Ethical Issues and Business Conduct
Presentation and Discussion
Charles Blankson, Ph.D.
Ethics is a code of behavior that a society considers moral
and appropriate for guiding relationship with one another.
The issue at stake here includes: honesty, integrity, fair, open
and straight-forward dealing.
Ethics involves judgments as to good and bad, right and
wrong and what ought to be (Hartman, 2002).
Teens tendency toward deception (Bristol and Mangleburg,
The golden rule therefore is: “do unto others as you would
have them do unto you”.
Ethics deals with things to be sought and things to be
avoided, with ways of life and with telos (Telos is the chief
aim or end in life) (the philosopher, Epicurus, cited in
Morals: rules or duties that govern our behavior, e.g. “do
not tell lies”, or “do not hurt another person”.
Values: these are beliefs that a given behavior or outcome
is desirable or good.
Values serve as standards of conduct that guide our
Example: how we value (a) the environment, (b) self-
respect (c) keeping our family safe, (d) good health, (e)
Introduction: schools of thought
Existentialists led by Jean-Paul Sartre believe that
standards of conduct cannot be rationally justified and no
action is inherently right or wrong.
Thus each person may reach their own choice about
This view resides in the notion that humans are only what
they want to be…
Sartre claimed that existence precedes essence, i.e., first
humans exist, then we individually define what we are –
Therefore each of us is free, with no rules to turn to for
That ethics and moral responsibility belongs to each of us.
Schools of thought contd.
According to the Existentialists, …what one person
believes is “right” or “just” may not necessarily
be believed by others.
Existentialists may say, perhaps, there is no right
answer in this situation.
Relativists however call for some universal
principles of right and wrong.
Relativists contend that the ethical answer
depends on the situation, i.e., that ethics is
relative to a particular society.
Theories about ethics and religion: two
Theory of Rationalization:
Based on the case whereby religious people attempt to be
ethical both at home and outside their home (e.g., very
devout religious people).
Theory of Sacred Canopy:
In today’s materialistic, opportunistic and fast-paced
lifestyle, it is a common belief that religious people have
lost their influence on the direction of morals and ethics.
This has meant that although people may be ethically
astute at home, they may behave differently away from
Source: Rawwas (2005)
More issues about ethics
Remember that ethics does not refer only to
financial favors, i.e., corruption, but includes:
Conflict of interest,
Misuse of position by abusing ones office (e.g.
misusing confidential information, government
property, official time etc.).
According to Gbadamosi (2004), high ethical
standards, and low corruption perception will
always be relevant in organizations and human
More issues about ethics contd.
We already use ethics as a basis for decision
making – family situations etc.
“…there is no law that requires one answer or
“…you might believe that you should act one
way or another because it is the right thing to
This is your personal ethic and which stems from
the society/culture one belongs to.
21 Century propelled by globalization and multiculturalism.
The case of BP, Burger King, HSBC
The case of Japanese and South Korean auto makers in
Implications for international marketing – US outsourcing
its call centers in India and China or the US reliance on
crude oil from Saudi Arabia, Kuwait and Nigeria.
Even locally, cultural diversity and cross-cultural issues
present different challenges to all marketers.
Important in USA, UK, Canada, South Africa.
Cultural conflict: unethical behavior
Different cultures have different rules of conduct.
Some cultures view certain ethical practices with different
levels of condemnation (Pitta et al., 1999).
The more serious problem concerns two different ethical
standards meeting in a business transaction.
US vs. Russian; US vs. Nigerian; US vs. Colombian; US vs.
UK; US vs. Germany; Israel vs. Egypt.
This situation is characterized as cultural conflict.
Cultural conflicts and unethical behavior:
bribery, corruption and sleaze
The US Foreign Corrupt Practices Act.
Bribery is part of life in some countries because of
different ethical standards.
Russia, Pakistan, Nigeria have been mentioned in the
Also in the West: UK, USA, France, Japan.
“…with tobacco advertising banned in many Western
countries, cigarette manufacturers are increasingly
targeting countries in Africa…and more and more Africans
are taking up the habit” (BBC online News, 18 March 2005).
Tanzania, Uganda, Ghana, Kenya and Mauritius have
introduced smoking bans and have increased taxes on
Bribery and corruption in Africa
In Ghana, the government’s “zero tolerance” for corruption is
challenged because Ministers have still not declared their assets.
The Ghana Integrity Initiative (GII) is urging the government to
implement the Public Procurement Act to enable it to subject
ministers and public officials to greater degrees of scrutiny in the
award of construction contracts (www.graphicghana.info, March
Shoddy construction works abound in Ghana and in Nigeria.
