Assignment:
Background:
"Relativity applies to physics, not ethics. Albert Einstein is credited with this powerfully simple statement, which helps explain how we must operate in an increasingly competitive global industry. We know, and research supports, that companies with strong ethical cultures outperform those whose ethical cultures are weak.
International companies are confronted with a variety of decisions that create ethical dilemmas for the decision makers. Right- wrong just-unjust derive their meaning and true value from the attitudes of a given culture. Some ethical standards are culture-specific, and one should not be surprised to find that an act that is considered quite ethical in one culture may be looked upon with disregard in another (Budrina, 2012).
For example, international businesses may be faced with a difficult situation of being involved in corruption without even knowing it sometimes. In some cultures it is acceptable to offer bribes to get a certain business transaction done. Bribery may come in many forms such as money, flowers, gifts, favors and entertainment. Giving any sort of bribe is illegal and unethical in the United States and the UK. However, in some countries there is no other way of getting any business done other than offering bribes. Also, giving a gift in appreciation to someone is considered as a bribe in the United States, but it is a normal act in Romania.
Let's look at the idea of "bribery" in more detail. The Romanian state owned company Oil Terminal spent tens of thousands of euros on jewelry, vintage wines, women's handbags and gold watches between 2009 and 2011. Oil Terminal spent some EUR 6,000 on jewelry, EUR 1,900 for gold watches, EUR 2,600 on perfumes, some EUR 2,400 on women's handbags, and EUR 5,300 on vintage wines. An additional unjustified expenditure of almost EUR 200,000 paid in a contract with a law firm was also discovered during an audit at Oil Terminal. Oil Terminal is certainly not alone (Budrina, 2012).
It is uncertain whether these expenses were simply bribes, or whether the leadership made personal purchases from the company's money, which would be another ethical dilemma in itself. Albert Einstein's quote, "relativity applies to physics, not ethics" begs the question, do global organizations act according to their own ethical standards or those of the international partners they conduct business with?
It is important for leaders to set the tone by reinforcing a strong ethical culture. Maintaining universal ethical values and being sensitive to the laws and customs of a diverse global customer environment can be a competitive advantage; an advantage that is sustainable and more important than ever given the realities of today's global market.
Budrina, I. (2012). International: Cultural ethical dilemmas in business.
Check out the following resources to further illustrate the social responsibility of corporate business and help with discussion. (Video: 17:26)
Document highlighting why every company needs a CSR strategy and how to build it.
(Beginning through pg. 13 the section titled "The Strategies of Crafting a CSR Strategy.")
Coca Cola Corporate Social Responsibility (Video: 14.58)
Coca Cola Corporate Social Responsibility
The above video discusses one major company's various corporate social responsibilities.
Prompt
Ethical leadership is a critical component of any well-run organization, especially in larger, international organizations. In a posting of 150 words, with one IWG reference (your text is fine), explain how ethical leadership shapes a company's formal and informal culture and structure? How should an ethical leader approach an issue like globalization where ethical standards may differ?
Make sure you address the following questions within your response:
1. Explain how leadership must account for internal and external stakeholders when making ethical decisions. In your opinion, which is more important-internal or external stakeholders? Be sure to justify your response.
2. Propose an argument for how you feel an ethical leader should approach an issue like globalization where ethical standards are different.