Ethical Dilemmas Hard Decisions Commerce Essay


Globalization has seen diverse cultures becoming increasing entwined and interdependent as business organizations operate across the world. The research finds the relevance in the day-to-day violation of business ethics in the globalised business and contends that business organizations must take responsibility of these violations or omit at their own peril. The malpractices that we continue to see in business world are centered upon the self-indulgent, introspective and myopic perspectives of the business organizations that are not able to transform their thoughts to consider all possible perceptions and ramifications of their actions. Despite the diverse ideals of relativism, universalism and imperialism as philosophies geared towards finding solutions to ethical dilemmas at global level, we contend that they are much far away from solution. The sections are: the methodology of the study, the next section expresses some challenging ethical dilemmas faced by global organizations engaged in international business that requires what we call hard decisions of choice in business, keeping in views the principle of self-regulation. The next section provides critique of diverse views of three schools of thought in regards to global business ethics. Last section is the discussions and conclusion part of the paper.

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Key words: Ethical Dilemmas, Relativism, Universalism, Imperialism, Relationship Approach, Globalization policy.


My special thanks go to the following authors': Dr. Elijah Siringi, Arthaud Day, Apel, Karl-Otto, Buller, McEvoy, Falkenberg, Windsor, Bowie, Beauchamp, Hampden-Turner, Parker, Kotler, Armstrong, Herskovits, Kohls, Frederick W. E., Ferrel et al, Williams, Skelly, Dyer, De George, Henry, Donaldson, Dunfee, Dobson, World Commission, ILO, Artdo International.


This is a desk research study of ethical dilemma issues in global organization. The study adopts a descriptive research design. Authors have achieved these results through the use of internet and the use of numerous surveys. The qualitative analysis of the result and presentation in the research is purely descriptive in name. The qualitative analysis of results and presentation in this paper is purely descriptive in nature.


What do we mean by Ethical Dilemma? Is the situation in which none of the available alternatives seem ethically acceptable. Many research scholars today share this view and indicate that what they took for granted, assumed, believed and worked towards has been upended by those who argue that in order to 'get it right' in a global business environment, organizations must rethink their business ethics approach. Sheth and Sisodia (1999) also support this hypothesis by asserting that, the context of ethics in global business environment is changing in fundamental ways. The acceptance of law-like generalizations has to be, as they suggest, "Either enhanced or modified". The old opinion of business ethics as "an oxymoron", or that "business organizations do not have ethics" (Laczniak and Murphy, 1993) is being re-thought. The business ethics is increasingly being called into question from various quarters (Brownlie et al., 1999) and research scholars are developing the discipline in order to challenge the ethical complacency that existed in the past.


The ethical obligations of a multinational corporation toward employment conditions, human rights, corruption, environmental pollution, and the use of power are not always clear-out. There may be no agreement about accepted ethical principles. From an international business perspective, some argue that what is ethical depends upon one's cultural perspective. For example, where Siemens used bribes to win business in countries around the world. In the case of using child labour is not accepted is in direct violation of the company's own ethical code, doing the right or even knowing what the right thing might be, is often far from easy. Hampden-Turner (1990) defines dilemma a choices between unfavourable alternatives. Hampden-Turner (1990) argues that one needs to extend dilemma theory to describe a very common experience such as management wanting rapid growth and high profitability but it is difficult to obtain both. Whereby Parker (1998) also argues that the primary challenges associated with the impact of globalization is balancing, conflicting or competing objectives such as the apparent trade-off between profits and social responsibility, individual and collective interest, autonomy and collaboration innovation and order, heterogeneity and homogeneity. He further reveals that an organization houses not only diverse people but diverse systems, diverse structures, diverse way of thinking and acting. He suggests that incorporating the diverse perspectives becomes possible with increased understanding of the ways in which the world is currently understood or may change and how those perspectives are affecting business roles. This means that change and the increased complicity brought about by global change reduces the rehabilitee of managerial tradition and increases the need to develop more dynamic and complex view of the organization in the global context.

