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Have you ever considered how globalization has not only brought countries closer together, but also how it has created a unified ethical perspective for countries doing business together? Management teams are finding out that there is a world of ethical challenges waiting to be discovered through the increased development of globalization. If ethics are a problem within a country, imagine the challenges that arise when the language is foreign, cultures are diverse, and the number of people involved grows to a global scale. In this paper we are going to discuss two articles which cover the ethical perspectives of India and China, how these articles contribute to understanding global ethics, and how India's and China's business ethics compare to that of the United States.
Santa Clara University published an article written by Stephen Rothlin called "Business Ethics in the Chinese Context" that discussed some of the progress China made in 2006 and 2007 in business ethics. Stephen Rothlin is the general secretary of the Center for International Business Ethics in Beijing. In January 2008, Rothlin updated the Markkula Center for Applied Ethics Business and Organizational Ethics Partnership with the progress he had seen since his last visit in 2006. Rothlin discussed six categories including; consumer rights, anti-corruption activity, environmental sustainability, community contribution, and criteria for ethical companies. In each of the six categories he discussed both improvements seen and recommended areas that needed attention for improvement (Business Ethics in the Chinese Context , 2008).
China's worker rights and labor standards have improved through the development of their Labor Contract Law that now protects China's longtime employees from being fired from a position without specific cause. It also requires companies to contribute to employee social security accounts and has improved the employee's safety by improving regulations of working conditions. The new law also protects children through child labor laws and the big to do now is to ensure that China follows these new laws and regulations (Business Ethics in the Chinese Context , 2008).
In 2007, China faced a major setback with the wave of product recalls. Rothlin talked about how China should improve their product safety, advertising, and China's action taken on such problems as being a major ethical concern for China. Rothlin also discussed China's anti-corruption activities and how firing Mayor Chen Liangyu sent a shockwave through China as part of the crackdown on corruption there. Rothlin stated that "We have to rely on the commitment of top officials to combat corruption," and that "they [top officials] lose credibility by doing nothing." A major problem with corruption in China is bribery through gift giving. Rothlin believes that refusing a gift would be against cultural norm in China, but that officials need to focus on how a code of conduct can set specific limits to giving gifts (Business Ethics in the Chinese Context , 2008).
Rothlin also discussed environmental sustainability and how with the 2008 Olympics in Beijing, China has enticed officials to clean up the public transportation system, conserve energy, and clean up the current water and air pollution problem. The community has been encouraged to help through the new tax system that was developed. With that, social responsibility has become a growing interest, especially with education. The last thing that he discussed is how his company is developing new criteria for ethical companies that will be used to help identify the most ethical companies in China (Business Ethics in the Chinese Context , 2008). Rothlin developed the "18 rules of International Business Ethics" (Schulman, 2006).
Rule 1: If you strive to understand the values of different cultures, you will find common points.
Rule 2: if you analyze the facts, you will realize that honesty and reliability benefit you.
Rule 3: if you analyze case studies from different perspectives, you will discover the benefits of fair play.
Rule 4: Respecting your colleagues is the smartest investment you can make.
Rule 5: To increase productivity, provide safe and healthy working conditions.
Rule 6: To inspire trust, make your performance transparent.
Rule 7: Your loyal dissent can lead your institution in the right direction.
Rule 8: Downsizing your labor force is only beneficial when you respect each stakeholder.
Rule 9: To establish your brand name, act as a fair competitor.
Rule 10: Reduce the gap between the rich and poor by developing a new social security system.
Rule 11: if you act against discrimination, you will increase your productivity and profitability.
Rule 12: If you protect intellectual property, all stakeholders will receive their due share.
Rule 13: Ongoing changes in information technology require new forms of loyalty.
Rule 14: Your public relations strategy will only secure your reputation if it witnesses your drive for quality and excellence.
Rule 15: Your economic achievements will only stand on firm ground if you diminish corruption.
Rule 16: Long-term success urgently calls you to constantly care for the environment.
Rule 17: To become a refined player, sharpen your discernment and cultivate good manners.
Rule 18: Care for your business by caring for society.
The next article was also found on the Santa Clara University website. It was written by Margaret Steen who is a freelance author. Her article "Business Ethics in a Global World: India's Changing Ethics" reviews an address to the Markkula Center for Applied Ethics by Jagdish Sheth. Sheth is executive director of the India, China, and America Institute and a professor of marketing at Emory University. On March 9, 2007 he discussed "Business Ethics in a Global World" (Steen, 2007).
Sheth discussed a few ways in which the Indian business practices are unique. He believed that these unique business practices may encourage the ethical behavior of the popular western viewpoint. Some of these unique business practices include corporate social responsibility, favors, clanship, and friendship (Steen, 2007).
Sheth believed that the collapse of Communism was a major factor in the shift from the previous 20th century business ethics to the current 21st business model. He argues that some countries that used to be communistic countries are now some of the best run capitalistic countries, like India and China. Another driving factor is the affluent nations that are aging and traditional industries do not generate as many jobs today as they did in the past. The next factor in shifting nations is that people in positions of power have discovered that economics plays a vital role in elections. The last major factor that has helped shift business ethics into the 21st century is that the revolution of information technology has really leveled the playing field for all economies (Steen, 2007).
In the article, Sheth believed that both China and India are on the edge of becoming innovative economies and not just different locations for our low-end jobs. He believes that if this does happen, the shift will ultimately redefine business practices. India's business practices are unique and might even be compatible with western business practices someday, but because India believes that favors, clanship and friendship are important in business, western business ethics believe this to be a conflict of interests. Friendships, which can be school, personal, or even multigenerational family friendships, are all highly valued in India (Steen, 2007).
As we have seen from a review of the two articles, the business ethics of India and China are much different than that of the business ethics of the United States. China understands now that economics are a crucial part of elections and in the second article, Sheth explained that the reason that George Bush Sr. lost his re-election bid was due to the faltering economy. Sheth also explained that the reason that he believes the 20th century will be considered the "Asian century" is because the Asian culture puts a "premium" on friendship, clanship, and favors where in American ethics, this would be a big conflict of interests (Steen, 2007). He stated that Western business has their own version such as "Procurement departments in U.S. companies are more likely to buy from the company's customers" (Steen, 2007).
Sheth believed that nations are shifting to focusing on stakeholders rather than focusing on shareholders. In the future, Sheth believes that "ethics will be anchored to the idea of business as a profession, similar to the way the field of medicine is now. And he said there will be global standards of governance, but their application will be adapted to local conditions" (Steen, 2007).
So when it comes to Globalization, India and China are expected to top the charts in the 20th century. Some believe that the 19th "American Century" has finally come to an end. Through globalization, China and India have discovered that business ethics are an ever changing environment and management teams within these countries have developed an ethical program that allows them the ability to work ethical together. Even though there are major boundaries such as foreign languages, diverse cultures, and a growing number of people involved, they have been able to overcome them all in order to work together. In this paper we talked about two articles from Santa Clara University that discussed the business ethics of India and China and how their business ethics compare to that of the United States of America.