Globalization And International Marketing Ethics Problems Business Essay


During the procedure of global markets and production, there are some ethical issues in overlapped-cultural settings that salesmen and businessmen are facing. In this article, basic methods in marketing ethics have been reconsidered for international ethical resolution and decision making. Ethics Problems in the process of International business are linked to each other. By the development of globalization we will face many issues which comprise ethical ones.( Yücel, 2009) Even small trades are developing their investiture boundaries. These mean that millions of business people working abroad in different geographical, political, and especially, religion is very important in shaping ethical systems refer to a set of moral principles, values, that are used to guide and shape behavior. Most of the world`s ethical systems are the product of religions. .( Yücel, 2009)

Global Business Strategies of a Global company

As domestic firms increasingly employ in cross-border business and investiture, managers need to identify that the function of managing an international business varies from that of managing a completely local business in many ways. At first, the differences come from the easy reality that countries are varied. ( Yücel ,2009)

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Countries are varied in their cultures, political manners, socio-economic , legal systems and degree of economic growth. Despite developing of globalization in international business, there are many major and tenacious distinctions between the countries yet. ( Yücel ,2009) . Distinctions among countries need different marketing approaches. For instance, marketing a product in India may require a different approach than selling the product in Japan or Germany. Managing Workers in Italy may need different policy and skills than managing Iraqi workers; keeping close communication with a special level of administration and government is quite serious and significant in The Republic of China and irrelevant in Germany.Somewhen as a global company, it is infeasible to advertise a unit and standard advertising in various countries. Due to discrepancy in cultural and legal environments, for example, it is unlawful to use any inductive advertising in Germany (Cateora & Graham,2005: 483). As (Sunil,2002) declared "Advertising on television is strictly controlled in many countries, e.g., in Kuwait, the government controlled TV network allows only 32 minutes of advertising per day, in the evening".

For emulating in the international world, companies can take advantage of four fundamental entry strategies:

International strategy, transmission the proficiency and products derived from specific qualifications to foreign markets, while undertaking some limited domestic customization.

Multi-domestic strategy, customize their supply presentations, selling and buying strategy, and business strategy to national situation

Global strategy, concentrate on obtaining the expense reductions that achieve from experience curve effects.

Transnational strategy included a concurrent concentrate on reducing expenses, transmitting knowledge and products, and enhancing local reactions. ( Yücel ,2009)

Ethical Issues in International business

Various cultural environments eventuate in different ethical conceptions in international marketing, for the reason of ethical stability, it is essential to produce internationally enforceable ethical laws and arrangements. Recep Yücel ,2009 declares that in fact, detecting of an experimental research conducted by Armstrong proposes that "The Australian general managers disagreed that it is necessary to compromise one`s ethics to succeed in international marketing"(Armstrong, ibid: 161). The behavior query of what is correct or suitable has many difficulties for local marketers. Even through a country, ethical standards are mostly not determined or always obvious.

The issue of business ethics is extremely complex in international marketplace, because value arbitration varies widely between culturally various groups. That which is generally avowed as right on one country may be entirely ineligible in another country. Giving high price business presents, for instance, is generally convicted in the United States, but in many countries of the world awards are not only avowed but also awaited. ( Yücel ,2009)

According to Recep Yücel ,2009 , significant International Marketing Ethical Issues presented with their short definitions as follows:

Common Small Scale payola- involves the disbursement of small amount of money,

generally to a foreign formal in interchange for him/her offending some formal duty or

liability or to speed routine government operations ( tamper payments, reimbursement).

Large Scale payola- a relatively large payment aimed to permit a infraction of the

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law or designed to impress rule directly or indirectly (for instance, political cooperation).

Awards/Gifts/Entertainment- consist a span of items like dissipate physical

awards, prostitutes, chance for personal travel at the firm`s expense, presents received after the fulfillment of bargain and other strange valuable hobby.

Rating and Pricing consist partial various pricing, questionable factor - where the buyer appeal a written factor displaying a price other than the real price paid, pricing to push out domestic competition, venting products at prices quite below that in the local country, pricing practices that are unhallowed in the local country but legal in host country (for instance, price fixing contract).

Yield, Products/Technology - comprises goods and expertise that are forbidden for utilize in the local country but allowed in the host country and emerge unbefitting or unfit for apply by the people of the hosteller country.

