Ethical dilemmas—situations where there’s more than one ‘right’ answer—are among the toughest decisions a manager faces. Ethics get even more complex when companies do business across borders. What’s perfectly acceptable in one country can, for cultural reasons, be considered unethical in another.

For example:

  • In some countries, it’s respectful for businesspeople to exchange gifts. In the other countries, lavish gift giving is viewed as bribery.
  • Very low wages may be considered unethical in wealthy developed countries. But developing nations may accept those wages if they encourage investment and improve living standards.
  • Managers in some countries may have a higher tolerance for bribery than those in other parts of the world. But they consider taking credit for a subordinate’s achievement a nearly unforgivable sin.

Such differences—in history, cultural traditions, and level of development—can make it difficult for managers to know how to behave.

 

Choose a balanced approach

Managers doing business internationally often take one of two routes when faced with ethical dilemmas:

  • Either they stick rigidly to what’s done at home (i.e., “ethical imperialism”)
  • Or they embrace the foreign country’s norms (i.e., “cultural relativism”)

Neither of these strategies is ideal because:

  • If you always do elsewhere exactly what you do at home, you might be at a competitive disadvantage. Showing respect for local customs is an important part of forging business relationships.
  • However, if you adopt wholesale a different country’s ways of doing business, you may inadvertently condone unscrupulous practices—such as bribery or child labor.

Instead, it’s crucial to find a balanced approach. To do so, adopt the following guiding principles:

 

  1. Honor core human values

Although business norms differ around the world, research has shown there is strong global consensus about what’s fair and right.

Three core human values form an ethical foundation you can rely on no matter where you do business—or what profession you’re in:

 

Core human value

How to honor

Respect for human dignity

  • Provide safe, humane working conditions

  • Value employees, customers, and suppliers as individuals

Respect for basic rights

  • Uphold individual rights to health, education, and equal opportunities in the workplace

  • Pay a fair, livable wage

Good citizenship

  • Protect the environment

  • When possible, “give back”—share a portion of your gains with others

 

Underlying these three values, there’s one time-honored guideline: treat others the way you would like to be treated. This one rule appears in some form in every major religion and global tradition.

 

  1. Respect tradition

When you respect local traditions, you’ll forge relationships faster and create trust. In turn, that goodwill can help you tackle sensitive ethical dilemmas.

In Japan, it’s a sign of respect for a businessperson to give a business partner a gift. When Western businesspeople first started doing business in Japan, many thought that accepting these lavish gifts was akin to taking a bribe.

But as Western companies became familiar with Japanese customs, many understood it was potentially offensive to decline a gift or to come empty-handed to an important meeting. Accordingly, many companies decided to set different limits on gifts in Japan than they do elsewhere.

Even though it is important to respect local traditions, do nothing that conflicts with the laws that apply to your company at home. Companies—and the managers who work in them—should not violate their own country’s laws to fit in with the norms of those they’re doing business with internationally.

 

  1. Consider the context

Practices that may be wrong in one country may be logical and even necessary in another. As you weigh an ethical decision, consider the issue’s background and the reasons the behavior is accepted where you’re doing business.

For example, consider the following practices:

  • Use of pollutants. In places where people are starving, using pesticides, chemical fertilizers, and other pollutants may be acceptable because they help produce larger crop yields needed to feed the population.
  • Nepotism. In some countries with high unemployment and widespread poverty, companies guarantee jobs for employees’ children. This practice is not seen as unethical; it is considered a cherished employee benefit that brings hardworking families stability.

Here are some additional tips for adopting a global ethical perspective:

  • Network with colleagues from your home country who work for trusted companies abroad. How have they resolved ethical conflicts? Seek advice and examples.
  • Support efforts to decrease local institutional corruption. Suggest that your company join coalitions of businesses, government officials, and others who are working to combat corruption.
  • Be innovative in ethics, just as you are in your products and services. For instance, if your company risks losing business because it’s turning down requests for bribes, think of other ways to gain political support and public trust—such as sponsoring a project to plant trees or funding local schools.

Harvard ManageMentor Tools:
a) worksheet_for_considering_the_consequences
b) worksheet_for_resolving_a_cross_cultural_ethical_dilemma

Adapted from “Global Collaboration” in Harvard ManageMentor

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