Article Review
The article has been written in order to find out the ethical procedures and systems adapted by organizations in developed nations and to determine whether one of the important factors responsible for explaining discrepancies in the ethical policies in various nations is culture. For this purpose, the writers carried out an extensive research which spans 2700 organizations across 24 nations and spanning across 35 diverse industries. The writers carried out a survey of these various companies over six diverse fields like governance, environment, human rights, ethical concerns, stakeholder problems and favourable services and products (Scholtens & Dam, 2007).
In order to find out the significant culture dimensions, the Hofstede database was employed. According to Hofstede the cultural or social indicators are power distance, individualism, masculinity and uncertainty avoidance. Although this data is around 30 years old, the writers have employed it in the research as changes in culture are extremely slow and hence the data still holds good for research purpose. A complete data analysis has found that there is a favourable relationship between ethical conduct and individuality and ethical conduct is negatively associated with human rights policies (Scholtens & Dam, 2007). The writers have also observed that uncertainty avoidance is favourably linked with ethical conduct whereas power distance and masculinity is negatively associated with ethical conduct. However, the results are not consistent and tend to differ across countries.
One of the key differences pointed out by the writers is the governance of corruption and bribery and significant discrepancies have been observed with organizations from nations like Norway and the United States of America performing best while nations like Ireland, Portugal, Spain, Luxembourg, Hong Kong and Singapore performing worst. There have been significant differences in firm which maintain a code for ethical processes and here Netherlands, United States and Australian firms are the highest scorers with Hong Kong, Singapore and Luxembourg being the lowest scorers. The third significant difference is with the difference in the communication of ethics and here firms from New Zealand, Australia and America scores the best whereas organizations from Ireland, Singapore, Hong Kong and Luxembourg have extremely low scores. From the above findings, it can be observed that firms belonging to developed and large nations like U.S.A., New Zealand, Netherlands and Australia significantly outperform the firms hailing from smaller nations like Luxembourg, Singapore, Hong Kong and Ireland on their ethical code of conduct (Scholtens & Dam, 2007).
It is extremely essential to understand the difference in culture and its influence in following certain ethical codes of conduct. This is because individuals are governed by values and cultures which have passed on from generations and this is something which shapes their personality. These discrepancies in ethical codes of conduct exist as each culture has its own unique way to deal with the violation of cultural rules. Moreover, embracing the culture existent in the nation in which the firm wishes to establish its branch is beneficial as it helps in acceptance of the firm’s products and services by the people living in the alien nation. Also the workforce in the office will be natives of the country. Also, for a firm to minimize cost and maximize its financial resources, it is important that it embraces the set of values and norms existing in the particular nation in which the firm wishes to establish its branch. Hence, nations interested in investing and setting up business in alien nations should be aware of the culture and the code of ethics prevailing in the alien nation as it will help to determine the diverse manner in which firms deal in tackling ethical violations. Accordingly business systems and processes can be established and the set of ethical guidelines should be in lieu with the culture and values followed in the nation in which the firm has set up its local office.
Reference
Scholtens, B. & Dam, L. (2007). Cultural values and international differences in business ethics. Journal of Business Ethics, 75, 273 – 284.
