Business Ethics in the Global Economy Essay

Definition of business ethics in the global economy

Business ethics can simply be defined by social and ecological responsibilities of the business. Ethics in business requires that organizational decisions should not only be made from a narrow and economical perspective but should also consider the social and ecological perspectives. In this case, the people in business life should put into consideration the effects of their economic decisions on other people, the environment and the society at large. Business ethics refer to moral principles that guide the way in which a business operates and behaves. Ethical operations involve acting ethically and distinguishing between "right" and "wrong" and selecting the "right" decision. Having an ethical business outline helps to easily identify unethical business practices.

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Business ethics is applied ethics whose contemporary task is to morally regulate the activities of economic subjects in a new global economic and social environments (Svitacova & Kovacikova, 2018). The business activities within its environments are connected with a myriad of immoral practices that would lead towards global inequalities, conflicts and global social thunders that might deepen some of the global problems. It therefore focuses on the fact that businesses in their attempt to succeed in the global market and outgrow their global competition, their economic subjects forget about their principle role of economics which is to satisfy the needs of their customers all over the world and take part in the development and improvement of the quality of their lives. It elucidates the need to examine the business activities from an ethical point of view and to put into consideration the global ethos and the new global economic environments. It provides the need to morally regulate business operations so that business subjects can realize their goals within the global environment while acting responsibly towards all the stakeholders in the business and nature. Business ethics aims at warning contemporary and future business persons to ensure that they comply with the moral behaviours of entrepreneurial subjects and represent one or more of the instruments of increasing competitiveness.

The global environment is established by the powers of globalization that provide entrepreneurs with new opportunities and possibilities to force their economics interests on a global scale to increase their business, growing integration with the international market and to satisfy the human needs. National economies provide room for international business, entrepreneurial investment, global competition and international work division. Global economies offer freedom, a better environment for business activities in the global economy and enabling entrepreneurial subjects to facilitate the realization of economic goals.

Ethical issues in international business

Ethical-related issues have been representing the foundations of a myriad of religions and lifestyles. The ethics are found in all aspects of human activities. It represents a mental process that is systematically developed to identify and analyze the differences between the manner in which business operations are conducted and the way it could have been as a result of human actions or activities that would improve human behaviors in the society (Gangone, 2010). Ethics represent a vital aspect of the economic environment within the twentieth century. The different social groups manifest in public security and political manipulations and customer awareness that are necessary to take responsibilities by the organization and to find a fair solution to the various ethical issues.

In the current industry, consumers and other pressure groups are increasingly demanding as the firms tend to find out more ethical and ecologically sound ways of conducting their business activities. The media is also on the watch out for corporate malpractices as firms appear to be increasingly realizing that being ethical may is good for business. Business practices outline the fact that all extraordinary decisions are based on financial elements as well as ethical ones. Ethics is, therefore, an integrating part of the modern business environment.

Contemporary countries haves established the stability and development levels of their institutions that direct them from social and political levels. This can be observed through the capacity to outline, approach and establish solutions to ethical issues. However, in many political states, this capacity is minimized by poverty, limited access to information, poverty, nonfunctional political environments, and corruption.

The current nations present vital differences ranging from economic, political, cultural and social point of view and showcase a great resemblance between the unethical behaviors that are displayed by the transnational corporations. These include corrupting of various major officials in the host countries, disrespect to human rights, provision of false information concerning the financial position of the company and deceitful publicity, the use of underage employees, industrial espionage, informational piracy, sexual discrimination, wasting of natural resources and deliberate pollution among others.

According to Gangone (2010), the ethical considerations that manifest in the area of international business represent real ethical dilemmas that contemporary managers can use as they generate a conflict between organizational and economic performance (checked by looking at the turnover, costs and business profits) and its social performance (checked by analyzing the ethical responsibilities to the people outside or inside the organization). Gangone analyses some of the major sources of ethical issues in the international business environment and behaviors that provide ethical implications to some multinational businesses.

