Business ethics and culture are intertwined, as culture influences the practice of business ethics. With globalization and diverse workforces, companies must address cultural differences to create an inclusive corporate culture. Ethical considerations include fair treatment of employees and customers from different cultures, and misapplication of ethics can lead to substandard goods or the use of child labor.
The relationship between business ethics and culture can be viewed from the perspective of the influence of a particular culture on the practice of business ethics. In its application to business ethics, culture can be defined in terms of the place of origin of the people who make up the organization’s human capital.
Culture can also be defined in terms of a collection of a group of people who have something in common, such as an ideology, the fact that they are a minority, or that they belong to a particular gender or religion. Corporate ethics and culture can also be analyzed from the perspective of how the company’s management and employees apply ethical standards to their business operations while conducting their business in another country.
With the growth of globalization and the ease with which people migrate from one country to another in search of better business and career opportunities, it is all too common to see that most medium and large companies have a diverse representation of employees from different backgrounds and cultures. This makes it imperative for such companies to have some form of standard for addressing the diverse cultures that make up the employee base in order to create an inclusive corporate culture.
An example of the relationship between business ethics and culture is the way an organization’s management treats employees of other cultures. The ethical consideration here is whether management applies the same standard of treatment to both local and immigrant employees.
An example of the application of ethics and corporate culture can be seen in the case of a multinational company opening a subsidiary in a less developed country. Assuming that the company’s management has a different standard of treatment for its own citizens and another treatment for citizens of least developed countries, such an act would hardly be ethical. For example, if they have different wages for employees of the same category or level, this is a misapplication of ethics.
Furthermore, ethics and corporate culture mean that employees and management must apply ethical standards in their dealings with customers from other cultures. An example would be a company that manufactures electronic items and has a subsidiary in another country where it also manufactures similar items.
Absence of business ethics could lead to a situation where the company will produce substandard goods for sale in that particular overseas market. This could be because the culture in that country is more corrupt and businesses can get away with such an act, which can also be seen in the use of child labor.
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