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Some organizations tend to use questionable advertisement which affects the public, for instance cigarettes. Parker (1998) writes that the way corporations go about their business activities, with respect to business ethics performance, is increasingly important to their customers as well as all stakeholders of the corporation and the society in general. Customers in market place are becoming increasing aware of increasingly discriminating against corporations that fail to meet the customers' criteria of acceptance versus unacceptable ethical business activities and management principles. Ethical consumer issues include breaches in labour practices and human right. For example United Nations Emergency Children's Fund (UNICEF) appealing for ethical policies to address the use of child labour and inadequate core labour provisions occurs. According to (International Labour Organization, 2003), information available shows that one child in every six aged and five and 17 are being exploited by child labour around the world. International Conventions on Child Labour Practices have been formed (The international Labour Organization, 1973). The main ILO Convention include; Convention No. 138, which prohibits all economic activity by children under the age of 12; and Convention No. 182, which prohibits and appeals for the elimination of all child labour for children below 18 years. Despite an increasing number of countries committing themselves to these Conventions, they are not as yet universally ratified. China appears to be most significant number of violations regarding Gap Icn. Vendor code of conduct (VCC) with over 50 percent of Chinese factories found to be violating local working law; between 10 percent and 25 percent of factories using psychological or verbal abuse against the workers; and between 1 percent and 10 percent found to be non-compliant with child labour laws. Unwillingness to share documentation (25 -50 percent), which contributed to the major number of contract termination that took place in China (The Gap, 2004b).

Another criticism is that products lack the needed quality and product safety. Some firms are argues of holding back some of the nice and attractive features of their products and introduce them later to make more profit, others are also argued of destroying the ecosystems. Commercials interrupt serious programmes, pages of advertisements, obscure magazines and billboards mar beautiful scenery. These scenes tend to pollute people's minds and do no good to the public, it rather send messages of materialism, power, sex, or status. While it has been pointed out that the business organizations need to be friendly to the environment, consumerism and environmentalism movements demand that care for environment must be adhered by all individual.

Beauchamp and Bowie (2004) reported that there are fundamental ethical issues associated with international business ethics which include bribery, extortion, facilitation payment, environmental concerns and human right. Human rights issue are another key of ethical dilemma at global arena: it include child labour, detrimental working conditions, discrimination and exploitation of workers. Ferrell et al (2002) describes global ethical issues encompassing human right, sexual and racial discrimination, price discrimination, bribery, harmful products, breach of business contracts, pollution and telecommunications issues. It is also important recognising stakeholders, individual, group and communities' interest and concern that can directly or indirectly affect a firm's activities. Most corporation have emphasized Shareholders are most important, failure to recognise them can lead to ethical lapses. Stakeholders pinpoint issues, concerns and risk that could trigger ethical decision-making process. There is also widespread concern in business and other organizations over globalised ethical issue that affected them in very real way, even to the point of threatening their survival. The contributing factors can be identified; such knowledge can lead to improved ethical policy implementation or lead to the development of proactive step to prevent unethical behaviour and promote good ethical behaviour


The growing literature in the international business ethics indicate that managing across borders involves dealing with ethical challenges that are complex and multifaceted (Arthaud Day, 2005; Buller and McEvoy, 1999; Falkenberg, 2004; Windsor, 2004). They range from varying legal, political, economic and cultural conditions that provide a challenge for business executives who want to satisfy moral expectations across different countries and aim to integrate an ethical dimension into their strategic decision-making processes. Bowie (1996) writes that all countries are different in various ways such as physical setting, economic development and literacy rate and argues that even if truly universal moral principles existed, they would be subjected to differing culture contexts. Hence ethical behaviour would still differ among cultures even though they may agree on fundamental universal moral principles. While reviewing the current literature on international business ethics, three important schools of thought emerged. The first school is relativism that supports the maxim it say that when in Rome do as the Romans do, you comply with their rules (Kohls and Buller, 1994:31). Rooted in the ancient Greek philosophy of the Sophists and Skeptics, the cultural relativisms school accepts that different cultures hold different ethical beliefs and that it is difficult to argue that the ethical standards of one culture are better than those of another. Cultural relativism asserts that words such as right, wrong, and injustice derive their meaning and true value from attitudes of a given culture (Donaldson, 1996: 136).

