International code of ethics

Doucet, Van-Kampen, Mworia (2010).

International Code of Ethics

The international code of ethics presented below will serve as a moral compass to aid global organizations in business decisions. The stipulated code will serve as a standard in global ethics to establish and regulate ethical, social, and environmental responsibilities of companies operating in global markets. The established standard will become a useful tool in comparing, and measuring the level of responsibility taken by global organizations. As such organizations will be held accountable to ensure their decisions do not cause negative social outcomes on foreign economies.

Code of ethics

1. Respect the economic and social environment of foreign markets. Carefully measure the impact of business on:
   1. The economy: The ethical organization will care about the global economy by helping to create positive economic conditions not only for the wealthy but also for the most vulnerable of citizens as well.
   2. Social welfare: The business or institution  shall take action to ensure not to harm social welfare with the introduction of business in the foreign economy. The organization will not take part in business that will destroy the livelihoods of citizens, otherwise harm, or take advantage of citizens.
2. Laws and regulations:
   1. Respect the rules, laws, and cultural behaviours and traditions of foreign countries when conducting business in foreign markets.
   2. Political climate: The business or institution shall understand and respect the politics and the way that the government is governing the country in which trade will be happening.
   3. Multilateral trade: Organizations will support trade agreements between many nations at once. Multilateral trade allows all nations involved in the agreement equal trading treatment.
3. Respect the environment of foreign countries, and avoid business activities that would otherwise damage it or impede it:
   1. Avoid illicit operations:  Do not conduct illegal business questionable in ethical behaviour.
   2. Environmental pollution: Do not conduct business in foreign countries that one would not conduct in one’s own country for the purpose of preserving one’s own environment at the detriment of another’s.
   3. Exploitation of resources: Do not conduct business in any way that will take natural resources and exploit and possibly cause extinction of such natural resources.
4. Corporate Culture requires that all involved organizations understand the culture of other countries and in unity develop guidelines that will help form a shared culture.  A corporate culture has:
   1. Shared goals and values: Deciding what is good and bad for all those involved sets a guideline of expected behaviour.  Establishing goals declares what need to be achieved and all parties can focus on attaining the desired results.
   2. Learning culture: Such a culture will facilitate sharing knowledge among teams.  It will also help in reviewing the successes and failures in the relationships as they seek change.
   3. Clan control of values: A requirement for non-straightforward issues, requiring trial and error, adaptation, and flexibility.
   4. Leadership: By example, successful leaders will lead all teams in enacting the proposed code of ethics.  Followers adopt the values portrayed by their leaders even when they are not seen as ethical.
5. Study the foreign culture to form an understanding of, and respect of the rules that form the ethics behind cultural differences. According to  Dr. Greet Hofstede there are five dimensions that form different cultures:
   1. The power distance index (PDI):

This index focuses on the degree of equality and inequality between the country’s people. Two categories make up the PDI: The High Power and Low Power Distance. High Power Distance refers to the inequalities of power and wealth and how much growth is allowed in the society., a High Power Distance example is a caste system. Low Power Distance ranking is the gap between the power of citizens’ and their wealth. The polarization gap between wealth and power is wider in the Low Power Distance ranking system.

1. The Individualism index (IDV):

This Index focuses on how much members of the culture define themselves apart from their group memberships.  Hofstede uses two category’s in the IDV: High Individualism and Low Individualism.  High Individualism refers to people who develop and display their own individual personalities and loosely affiliate themselves with a group’s personality. Low Individualism refers to the high affiliation that one relates to their group’s personality.

1. The Masculinity index (MAS):

This Index focuses on the traditional value of Male and Female power, control, and achievement.  Hofstede uses two categories, Masculinity, and Low Masculinity.  Masculinity refers to a culture  driven by men. Men hold all the power and control the household. Low Masculinity refers to a culture that has equal power distribution between men and women.

1. The Uncertainty Avoidance index (UAI):

This index focuses on how hesitant the society is toward the unknown and the attempt to minimize uncertainty.  Hofstede uses two category’s, High Uncertainty Avoidance and Low Uncertainty Avoidance. A High Uncertainty Avoidance Orientation refers to a culture whose rules are set in place to help reduce the amount of uncertainty in the future. Low Uncertainty Avoidance refers to a culture being more flexible to rules and guidelines, and less worried about the future. This society also has more tolerance for a variety of opinions and lifestyle differences.

1. The Long- Term Orientation index (LTO):

This index focuses on the society’s value on history, culture, and long- term devotion to traditional thinking. Hofstede uses two categories, High Long-Term Orientation and Low Long-Term Orientation. High Long-Term Orientation refers to a culture that values history, long-term commitments and tradition. Low Long-Term Orientation refers to a culture that does not value the past or present and has more of a focus on the future. In Low Long- Term Orientation changes occur more frequently and commitment levels are low in traditional style thinking.

How the proposed code is ethical

The stipulated code of ethics can be used to create an organizational goals and an organizational vision that will help direct the business in ethical activities.

Goals define expected outcomes hence removing any doubts on what is the purpose of working together.  Such clarity does show ethics.  Clan control solves problems that have “no one best way” of handling them.(Bateman-Snell, 2007).  It ensures that all involved parties will fulfil their obligations to the best of their abilities and creates a fair environment. Leaders play a big part in defining the culture within the organization and they will influence employees behaviour.  A good leader will empower teams to create trust and achieve goals. The values and ethical standards of an organization will define what kind of leadership is seen within the organization.  Effective leaders will ensure that all individuals follow the code of ethics. In addition, the stipulated code of ethics covers areas of uncertainty and establishes a framework in which organizations reflect beyond their ability to profit from conducting business in a foreign country but also on the impact of their presence on the country. The code of ethics attempts to bridge the gap between what is morally right and wrong. For example, the bullet points cover issues such as harming the livelihood of citizens, or taking advantage of them.

Finally, the last bullet covers studying cultural differences in societies to ensure that any business activities do not offend the culture of the country penetrated. Using Hofsted’s study of cultures the stipulated code of ethics highlights that every global organization must take steps to protect the individual beliefs that make a culture unique. To be ethical it is important to gain an understanding of the cultures an organization is doing business with to ensure that members are not disrespecting sacred beliefs and subtle differences.

What one can be learn about ethics from other cultures:

No one culture is the same as the other and what people term to be ethical or unethical has a greater influence by their culture. Learning different ethics offer organizations a unique scope on what is seen as important from a multinational level of doing business. Ethic understanding is pivotal in succeeding in today’s multinational, multigenerational, multicultural world so that a company can understand and comprehend the layered complexion of today’s market and today’s consumer.
Conclusion

Cultural values greatly influence ethical standards as well as behaviour in business. Great leaders will show sacrifice for values that form an international code of ethics by sending a clear and strong message on the importance of ethics.

References

Bateman, T.S., Snell, S.A. (2007). Management: Leading and collaborating in a

competitive world (7th ed.). New York: McGraw-Hill.

ITIM International (2009). Greete Hofesteede 5 Culture Dimensions: Retrieved June 3,

2010 from http://www.geert-hofstede.com/