Culture as a factor in international business

Culture provides everything in our surrounding and is made by both tangible and intangible concepts and values. Each nation consists of distinctive culture and beliefs on the acceptable and unethical beliefs. The citizens who form the markets for international companies are also based on their religious beliefs and perceptions of time where the values and ethical standards play a vital role. With the widespread of cross-cultural agreements on normative issues of business and corporate ethics and management issues such as the codes of conduct in the business operations. With the rejection of ethical relativism in favor of the level of universality in the normative content of global business ethics, questions still arise on how cultural factors affect the manner in which multinational corporations manage their ethical responsibilities (Weaver, 2001).

Cultural appropriateness and organizational culture should be considered while establishing a means that encourages ethical behavior in an economy with varied cultural settings such as the global economy. Just like other management issues, i.e. leadership and motivation, organization culture, ethical initiatives, and programs can be characterized by the application of American business practices on non-American places or situations. However, a presumption of culture-free ethical management strategy can be enhanced by the establishment of common advocacy and creation of formal business codes that are accepted by the international agencies.

Global business ethics and its strategic approach

With the current changes in the environment and global business ethics, the strategic approaches to global business ethics emerge (Takei, 2011). New strategic approaches emerge to control business ethics to ensure that ethical businesses are conducted and consequently contribute to long-term profit maximizations. The multinational enterprises are therefore left with the option of understanding the fundamental and corporate goal of maximizing corporate shareholder value. Global business ethics should therefore not only be assessed and managed to base on their ethical relativism but also on their cost-benefits. Management should also consider the influences of current business decisions on the ethical behaviors of corporations.

Takei (2011) points out the factors that management must consider to influence its current business decisions and ethical behaviors of the corporations. He describes the critical elements of strategic, ethical management. In his argument, he connects business decisions to ethical business activities and corporate social responsibilities. He also suggests that business ethics are continuously considered in the entire duration of operation where continuous business decisions are highly required. The implications of strategic approach ensure that companies maintain longer perspectives to their profits if they consider business ethics as critical elements. Moreover, long-term business strategies should build business ethics into proper decisions. Ethical strategies have been quite meaningful to MNEs because of their emphasis not only on ethical business decisions in the various business levels but also among various corporate cultures.

Ethical relativism and strategic business decisions

Ethical relativism is what makes global business ethics more sophisticated compared to regular business activities. The relativism creates various ethical values in in various cultures. Therefore, the MNEs should be sensitive to ethical relativism in their operations. MNEs base on certain countries that have different ethical values which are influenced by cultural relativism. Existence of ethical relativism results in disagreements in ethical values and complexities in business ethics. Companies are therefore supposed to be flexible enough to adapt themselves to different ethical values. They should reverence local ethical values and adapt to the stipulated ethical values in the local region. Tekai argues that instead of companies adapting to their market's ethical values, they should control their business ethics so as not to violate the common ethical values in business. The companies should be able to manage their global business ethics by controlling not only their ethical business principles but also the factual aspects of the ethical business operations.

Role/importance of business ethics in the global economy

Ethics highlight principles, beliefs, and values that help to define what is wrong of right within a business setting. According to Gerasimova (2016), ethics can be classified into three categories i.e. code and compliance, destiny and values and social outreach. On a global scale, ethics include respect for the differences that exist between co-workers and enhancing honest communication and trust within the workplace. Therefore, to avoid confusion on ethics within the workplace and global business operations, Gerasimova suggested three steps that would help to guarantee companies and their employees' ethical behaviour.

Step 1: development of a clearly articulated set of core values established by global policies and decision making processes. The companies must, therefore, align its decisions by its values. The most common values in global business are honesty, responsibility, dignity, and respect for others. It is also vital to understand and appreciate the operations of other cultures as well as their differences that exist between them.

Step 2: train the international employees to ask questions that will enable them to come up with proper business decisions that are both flexible and culturally sensitive to the industry's core objectives and values. These companies establish policies and training that teach employees its ethical codes. In addition to forming the vital formal legal protection policies, the management should also consider how these policies are perce...