Different Ethical Standards for International Business

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Different Ethical Standards for International Business
Different Ethical Standards for International Business (Image: Cynwulf/morgueFile)

Understanding ethical norms is easy when companies arise out of the culture in which they conduct business. However, corporate business ethics don't travel well and ethical standards change along with language. Right can be wrong once companies cross the border.

Bribery

Bribes correlate to culture and political systems according to John Hooker of Carnegie Mellon University. For democratic countries wherein rules are important, bribes are less likely. In non-democratic countries where relationships are valued, bribes are common. (See References 1)

Bribe Payers Index

The Bribe Payers Index (BPI) compiled by Transparency.org ranks countries based on the use of bribery. It is a useful tool to measure corruption in international markets. (See References 2)

Fun Fact

The Foreign Corrupt Practices Act (FCPA) of 1988 makes bribery illegal for US companies. However, despite the law, the United States has a mid-list BPI ranking. (See References 2)

Nepotism

Relationship ethics vary by country. In Western countries, nepotism is unethical. In Asian countries, nepotism is acceptable and believed to be essential. (See References 1)

Prevention/Solution

Stephan Rothlin of the Center for International Business Ethics offers 18 insights on international business ethics that include understanding cultural value systems, fairness, honesty, and transparency. (See References 3)

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