwide.
Conclusion.
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Ethics in international business is crucial
for maintaining a company's reputation, legal compliance, and building trust
with stakeholders. Two approaches to enforcing ethical business practices
overseas are voluntary codes of conduct and government regulations. Voluntary
codes of conduct provide guidelines for ethical behavior, but their
effectiveness depends on the willingness of companies to comply. Government
regulations have the force of law behind them, but they can be challenging for
businesses to navigate. Global ethics standards provide a common framework for
ethical behavior, making it easier for businesses to operate in different
countries. The adoption and implementation of global ethics standards by
businesses and governments worldwide can promote ethical behavior in
international business and enhance the global reputation of businesses.
References: -
Carroll, A. B. (2016). Carroll's pyramid of CSR:
taking another look. International Journal of Corporate Social
Responsibility, 1(1), 3. [Online] Available at: https://jcsr.springeropen.com/articles/10.1186/s40991-016-0004-6
[Accessed on 18th April].
Hartman, L. P. (2019). Perspectives in Business
Ethics (5th ed.). McGraw-Hill Education.
Crane, A., & Matten, D. (2016). Business ethics: Managing
corporate citizenship and sustainability in the age of globalization.
Oxford University Press.
[Online]
Available at: https://books.google.lk/books?id=J8-SDAAAQBAJ&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false[Accessed
on 18th April].
Ferrell, O. C., Fraedrich, J., & Ferrell, L.
(2019). Business ethics: Ethical decision making and cases. Cengage
Learning.
International Organization for Standardization.
(2010). ISO 26000: Guidance on social responsibility. [Online] Available at: https://www.iso.org/files/live/sites/isoorg/files/store/en/PUB100258.pdf[Accessed
on 18th April].
International Organization for Standardization.
(2016). ISO 37001: Anti-bribery management systems. [Online] Available at: https://www.iso.org/files/live/sites/isoorg/files/store/en/PUB100396.pdf[Accessed
on 18th April].
Kline, J. M. (2005). Ethics for international
business: Decision making in a global political economy. Routledge. [Online] Available at: https://www.taylorfrancis.com/books/mono/10.4324/9780203023242/ethics-international-business-john-kline[Accessed
on 18th April].
Treviño, L. K., & Nelson, K. A. (2016). Managing
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Good work !
ReplyDeleteBy defining acceptable conduct outside the purview of governmental regulation, business ethics strengthen the law. Businesses adopt business ethics to encourage honesty among their staff members and win over important stakeholders like investors and customers.
Dear Tharanga .
DeleteBusiness ethics strengthen the law by defining acceptable conduct beyond government regulation. They encourage honesty among staff members and win over stakeholders such as investors and customers.
Thank you very much.
Ethics in international business refers to the moral principal and values that guide the behavior of business and individuals in their international business dealings. Labour practices , environmental impacts , corruption ,human rights are some of the key ethical issues in international businesses.Dealing with these can be challenging. Therefore by establishing code of conducts, conducting risk assignments , training employees , monitoring compliance , implementing remidial actions; businesses can mitigate these issues.
ReplyDeleteDear Sanduni.
DeleteEthics in international business refers to the moral principles and values that guide the behavior of businesses and individuals in their international business dealings.
Some key ethical issues in international businesses include labor practices, environmental impacts, corruption, and human rights.
Dealing with these ethical issues can be challenging because they often involve complex legal and cultural differences across countries and regions.
Businesses can mitigate these ethical issues by establishing codes of conduct, conducting risk assessments, training employees, monitoring compliance, and implementing remedial actions when necessary.
Thank you very much.
Nice article. Ethics is crucial for a business as it fosters trust and credibility among customers, stakeholders, investors and employees. This would lead to increased loyalty, long-term sustainability and a strong brand reputation. Keep writing.
ReplyDeleteEthics is crucial for business as it builds trust and credibility with customers, stakeholders, investors, and employees. This leads to increased loyalty, long-term sustainability, and a strong brand reputation, making it essential for the success of any organization. Thank you very much.
DeleteEnforcing ethical business practices abroad requires a multi-stakeholder approach that involves companies, governments, civil society organizations, and communities. By working together, we can create a more ethical and sustainable global business environment. Well done.
ReplyDeleteDear Tharanga.
DeleteI aggre with you enforcing ethical business practices abroad needs a multi-stakeholder approach involving companies, governments, civil society organizations, and communities. Collaborating can create a sustainable and ethical global business environment. Thank you very much.
Hi Chrishan , you have gathered information very well.
ReplyDeleteA worldwide code of conduct, or international business ethics, is a system of values that imposes moral requirements for both people and companies. Even though every company has an ethical code, doing business internationally may result in ambiguous areas where expectations for employee behavior are concerned.
Thank you very much saraj,
DeleteThis comment has been removed by the author.
ReplyDeleteThis article include the importance of ethical business practices in the international arena and presents two approaches to enforcing ethical behavior: voluntary codes of conduct and government regulations. It also discusses the advantages and limitations of each approach and emphasizes the need for global ethics standards to promote ethical behavior and enhance the reputation of businesses worldwide. Overall, the article provides a useful overview of the topic and raises awareness about the importance of ethical considerations in international business. Well done!!!
ReplyDeletesignificance of ethical business practices in the global context and presents two approaches, voluntary codes of conduct and government regulations, to enforce ethical behavior. It also highlights the advantages and limitations of each approach and stresses the need for global ethics standards to promote ethical behavior and enhance the reputation of businesses worldwide. Thank you very much
Deletegood work.
ReplyDeleteThe goal of ethics in international business is to ensure the company gains a reputation for ethical and responsible business practices in its home country and overseas. The result is a more equitable, principled marketplace, strengthened by partnerships between businesses that share high ethical standards...Well done.
Ethics in international business aims to establish the company's reputation for ethical practices, promoting an equitable marketplace. High ethical standards foster partnerships among businesses, resulting in responsible practices both at home and overseas, benefiting society and the economy. Thank you very much .
Delete