Business leaders must consider many factors to succeed in the global marketplace. In addition to international laws and regulations, logistics, marketing, communicating in multiple languages, environmental issues, demographic diversity and more, ethical considerations are critical, especially for those in international business leadership roles.
Writing for Forbes, Michael Shribman discusses the evolution of business ethics for global businesses. “The perception of business ethics has shifted from a regulatory requirement to a strategic imperative,” he explains. Businesses now recognize that there is intrinsic value in ethical conduct. If you’re seeking a management role in the international corporate realm, Texas A&M International University (TAMIU) offers an online Master of Business Administration (MBA) in International Business program that provides a solid footing in sociological and demographic diversity, global business ethics, legal and regulatory issues, and more.
The Complexities of Ethics in Global Business Administration
Businesses operating in a foreign country need to understand and respect the local population’s cultural norms and customs. This practice holds true even in other English-speaking countries and is more than avoiding cultural faux pas — it helps build stronger relationships with local partners and clients.
In addition to compliance with international laws and aligning values and goals with local employees and partners, it’s essential to set clear ethical guidelines and provide cross-cultural training to employees to help promote a culture of integrity and responsibility. This includes respecting human rights and incorporating sustainable practices.
A primary obstacle to implementing ethical business conduct is the pressure to deliver short-term financial results. Shribman explains that operating in the global business environment demands heightened ethical awareness: “Companies operating in multiple jurisdictions must navigate diverse legal and cultural landscapes, requiring a nuanced approach to ethics. Balancing the interests of various stakeholders, including shareholders, employees, customers and the community, poses another significant challenge.”
Business concerns that apply to both domestic and global business operations include the following: building trust with customers and employees; prioritizing environmental, social and governance (ESG) factors; focusing on employee engagement and retention; and growing customer loyalty. To operate ethically, companies must prioritize these issues while delivering financial results.
Building an Ethical Framework in a Global Business
Political systems, law, economic development and culture vary from nation to nation. According to Academia World News, the most common ethical issues involve employment practices, human rights, environmental preservation, corruption and moral obligations of multinational corporations. Business can better facilitate compliance by establishing a decision-making process that accounts for stakeholder needs and perceptions and uses feedback, assessment and monitoring instruments to build ethical awareness.
Internal audits and ongoing monitoring help businesses identify ethical issues and take corrective action. It’s also helpful to seek external evaluations that may be able to identify areas of concern that an internal audit may miss. These audits and evaluations help international businesses build a strong ethical foundation.
Ethical Issues in International Business
An example of a cross-cultural ethical issue is the giving of gifts and bribery. In some regions, gift-giving is not only customary but also expected. Other cultures may view it as unethical or bribery. Labor rights, environmental concerns and social responsibility can vary significantly in different cultures. Learning these differences and respecting local business practices and regulations are essential to ethical decision-making and building strong relationships.
A recent study by the International Journal of Creative Research Thoughts addressed ethical challenges faced by a wide array of companies involved in international business. It found that ethical issues in the global marketplace include work standards and conditions, especially in countries with lower standards than the U.S. Improving workplace diversity and providing equal opportunity are important considerations in the global market. Human rights issues, pollution, financial fraud, technology and privacy practices present other ethical challenges.
In the U.S., child labor is considered unethical, but each country has its own standards for child labor and the minimum age at which a child can work. Even in countries where this is accepted, companies can come under fire when employing child labor.
A robust ethical framework helps when navigating ethical dilemmas and dealing with misunderstandings due to cultural differences. Communication is critical, and building clear channels for reporting ethical concerns and addressing issues makes it easier to resolve quickly. Investing in cultural understanding and building relationships with local stakeholders helps companies build trust and thrive in the global marketplace.
Examine Global Business Ethics in an Online MBA Program
The online MBA in International Business program from TAMIU provides students with domestic and foreign perspectives that shape international business. Students learn about demographic diversity; issues and concepts associated with managing international organizations; and social, political, cultural and economic issues that impact decision-making.
Equipped with these skills, graduates of TAMIU’s program can step into management and leadership roles. Foundational knowledge in business gives them the technical know-how for success, while an ethical compass gives them the insight for longevity and growth.
Learn more about TAMIU’s online Master of Business Administration in International Business program.
