Good Essay On Ethical Decision Making And Framework For Ethical Choices In International Business

International business exposes a professional and a manager to various legal and moral frameworks. This is because international business provides an opportunity for a business to extend from the home country to a host country and this means there could be different value systems which in turn would culminate in different legal structures and systems. This means that an organization in international business would have to create an ethical system in-house that will ensure that the facility makes the best decisions that are ethical and appropriate. The purpose of this paper is to craft a plan and framework that are meant to respond to the ethical challenges of a manager/professional working with an international business.

Dynamics of International Business

Ethics are a set of rules and value systems that are internalized by an organization. It guides the way and manner through which staff members of an organization carry out its activities. Ideally, ethics are meant to be stable and institutionalized throughout an organization. This is because ethics guide the way and manner in which the leaders of an organization connect morality and laws of the external environment to the decisions and choices made by their staff members based on internal values as well as personal values of these individual staff members.
International businesses come with a complication because most professionals or managers will have to apply ethical systems and ethical rules they are familiar with in the home country to a foreign environment. This might culminate in various results that might not prove detrimental. In most instances, apply the ethics of a developed country to a business unit in an emerging economy presents a firm as being “over-righteous” and this leads to the loss of opportunities. A case in point is where a firm from a country like Australia which is based on high ethical and legal traditions is operating in an emerging market where bribery and corruption is normal and acceptable. The main dilemma here is that the Australian firm might have to lose opportunities because firms from other countries like China where there are less rigid rules and regulations on operation and activities. This will inevitably culminate in the loss of competitive advantage and authority.
However, in a strict sense, there is the need for firms to strive to maintain ethical standards and ethical values that are similar to the best and most appropriate levels. This is because it might not be practical to obey all rules and regulations. Therefore, in international business, there is the need for the right decisions and the right choices to be taken. Personally, I believe a firm does not need to be more ethical than other entities operating in the same market in a developing country. However, a firm must take reasonable steps to obey the rules, regulations and moral codes of the home country as well as the host countries. Therefore, below, I outline the most important pointers a firm needs to be sensitive to in order to gain some kind of ethical correctness in international business.

Proactive Evaluation of Ethical Dilemmas

Although it might be difficult, it is imperative for firms to conduct due diligence of their legal and moral obligations in foreign markets. There is the need to ask questions about the high risk areas and activities and how they are measured up in the home market as well as the host markets. This proactive approach will culminate in the formulation of official policies on how moral dilemmas that would occur in operation will be analyzed and dealt with. To this end, it is expected that some members of the firm charged with corporate governance will be given individual obligations on taking sensitive decisions in areas where the firm’s reputation is at risk. In minor matters, individual managers will have to take the initiative and take decisions on ethical matters, but these should be within a reasonable scope defined by the authorities at the top of a firm.

Controls and Checks

One of the fundamental duties of people charged with running and directing firms is to come up with a framework for running an organization. This will mean that when a proactive evaluation is done, there should be the identification of the levels of reputational risks that must be deliberated upon by the top management as a team and those that individual managers can handle on their own in an international business. These limits can provide a roadmap towards the control of affairs and situations that may come up.

Stakeholder Sensitivity

In situations where individual managers or groups of directors need to take decisions, they will need to have an awareness of stakeholder needs and expectations. Stakeholders are defined by Freeman as those who affect and those who are affected by the operations of a firm. Therefore, there is the need for an international business to identify the stakeholders in every ethical ordeal. There are tools like the Mendelow Power-Interest Grid that can objectively define the level of interest and power wielded by each class of stakeholders. From there, an individual taking a decision in an international business matter can identify who the highest level of obligation is owed to and deliver it. This way, the manager or management team of an international business can make a choice based on the most optimal needs of each class of leaders in an organization and also discharge it appropriately.

Organizational Culture and Organizational Structure

The levels of checks that will be put in place by an international business will have to be considerate of the kind of organizational structures and chain of command as well as span of control of people in the organization. This will mean that upon the occurrence of major problems, there would be a set of laid-down rules on who has to deal with which issues and which levels of management professionals should cooperate to deal with international ethical matters and issues.
Once this is done, it would be woven into the organizational culture and this is best served through the creation of a democratic structure and system through which issues can be dealt with and solutions can be provided. This will allow the organizational culture and system to be opened to some democratic and proactive structures on issues.

Democratization and Personal Ethics

The average international organization is made up of people from different religious, cultural and ethical backgrounds. People have their social situations and they would have different reactions to matters. Therefore, there is the need for the democratization of the ethical decision-making in international business. And once the system is collectivized, different personal ethics based on the psychological and sociological factors that shape the thoughts of managers and directors can be brought to the fore through debates and other interactions. This way, issues can be dealt with to high standards since there will be clear accountability lines that will inevitably be represented.

Conclusion

Ultimately, the duty of taking ethical and morally responsible decisions in an international organization is in the hands of the directors of the organization. Therefore, for success to be achieved in ethics in international business, there is the need for the directors to set up a the risk appetite and limits before entering an international market. And when this is done, democratic structures ought to be set up to evaluate and analyze issues critically before choices are made.
An internal control system ought to be set up and this must detect high-risk matters and coordinate discussions on them. This will gradually form the basis of the culture of the organization in relation to ethical matters since it will be proactively monitored. The democratization of the system will allow different managers to deliberate on issues on the basis of their personal beliefs and with respect to stakeholder needs as and how they appear within the organization.