Discussion on bribery is problematic and controversial.
The case of Nigeria and Ghana where it is argued that the roots
are embedded in colonialism, rather than the fact that these
countries are relatively poor.
The German-based Transparency International
Corruption Perception Index in 2002 (Africa)
Countries Africa World Countries Africa World
Rank Rank Rank Rank
Botswana 1 24 Senegal 9 66
Namibia 2 28 Malawi 10 68
South 3 36 Cote 11 71
Tunisia 3 36 Zimbabwe 11 71
Ghana 5 50 Tanzania 11 71
Morocco 6 52 Zambia 14 77
Ethiopia 7 59 Kenya 17 96
Egypt 8 62 Nigeria 20 101
Woman fetching water in a country in Africa: result
of failed government and corrupt officials? Source:
A teacher’s dilemma: results of corrupt
policies and failed governments?
Culture as the basis of business ethics
There is common agreement that a
country’s culture is directly related to the
ethical behavior of its managers. Two
(1) Public or corporate statements and
actions about ethical behavior.
(2) The collection of ethical attitudes and
values in the country.
Interface of culture and business
ethics: American Culture
Ethical roots date back to the founding fathers
and their traditional Judeo-Christian and Western
socio-theological laws and principles. The
founding fathers were mostly Christians and
identified three basic “self-evident” truths
regarding “inalienable” rights of mankind to:
The pursuit of happiness;
and exercised in an environment in which people
are equal under the law.
Culture and business ethics contd.
Two dimensions influence the business culture
(a) Islam and (b) the Bedouin tradition.
The Bedouin tribal heritage views loyalty, justice,
generosity and status as important.
Religion has a profound effect on business,
politics and social behavior.
The “mutawwa” (The Saudi religious Police) is
run by the Society for the Propagation of Good
and Abolition of Evil ensure compliance (Rice,
Saudis conduct business only after trust has
The Bedouin tradition allows business meetings
without a prior appointment.
Sexual modesty and chastity is highly valued.
Separation of women from unrelated men.
Most activities outside her home requires the
mediation of a female servant, male relative or a
male servant e.g., chauffeur or gardener.
Women are not allowed to drive, but they can use
a male chauffeur.
Customs and Courtesies of Ghanaians
English greetings (good morning etc.) and hand shakes are
In the Akan culture of Ghana, inheritance is via the
maternal lineage rather than the paternal lineage (i.e.,
nephews inherit their uncles rather than sons inheriting
Most greetings are in the dominant local language and are
followed by questions about one’s health, family welfare,
journey (these were found to be similar in Saudi Arabia and also in
Children refer to any adult that is well known to the family
as “aunt” or “uncle” even when they are not related.
It is generally improper to pass or receive items with the
left hand. Right hand or both hands are the norm.
It is common and appropriate for friends of the same sex to
hold hands while walking/speaking. It does not signify
anything beyond friendship.
It is impolite to place feet on chairs, desks, or tables
especially those being used by another person.
Friends and relatives visit one another frequently, often
Most initial business visits occur at home and it is polite to
take a small gift for children.
Guests are always served drinks and other refreshments. It
is impolite to refuse these offers.
Hofstede’s cultural dimensions
Geert Hofstede’s (1979) Cultural
– The willingness of a culture to accept status and power
differences among its members
Individualism / Collectivism
– The tendency of a culture’s members to emphasize individual
self-interests or group relationships
– The cultural tendency to be uncomfortable with uncertainty
and risk in everyday life
Masculinity / Femininity
– The degree to which a society values assertiveness or
Long-term / Short-term Orientation
– The degree to which a culture emphasizes long-term or short-
US vs. Malaysia:
Hofstede’s Cultural Dimensions
The six dimensions of culture by
Kluckholn and Strodtbeck (1961)
1. What are the society’s assumptions about the essential
goodness of people?
2. What does the society emphasize in interpersonal
relations, the individual or the group? Should people feel
free to act as individual or as a group?
3. What is the value of personal space in the society?
4. What does the society assume about the relationship of
man and nature? Is man meant to live in harmony with
nature or to dominate it?
5. What is the role of change in society (value for stability?)
6. What is society’s regard for time; past present or future?
Research undertaken by Singhapakdi
et al. (1999) in Journal of Consumer Marketing
How consumers from Malaysia and USA
differ in their perceptions of:
– Marketing ethics
– Attitudes toward business and salespeople
– Personal moral philosophies that underlie the
Singhapakdi et al’s. (1999) Results
Malaysian consumers were less sensitive to unethical
Malaysian consumers tend to be less idealistic and more
relativistic in their moral philosophies than US consumers.
