Ethics and Social Responsibility in International Business Research Paper

September 21, 2021 by Essay Writer

The importance of ethics in the global business environment needs to be over emphasized. Nowadays, the need for ideal ethical behavior within organizations is paramount if organizations are to avoid potential lawsuits and other uncertainties in their operations as new business trends emerge on a daily basis causing problems to organizations and end users.

Public scandals of corporate malfeasance and malpractices, which and have even claimed death of many organizations, have profoundly influenced the public perception of many multinational organizations. Cases in point are large organizations such as Enron, Arthur Andersen and WorldCom among others.

The recent expansion of global business as well as decline of trade barriers has necessitated the world over to further underpin the interest in the topics of ethical behavior and social responsibility. On top of this, human rights and environmental conservation are getting more recognition with every passing day in both academic as well as commercial circles.

As multinational organizations expand globally and establish operations in foreign markets, ethical conduct of their officers and employees gain more importance since the cultural diversity that usually accompany such expansion may compromise the much shared cultural and ethical values observable in the more homogeneous organizations (Morf, Duffy, et al. 1999 ).

Although understanding of other cultures and acknowledgement of differences among them will enhance the cross-cultural communication, it may not be enough to offer ideal structures of proper ethical behavior in organizations. In the academic circles, the culture-based consequentiality model is developed to explain among other things, how cultural differences influence the ethical perceptions as well as actions of individuals engaged in making decisions with ethical overtones.

Multinationals need to come to terms with the legal and moral atmosphere in which they operate. And above all, they need to establish an environment that fosters ethical behavior, because in the final analysis to do otherwise eats into their profitability. In contrast to this opinion, some scholars advanced the theory of Virtuous Ethics, which is defined as a theory that focuses mainly on an individual’s moral character.

According to these scholars, marketing researchers attach little importance to virtuous ethics. Furthermore, they propose that without considering virtuous ethics, an elaborate analysis of the ethical character of marketing decision makers and their strategies cannot be attained.

Strategies such as the codes of ethics represent one means of achieving the ultimate goal of having ethical international responsibility of business worldwide. There are numerous ethical responsibilities faced by multinational organizations.

Therefore, just as one can value an individual’s culture by his or her actions and personal activities, ethical climate can be observed on a larger scale; in this case, the organization. Here, ethical climate is the employee’s perception of the norms of an organization (Bartels et al., 1998).

Organizations that have a robust ethical climate experience few serious ethical problems and are more successful in coping with such problems. Their research suggests that it is vital for managers to consider developing strong ethical climates in order to equip organizational members with the capability to deal with ethical dilemmas.

They have to oversee the development and maintenance of clear and robust set of norms to promote good ethical behavior. As Laczniak, et al (2007) has pointed out an organization’s codes of ethics and enforcement of rules goes a long way in controlling the direct behavior of social entities.

Based on the above analysis, multinationals must acknowledge the need for a homogenous code of business ethics. Without such a code, the conduct of players in this field will be unpredictable.

Furthermore, national governments need to know that the most effective way of safeguarding their citizens, their national interests, and that of the global environment against the vagaries of the global business depend on the development, adoption and enforcement of such a code. However, a surge of momentum has been witnessed the world over owing to increasing interest and awareness of the parties concerned.

Many multinational companies such as Toyota, Siemens, General Mills and Johnson & Johnson among others have written guidelines that elaborately and explicitly detail how employees are expected to treat suppliers, customers, competitors, as well as other parties. There are those that have formulated formal codes of ethics—written statements about the values and ethical standards that guide the institutions’ operations

Some multinational companies deal with ethical issues proactively, by giving their employees training on how to handle ethical dilemmas. At Boeing, for instance, line managers are responsible for overseeing training sessions for other employees, and the company also has an ethics committee that answers directly to the board of directors. The training sessions entail discussions of various ethical dilemmas that employees might face and how best to handle them.

Organizational practices as well as corporate culture also have an influence on the management of ethical behavior. If leaders in a firm conduct themselves in an ethical manner and violations of ethical standards are promptly and ideally addressed, then everyone in the organization will recognize that the firm expects them to conduct themselves in an ethical manner. If leaders appear to be above the set ethical standards or either trivialize or ignore unethical behaviors, then the wrong message is sent to the employees.


Bartels L.K. et al. (1998). The Relationship between Ethical Climate and Ethical Problems within Human Resource Management”, Journal of Business Ethics Vol. 17, 799-804.

Laczniak, G. R. and Inderrieden J. (2007). The Influence of Stated Organizational Concern upon Ethical Decision Making, Journal of Business Ethics. Vol 6, 297-307.

Morf, Duffy A., et al. (1999). A Survey of Ethics Officers in Large Organizations, Journal of Business Ethics. Vol 20, 265-271

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