Tax Evasion Practices - used purposely to avoid tax such as shift pricing (for example

where prices paid between partners and/or parent company attuned to influence earnings allotment) comprising the utilize of tax havens, where any profit made is in low tax authority, attuned interest payments on intra-firm loans, questionable organization and service fees charged between partners and /or the parent company.

Corrupt acting in the country of Hosteller performs like polluting the environment, maintaining dangerous working situation; creation/technology copying where safety of patents, brands or copyrights has not been imposed and short weighting abroad delivery so as to charge a country an illusion mass.

Entanglement in Political Affairs connected to the mixture of marketing acts and politics including the following: the effort of political influence by multinationals, evolving in marketing activities when either local or host countries are at battle and unlawful technology (Armstrong, Ibid).

Cultural Differences - among cultures relating potential confusions related to the conventional conditions of the trade process (for example deals) may be regarded by one culture as payolas but be all right business in the other culture. These practices comprise: prizes, financial payments, supports, leisure and political donations.

Probably the best advisor to best international marketing ethics is the samples put by ethical business leaders (J. Byrne, 2003). DeGeorge (Ibid) offers to settle international business ethics problems in five guidelines:

Do not lead intentional damage.

Create more beneficent than damage for the hosteller country.

Respect the rights of members and of all others affected by one`s function or diplomacy.

To the vastness steady with ethical bezels, respect the domestic culture and work with and not versus it.

Multinationals should reimburse their impartial portion of taxes and collaborate with the domestic governments in developing equitable laws and other background foundation and institution.( Yücel ,2009)

Globalization and its Effect on International Business

The globalization increases the general need for knowledge of cultural differences between not only countries but also corporate cultures. Today more and more employers start transferring their experts from country to country to improve build new subsidiaries or to support existing ones in specific projects (Beaverstock, 2012). Their prosperity is closely connected to not only the clear need for language skills but also the comprehending of sub cultural influences, different communication styles and social conducts of each society. But these challenges have not been addressed in numerous companies yet. (Herrmann, 2012)

Globalization is happening very fast due to:

faster communication

improvement of technology

fast travel possibilities via cars, ships and aircrafts

In the 1960's already the difficulties with cultural differences for international business became more obvious and have also been recognized by IBM. Therefore Geert H. Hofstede was hired to conduct research on human behavior and priorities across countries to get a better understanding of cross-cultural management. Hofstede questioned 60.000 employees from 71 different countries in his survey. Hofstede published his model of five cultural dimensions based on the results of his research in 1980 (Hofstede, 1984). In his opinion the five dimensions defined are the most influential on differentiating behaviors of people and with that help to clarify the country's culture (Hofstede, Geert Hofstede, 2011). This provides a better understanding on stereotypes of peoples thought processes and decision making. (Herrmann, 2012)

The following are the five dimensions on differentiating behaviors of people:

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Power Distance

Measures the extent to which power is distributed equally within a society and the degree that society accepts this distribution.

Individualism versus Collectivism

The extent to which individuals base their actions on self-interests versus the interest of the group

Masculinity versus Femininity

A measure of society's goal orientation

A higher focus on status or human relations

Uncertainty Avoidance

The extent to which individuals require set boundaries and clear structures.

Long-term vs. short-term orientation

The extent to which a society does or does not value long-term commitments and respect for tradition (Herrmann, 2012)

Contrasting the USA and Germany with each other you will find out that there are some main differences to be discovered and addressed during business with each other. (Herrmann, 2012)

This survey was directed between the 1960's and 1980's. Hence there are changes in managerial manner expected, particularly as a result of the development of technology in travel and communication. A study based on 50 responses from American residents and 100 responses from German residents has demonstrated the following outcome:

Based on the above stereotype corporate cultures a diversity of international corporates struggle to manage the different leadership methods and expectations in their subsidiaries. (Herrmann, 2012)

There are three types of corporate cultures

Mono culture: Same culture in every location

Multi culture: Locations develop separate cultures which not necessarily need to be linked to one another

Mixed culture: coordinated corporate culture using synergies between the headquarters and subsidiaries culture

The main challenges for international corporations are and will be the interplay between employees global. Based on the ongoing globalization this will be a raising problem unless companies are aware of the challenge and make the right decisions. The management needs to decide about what cultural approach they will pursue to prepare their company for an international environment and this decision requires to be discussed between all workers. The other challenge for the corporation is to find people to coordinate their environment and cultural approach. Not everybody is capable to adapt to various cultures and might just be impressive in the local culture of countries. Also alter of the cultural environments as a result of continues globalization requires to be looked after strictly. (Herrmann, 2012)