Week
Two – Countries: Culture, Law and EthicsWeek
Two – Countries: Culture, Law and Ethics
Ethics
Culture encompasses ethics. Practicing ethical behavior is a combination of practicing a religion without the Ten Commandments but guided by common sense. Ethical behavior can run from being very pious to the point of not providing or accepting basic hospitality to outright corruption which is where ethics becomes completely dysfunctional.
The real world lies between these two extremes and here is where common sense takes hold. While I was in China when executives questioned me on how to deal with the sometimes dodgy local approach to ethics in business, I had the following advice:
• Use the Toronto Globe and Mail test http://www.theglobeandmail.com/headdex
(Canada’s equivalent to the New York Times). If confronted by some potentially
questionable approach to doing business, it was suggested that this question
be asked, “if the activities involved were to make the front page of the G & M,
would the individual be able to face family, friends as well as their employer?”
• Play by your ethical rules and not that of those you do business with. In
any sport or competitive activity one must know the rules to be successful.
When in a foreign culture with their own brand of ethics it makes no sense
to play by their rules in business. On the other hand the rules of high ethical
principles are understood universally (Hill) so you are not asking the local
business contact undertake a course of action that is foreign to him.
• Once one lets their ethical standards lapse there is no going back to the
moral high ground. The rules of the game are thus established and the only
way out is to disengage from whatever business was underway.
• Statements on what the ethical misdemeanors of competitors are doing are
often overblown by local business contacts to encourage foreigners to play
their game.
• If corruption is the only game the locals want to play - the world is a big
place - think seriously of going elsewhere. I have a pertinent example here.
A few years ago I spent a week teaching international trade in Macedonia. One
of the students (they were all mature individuals mostly involved with some
form of export orientated business) asked how North American dealt with corruption.
Besides pointing out that we had enforced laws prohibiting it, I reviewed the
ideas above. I then got a lecture from him in return that I was naïve
and that corruption was a way of life in Macedonia, and if foreigners wanted
to do business there the situation was akin to “When in Rome, do as the Romans
do”. I pointed out that with a population of only a few hundred thousand, Macedonia
was no Rome; and that why would foreigners want to do business in such an environment
when there was a lot of the world where corruption was within acceptable limits.
He failed to grasp that corruption drives good business away, particularly
from such a small economy. As I recall, I did not get any further with him
than to agree to disagree.
Question: Are ethics stretched in the following examples which involve special
treatment of individuals.
Canadian companies in China were frequently asking the Embassy in Beijing and indeed elsewhere while in Asia to facilitate business visitor visas for their contacts. When they approached us with a legitimate reason why someone should visit Canada, I along with my immigration colleagues saw to it that the person got expedited service. No rules were bent but the person was not exposed to any unnecessary delays and received an interview with a top notch immigration officer – usually the head of the section.. When the passport with the visa was returned, special attention was provided but nothing more than being invited to my office instead of cueing up in a crowded public waiting room.
The Chinese, they were totally amazed how the Canadian business contact could make the system work (ethically) and probably thought there was some payoff to the embassy to make this happen. Their basis of comparison was the dismal treatment they would receive from their own bureaucracy. To us, our procedure was simply taking care, ethically, of national interests.
Somewhat related to the above, a Canadian businessman was told that the son of a very influential government official had applied to the Embassy to study in Canada, and by chance in the same city where the businessman lived. The young man was perfectly qualified academically, and we used the above routine to obtain a student visa. Furthermore, the Canadian invited the student to live with him for the duration of his studies. To be certain, business flowed as there was probably little else the Chinese official could have received than this opportunity for his son.
These examples and other comments hopefully provide a context in which acceptable ethical principles are practiced.
Sustainability
Sustainability in the business context means profit or at least loss avoidance. The Dow Jones sustainability index http://www.sustainability-index.com/ provides a guide to investors on corporations, many of which are the big multinationals, on how they manage sustainability issues.
While the Environmental NGO’s such as the Sierra Club http://www.sierraclub.org/, WWFund http://www.worldwildlife.org/ and others do a fine job of promoting good environmental practices in the context of sustainability, it is really the private sector that can deliver in a substantial way. While still working under the profit motive, much can be done by corporations as is evident from the Dow Jones effort in this regard.
The third player in the sustainability game is government which becomes involved through regulation where the profit motive, on its own, will not achieve the desired results which are in the public good.
For example, my company Iogen (http://www.iogen.ca/) produces an enzyme for use by the pulp and paper to reduce the bleach required to produce quality white paper. Our product was developed in response to government environmental regulations which forced companies to reduce their bleach inputs per ton of paper produced. High bleach content in the rivers are unsustainable as far as fish and other ecological attributes of our waterways were concerned. It should be pointed out that as all companies were similarly impacted, their competitive position regarding others in the industry was not affected – increased costs were simply passed to the consumer.
However, the profit motive drove the industry to see the most cost effective way to meet governments bleach limitations. We worked hard to provide a low cost solution which has been adapted by much of the North American paper industry. I understand that the technology has now advanced to the point that the costs to achieve white paper are less than using unrestricted quantities of bleach.
Hence, achieving sustainability is not necessarily bad for business.
Yours,
Maurice Hladik