Cross-cultural Issues in Business Ethics

1 Cross-cultural Issues in Business EthicsJohn HookerCarnegie Mellon UniversityJune 2007 Outline of the argumentA new economic on cultural comparative for Business and understand differences in cultural than universalize Ethics along Western : that undermines a cultural new economic orderMovement toward a multi-polar new economic orderBased on comparative cultural more than outsourcing. Many countries have cheap a few have become economic information technological new economic orderJapanese qualityContinuous improvement. Group3oriented, rather than requiring individual reward. Long time horizon. No need for cause3and3effect manipulation. Maintain group harmony by honoring everyone s ideas. a part of nemawashiA new economic orderSuperior operations management Just3in3time inventory management Kanbansystems minimize rework, maximize flexibility.

2 Lean manufacturing, reduced setup of keiretsu(formerly zaibatsu). Old3boy networks, trust relationships. factory in JapanA new economic orderIndian ITPantheism vs. secularism No need to maintain & manipulate nature. Other coping mechanismsInner discipline Get control of one s mind rather than the environment. Modern form: intellectual discipline, academic MumbaiA new economic orderNetworking. Efficient way to absorb technical verbal culture. Well suited to academic discourse, information study: software development No need for the technology, but well suited to create it. Create an orderly world of the mind, rather than an orderly world see themselves as Westernizing There is a common reliance on rationality. But Indians are leveraging their own cultural new economic orderKorean ManufacturingInitially an imitation of Japanese zaibatsu.

3 High power distance culture allowed Park Chung Hee to create the relationship between leading industrial families and the government Allowed Korea to build major private corporations in a relationship3based Chung HeeKorean dictator 1961379A new economic orderLoyalty to the boss. Paternal disciplined, hierarchical groups. Organized by competitive, masculine culture. Strong national on loyalty to boss. Bottom line and short3term profitability are chaebolA new economic orderChinese entrepreneurshipA cultural trait of coastal Chinese. Particularly, speakers of Yu (Cantonese), M n(Fujianese), and W (Shanghaiese) tolerant esteem tied to wealth and status. To be rich is glorious (Deng Xiaoping).Masculine culture, new economic orderRelationship3based Business .

4 Gu nx is a time3tested mechanism. World s largest economy for 8 of last 10 centuries, soon to be inroads into South America, Africa, Middle East. These countries are more comfortable with Chinese relationship3based Business style than Western rule3based Hosni Mubarakof Egypt with Chinese Trade Minister Bo Xilai, who headed a delegation of 150 Chinese businessmen. A new economic orderWestern technological innovationDisenchantment of nature. Opened the way to manipulation of a secular world. Greek as coping mechanism Controlling the environment rather than oneself. Support from family, friends less WeberA new economic orderIndividualism. Individuals have the right to rethink everything. Students asked to reason from first principles. Do experiments, prove theorems.

5 Individual expression, originality : new ideas for technological coping for Business ethicsSuccessful countries will retain and emphasize the cultural traits that bring them success. Including their ethical norms. They may see themselves as Westernizing. We must understand their norms and value systems..to succeed in the new world City, near BangaloreImplications for Business ethicsCommunication technology reinforcescultural than homogenizing the phones and web sites facilitate relationship3based programming is increasingly regionalized. is an online community that connects people through a network of trusted friends. Wildly popular in for Business ethicsDifferent ethical norms derive from different conceptions of human cultures Humans are autonomous, rational cultures Human existence is defined by its relatedness to others.

6 Family, familyImplications for Business ethicsRule3based culturesAutonomous, rational individuals must have equal status. Ethic of justice, equality, human rights. Grounded in rationality ( , Kant)..and equal authority. Allegiance is to rules rather than persons. The rules must be self3evident and therefore for Business ethicsRelationship3based culturesPersons do not exist apart from their participation in a larger unit. Family, ancestors, community, even the universe as a leads to an ethic of care. Synonymous with self3interest. Justice and human rights are secondary and villageImplications for Business ethicsWe must change the focus of Business primary emphasis on Western deeper understanding of value systems that stem from different conceptions of human the project of universalizingethics along Western is difficult to ground a distinction between fundamental international norms and culturally3specific for Business ethicsRather, investigate how each ethical systemcan deal with cross3cultural example, Western system might use a generalizability only in a manner that, if generalized, would be consistent with the survival of the cultural system that allows the purposes of the action to be KantImplications for Business ethicsDoes this allow coexistence?

7 This is an empirical cultural /ethnic conflicts are between peoples of very similarcultures. Perhaps because Territorial conflict with neighbors was once ecologically radically different cultural systems can coexist in a mutually beneficial way, much as ecosystems. Let s take advantage of differences rather than pretend they don t HarrisExample: CorruptionCorruption may be defined as behavior that undermines a cultural , behavior that is corrupting in one culture may be functional in corrupting for different apply generalizability actions that would corrupt the system if in rule-basedcultures. For example, Europe, USA. Creates a conflict of be functional in relationship-basedsystem. System is based on personal trust relationships. Rather than trust in the system.

8 Possibly no conflict of and overt disagreements in be corrupting in relationship-based cultures. For example, Japan and other Confucian cultures. Undermines harmony. No overarching rule system for resolving differences. Important not to give in rule-basedcultures. Disputes resolved by appeal to rules. Courtesy, face are less weakness of relationship-based cultures. A shortcutto relationship building. Corrupting because it undermines long3term predictability, corrupting in rule3based cultures It undermines respect for the XiaoyuFormer head of China s Food and Drug Administration, sentenced to death for accepting bribesCorruptionCheatingA weakness of rule3based cultures. Relative lack of supervision makes these cultures more efficient. But it makes cheating easy.

9 It undermines stability and trust in the system, Business corrupting in relationship-based cultures It undermines Skilling, sentence to prison for fraud and insider trading in the Enron scandalCorruptionTo fight the integrityof the system in which it than try to impose incompatible practices from a different system.