The Importance Of Ethics In International Business

In this essay, a discussion on the context in which managers of international businesses may have acted in a similar manner as the leadership at Volkswagen (before the worldwide news of the scandal) and the context in which they would have acted otherwise will be critically analyzed. This analysis will look at how ethics plays an important part in international business using the four approaches to business ethics. Ethics refers to accepted principles of right and wrong that govern the conduct of a person, the members of a profession or the actions of an organization (Hill, 2014). Business ethics are frequently guided by law, while other times provide a basic framework that businesses may choose to follow in order to gain public acceptance

Cultural relativism is the view that no culture in the world is superior to any other culture when comparing morality, law, and politics and that there are no international rights and wrongs (Vorster, 2010). It's the philosophical notion that all cultural beliefs are equally valid and that truth itself is relative, depending on the cultural environment (Hill, 2014). Those who hold to cultural relativism hold that all religious, ethical, aesthetic, and political beliefs are completely relative to the individual within a cultural identity (Vorster, 2010). For example, if Uganda tolerates the bribery of public officials, then Ugandan tolerance is no worse than German and American intolerance. If South Africa fails to find insider trading morally repugnant, then South African liberality is no worse than British fair-mindedness. In relation to international business, an MNC or managers applying this approach make decisions based on what they believe to be right or wrong which varies with culture. According to cultural relativism, morality is relative, which means that what one person considers right is considered wrong to someone else. Going back to Volkswagen, if they had used this approach, whether or not those managers would have given the green light for cheating the emissions test depends on if they as individuals, consider it permissible. If they had not believed it to be acceptable, they would have refrained from that

Righteous moralism is the elitist view of home country ethics (Hill, 2014). It is the approach were by home country ethics are seen as superior to those of the host nation. A manager using this approach would claim that his organization’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. If the managers at V.W were to have used this approach, the standards of ethics that the company would follow are those of Germany. Germany has a sizable and one of the most robust system of laws that governs the automotive sector. On entering a new market like America, the managers would then to adhere to the same safety and quality standards of Germany because they feel that their way of doing things is superior to that of the host (U.S). Had Volkswagen used this approach, they would not have cheated emissions tests (through the use of defeat devices) because that would go against the ethical standards from their home country