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The second school of thought is universalism, which of course refers to normative ethical standards that serve as guide to evaluate cultural difference across the national boarders (Donaldson, 1996a; Wicks, 1990). A normative set of guidelines usually refers to business dealings as well as fundamental human rights issues and employment practices. Indeed, as business becomes an increasingly global affairs, the advent of international moral absolutes being formed becomes more apparent (Donaldson, 1996b; De George, 1993a). Many global institutions such as Transparency International (Transparency International, 2001), the Caux Round Table (Ferrell et al., 2002; Williams, 2000; Skelly, 1995), the United Nations and OECD (Dyer, 1998) have proposed various broad-based global codes of conduct. Potential advantages of a global code of ethics are several. First, the company code helps to reduce all potential risk that might bring problem in operating. Second, using the same ethical code worldwide will make it easy for them to comply with the rules and work on the same level. A global code of ethical standards provides a means for standardizing within-and-across-firm behaviours as well. Since global rules are likely to emerge from a negotiation process, they are unlikely to reflect values and habits consistent for all cultures. According to the theory of dialogic idealism, which is based on the philosophical theories of Apel (1988, 1990) and Habermas (1983, 1991), it is not possible to find or to generate concrete ethical principles that are universally valid (Nil, 1995a: 44). For instance global codes of ethics developed by firms from the west may not incorporate ethical concerns for other nations.

Further, global ethics may be viewed as a 'Seal of approval' and thus represent an end point to developing global ethics rather than the beginning point they should be. Big interesting questions can be raised about the role of laws and the legal system in the cross-cultural ethical decision-making. At a more macro-level one could argue that a fairly comprehensive international legal systems exits to resolve most disputes. Should Business organizations use the system to resolve conflicts? De-George (1993a) has suggested that "law is often ineffective outside boundaries; expectations vary from society to society or from region to region; and interests often clash where no clear methods of resolving dispute exist." Pedigo and Marshall (2003) argue that the use of various industry arbitrators such as the World Trade Organization and Swiss General Surveillance do provide a means of recourse when dealing in particular with the ethical dilemmas of bribery, breach of contract and software piracy seriously failed among Australian Managers working in overseas business organizations. Other scholars in the area of business ethics purse a more pragmatic approach by designing an ethical checklist that helps businessmen engaged in international trade. For instance the Global Compact Programme, launched by Mr. Kofi Annan, then UN Secretary General, in July 2000 was designed for the social responsibility of corporates all over the world and its sustainable growth. The association is between the UN, the business community, International Labor Organization (ILO) and Non-governmental organizations. The formation of the group is to work together to improve upon the corporate practices rather than disagreeing all the time. The programme is aimed at responsible corporate citizenship so that businesses work for social development while creating and spreading wealth and prosperity. It takes companies to welcome, establish by law and support within their field of activity the ten universally accepted principles:

Under Human Right:

1. Organisations must support and protect international human right campaign.

2. Ensure not to engage in human right abuse.

Under Labour:

