Ethical Norms

The international business scope is characterized by diverse customs, cultures, and professional practices. As a result, managers and business executives often find themselves in a dilemma when the norms stipulated in the host and home countries differ. In such an environment, the management may be confused about whether it should observe the host's or its home's ethical standards. For instance, an American company may be limited when operating in China, where the cultural requirements are strict and less formal (Melé, Debeljuh & Arruda, 2006). What Americans consider a norm, such as a casual relationship between the employee and the employer, could be considered disrespectful in the Chinese setting. Exposed to such scenarios, the management should consider the practices and cultures that should be embraced or ignored in the international space. When the norms in the host country differ from those in the home country, managers should adopt local ethical standards only if they are higher than those stated in the home country.

According to the old cultural adage, managers in Rome should do what Romans do. However, this statement is not applicable in this situation. The aspects that are considered ethical in the host country may be unethical in another country. For instance, while kickbacks and bribery is a regular and accepted part of business in most Latin American countries, such practices in the United States would result in ethical-related consequences (Alas, 2006). In terms of business contracts, all business transactions in the US are based on the contract's stipulations, obligations, and business relations. Business transactions are formal and recorded. In China and African nations, business transactions are less formal, and the terms can be changed depending on the parties in the contract. Thus, an African company in the US will need to adhere to all the contract requirements as it is an ethical requirement to adhere to contractual stipulations. On the other hand, an American company in Africa should also observe contractual requirements, although the ethical requirements in the region are lower than those in the US. Thus, the statement is not applicable in business as the host country could have low ethical standards compared to the standards in the company's home country. The company should not do observe the ethical standards in the host country blindly.

            When the norms in the host country are different, the company should begin by establishing a management philosophy in accordance with the host's business standards. This is important because business operations should be guided and shaped by the laws stipulated in the company's home country. Such laws often offer a point of reference on various aspects such as worker safety regulations, environmental standards, and minimum wage (Melé, Debeljuh & Arruda, 2006). Other laws may also set requirements for fair dealing and honesty. However, whether a business is dealing with a new customer or a partner, ethical norms should be adopted when doing business in any part of the world. However, it is important for a company that wants to expand to revisit its ethical rules to ensure that they cover unexpected ethical requirements.

An ethical dilemma is likely to erupt when doing business in foreign nations. In such a case, Alas (2006) advises that a business can choose to operate according to the stipulated procedures and policies developed in its home country or adapt its operations to the host country's norms. Melé, Debeljuh & Arruda (2006) explain that every organization has a duty to adapt to the foreign standards of the host country if the stipulated are higher than those in the home country. For instance, a France company operating in Germany should adhere to the legal requirement of a minimum of 24 holiday days every year rather than the France-stipulated requirements of four-day in a work-week. In the United States, the company can observe the France minimum vacation requirement as there is no federal requirement for such time off. In the end, the company should observe the highest degree of ethical standards.

The managers in the company can also establish different procedures and policies for businesses in foreign nations. When establishing the code of ethics, the managers should consider the unique ethical climate of the host country and ensure that the code is relevant to the international scope. When preparing the code, the company should consult employees in the host country to ensure that the ethical programs are relevant to the foreign market. For instance, the code should take into consideration possible clash of cultures between the home and host country. For instance, while the Chinese often value stability and the status quo, American culture values change and progress. Thus, an American company operating in China should ensure that change is evolutionary and persevering traditional values.

Discretion should be observed when following local traditions and customs. For instance, an American company in France should use discretion to resolve issues associated with wage considerations and bribery. However, the company should use its code of ethics when handling environmental and humanitarian concerns such as deforestation or child labor. The business standards should be applied equally in the market (Beine, Docquier, & Schiff, 2013).  The company should stick to its standards and enact a policy that requires the employees to adhere to the stipulated ethical standards wherever it is operating from. The managers should be ready to turn opportunities in the markets that have unfavorable ethical standards. For instance, the manager can turn down bribery opportunities and explain courteously that the company's code of ethics prohibits engagement in such behavior. The manager should also explain that although they are turning down such offers, they are willing to take and keep future business opportunities. It is important to ensure that decision-makers and partners in the host country understand their commitment to ethical standards.

Adhere to Stringent Ethical Standards

Managers in international markets should adopt ethical standards in the host country even if it means violating the ethics in the home country. This statement is applicable only in situations where the ethical standards in the host country are higher than those in the home country. The manager should adopt desirable ethical standards in the host country. Multinational companies have a duty to adhere to the most stringent rules and standards regardless of how lax or strict the ethical standards in the host country are. Feikis, McHugh, & Lane (2014) explains that most multinational companies often apply and follow a set of requirements in the home country but ignore them when the host country is less stringent. Instead, multinational companies should uphold high values and ethical standards globally and establish high requirements on issues associated with human rights, environmental standards, and safety needs. Such universal values should be embraced by the organization as a fundamental idea to govern the employees' conduct. The management should also respect and consider the stakeholder' interests in pursuit of profitability. Prioritizing the comfort and well-being of the stakeholders will ensure that all activities in the company uphold the highest ethical standards as stipulated in the organization's code. Adhering to global ethics and embracing environmentally sustainable practices will help to benefit the company's reputation, profits, and long-term viability.

However, although it is important to mold the company's culture to reflect the local areas, the managers should not compromise the company's critical ethical values. For instance, operating in an environmental where unethical leadership is common, it is unacceptable for the cooperation's personnel to engage in such practice. The managers should maintain an ethical tone and ensure that operations observe integrity and are conducted in accordance with the organization's governance system. In order to apply values universally, the management should ensure that employees from the host country agree on unethical actions and how ethical issues should be handled.

Conclusion

When the norms in the host country differ from those in the home country, managers should adopt local ethical standards if they are higher than those stated in the home country. The managers should hold ethics in the highest regard to promote trust and improve connections between the different cultures. Although the management may experience new customs, etiquette, and practices, committing to ethics will help build a good reputation in the new environment. Organizations in the international scope should establish a code of ethics to improve operational efficiency and prevent corruption. Ethical organizations should observe the highest level of ethical values and standards when doing business in the international scope. An organization should not lower its ethical standards even if the ethical standards in the host country are low. Thus, when the norms differ, the manager should embrace the highest ethical standards. The manager should adopt local ethical standards only if they are higher than those embraced in the home country.