Relative to US consumers, Malaysian consumers reject
moral rules (i.e., high relativism).
They are however positive about the possibility of
achieving positive outcomes for everyone concerned.
Malaysian consumers were more likely to respond
positively to collectivist (as opposed to individualistic)
Research undertaken by Robinson
(2004) in Journal of African Business
To examine how entrepreneurs experience and deal with
ethical dilemmas in South Africa.
Results: Entrepreneurs forsake demeaning workplace and
inter-personal practices, containing crime, adopting
socially responsible and ethical business practices,
appreciating ethnic differences and attempting to reconcile
with each other.
Ethics is facing challenges in the context of: (a) Issues
such as diversity, (b) overcoming the legacy of Apartheid,
(c) crime containment, (d) business ethics, (e)
reconciliation between different ethnic groups.
“…Apartheid may be officially dead and buried, but its
legacy thrives in a clearly dichotomous society…”
A woman selling produce in Harare: Failed
governments and corrupt officials?
Harare, Zimbabwe, a man selling on the street
School children in Harare
A young man in Harare
Selling on the street in Harare
Cars queuing for gas (petrol) in Harare
Taxi in Harare
Fetching water in some parts of Africa
Happy? about a newly installed pipe-
borne water in a country in Africa
Africa is the only
continent to have become
poorer in the past 25
By the year 2000, half of
the world’s poor were in
Africa compared with 10%
in 1970 (BBC online News,
March 18, 2005).
Is Africa “better in colonial times?”
asks Moeletsi Mbeki
“…the average African is
poorer than during the age
of colonialism…in the
instead of focusing on
enormous wealth, saving
their loot in Western
countries – Switzerland,
UK, USA, France)…”
Photos from around the world
Pipe-borne water in a
country in Africa
Wife of the President
President of Mali Mr. Amadou Toumani
President of Mali conversing with the
oldest woman in Mali, 128 years old.
Man walking on a street in India
Friends playing in India
Woman washing clothes in India
Man sipping tea in Egypt
Montreal, Canada, skyline during
Closing comments and implications
for international marketing
Many of the differences in ethical behavior result from the
world’s cultural diversity.
Most pressing challenge for international marketing is
tolerance of diversity.
“…think and act as equals with overseas business
partners…” (Robinson, 2004).
According to Robinson, philosophers through the ages
have advised that it is important to appreciate cultural
The latter calls for a relativist view of the world.
Note: Moral objectivism offers little accommodation for
differing views (Robinson, 2004).
Closing comments contd.
Notwithstanding, in view of the well
known human shortcomings such as
fraud, bribery, corruption, sleaze,
deception across all cultures, the
How can we ensure the adherence to
ethical conduct in cross-cultural
Africa Better in colonial times, http://news.bbc.co.uk
Early years, http://news.bbc.co.uk
Singhapakdi, A., Rawwas, M. Y. A., Marta, J. K. and Ahmed, M. I. (1999), “A Cross-cultural study of consumer perceptions
about marketing ethics”, Journal of Consumer Marketing, Vol.16, No.3, pp.1-13.
Rice, G. (2004), “Doing business in Saudi Arabia”, Thunderbird International Business Review, Vol.46(1), January-February,
Pitta, D. A., Fung, H. G. and Isberg, S. (1999), “Ethical issues across cultures: managing the differing perspectives of China and
the USA, Journal of Consumer Marketing, Vol.16, No.3.
Implement Procurement Law-Integrity Initiative, http://www.graphicghana.info
Customs, Courtesies of Ghanaians, http://www.graphicghana.info
Why do we still smoke in Africa? http://news.bbc.co.uk
Robinson, D. A. (2004), “Entrepreneurial Challenges in South Africa”, Journal of African Business, Vol.5(2), pp.173-185.
Hartman, L. P. (2002), Perspectives in Business Ethics (2nd ed), McGraw-Hill, New York.
Gbadamosi, G. (2004), Ethics, Corruption and Economic prosperity in Africa: Botswana Experiences, Proceedings of the
International Academy of Business & Development (IAABD), Atlanta, April 7-10, pp.204-213.
Bristol, T. and Mangleburg (2005), “Not Telling the whole Story: Teen Deception in Purchasing”, Journal of the Academy of
Marketing Science, Vol.33, No.1, pp.79-95.
Rawwas, M. Y. A. (2005), Does Religion Matter? A Comparison Study of the Ethical Beliefs of Students of Religious and Secular
Universities in Japan, Proceedings of the AMTP Conference, March 24-26, Jekyl Island, GA, pp.378.