GLOBAL BUSINESS AND ETHICS

Global Business And Ethics

Global Business And Ethics

Introduction

Navigating the boundaries between right and wrong can prove tricky for companies that operate in several nations and across cultures. Ethics is essential to economic development. The field of ethics, also called moral philosophy, involves systematizing, defending, and recommending concepts of right and wrong behavior. Business ethics is the study and evaluation of decision making by businesses according to moral concepts and judgments. Ethical questions range from practical, narrowly defined issues, such as a company's obligation to be honest with its customers, to broader social and philosophical questions, such as a company's responsibility to preserve the environment and protect employee rights. Many ethical conflicts develop from conflicts between the differing interests of company owners and their workers, customers, and surrounding community.

Discussion

In the years before WorldCom Inc. announced the $3.9 billion in improper accounting that led to its bankruptcy this summer, the telecommunications giant was plagued by loose business practices, inadequate financial disclosure, and widespread internal chicanery and corruption. Salespeople and managers boosted their commissions by manipulating the company's billing systems. Orders for services or equipment were booked even if they were not provided, so that departments could meet revenue targets. Outside contractors billed for hours they could not have worked, and some equipment was purchased without anyone checking to see whether it was already in inventory. The documents also show that a small group of WorldCom executives, knowing that their business was eroding rapidly, discussed various accounting maneuvers that would help prop up the company's bottom line.(Weiss,1994)

A majority of top corporate ethics officers predict at least a half dozen more major business ethics scandals will be revealed during the next 12 months, and some of these executives expect more than 20 such cases, The Conference Board reported in a recent survey. A majority of these corporate ethics officers say that even ethics training wouldn't have prevented the collapse of Enron. About 54% of those surveyed say that even if Enron's senior management had received extensive ethics training, it would have made little or no difference in preventing what happened. Surveyed ethics officers blame Enron management for the company's ethical lapses and collapse, with Arthur Andersen named as a close second. Cited next is Enron's outside law firm, investment analysts and government regulators. "These findings show that an absence of ethical leadership and a culture of anything goes as long as it makes a buck will prevail over even the best training, code of conduct or hotline," said Steve Priest of Ethical Leadership Group, who conducted the survey. "This emphasizes the critical importance of building integrity into the essence of the corporation." (Porter,1986,22)

Corruption is not inherent to any one society. Its reach is global. According to the United Nations World Development report in 1997, fifteen percent of all companies in industrialized nations have to pay bribes to win or retain business. In Asia, the figure is 40 percent and in the countries of the former Soviet Union, 60 percent of all companies must ...