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Business Ethics Across Cultures Article Review: mb.. America has not always had the same working conditions and ethical guidelines it has today, in fact in the early 1920’s American industries painted a very different picture. There were no child labor laws so it was acceptable that twelve year olds went to work to “feed the family. ” There were no safety guidelines in place, if you got your arm chopped off working for the railroad then your oldest child had to go to work to make up for your lost wages.
There certainly were no ethical standards that companies and employees had to follow; women did not work outside the home so there were also no sexual harassment laws in place. American Industry in the early 1900’s was a lot like China is today; perhaps this is why so many American jobs are lost to China every day. The first article reviewed for the Business Ethics across Cultures article review was about issues with Wal-Mart and China. Almost every product that is sold in Wal-Mart stores today are made in China although that is not what Sam Walton would have wanted you to believe in the late 1980’s and early 1990’s. One of Sam Walton’s earliest imports from Asia was team spirit. Enthused by a factory cheer he witnessed in 1975 at a Korean tennis ball plant, Walton instituted his own “Wal-Mart Cheer,” still a staple of the company’s corporate culture. He liked the dramatic device for its “whistle while you work philosophy. ” Wal-Mart was not the first retailer to “cash in on low-wage Asian labor” (PBS, 2005) he followed in the footsteps of other big name department stores such as K-mart and Target.
Although Wal-Mart was not the first in Asia, Wal-Mart certainly was the most business savvy, constantly “moving around to chase lower wages” (PBS, 2005). Sam Walton was afraid of what Americans might think of Wal-Mart as a company, if we knew how much product was being purchased there. The leadership in China was Communist and oppressive and Sam Walton needed a middleman, he named the company “Pacific Resources Export Limited” (PBS, 2005). This middleman allowed Wal-Mart to push the “Buy American” campaign while Wal-Mart was importing forty percent of their merchandise from the very beginning.
Although the “Buy American” helped to salvage a few American manufacturing companies it was mainly a big trick played on the American consumer. The primary ethical issues in facing China was that the leader Deng Xiaoping had taken away many former restrictions on business and declared special economic zones which gave no tax areas to businesses for the first few years upon opening. Another issue was that the Chinese currency was devalued in 1994 making labor even less expensive. Millions of poor Chinese citizens flocked to the special tax areas just to find work and Wal-Mart took advantage of that.
The wages of a Chinese worker for a 12 hour shift is equivalent to just a few American dollars per day. The second article reviewed was called “Implementation of Ethics Codes in Germany: The Wal-Mart Case. There was a code of conduct given to every German employee of Wal-Mart in February 2005, which was thirty-three pages long and attached to their pay-checks. The code of conduct had many rules about what was expected of Wal-Mart employees at work and in their private lives. The code of conduct also had a provision for an ethics hotline where people could call and report unethical behavior.
Most of the information in the code of conduct is what we find here in rules stated that employees could not enter into any kind of relationship that would affect the American company’s code of ethics handbooks; the main difference was the way the German Constitution looks at these issues. “The Local Labor Court of Wuppertal ruled in favor of the Wal-Mart employees. The clause to regulate the love life of the employees was judged to violate the personal rights of the employees, particularly the personal freedom guaranteed in the Basic Law (Grundgesetz, the German Constitution).
In the order of priority the Basic Law has a higher rank than all other legal norms of the German legislation. Employers have to respect the constitutional personal rights of their employees. Therefore an employer cannot force its staff to adhere to a strict code of conduct forbidding love affairs, sexually suggestive conversation, rude jokes and even lustful looks. Under German law anything regulating the personal lives of employees should first be agreed between employers and workers. (University of Pompeii, 2005) The primary ethical perspectives of Germany are very different than that of America, it was not until the late 1990’s that American companies tried to enforce any ethical standards in Germany’s workforce. Companies like IBM, McDonalds, and Ford began enforcing ethical guidelines with their European subsidiaries. It was not until recently that German employers took any interest in enforcing corporate ethical behavior in those that they employ, and quite a few voluntary company codes of conduct have appeared.
There will always be some resistance to the American code of conduct due to cultural traditions which makes the substance of the codes different. In German codes it is likely to have clauses concerning environmental issues and workplace safety where in American code there will likely be information pertaining to privacy and proprietary information. The main difference between China and Germany when it comes to ethical perspectives is basic respect for humans. In China humans are looked at as dispensable, their worth is only valued at what amount of profit they can turn in a day.
There are no rules about work-place safety, or compensation from an injury on the job. Chinese workers are plentiful and will work 14 hour days for very little pay, if they cannot or do not want to fulfill their daily tasks there is a line of people waiting to replace them. Germans are respected as human beings; they have rights not only to a safe workplace but to a clean environment. Germans will not be told how to live their lives outside of work; they have the right to date anyone they see fit. The idea that they could be told how to look at another employee absolutely enraged German workers.
One of the main differences between German workers and Chinese workers is education. Education is the only thing that cannot be taken from a person, if the economy crashed and everyone lost their homes, cars, and way of life, there is no way to take away their knowledge. Ethical guidelines did not become widely accepted until scandals of the early 1980’s. After these scandals corporations became interested in business ethics programs which offered training to all employees and codes of conduct for employees to follow. The approach was accelerated by the enactment of US Sentencing Guidelines in 1991, which provided potential monetary incentives for corporations to institute ethics or compliance programs. According to the Guidelines, any organization is liable to sentencing, fines, and to periods of probation for federal offenses connected with antitrust, securities, bribery, fraud, money laundering, criminal business activities, extortion and embezzlement, conspiracy, and others” (University of Pompeii, 2005). The guidelines made it clear that businesses were run by their managers and were responsible for their actions. The innovation of the Guidelines lies in the fact that the sentences imposed on the organization and its agents are designed to achieve the following objectives: just punishment, sufficient deterrence and encourage the development of internal mechanisms to prevent, identify and report on criminal behavior in organizations” (University of Pompeii, 2005). The new guidelines held a company responsible for how they reacted to their managers’ behaviors, and held companies responsible for a lack of action. “Fear of embarrassment at the hands of NGOs and the media has given an even bigger incentive.
Pressure groups of consumer power are growing more professional. While in the past, unethical behavior by a company might have kept quiet; there is now a greater likelihood that employees from within a company will alert relevant pressure groups” (University of Pompeii, 2005). So combinations of fear of embarrassment and lawsuits have been the main reason for the “American Ethical Standards” according to (University of Pompeii, 2005). I believe it is very important to understand the ethics and business etiquette of those individuals that you may be trying to do business with from out of the country.
Expanding globally is important, but can only be successful if executed correctly with the right information to help make the best impression possible on your new possible business partner. Read up, study, and understand what is acceptable for those you are planning to do business with. References PBS. (2005). Wal-Mart and China: A Joint Venture. Retrieved from http://www. pbs. org/wgbh/pages/frontline/shows/walmart/secrets/wmchina. html University of Pompeii. (2005). Implementation of Ethics Codes in Germany: The Wal-Mart Case. Retrieved from http://www. upf. edu/iuslabor/032005/art11. htm