1. Businesses must uphold efficient acknowledgement of the right to combined bargaining and freedom of collaboration

2. Eradicate any use of forced and compulsory labour.

3. The effective and complete abolition of child labour.

4. Eliminate discrimination in respect to employment and occupation.


1. Business must support a precautionary approach to environment challenges.

2. Encourage the development and diffusion of environment friendly technologies


1. All forms of corruption, extortion and bribery must be eradicated by businesses.

The opposite extreme of ethical practices to ethical relativism is the third school with is Moral Imperialist that argues that people should apply their own cultural ethical values when operating anywhere around the world (Donaldson, 1996a; Gopalkrishnan, 2001). Given the choice between ethical relativism and moral imperialism, Ciulla (1995) suggests the need to move away from the question of whose values and focus more on what values are best for businesses and the cultures in which they operate. While several schools of thought have begun to address this issue of 'evolutionary ethics' at global level, the main premise of this perspective is two-fold: first, that ethics emerge to the response to intrinsic urge to survive, particularly in environments where competition for scarce resources is strong. Second, that human seek to negotiate such competitive environments by adjusting their cultural morals albeit subconsciously. The resulting adaptive response may manifest as an ethic, simultaneously enduring cultural survival, individual fitness and normalcy of behaviour. Thus, a global set of agreed standards would therefore perhaps appear to be the solution to whose ethics one should use in international trade. Leaders of global businesses and from other walks of life collaborated to create a global code of ethics intended to provide structural order amidst the occasional chaos of dynamic markets. The document, known as the Caux Round Table (CRT) principles for business (1995) was launched in 1994 and has been translated into many languages and introduced all over the world. The CRT principles speak of business responsibilities, including responsiveness to stakeholders as well as shareholders, efforts to create justice and a world community and business behaviour conforming to the spirit as well as the letter of the law.


To round up my discussions, I would like to impose these few questions, why ethical dilemma in global organization? Is it because businesses don't know their values? Or are they having problems recognizing their responsibilities? Are managers only interested in taking personal decisions and not caring about the society? Bribery, Corruption, Child Exploitation, Discrimination and Business Malpractices are the common ones.

Bribery and corruption are the major disruptions in countries and organisations these days. For example, Nigeria is rated as one of the most corrupted country in the world. The question then comes up again. Why is that so and if so what are the monies gained from bribery and corruption used for? Do they end up in individual's pockets or are they used wisely to advance the country's interests in the international community? Common sense tells us that individuals benefit from these unspeakable attitudes while the majority wallow in poverty and drought.

Child labour should be abolished because children are the future building blocks and using them for such laborious task instead of them being in school is disheartening and very upsetting. An example is what goes on in China which should be completely abolished by the UNICEF. Discrimination some countries and organization discriminate whom to offer jobs to like. A typical example is South Africa, which distinguishes which jobs a white skin person can have and which one befits a black/dark skin. This revelation is despicable.

Some companies also spend a lot of money in advertisements such as billboards magazines, newspapers, video clips etc. To recoup their money, managers are forced to push prices up the roof, making customers pay a fortune for unworthy items. In the same way some businesses hold back some of their attractive features and to make huge profit, they introduce these features back at a later time to make them look superb with higher price tags. I strongly believe that there would not be too many issues if businesses practice accurate code of conducts. When setting these values personal feelings should be out of equation, rather they have to focus on the consequences to the parties involved whether anyone will suffer unjustly.

The second consideration is the code of conduct. Organizations have to select the suitable model which best describe them either consequential or non-consequential theories. Consequential Theory (teleological theory) action is judged by its outcomes while non-consequential theory the outcome is considered when faced with an ethical dilemma. All the theories have their strengths and weaknesses. For example, when we look at utilitarianism theory - is useful for decision-making, flexible, recognizes interest of all and resolves conflict of interest. On the other hand, it ignores wrong, may conflict with justice and difficult to design rules. This applies to all other theories, so it is up to organizations to select the best ethical theory they feel is most aligned with their core values, this will help them find suitable solution for solving the problem of ethical dilemma. Once they are conscious of their values and models then they will follow a set criteria to solve their problems.


Organizations should go beyond their capacity to improve the lives of their employees, the societies, treating everyone fairly without discrimination. Human beings are not machines, they should be treated with respect and courtesy, taking each other's feeling into consideration and relate to people nicely. Businesses must have the ability and willingness to forgive to make objective decision and also to maintain high level of integrity.


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Appendix A and B